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Jamaica Stock Exchange delays listing of US proxy stocks

Published:Friday | April 29, 2016 | 4:00 AMSteven Jackson
JSE General Manager, Marlene Street Forrest

The Jamaica Stock Exchange (JSE) wants more time to sort out technical and legal issues prior to potentially raising billions of dollars with proxy listings of foreign stocks as Jamaica Depository Receipts (JDR).

The JSE expects to list shares of blue-chip US companies before the end of June or about three months beyond the original timeline.

"If all these securities are listed, the value would be approximately US$16.5 million," said General Manager Marlene Street Forrest.

There are 33 securities to be listed on the market this year.

"We have agreed to delay the listing of the JDRs to enable the JSE to fine-tune the legal and operational infrastructure, which we expect will be sorted out within a few months. You will appreciate that it is necessary for us to ensure that the framework is properly established ahead of listing the securities, and some issues have taken a little longer than expected to be ironed out," said the JSE boss.

Two brokers, BCW Capital and NCB Capital Markets, were given regulatory approval last year to float JDRs of US stocks. The approval allows them to buy these stocks on behalf of investors; create receipts, or JDRs, which show ownership of these shares in the United States; and trade the JDRs on the JSE.

The JSE is not revealing the names of the first batch of stocks at this stage, saying the Financial Services Commission (FSC) might consider it as "priming the market". Street Forrest added that, to date, the brokers have only been preapproved by the JSE and must still go through the process of approval by the FSC, which has to sign off on the prospectuses.

BCW previously told the Financial Gleaner that the stocks under consideration for JDR offers include "blue-chip equities" like Facebook, Apple and Microsoft; retail stocks such as Amazon, Wal-Mart, Target and Best Buy; major brands such as Coca-Cola; and financial giants such as Goldman Sachs and Bank of America.

 

UPDATE: This article has been updated to correct the figure US$16.5 billion to US$16.5 million.

steven.jackson@gleanerjm.com