Jamaican capital markets remain strong, JN executive says

Jamaica’s capital markets remain one of the deepest and most active in the English-speaking Caribbean.

Deputy Managing Director, JN Fund Managers, Dylan Coke made the claim while addressing the Jamaica Stock Exchange (JSE) virtual forum titled “Invest in Jamaica”, which was recently hosted in conjunction with the Consulate General from Jamaica.

“I’ve been in this business for 15 years now, and it’s amazing how the local markets have developed. Until 2018/2019 you would have seen increasingly large debt transactions, initial public offerings (IPOs), rights issues, preferred stock issues and listed bonds, just a variety really impressive transactions,” he said, noting that it would have slowed during the pandemic as issuers and investors have been more cautious, opting to wait and see.

He noted, however, that activity had picked up in the latter part of 2021 and early 2022.

“There are more registrations on the JSE. Recently, you would have seen Massy interlist on the local main market and there would have been three junior market quotes in quick succession, and trading activity on the junior market has been robust. So I’m happy to say that in this space, the activities remain quite strong,” he said.

The investment banker observed that on the debt side of the market, there is still significant activity going on. There have been several private placements of debt in the local market by issuers in a variety of industries ranging from financial services to energy and real estate.

“I expect there will be additional activities in the future. The concern I would have though is how geopolitical issues like the war in Ukraine are impacting supply chains and causing increases in fuel prices, which will ultimately impact local markets,” said he shared.

Coke said that so far these issues have affected inflation, which has now topped 10%. Point-to-point inflation in February 2022 was 10.7% and in response, the local central bank raised policy rates to 4.5%.

“What we see now [is that] debt offerings are impacted in terms of structure. You see deals with shorter durations, and you see them structured with fixed to variable rates and some of the sizes would be smaller than they would be in normal times,” he revealed.