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Minister: Govt debt listing ‘has merit’

Transparent pricing
  • Michael Halkitis at the Nassau Conference on Wednesday, October 17, 2013. ERIC ROSE

Guardian Business Editor

Published: Oct 17, 2013

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A listing of the over $3.4 billion in government debt on the Bahamas International Securities Exchange (BISX) “has merit” and would be helpful to the government, the minister of state for finance said yesterday.

Michael Halkitis admitted that discussions over a possible listing of government debt on BISX date back many years, and he said he is “hopeful” the matter can be “brought to the forefront” by the current government.

His comments come after some, such as leading investment banker Michael Anderson, president of Royal Fidelity Merchant Bank and Trust, said that a listing of this debt should be a priority for BISX over any other initiatives, such as developing a commercial paper market.

In an interview with Guardian Business in late September, shortly before BISX Chief Executive Keith Davies presented his hopes to expand activity on BISX through the creation of a commercial paper market to a meeting of the Chartered Financial Analysts (CFA) Society, Anderson told Guardian Business he would first focus on facilitating trading in currently outstanding debt, such as the $3.4 billion in government bonds, before turning to creating new securities to list.

Such a listing would effectively double BISX’s market capitalization, but Davies has argued that the decision to move ahead with the initiative rests with the government.

Government debt is currently traded through a Central Bank of The Bahamas auction system.

Commenting on the matter yesterday, Halkitis said listing the debt “would help [the government]”.

“It would help in terms of making it a more transparent pricing process, and it would help BISX in terms of their revenue from the listing fees.

“It’s a conversation that has been going on for a really long time. Hopefully, we can bring it up to the forefront. They’re eager to do it, and it would create a place where it is listed and sold through a transparent system.

“I can’t say how quickly that would happen because there’s other things to do but there’s merit to it, and it has unfortunately just dragged on for a long time.”

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