Seaga creates history at JSE
The opening of the stock exchange was very significant for Jamaica's economic development. Minister of Finance and Planning, the Hon Edward Seaga, spoke of the endless possibilities the JSE would bring to the country.
Published Saturday, February 1, 1969
STOCK EXCHANGE OPENED
Seaga: Chance for public to make investments
TWO OBJECTIVES for the Jamaica Stock Exchange (JSE) – the opening up of the capital market for the assistance of companies in Jamaica and the opening of the doors of those companies to Jamaican investors – were named by Minister of Finance and Planning, the Hon Edward Seaga, yesterday afternoon.
The exchange will start trading on Monday morning. Seaga said it was the hope of the Government that the Exchange would provide the opportunity for private companies to go public, so as to allow members of the community to have a share in the ownership of the means of production of the country.
Seaga said it was four months ago that there was a ceremony to mark the inauguration of the Jamaica Stock Exchange, which took place on September 16 last year.
Now, they were marking the formal opening of the Jamaica Stock Exchange and the start of trading activities, which would take place on Monday next.
During the interval from September to now, he said, the Jamaica Stock Exchange formulated the rules under which it would operate, and a great deal of cooperation had taken place among the parties who had a vital interest in the matter.
These included the Bank of Jamaica, the Ministry of Finance, and the brokers, who, with the “invaluable assistance” of Mansell Ketchin of the Toronto Stock Exchange, who was loaned to Jamaica for the purpose, had succeeded in putting together all the rules and regulations that would govern the activities of the exchange in the coming years.
Giving the background to the establishment of the Exchange, Seaga said it had not suddenly arisen. The market had been rapidly growing. In 1963, the value of new issues in 1967, four years later, was £15 million, an increase of over seven times.
With regard to the secondary market, the number of new issues in 1963 was 700. The number of new issues in the secondary market in 1967 was 1,800, two and a half times as many. The market had risen in four years from £600,000 to £2.5 million.
“A stock exchange cannot exist without a market. This market has been in the process of building up over the past two years, and now, at last, it has arrived,” he declared.
Seaga went on to point out that in 1963, the number of companies that were in a position to offer shares to the public was 18. In 1967, the number had risen to 31 companies. He said he was pleased that nearly all these companies would be listed on the Jamaica Stock Exchange.
“This growth of transactions in stocks is something that is of great value, great promise, and great assistance for the development of the country,” he declared.
Seaga said a stock exchange was nothing more than an auction room in which certain operations took place under certain rules and regulations. But there was a second purpose behind the operation of an exchange, and that was to provide an opportunity for those members of the public who sought to make an investment and to those companies that sought the capital.
With a stock exchange, private companies that required capital could go on the market to obtain that capital. At the same time, there was an opportunity for members of the public, through subscriptions to the capital market, to own a piece of the means of production in the economy of their country.
Seaga endorsed remarks that had been made earlier by the governor of the Bank of Jamaica, the Hon G. Arthur Brown, who is also chairman of the council of the Jamaica Stock Exchange, concerning the “democratisation” of businesses in Jamaica.
“As we get closer to being categorised among the developed countries of the world,” Seaga said, “we have to seek means of spreading the ownership of businesses among as many members of the public as is possible.”
One of the means of achieving this, he said, was by way of the unit trust, which permitted the average investor to invest his money without necessarily possessing the investment intelligence to know what was a right investment to make, and which he could do through a properly organised institution such as a unit trust.
Progress was being made with the establishment of a unit trust in Jamaica, he said. Someone had been found with the necessary ability and experience to operate it, and it was hoped that arrangements would soon be finalised for that person to come to Jamaica and start the trust.
Here,Seaga stated the two main objectives of the stock exchange, then went on to speak of the need for providing an opportunity for Jamaicans overseas to invest in Jamaica – something that the stock exchange could not easily do, but which was a role that could be admirably filled by Jamaican banks opening overseas branches.
Seaga closed by thanking Ketchin for coming to Jamaica and giving the Jamaica Stock Exchange the benefit of his “wisdom and experience”. He also thanked William Summerville, executive vice-president of the Toronto Stock Exchange, for taking part in the opening ceremony of the local exchange.
On behalf of the Government, he thanked all parties concerned for the cooperation that had been given. He thanked the brokers, who had given their time and interest and “every kind of support and cooperation”. He praised the part played the by the Bank of Jamaica, and singled out Messrs V. Mendez, fromthe bank, and H. W Milner of his ministry for their work in getting the exchange started.
“I close by formally declaring opening the stock exchange and to wish much prosperity, much good luck, and the highest possible standard of activity and integrity,” he said.
Before Seaga spoke, there had been speeches by Messrs Brown, Mr Sumerville, and Ketchin.
Brown, who welcomed Seaga and introduced Sumerville, took the opportunity to thank the Toronto Stock Exchange for having provided Jamaica with Ketchin’s services.
Commenting on the purpose of the gathering (which he humorously remarked represented 90 per cent of the capital investment in Jamaica!), Brown said the establishment of a stock exchange in Jamaica had long been talked about, but that a stock exchange was not something that could be created by the fiat of regulation.
A stock exchange, he said, is a market in which certain commodities were sold. If there were no commodities, there could be no market; and Jamaica, up to a year or two ago, had no commodities in which to trade, hence there was no stock exchange.
“Now we have reached the stage where there are several stocks that will allow us to start a stock exchange under certain rules and regulations, which have been approved by the Government,” Brown said.
After giving information of the exchange, the setting of its rules, and the operation of the council, Brown went on to make an appeal for more Jamaican companies to come on the market, so that the public would have more stocks to buy and the exchange would have more transactions to do.
Brown called for more “democratisation” of business in Jamaica, under which private businesses would make ownership in their companies open to more members of the public.
If Jamaica wished to maintain a capitalist society, he said, then the capitalistic system must extend its benefits more widely in the community, at the same time reducing the gap between the "haves and the have-nots".
With the coming of the exchange, too, he called for a higher standard of business morality and ethics among businessmen, so that the public could feel confident about the activities of the exchange; could know that the businessman’s word was his bond; and that in stock-exchange dealings, everything would be above board.
Sumerville, asked to speak, said the Toronto Stock Exchange was glad to support Jamaica in setting up its stock exchange. He presented gifts to Brown in his capacity as chairman of the exchange and to the exchange itself.
Ketchin, who was also called on to say a few words, said he was happy to have had a hand in setting up the Jamaica Stock Exchange and hoped that in years to come, his children and grandchildren, when they come to Jamaica, would be able to point with pride to the exchange and boast that he had a part to play in its establishment.
The final speaker was Willard Samms, a member of the Jamaica Stock Exchange Council and its public relations officer, who said thanks to all who had taken part in the formation of the exchange and in the opening ceremony. He pledged, on behalf of his fellow members of the exchange, “the highest standards of international operation”.
At the end of the speeches, the gathering left the Bank of Jamaica building, where the ceremony took place, and went across to 31½ Oliver Place, where the stock exchange is located.
Here, Seaga took part in the actual opening of the Exchange – two actual transactions in which lots of shares were purchased by two brokers. Seaga himself wrote up the transactions on the big board, on which the Exchange dealings will be recorded each day.
This episode marked the official opening of the 'floor' of the Exchange.
Hosts at the function were the chairman, directors, and officers of the exchange. The guests included directors of the Bank of Jamaica, associate members of the exchange, bank managers, representatives of life insurance companies, stock-broking firms, and representatives listed companies on the exchange.
Other specially invited persons were the Hon Victor Grant, Hon Sir Neville Ashenheim, Hon Ivan Vaz,Abe Issa,Carlton Alexander and Winston Mahfood.
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