Business
Corporate bonds can now list on stock exchange, access given to smaller investorsSunday, June 30, 2013Companies are now able to list bonds on the Jamaica Stock Exchange (JSE), which will give a wider pool of investors access to debt instruments.The JSE is currently reviewing the minimum amount, also called a board lot, that investors can buy into the bond market, but it should be in the region of $10,000 increments.And while no corporate bonds — instruments issued by an entity for the purpose of borrowing money from investors for a defined period of time at an interest rate — are ready to be listed, the stock exchange is waiving the fee to do so for the rest of 2013.“The bond market is designed to facilitate the trading of bonds whether they are corporate bonds, Government of Jamaica securities, or the securities of any other sovereign CARICOM nation,” said Marlene Street Forrest, JSE general manager. “The JSE Group has the platforms through which issuers of corporate bonds can raise capital on the primary market and list on the JSE.“Equally, those corporate bonds that have already been floated privately can still be listed on the exchange.”The idea behind the JSE bond market, is to facilitate the trading of bonds with the aim to increase efficiency, transparency and liquidity.For companies, the the market and trading platform offers an alternative to bank loans, flexibility to expand from equities into bonds, and potentially cheaper source of funding.Rating of bonds provide another means by which companies are able to signal the grade bonds they are floating, which could potentially impact on the cost of borrowing, according to Wayne Dass, CEO of Caribbean Information and Credit Rating Services Limited (CariCris).On the other side of the coin, investors will be able to enter or exit bond positions much easier, they will have greater access to information on the borrower, there is potential for capital appreciation of the bonds, and continuous pricing allows for daily monitoring of the bonds.As is customary, investors will be required to place their buy and or sell orders with a licensed member of the JSE.Wayne Dass (right), CEO of Caribbean Information and Credit Rating Services Limited (CariCris) speaks with Donovan Perkins (left), Jamaica Stock Exchange (JSE) chairman, while JSE general manager, Marlene Street Forrest listens attentively. (PHOTO: BRYAN CUMMINGS)
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JSE bond market launched
