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Advertisers Dupuch & Turnquest & Co.
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Slated for an April opening, Bahamas Stock Exchange to be a leader in its class
The timing of BISX is well positioned. Many offshore jurisdictions are being pressured by Organization for Economic Cooperation and Development (OECD) countries to change withholding procedures and to re-examine their offshore structures. While others could be in jeopardy when it comes to banking secrecy and tax-free status. The Bahamas, because it is an independent nation, has the advantage because it is immune to legal changes Britain or any other country makes; therefore, it will not have to succumb to such demands of these pressures as will other offshore dependent territories such as Bermuda, Guernsey or the Cayman Islands.
BISX will complete The Bahamas Financial Service offerings. For the international investor, BISX will have several advantages such as: listing mutual funds, hosting bond markets and the ability for international holding and operating companies to list their companies and to raise global capital, among other features.
According to Brian Taylor, CEO of BISX, the total capital issued for BISX will be approximately US$5 million distributed among 40 shareholders.
"It will be a stock exchange that can will trade 22 hours a day anytime, anywhere and will be able to include any security in the world. It will be like a comprehensive supermarket, you will have one stop shopping for all your financial needs, from equities, bonds, derivatives, mutual funds, etc".
BISX will also change the face of business within The Bahamas. Traditionally, Bahamians have invested in real estate, bank deposits or annuities. While Bahamians can invest abroad, it is very difficult for them to do so.
Owen Bethel, President and Managing Director of Montague Securities International Ltd., a Bahamian investment and financial services firm, explains that investments outside the country require a deposit equal to 25% of the total investment to be placed with the Central Bank. This structure makes investment earnings marginal and in effect made investing prohibitive.
Timothy Baswell Donaldson, Chairman of the Securities Board, among one of his many posts, notes that some argue that in a democratic country, individuals should be free to invest where they wish. He explains, however, that because the Bahamas currency trades on 1:1 with the US Dollar, great influxes of capital would make the Bahamian Dollar unstable.
Donaldson explains that the ability for Bahamians to purchase stock in local companies will mean an increase in the available capital for local companies. While six to seven million dollars in capital may be insignificant for global companies, the raising of this kind of capital for local companies will be indispensable. In most cases, these kinds of funds would not have been available from national or international banks or alternative funding sources.
There has already been overwhelming interest in buying a piece of the local pie. The 16 companies presently being traded have had good returns. Cable Bahamas began trading on June 30th, 1995 at one dollar per share and is currently trading at seven dollars.
According to Donaldson, new Initial Public Offerings (IPOs) are being planned one per month for the next several months. This will allow for continued measured investment.
Taylor notes that there are two big challenges for BISX. "One is making sure that the legislation is in place domestically. The other will be growing the brand name of BISX and to change consumer preference to trade on BISX".
"If investors want a simple and efficient market that they can buy any stock at any time from any market and they want the protection of banking secrecy, the regulations and zero tax, and in the future the e-commerce infrastructure, then they must seriously consider BISX as an alternative to any other conventional vehicle they are looking at," says Taylor.
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Table of Contents The Bahamas: An established tourism and tax-free financial services center experiences a renaissance |
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While already a reputable, active offshore financial center, The Bahamas hopes to edge ahead of its competitors with April 2000 launch of The Bahamas Securities Exchange (BISX). BISX will be one of the most technologically advanced, modern stock exchanges in the world and will include domestic and international stock exchanges as well as a domestic capital market. The advent of the exchange is expected to create significant job growth in the financial services industry.