BSE Newsletter Issue V

Newsletter Issue V

8th Avenue Belleville, St. Michael BB11114, Barbados T: (246) 436-9871/2 | F: (246) 429-8942 | www.bse.com.bb

CEO’s Message

Marlon Yarde

At the close of 2015 it was safe to say that the Barbados Stock Exchange (BSE) Inc. had a relatively good year. There were marked improvements in the volumes and values traded across the board of the BSE, fueled primarily by takeover activity which saw the ownership of two companies traded on our board change hands. While improvements in trading volumes and values are always welcomed by the BSE, we were also pleased to see improvements in the prices of securities traded.

Of the 24 securities listed and traded, eleven experienced an increase in share price, five experienced declines and eight had no change in price. Improvements in share price are a good measure of shareholder confidence, not only in a company, but in the stock market itself and we are pleased to see this and, of course, welcome this trend in 2016.

While 2016 will see the BSE focusing primarily on developing the ISM, we are ever conscious of the fact that home drums beat first. We continue to pride ourselves on providing business owners with the opportunity to raise capital for growth and listing shares on the Exchange, while individuals can create wealth by investing - both buying and selling shares and bonds - in companies listed on the board of the BSE. Our brand is built on the critical success factors of operating an efficient and transparent Exchange, utilizing modern technologies, employing knowledgeable staff who provide exemplary service to clients and having qualified Registered Brokers. We will endeavor to continuously improve as we strive to facilitate wealth creation for the masses, ensure growth in both the capital markets and the wider economy as a whole.

Marlon Yarde Managing Director - Barbados Stock Exchange

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On the operational front, the BSE received approvals for both the demutualization of the Exchange and the Establishment of the International Securities Market (ISM). The former has resulted in the BSE changing its operating structure from a member owned non-profit organization to a shareholder owned for profit entity. This changes our focus tremendously, as profit maximization is paramount in ensuring that our new owners are satisfied with our performance. The latter has been established to ensure the both sustainability and continued viability of the BSE as well as solidifies the BSE’s commitment to assisting the Government of Barbados in its mandate to make Barbados the premier location within the Caribbean region for the incorporation and operation of International Business Companies. Indeed, the establishment of the ISM cannot only reap rewards for the International Business and Financial Services Sector (IBFS) but the wider economy of Barbados.

Broker of the Year - 2015 Beverley Walters - CIBC FirstCaribbean International Bank The Barbados Stock Exchange Inc. wishes to congratulate Ms. Beverley L. Walters, Manager - Securities Trading, CIBC FirstCaribbean International Bank on winning our Broker of the year 2015 Competition for the second year in a row. Ms. Walters is the first Broker to win back to back titles since the inception of our Broker of the Year Awards program.

Beverley Walters

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After examination of the trading activity - buy and sell - conducted by all Brokers of the BSE, it was clear that Ms. Walters’ performance had surpassed that of anyone in the competition at the close of the year ended December 31, 2015. Ms. Walters’ conducted 471 equity trades as the Buying Broker trading a total volume of 24,833,240 shares with a total value of $132,077,503.78. As a Selling Broker, she conducted 404 equity trades, trading a total volume of 23,601,263 shares with a total value of $118,281,904.16. Her performance in the Fixed Income Market was also exceptional as she conducted a total of 136 trades as a Buying Broker with a face value of $18,959,000 and 127 trades as a Selling Broker with a face value of $1,475,000.

Ms. Walters has served in her role as Manager - Securities Trading for the past 12 years with CIBC FirstCaribbean International Bank and has amassed a wealth of knowledge and expertise in several key areas within the bank including Wealth Management, Capital Markets and Asset Management. Outside of work she serves on the Executive Committee for Barbados Gospelfest assisting with all aspects of the planning and execution of the annual gospel festival. Her interests include Arts and Culture, Civil Rights and Social Action, Poverty Alleviation and Economic Empowerment.

Runner up to last year’s competition was past winner Terry Williams of Signia Financial Group Incorporated who was crowned Broker of the Year - 2013.

Barbados Stock Exchange launches International Securities Market Lower costs, right-sized regulation, Barbados reputation – keys to success Bridgetown, Barbados. March 15, 2016 – Today, the Barbados Stock Exchange (BSE) formally launched an international securities market (ISM). Though within the BSE, the ISM will operate as a separate market with distinct rules that apply to membership, trading, clearing and settlement and listing of securities. As such, the ISM will be able to attract issuers from both Barbados and international markets that may otherwise be listed and traded on other exchanges.

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In his remarks at the official launch, Minister of Industry, International Business, Commerce and Small Business Development, the Honorable Donville Inniss applauded, “the vision and determination of the BSE in the launch of the International Securities Market as it aligns with the futuristic view which my Ministry has articulated as a goal for the development of our international business and financial services sector. It also brings our vision of Barbados becoming the international financial wealth management centre of choice in the western hemisphere, one step closer to reality.”

The launch was attended by several key private and public sector stakeholders.

“The new international securities regime represents a pivotal part of an ongoing process whereby Barbados transforms its international business services into an all-encompassing jurisdiction of choice for serious international financial planning. It is multi-faceted and multi-layered giving great scope to the serious international tax and financial planner,” said Sir Trevor Carmichael, Q.C., Chairman, Chancery Chambers.

The ISM was created to accommodate the needs of a wide range of international businesses. Accordingly, the fees for listing on the ISM are upwards of 30 – 50% lower than that of larger exchanges in North America and Europe – providing affordable access to public markets for small and mid-sized firms that may otherwise be unable to sustain a public listing. In support of the ISM, Barbados created a comprehensive governance and regulatory framework that includes the BSE, the Central Bank and the Financial Services Commission. The strong regulatory environment for the ISM is designed to be much more rigorous than many other offshore financial jurisdictions yet without the overly burdensome requirements of the larger North American and European exchanges.

“Though attractive to international companies of all sizes and from all regions, the Barbados ISM will be particularly attractive to companies that would value the lower listing fees and robust, yet right -sized regulation to be found in Barbados,” said Marlon Yarde, C.E.O. & General Manager, BSE Inc & Barbados Central Securities Depository Inc. “Traditional markets for Barbados in North America and Europe will likely be early adopters of the ISM. However, we anticipate that the ISM will be well received by international businesses globally.”

The Barbados Stock Exchange is one of the leading stock exchanges in the Caribbean region. The Barbados Stock Exchange (BSE), formerly the Securities Exchange of Barbados, was re-incorporated on August 2nd, 2001 with the passage of the Securities Act 2001-13. As a result of the Act, the Barbados Securities Commission, now the Financial Services Commission, was established which has overall regulatory responsibility for the entire Barbadian Capital markets including all Self Regulatory Organizations (SRO), of which the BSE and its subsidiary the Barbados Central Securities Depository comprise, as well as all public companies whether listed or not. The Barbados Stock Exchange Inc. is a member of the World Federation of Exchanges with Correspondent Status.

About Barbados’ international business sector Barbados’ international business sector contributes approximately 10% of the nation’s GDP and is comprised of approximately 4,000 entities.

Significant vertical markets within the international business sector include; financial services, niche manufacturing and information and communications technologies.

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About the Barbados Stock Exchange (BSE)

The Honorable Donnville Innis M.P. - Minister of Industry, International Business, Commerce and Small Business Development and CEO and General Manager of the Barbados Stock Exchange, at the launch of the International Securities Market at the Hilton Barbados.

“The International Securities Market – From Missing Pillar to Established Post in Barbados’ International Financial Services Landscape” On December 22nd, 2015 the Rules of the International Securities Market (ISM) were approved by the Financial Services Commission (FSC). The road has been long and arduous but the Barbados Stock Exchange Inc. (BSE) is extremely appreciative for all the efforts made by our consultants, market participants and our regulator - the FSC - who have assisted in ensuring that the final product is destined for success.

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In the context of the BSE, an International Securities Market is defined as: a market for the listing and trading of securities of issuers which may or may not be incorporated in Barbados that would otherwise be listed and traded on other exchanges around the world. The ISM will fall under the regulatory umbrella of the Exchange, which in turn is regulated by the Financial Services Commission. The ISM will have its own separate operating structure and rules governing the listing and trading of international offshore securities.

Participants in the ISM, who are likely to be International Offshore Banks and International Business Companies, would be regulated by the Barbados Stock Exchange - a self regulatory organization - for their actions and obligations under the Rules of the ISM and continue to be subject to prudential regulation by the Central Bank of Barbados (CBB).

They would also continue to be regulated by the Financial Services Commission for take-overs, insider trading and market manipulation.

This would enable the BSE to ensure a strong regulatory focus for the ISM absent in many less well-regulated offshore international centers.

There are three categories of participants in the ISM: ■ ■ Trading Participants - Brokers, Dealers and/or Market Makers, ■ ■ Listed Issuers - the issuers of securities; and ■ ■ Listing Sponsors - Nominated advisers whose role is to both shepherd prospective issuers through the listing process as well as ensure that they continually meet their obligations as Listed Issuers on the board of the ISM. The membership rules will allow an applicant to be for one or all three if necessary. Therefore a fund administrator may bring their issue to listing and act as the Listing Sponsor for the issue. The range of products that will be considered for listing on the ISM includes:

■ ■ Equity Securities, ■ ■ Debt Securities - including Corporate Debt Paper, Term Notes, Eurobonds and Convertible Bonds; and ■ ■ Investment Funds - including Property Funds, Umbrella Funds, Feeder Funds and Fund of Funds.

All trading will be denominated in a currency other than Barbados dollars and, in some cases, other foreign currencies may be utilized once settlement is possible through foreign currency accounts at the Central Bank of Barbados.

The establishment of the ISM will be beneficial not only to the international business community but to the economy as a whole. It is a vital step towards making Barbados the premier capital market hub for the region and supports Government’s recognition of the important role the IBFS plays in the development of this great nation. The benefits to be derived by Barbados from the ISM are as follows: ■ ■ Strengthens and expands possibilities for the existing international business community.

■ ■ Raises the profile of Barbados internationally as an international financial centre and further solidifies Barbados as an international business destination.

■ ■ Raises the possibility of attracting new types of international business to Barbados.

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■ ■ Encourages positive use of the numerous double tax treaties.

■ ■ Enables new types of business to be undertaken such as Listing Sponsors.

■ ■ Catalyst for changing dated legislation and possibly assist in removing obstacles to company registration.

■ ■ Creation of new jobs and opportunities for persons with specialized skills.

■ ■ Creates a ‘One Stop Shop’ for the international business community.

■ ■ Additional tool to the Invest Barbados toolkit for selling the Barbados Brand.

■ ■ Assists in future double tax agreement negotiations and trade agreements.

■ ■ Enhances the current international financial services infrastructure with new and updated legislative framework.

The benefits to be directly derived by the BSE include: ■ ■ It expands the range of instruments listed on the BSE. ■ ■ It brings to membership a new group of participants from the international business community both from within Barbados (the international offshore banks) and externally (remote members).

■ ■ It creates new business opportunities for existing participants.

■ ■ It raises the profile of the BSE as an international exchange both in Barbados and throughout the world.

■ ■ It strengthens the position of the BSE as the leading exchange in the Caribbean and moves the BSE from being a purely domestic

The ISM enhances the current international financial services infrastructure with new and updated legislative framework.

exchange to an international one.

■ ■ By launching ISM now, it makes it more likely to attract participants from Trinidad and Jamaica.

Support from the international business community is a critical element in the success of the ISM, as they will be the primary users of the market. If the international business community is not convinced of the benefits that the Barbados ISM has to offer, the uptake on the ISM will take much longer; the result of which is the ISM having lower product listings than expected.

ISMs are by no means a new concept as there currently are quite a number of successfully operated ISMs across the globe; most notable of which are those operated in Bermuda and the Cayman Islands.

Both Exchanges cite their innovative and flexible approach as the key ingredient to their significant and sustained growth over the last few years. Other major contributing factors cited were “light but effective” regulatory environment which encourage new and innovative product listings as well as the evolution of their regulatory and legal systems by their respective Governments which facilitates the international business sector by providing the necessary infrastructure conducive to the growth and expansion of the sector.

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Barbados faces competition as an international financial centre and a robust and coherent legislative framework is essential for economic development. Foreign entities looking to invest or do business in Barbados want certainty in the rules that govern them and will move elsewhere if it takes too long to get an approval or if rules are not clear.

Although no legislative or regulatory changes are necessary to establish the ISM, there are a number of changes that should be made to assist in ensuring its success. These changes will also make the Barbados International Financial Centre more competitive with other offshore centers. Particularly with respect to mutual funds, there is need for updated, comprehensive legislation related to these types of securities.

Amending current legislation to reflect current best practices will bring new players to the market.

In some instances, the legal regime falls short in some critical areas and needs to be updated to ensure that Barbados remains competitive. The following are some examples of these deficiencies: ■ ■ Statutes have been enacted without accompanying regulations, requiring market participants to turn to the courts for certainty.

■ ■ Key concepts in legislation are not defined, leading to uncertainty and conflicting opinions among practitioners. An example of this is the requirement to file a prospectus for an “offer to the public.”

■ ■ The Companies Act and the Securities Act are both modeled on long outdated Canadian legislation and need to be modernized.

Efforts have commenced by the FSC to modernize the Securities Act and the Mutual Act. ■ ■ The prospectus and take-over rules are too expansive, and cover many transactions that do not need that level of regulation or disclosure. More specific exemptions should be provided, although some existing exemptions are vague enough that they are open to abuse.

■ ■ There is unnecessary overlap in legislation governing companies, securities, mutual funds and bankruptcy. Prospectuses must be filed and cleared by both the Financial Services Commission and the Corporate Affairs and Intellectual Property Office, not to mention the BSE. ■ ■ The Mutual Funds Act is inadequate and an impediment to the development of an international funds market.

Ideally, there should be an overall review of the relevant legislation to ensure that the final product is coherent and comprehensive and overlaps are eliminated. We tend to look towards Canadian legislation as a model for most domestic laws; however, we believe that the laws of Guernsey, the Cayman Islands and Bermuda should also be considered, as these are the legal regimes that will be most familiar to many participants in the ISM. The local law should only impose more onerous requirements than competing markets if such requirements are necessary for investor protection or the efficient functioning of the market. One important feature in Canada’s legislative landscape is that of the Law Reform Commission which has the primary responsibility of reviewing legislation on an on-going basis and drafting recommendations for amendments. The implementation or establishment of such a unit would help to ensure that legislation, once enacted, stays up-to-date, something that has not been done in the case of several acts reviewed. The critical and important pieces of legislation identified as requiring modernizing and/or amending include: ■ ■ Securities Act, ■ ■ Companies Act, ■ ■ Partnership Act and ■ ■ Stamp Duty and Property Transfer Tax Act It must be noted, however, that plans are afoot to make amendments to some of the legislation previously stated and, where possible and permitted, the Rules of the ISM have been drafted to fill in any voids which may exist in current legislation; another proactive step taken to ensure this new market’s success.

There are also a number of threats that have been indentified and are constantly being monitored by the Exchange that may impact the operations of the ISM. These include but are not limited to: ■ ■ Pending legislative changes (globally) to address international tax evasion and aggressive tax avoidance.

■ ■ Canadian based parent corporations migrating subsidiary corporations from Barbados and/or establishing new business operations in jurisdictions other than Barbados.

■ ■ Over Regulation.

■ ■ Emerging global markets such as those in Dubai, Ireland and Singapore.

■ ■ Emerging regional competitors for international financial centre – Jamaica & Trinidad.

The local law should only impose more onerous requirements than competing markets if such requirements are necessary for investor protection or the efficient functioning of the market.

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■ ■ Mutual Funds Act,

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■ ■ Offshore/Tax haven perceptions due primarily to the negative reports received from the Organization for Economic Co-operation and Development (OECD).

■ ■ The recent ‘Panama Papers’ scandal in which 11.5 million confidential documents containing detailed information about more than 214,000 offshore companies (34 of which are listed in Barbados) listed by the Panamanian corporate service provider Mossack Fonseca, the world’s fourth largest offshore law firm.

The leaking of this information has now brought the international financial centers like Barbados’ International Business and Financial Services sector under greater global scrutiny.

Consideration must also be given to what the IBFS would be without a vibrant ISM. All premier locations where international business is conducted successfully are complimented by a well-established and functioning international capital market affording offshore companies the opportunity to contribute more, not just to the sector but also to the economy as a whole. The establishment of a vibrant ISM will add great value to the existing IBFS and lend itself to greater expansion of and deepening of the capital market in Barbados.

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It must be noted that the BSE is but one voice and the success of the ISM is hinged on so much more. We have had many discussions on this initiative in the past to garner much needed support for the ISM. Our intent then, was for our single voice to become a resounding collective call to action from all stakeholders in an effort to generate the desired recognition of the pivotal role the ISM can play in assisting in the development and sustained growth of the IBFS and the Barbados economy as a whole. The Rules of the ISM have been approved by the FSC and it is about to move from being a ‘concept’, discussed in many forums and in the minds of many persons who have a vision of a better Barbados, to becoming a reality and an enabling tool to making that vision of a better Barbados a certainty. We must not rest on our laurels and allow this opportunity to be wasted, only to later reflect on the brilliant idea we once had and postulate on the ‘what if’, the ‘had we done this’, and the ‘what could have been’.

Hilary Hinton, also noted author Zig ZIglar said, “You don’t have to be great to start, but you have to start to be great.” The journey of the ISM starts now and we implore members of the International Business and Financial Services sector and other stakeholders to assist us in making the International Securities Market of the Barbados Stock Exchange Inc. great!

Dream Big

Take Stock

Looking for reliable ways to build wealth?

Consider investing in the companies listed on the Barbados Stock Exchange.

Our listed companies are reputable, stable and have great investment potential. Give us a call or speak to one of our Registered Brokers and let us help you work towards building a financially sound future.

8th Avenue Belleville, St. Michael BB11114, Barbados T: (246) 436-9871/2 | F: (246) 429-8942 | www.bse.com.bb

2015 Year End Report The year ending December 31, 2015 proved to be an encouraging year for the Barbados Stock Exchange Inc (BSE). Overall trading volume and value increased by 482% and 1,093% respectively. All markets recorded increases, however, there was no activity on the Junior Market. There was a substantial improvement in the total number of trades occurring as a result of transactions which took place in a takeover environment. The Bond Market also experienced improvements in the number of trades occurring as well as an increase in the total face value traded during 2015. The extraordinary transactions occurring during 2015 were as follows: ■ ■ There was one (1) Block Trade which saw 13.1 million shares in Banks Holdings Limited trading at $4.00 per share 1; ■ ■ There were three (3) Regular Market trades conducted pursuant to a takeover related to Emera (Barbados) Holdings No.2 Incorporated’s offer to repurchase all issued and outstanding shares of Emera (Caribbean) Incorporated and 2;

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■ ■ There were three hundred and eight (308) Regular Market trades conducted as a result of competing Takeover offers between SLU Beverages Limited and AM Caribbean Development Ventures Limited to purchase all issued and outstanding shares of Banks Holdings Limited 3.

Table 1 below illustrates all activity occurring on the board of the BSE for the year ended December 31, 2015.

Table 1: Trading Activity Comparison by Market December Market Regular Put - Through Junior Block Trade Total

2015 Volume

% Change

2014 Volume

2015 Value ($)

2014 Value ($)

24,803,107

5,734,749

189,776,184

18,124,650

333

947

4,872,460

1,629,561

19,905,540

3,859,712

199

416

-

-

-

-

NA

NA

13,170,728

-

52,682,912

-

NA

NA

42,846,295

7,364,310

262,364,636

21,984,362

482

1093

Volume

Value

Two securities were delisted from the board of the BSE during 2015. Royal Fidelity TIGRS A was delisted on March 18th, 2015 while Royal Fidelity TIGRS A1 Fund exited the board of the BSE on August 26, 2015.

It should be noted that both funds had completed the term of operations of five (5) years as indicated in their original prospectus documents.

All market measures showed improved results in 2015 when compared to the closing figures for 2014.

At year-end, the Local, Cross-listed and Composite Indices all recorded increases. The Local Index was the only measure to record a year on year increase in excess of 10%. The BSE Market Capitalization 1 See Block Trade Market Section.

2 See Takeover Activity - 2015 Section.

3 See Takeover Activity - 2015 Section.

measures performed similarly with the Local Market Cap recording the largest increase of 9.89%. Local Market Cap improvements can be attributed to the same share price appreciations that positively impacted the Local Index measure. The Cross-Listed Market Cap recorded a marginal increase as a result of an increase in the share price of One Caribbean Media Limited; the only Cross-Listed security to experience share price appreciation in 2015.

Table 2 below illustrates the Trading Statistics Comparison 2015 - 2014. Quarters III and IV for 2015 were the most active in terms of both volume and value traded due to heavy activity on the Regular and Put Through Markets as well as the one transaction occurring on the Block Trade Market in Quarter III. Table 2: Trading Statistics Comparison 2015 - 2014 Â Quarter

Number of Shares 2015

Market Value ($)

2014

2015

2014

Number of Transactions 2015

2014

I

1,445,566

2,096,844

7,694,692

6,485,537

437

370

II

2,677,450

1,705,040

5,554,149

5,242,080

362

281

III

19,397,800

2,319,643

72,584,102

3,696,961

367

395

IV

19,325,479

1,242,783

176,531,693

6,559,784

1045

234

42,846,295

7,364,310

262,364,636

21,984,362

2,211

1,280

Total

There was a 72.73% increase in the number of trades occurring in 2015 when compared to 2014. There were 2,211 trades in 2015 as compared to 1,280 trades for 2014. Figure 1: Total Trade Frequency Comparison, illustrates graphically how the trade frequency has varied between 2015 and 2014.

As illustrated in Table 3 below, there were large increases in both the volume and value traded for the fourth quarter of 2015 when compared to the corresponding period in 2014. The Regular Market recorded an increase of 1,305% in terms of volume traded while the value traded increased by 2,689% over its position in the corresponding period in 2014. It must be noted that the majority of the extraordinary transactions which took place on the Regular Market occurred during the fourth quarter of 2015. The Put Through market recorded a substantial increase in activity, 4,023% in terms of volume and 1,170%

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Figure 1: Total Trade Frequency Comparison

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in terms of value, while there was no activity on the Junior or Block Trade Markets for the 4th Quarter of 2015.

For the 4th quarter, the Local and Composite Index measures recorded increases of 8.03% and 5.17% respectively; the Cross-Listed Index recorded a minor decrease 0.05%. Similarly, the Local and Composite Market Cap measures recorded increases of 7.66% and 5.02% respectively while the Cross-Listed Market Capitalization experienced a decline of 0.05%.

Table 3: Fourth Quarter Trading Activity Comparison Fourth Quarter  Market

2015 Volume 2014 Volume

Regular

% Change

2015 Value ($)

2014 Value ($)

Volume

Value

16,505,609

1,174,383

171,153,713

6,136,264

1,305

2,689

2,819,870

68,400

5,377,980

423,520

4,023

1,170

Junior

-

-

-

-

NA

NA

Block Trade

-

-

-

-

NA

NA

1,242,783 176,531,693

6,559,784

1,455

2,591

Put - Through

Total

19,325,479

Index and Market Capitalization Movement

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For the year ended December 31, 2015, all market measures showed improvement over their closing positions at the close of 2014. The Local, Cross-Listed and Composite Market Indices recorded increases of 10.49%, 1.85% and 7.42% respectively. Market Capitalization measures performed similarly as the Local, Cross-Listed and Composite Market Cap figures recorded increases of 9.89%, 0.15% and 6.52% respectively. The improved Local Market measure performance was due primarily to increases in the traded price of eleven securities, six of which experienced double digit advances in price over their December 31, 2014 closing share prices. Table 4 illustrates the year on year changes in both index and market capitalization.

Table 4: Index and Market Capitalization - Year on Year Index

30-Dec-15

31-Dec-14

% Change

Local

2,361.47

2,137.26

10.49

Cross-Listed

1,738.11

1,706.54

1.85

656.56

611.23

7.42

Composite Market Capitalization

31-Dec-15

31-Dec-14

% Change

Local

5,898,175,671

5,367,178,305

9.89

Cross-Listed

2,853,955,050

2,849,599,943

0.15

8,752,130,721

8,216,778,248

6.52

Composite

For the fourth quarter of 2015, the Local and Composite market measures recorded improvements, however, the Cross-Listed market measures recorded minor decreases. The Cross-Listed Index and Cross-Listed Market Cap measures recorded declines of 0.05% each over their September 30, 2015 figures. Fourth quarter Cross-Listed results can be attributed directly to a two (2) cent decline in the share price of One Caribbean Media Limited from $7.02 on September 30, 2015 to $7.00 at December 31, 2015. Table 5, below, illustrates the fourth quarter index and market capitalization performance.

Table 5: Index and Market Capitalization - 4th Quarter Index

30-Dec-15

30-Sep-15

% Change

Local

2,361.47

2,185.88

8.03

Cross-Listed

1,738.11

1,738.92

-0.05

656.56

624.28

5.17

Composite Market Capitalization

31-Dec-15

30-Sep-15

% Change

Local

5,898,175,671

5,478,349,241

7.66

Cross-Listed

2,853,955,050

2,855,279,363

-0.05

8,752,130,721

8,333,628,604

5.02

Composite

Figure 2 below, illustrates index movement over the one year period 2014 – 2015. It clearly displays the sharp increase in both Local and Composite Index performance during the last quarter of 2015.

This movement can be attributed to share price movements in Banks Holdings Limited and Emera (Caribbean) Incorporated. The former’s share price rose from $3.10 at the close of September 2015 to $7.10 by the end of the year; an increase of 129.03% while the latter’s share price rose 29.57% from $25.70 in November 2015 to $33.30 at the close of December 2015.

Figure 2: Index Movement for 2014 – 2015

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Please click here for the full BSE 2015 Year End Report.

Emera Deposit Receipts What You Need to Know...

What is a depository receipt?

■ ■ A depositary receipt (DR) is a type of financial security that is traded on a local stock exchange but represents a security, usually in the form of equity, that is issued by a foreign publicly listed company. Depositary receipts allow investors to invest in shares of foreign companies in their local currency.

■ ■ DRs generally represent fractional ownership of the underlying stock, with each DR representing one half, one third, one quarter or even one tenth of an underlying shares. The price of the DR usually trades close to the value of the underlying shares on a currency conversion.

What are the benefits of holding depository receipts?

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■ ■ Local investors get access to foreign companies’ shares in local currency ■ ■ Permitting dividends and other distribution in local currency thus eliminating conversion risk ■ ■ Facilitate diversification into external markets ■ ■ Familiar trade, clearance and settlement procedures ■ ■ Easy to purchase, hold or sell on the local stock exchange ■ ■ Provides institutional investors with the opportunity to invest in international companies that otherwise may have been restricted ■ ■ Opportunity to benefit from economic growth in other countries

How are depository receipts traded?

Depository Receipts are traded in the same manner as normal equity securities. Investors who are interested in buying or selling depository receipts must contact a Registered Broker to have the requisite buy or sell order entered on their behalf.

How is the closing price of the security determined?

The Emera Deposit Receipt is a Sponsored Depository Receipt and thus its closing price on the Barbados Stock Exchange Inc. (BSE) is based on the closing price of its base security, Emera Incorporated (EMA), which is listed on the Toronto Stock Exchange (TSX). At the end of each trading day, the BSE liaises with the TSE to obtain the closing price of the base security - EMA - and makes the necessary conversions to calculate the closing price of the Emera Deposit Receipt (EMABDR).

This closing price then becomes the opening price for this security on the next trading day.

What does surrendering a depository receipt mean?

■ ■ Surrendering your Emera Deposit Receipt means relinquishing ownership of your depository receipts in exchange for the following: ■ ■ A whole number of Emera Incorporated Shares represented by the depository receipts; and ■ ■ Cash, in Barbados dollars, representing any remaining fractional Emera Incorporated share.

How do I go about surrendering my depository receipts?

To surrender your Emera Deposit Receipts, kindly complete the Emera Deposit Receipt Surrender Notice Form and submit it to the Barbados Central Securities Depository Inc. (BCSDI).

What happens after I surrender my depository receipts?

After the depository receipts are surrendered, the new holder of Emera Incorporated shares will either be issued with a physical certificate, a record of which is kept by the BCSDI or, in book entry form in a Canadian brokerage account.

For more details, interested persons can visit the Investors Section of Emera (Caribbean) Incorporated’s website or try these useful links: ■ ■ Presentation to shareholders of Emera (Caribbean) Incorporated ■ ■ Emera - Deposit Agreement

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■ ■ FAQs

8th Avenue Belleville, St. Michael BB11114, Barbados T: (246) 436-9871/2 | F: (246) 429-8942 | www.bse.com.bb