Monday, November 30, 2009

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Trade stalls By Scott Armstrong ~ Guardian Business Editor ~ scott@nasguard.com: The man at the helm of the Bahamas International Securities Exchange has sent out an optimistic message about the trading in the islands despite a back drop of falling figures. Keith Davies, BISX Chief Executive Officer, was speaking after the latest figures for 2009 showed share trading had dropped and that The Bahamas was being outperformed by other international markets. But he remained bullishly optimistic, citing that the drop in performance was less than that experienced by this time last year and he predicted a return to a better performance in the early part of next year. For the nine-month period ending September 30, 2009 the BISX All Share Index closed at 1501.78, which represented a year-to-date decrease of 210.58 points or a decline of 12.30 percent. By comparison; for the nine month period ending September 30, 2008 the BISX All Share Index closed at 1836.61, which represented a year-to-date decrease of 230.14 or down 11.14 percent. Speaking about the decline in the index, Davies said: "The continued decline of the BISX-All Share Index is obviously of concern to us. However, we were encouraged by the fact that the nine month decline in the Index for 2009 is less than the decline over the comparable period of 2008." The latest figures also showed trading in The Bahamas was slower than in international markets. Davies said: "Over the nine month period January to September 30, 2009, the BISX All Share Index was out-performed by many of the other international Indices. "However, it must be borne in mind that if you compare the date when the BISX All-Share Index hit its peak on December 21, 2007 to the present, the All-Share Index has performed at the same level as most other indices. "In addition for the nine months following the December 21, 2007 peak BISX outperformed most international indices. What we have found in our experience is that our Index tends to lag international indices by about nine months. "Based on this time lag that we have noticed we expect to see some turnaround in the BISX All-Share Index in the early portion of next year." The number of trades for the Q3 2009 quarter has increased with 323 trades taking place over this period compared to 209 in the second quarter of 2009. The increase in trades per quarter followed a period of gradual declines in trades per quarter. Addressing this fact, Davies also noted that the average value of trades in this quarter had declined compared to the previous quarter: "Some may view the decline in the average value of each trade in this quarter as a negative statistic, however there is a heartening note in that larger valued trades often are carried out by institutional investors trading large volumes of securities. "We believe the decrease in value per trade for this quarter is indicative of the fact that smaller investors are once again entering the market compared to the previous quarter. The average value of a trade in Q3, 2009 was $17,593.33 compared to $25,669.91 in Q2, 2009." Davies also spoke the performance of secondary issues listed on the Exchange. "At BISX we are very happy with the performance of the secondary issues that were listed on the Exchange over the course of last year. "As we have stated in the past, market participants have come to BISX and noted that they believe the Exchange is the best location for the trading of secondary issues. This is indicative of the fact that investors in these securities realize the best value in terms of ease of transactions, liquidity and pricing by being listed on a regulated exchange. In addition, the process of being listed on an exchange allows institutional investors the opportunity to invest in securities that they may otherwise be barred from investing in. Issuers who list their secondary securities are paying attention to the needs of the market place and their investors." BISX continues to offer its services to secondary issues that remain unlisted. The CEO also took the opportunity to talk about the Free-Float Index developed by BISX which is a market capitalization weighted index comprised of stock in BISX-listed securities that is held by the general public. The Free-Float Index excludes ownership stakes held by substantial shareholders, officers and directors. He said "We developed the Free Float Index to keep track of changes in the relative value of securities that are actually available to the general public. "Many of our companies have large substantial shareholders who rarely; if ever, change their shareholdings. The Free-Float Index helps us to ignore these shareholders and focus on the smaller everyday investors who are such a critical part of our market." During the Nine Month period ending September 30, 2009 the Free-Float Index declined by 148.24 points or 16.5%. BISX All-Share Index Year-To-Date Closing Date MSCI Emerging Market Index S&P 500 Index FTSE 100 Index BISX All Share Index December 31, 2008 567.04 903.25 4,434.2 1,712.36 September 30, 2009 914.045 1,057.08 5,133.90 1,501.78 Percentage Change (+/-) 61.2% 17.0% 15.7% -12.3% BISX All-Share Index Peak to Present Closing Date MSCI Emerging Market Index S&P 500 Index FTSE 100 Index BISX All Share Index December 21, 2007 1215.98 1,484.46 6,434.10 2,072.62 September 30, 2009 914.045 1,057.08 5,133.9 1,501.78 Percentage Change (+/-) -24.83% -28.79% -20.21% -27.54% BISX All-Share Index Peak to September 30, 2008 Closing Date MSCI Emerging Market Index S&P 500 Index FTSE 100 Index BISX All Share Index December 21, 2007 1215.98 1,484.46 6,434.10 2,072.62 September 30, 2008 786.92 1,166.36 4,902.50 1,836.61 Percentage Change (+/-) -35.29% -21.43% -23.80% -11.39% Friday November 27, 2009