BSE Newsletter Issue II

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Message From Mr. Yarde CEO and General Manager of the Barbados Stock Exchange

The Barbados Stock Exchange, our team members, our brokers, our listed companies and all of our stakeholders have a vital role to play in the development of the Barbados economy.

An active, efficient capital market, where companies can access funds to expand their businesses, can help create wealth for listed companies, for their investors and by extension, for the entire economy. Because of its accessibility, the Barbadian capital market provides an avenue for individuals from all walks of life to improve their financial position. Indeed, our stakeholders include not only our listed companies, brokers and investors, but also each and every Barbadian citizen who directly or indirectly benefits from the growth of the economy, which comes as a result of an active and efficient Exchange.

In order for the Exchange to play a greater role as an important engine for economic growth, we must collectively intensify our efforts to positively position the activity of investing as that which is beneficial to the economy. We must demonstrate beyond a shadow of a doubt that companies can truly benefit from listing on the Exchange and accessing funds that can help firms expand their operations and become more profitable. We must show that investors can reap healthy returns on their investments by investing in companies listed on the Exchange.

In short, we must build a brand for our market that is highly respected for the work it does in creating wealth and building the economy. All of us: BSE team members, fund managers, owners of businesses, investors and brokers can help to build this brand.

We look forward to working together in 2014 and beyond to help build this brand and help build our economy.

Best Regards Marlon Yarde

Marlon Yarde

CEO and General Manager Barbados Stock Exchange

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Kofi Farmer

Broker of the Year 2012 and Broker of the Half Year 2013

Kofi Farmer, Royal Fidelity’s Senior Securities Trader, has been named Broker of the Half-Year for 2013. This achievement follows up Mr. Farmer’s Broker of the Year for 2012 award.

Mr. Farmer, who was pleased to receive the award, believes competitions like this will help to develop healthy competition and excitement amongst brokers of the Barbados Stock Exchange. Kofi noted “while it is indeed a pleasure to be awarded for my past performance, I am also pleased to learn that second and third place prizes will be awarded as well. I think that this, if it hasn’t already, will foster healthy competition amongst the brokers in the market”. Marlon Yarde, CEO and General Manager, noted “The BSE is proud to honor the brokers who perform at the industry’s highest level each year. These industry leaders deserve to be recognised for their hard work, expertise and superior deal-making abilities. We extend our congratulations to Kofi Farmer on his hard-earned achievement.”

Brokers are extremely important to the continued development of an active market, as persons interested in purchasing shares or bonds can only do so through Registered Brokers.

The Barbados Stock Exchange and its Registered Brokers help individuals, families and the private sector to “dream big and take stock” of our economy.

Capital markets are critical to the development to the Barbadian economy as the Exchange serves a dual purpose of providing companies with the capital needed to expand, while offering investors an opportunity to receive a return on their investments. Kofi, who maintains this view noted, “The market has [experienced] challenges in the face of the ongoing global economic slowdown. The slowdown can also be in part explained by the fact that Barbadians have done a great job at developing a culture of saving. While it is vitally important, we needed to expand and inculcate a society of investors. I don’t think there needs to be a switch between the two behaviors. This conservative nature can help to make prudent investment decisions, once individuals can somewhat tweak their current mindset. At present, we see investors who are starved for return and businesses that are starved of capital. The role of capital markets has never been more important in providing solutions for both sides. Royal Fidelity will be engaging the BSE and other stakeholders on the further development of the Market.”

The Barbados Stock Exchange Broker of the Year Award recognises top broker performances based on transaction by number of trades, volume and value traded in the market.

Congratulations Kofi!

Kofi Farmer

Broker of the Year 2012 and Broker of the Half Year 2013

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A Brief Overview On Q3 Stats

At the close of the first nine months of 2013, the Barbados Stock Exchange (BSE) was recording decreases in both trading volume and trading value. Total volume of shares traded decreased by 2% while total value of shares traded recorded a decrease of 18% when compared with the corresponding period in 2012.

The Put-Through Market was the only market to experience increases in volume and value.

Trading volume on this market was up 266% while trading value was up 228%. There was no activity on the Junior or Block Trade Markets.

Table 1 - Trading activity for the first nine months Market

Year-to-Date

Year-to-Date

Year-to-Date

Year-to-Date

% Change % Change

2013 Volume

2012 Volume

2013 Value

2012 Value

Volume

Value

Regular

4,706,443

5,349,917

$ 17,983,039

$ 25,395,011

-12%

-29%

Odd-Lot

-

140,786

$ -

$ 596,466

NA

NA

Put Through

952,350

260,402

$ 4,603,446

$ 1,401,528

266%

228%

Junior

-

2,000

$ -

$ 20,925

NA

NA

Block Trade

-

-

$ -

$-

NA

NA

Total

5,658,793

5,753,105

$ 22,586,485

$ 27,413,930

-2%

-18%

Regular Market

The Regular Market recorded decreases in both the volume and value traded at the end of the third quarter of 2013. The total share volume was 4,706,443, representing a decrease of 12% when compared to the 5,349,917 shares recorded for the same period in 2012. There was also a decrease of 29% in the value of shares traded at the end of the quarter as compared to the same period in 2012.

Bond Market

As at September 30, 2013, twenty-five (25) Barbados Government Debentures, fifteen (15) Barbados Government Treasury Notes and one (1) Government-backed security traded on the board of the Exchange. There were a total of 156 trades occurring on the Bond Market resulting in a volume of 38,016,000 bonds trading with a total face value of $38,754,541.50.

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Index and Market Capitalisation Movement

There were mixed results for the indices and market capitalisation when examined over the past three, nine and twelve-month periods. The Cross-Listed Index recorded the largest increase of 15.31%, however, the double digit declines in share prices of some locally traded securities during the quarter resulted in only 1% increase in the Composite Index over its position at the close of the 2012.

The Cross-Listed Market Capitalisation was the only measure to record increases over the nine-month period (14.92%). These results can be attributed to marked increases in the share prices of Neal and Massy Holdings Limited whose share price appreciated from $14.05 at the close of 2012 to $17.25 by the end of the third quarter of 2013; an increase of $3.20.

The increase, however, was not sufficient to have a positive impact on the Composite Market Capitalisation measure as five locally listed securities experienced decreases in share value of over 10%.

Table 1 - Trading activity for first nine months Index

30-Sep-13

31-Dec-12

% Change

Local

2,979.25

3,082.38

-3.35%

Cross Listed

1,486.78

1,289.35

15.31%

Composite

737.33

730.04

1.00%

Market Capitalisation

30-Sep-13

31-Dec-12

% Change

Local

8,434,729,762

8,957,484,391

-5.84%

Cross Listed

2,481,309,653

2,159,097,185

14.92%

Composite

10,916,039,415

11,124,381,576

-1.87%

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Corporate Governance and Accountability Conference 2013 On November 21 and 22, 2013, The Barbados Stock Exchange (BSE) along with the Canadian Society of Corporate Secretaries (CSCS) and the Institute of Chartered Secretaries and Administrators (ICSA), hosted our first annual conference on Corporate Governance and Accountability at the Hilton Barbados Resort.

The comprehensive two-day conference was designed to serve two primary purposes. In the first instance, it highlighted the BSE Corporate Governance Recommendations for Listed Companies which became effective on January 1, 2014. Secondly, it exposed practitioners from both publically listed companies, private companies and Government officials to current trends and international best practices as it relates to Corporate Governance. It also provided the opportunity to network with peers from both Barbados and abroad to share lessons learnt from common issues that may arise from time to time.

We enlisted the assistance of three highly qualified and proficient practioners – Dr. Richard Leblanc, Professor, York University; Janis Riven, Adjunct Professor, John Molson School of Business, Concordia University and Sylvia Groves, President and Creative Director, Governance Studio. Presenters delivered a number of presentations on key areas critical to ensuring both the successful implementation of the Barbados Stock Exchange Corporate Governance Recommendations as well as the application of the recommendations in accordance with best practice. This implementation and application will be beneficial to all companies across Barbados; not just companies listed on the Barbados Stock Exchange. Topic areas covered included (but were not limited to): • Fundamentals of Corporate Governance • The Role and Duties of the Corporate Secretary • Corporate Governance and Continuous Disclosure Red Flags and Best Practices • Board and Director Performance Evaluation and Succession Planning and; • Managing Meetings, Schedules, Agendas, Materials and Annual Meeting Planning and Preparation Total conference attendance was eighty-three (83) persons, a mere seventeen (17) persons shy of the budgeted one hundred (100) participants. Although only six (6) of our twentytwo (22) listed companies were represented by a total of twenty-one (21) participants, the conference attracted attendees from the Barbados International Business Association (BIBA), the Institute of Chartered Accountants of Barbados (ICAB) and the Barbados Bar Association (BBA). We were also pleased to have in attendance three (3) participants from neighboring Anguilla (2) and Jamaica (1).

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Overall, the attendees gave high praises for the conference noting primarily the conference’s execution and the deliveries of the presenters as being of a very high standard. An analysis of evaluation forms submitted by attendees showed that 96% of respondents agreed that the conference was well organised and executed; 4% did not respond. Speaker performance was very favorable as 100% of respondents felt that the speakers were informative, engaging and well prepared, while 98% believed the speakers’ presentations and delivery were good.

The topics covered were considered relevant as 98% of respondents agreed with only 2% holding a neutral position on topic relevancy. Finally, 96% of respondents stated that they intend to attend the 2014 conference; 4% did not respond to this question.

Look out for more details on our Corporate Governance and Accountability Conference 2014 coming soon.

Special thanks to our sponsor PricewaterhouseCoopers Services Inc. (PWC) for partnering with the BSE for this conference.

CEO/GM of the Barbados Stock Exchange, Marlon Yarde (third from left), along with (from left) Dr. Richard Leblanc, Sylvia Groves, Janis Riven, Lynn Beauregard (CSCS) and Ronaele Dathorne-Bayrd, Engagement Leader, Corporate Services (PWC).

Quotes from attendees about the conference: • “The presenters provided a large quantity of information highly relevant and important to the new BSE recommendations. Excellent presentations and high energy!”

• “The speakers were very familiar with their material and fielded questions easily.

While the information was not new, the in-depth treatment and highlighting of current issues were very useful.”

• “Conference was timely and relevant.”

• “Great informative conference; was excellent in every respect!”

• “The speakers were engaging and knowledgeable in their respective areas. Very good conference speakers.”

• “Overall excellent! Practical information; perfect timing for the conference; extremely well put together. Nice package of material; extremely informative.”

• “This was an excellent conference with great speakers.”

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‘Taking Stock’ of Our Environment As the first stage of our Dream Big | Take Stock campaign wraps up, the Barbados Stock Exchange will be moving into the second stage of the campaign with our ‘Taking Stock of Our Environment’ initiative.

The concepts of ‘dreaming big’ and ‘taking stock’ of our lives certainly include ‘taking stock’ of our environment to minimise the harmful impact to our ecosystem. Across the globe, there is a growing recognition that there is a link between the health of our environment and the health of the economy. Clean air, unpolluted water sources, and pristine natural environments can help contributors to the economy maintain strong physical, mental and emotional health, which in turn can help us to develop a strong economy. In addition, by minimising corporate wastage, we can save money and reinvest funds in activities and projects which bring healthy returns to the economy.

Over the next few months, we will be embarking on a movement to help reduce, reuse and recycle our organisational waste to help us all save money, energy and natural resources.

Our ‘Taking Stock of Our Environment’ project will help provide us with many benefits, including: • preserving the beauty of our island for ourselves and for future generations • helping us fulfill our mandate as responsible corporate citizens.

• facilitating a more responsible working environment • aiding in helping us save money and resources We also hope that by embarking on this project, over time, the BSE and our partners will take a visible leadership position in the markets in which we operate and will help encourage strong corporate stewardship by other Barbadian organisations.

Our ‘Taking Stock of Our Environment’ will be launched in several phases. These phases will be used as baby steps as we work to become fully eco-friendly. Our first step will be recycling bins located at the Barbados Stock Exchange.

We are encouraging all of our employees, brokers, listed companies and all of our other stakeholders to participate in this project. If you have any recommendations or suggestions on how we can make this project a success, please let us know. We’d be happy to hear from you. If you would like to volunteer your time to help making this project a success, please also let us know.

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Update

Look out for our new Dream Big | Take Stock wristbands!

We will soon be distributing our wristbands, which will be used to enco urage persons to ‘take stock’ and invest in co mpanies listed on the Exchange and to list the ir own companies on the Exchange. Our wr istbands will be available to all staff, brokers, listed companies and persons conducting busin ess with us.

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Conference Gallery