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THE STOCK MARKET &
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THE STOCK MARKET&
HOW DID THE CONCEPT OF A STOCK MARKET DEVELOP?The institutional beginning of stock exchanges appeared
during the 12th century in Paris spreading to the great trad-ing centres of the world – Amsterdam, Great Britain,
Denmark, Germany and France during the 16th and 17th
centuries. The growth of trade created a need for banks andinsurance companies. A combination of expanding activityand intermittent capital shortages stimulated the earlyissuers of securities: governments, banks, insurance compa-nies and some joint stock enterprises, particularly the greattrading companies.
From the existing exchanges of commercial bills and notesit was an easy transition to the establishment of stockexchanges for securities. By the early 1600’s shares of theDutch East India Company were being traded inAmsterdam and in 1773 London Stock Dealers moved into
their own building. By the 19th century, trading in securi-ties on a formal basis was common in industrial nations.Today, trading is conducted on over 120 stock marketsworldwide.
WHAT IS A STOCK MARKET?A Stock Market is an important part of modern economies.The Jamaican stock market is a vital link between compa-nies needing capital and Jamaicans with money to invest.Through investments in stocks, investors become part own-ers of the companies of their choice and are able to partici-pate in the companies’ growth and development. In turn,companies which raise capital from the sale of shares areable to expand. This helps to increase employment bothdirectly and indirectly as more raw materials and services arebought and additional suppliers and contractors are hired.The increased economic activity helps to increase produc-tion and strengthen the country’s economy as a whole.
WHAT ARE THE BASIC FUNCTIONS OF THESTOCK EXCHANGE
a. To provide an additional channel for encouraging andmobilizing domestic savings.
b. To foster the growth of the domestic financial servicessector.
c. To provide savers with greater opportunities to protectthemselves against inflation.
d. To increase the overall efficiency of investment.
e. To facilitate privatization.
f. To improve the gearing of the domestic corporate sectorand help reduce corporate dependence on borrowing.
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WHAT IS THE STRUCTURE OF THE JAMAICASTOCK EXCHANGE?The Jamaica Stock Exchange is governed by a Council(Board of Directors) which comprises: the Governor of theBank of Jamaica (or his representative); a representative ofthe Ministry of Finance & Planning; up to ten seat–hold-ers and any three persons other than seatholders.The Chairman and Deputy Chairman are elected by theCouncil annually. The General Manager /Secretary is incharge of the day-to-day operations of the Jamaica StockExchange.
WHAT IS A STOCK EXCHANGE?A stock exchange is simply a marketplace where securities,that is, shares, stocks or bonds are bought and sold – quick-ly, efficiently and under strict regulations for the protectionof investors.
HOW DID THE JAMAICA STOCK EXCHANGE BEGIN?Before the Jamaica Stock Exchange began, Jamaicans wouldbuy and sell shares of corporations and companies throughbanks, lawyers and other individuals. The Kingston StockMarket was established in 1961 under the guidance of theBank of Jamaica, to co-ordinate the activities of traders, orpersons who bought and sold shares on behalf of individu-als. The Jamaica Stock Exchange itself, began operations inFebruary 1969 with one of its roles being to promote thedevelopment of a vibrant capital market and to ensureorderly trading in listed securities, that is stocks, shares orbonds that are traded on a stock exchange. The first officialtrade on the Jamaica Stock Exchange took place onMonday, February 3, 1969.
IS THE JAMAICA STOCK EXCHANGE A GOVERNMENT ENTITY?No. The Jamaica Stock Exchange is a privately – owned,limited liability company. The Bank of Jamaica was veryactive in the formation of the Stock Exchange and hadtaken part in all the pre – incorporation discussions andnegotiations. In the past the Central Bank provided operat-ing personnel for the Jamaica Stock Exchange which wasaccommodated at rented premises in the B.O.J. However,over the years the role of the B.O.J. has deliberatelydecreased and today the Jamaica Stock Exchange occupiesits own building at 40 Harbour Street, Kingston with itsown personnel.
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DO ALL JAMAICAN COMPANIES HAVE SHARESTRADED ON THE JAMAICA STOCK EXCHANGE?No. On any exchange, only the stocks of those publiccompanies that are listed are traded. That means a compa-ny must apply to the Jamaica Stock Exchange and beapproved to have its shares traded. A company consideringlisting on the Jamaica Stock Exchange must meet theExchange’s listing requirements which include a minimumlevel of capitalization and the submission of detailed finan-cial reports.
WHAT IS THE ROLE OF THE COUNCIL OF THEJAMAICA STOCK EXCHANGE?The Council is a self – regulatory body that monitors theactivities of the stock market. The Council’s functionsinclude:
A.Setting guidelines and rules of operations at theExchange to ensure that the stock market and its broker –members operate at the highest possible standards.
B.To determine the shares to be listed on the exchange. Inthis regard, the Council has the power to suspend compa-nies which violate the rules of the Exchange from trading,or to de–list companies which fail to meet the requirementsof the Jamaica Stock Exchange.
The decisions of the Council are arrived at on the basis ofa majority vote.
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WHAT MAKES THE PRICE OF SHARES GO UP AND DOWN ON THE STOCK MARKET?Share prices are determined by supply and demand and onthe confidence investors have in their value. If there aremore orders to buy a share than offers to sell, the price willgo up. If there are more offers to sell than to buy, the pricegoes down. The decision to buy or sell depends on theinvestor’s overall opinion as to the future prospects of acompany’s shares. This opinion is formed and influenced byfactors such as the companies growth prospects; the type ofindustry, individual and corporate taxes and capital marketconditions.
WHEN DOES TRADING TAKES PLACE ON THEJAMAICA STOCK EXCHANGE?Trading on the Jamaica Stock Exchange is conducted onMondays to Fridays between 9:30 a.m. and 1:30 p.m.A computerized trading platform was introduced inJanuary 2000.
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HOW ARE SHARES TRADED?The Jamaica Stock Exchange operates like any other stockmarket in the world. You choose a stockbroker, decide ona stock and place your order to buy or sell with your bro-ker. Once this is done, your broker will purchase or sellyour shares. The trade is complete when a buying brokerand a selling broker decide on a reasonable price for theorder.
WHAT IS THE JAMAICA CENTRAL SECURITIESDEPOSITORY (JCSD)?In 1998 the JCSD, a wholly owned subsidiary of theJamaica Stock Exchange was established. It is a facility forholding securities which enables share transactions to beprocessed by book entry. A book entry system is an accounting system which facili-tates the change of ownership of securities electronicallybetween parties without the need for movement of physi-cal documents.
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BARITA INVESTMENTS LTD.15 St. Lucia Way,Kingston 5Phone: 926-2681-2/2686Fax: 929-8432e-mail: [email protected]
CAPITAL & CREDIT SECURITIES LTD.18 Trafalgar RoadKingston 10Phone: 946-1770Fax: 978-8005e-mail: [email protected]
DEHRING BUNTING & GOLDING LTD.7 Holborn Road, Kingston 10.Phone: 960-6699/968-3365Fax: 960-3984e-mail: [email protected]
EDWARD GAYLE & CO. LTD.32 Trafalgar Road, 3rd FloorKingston 10Phone: 960-7108-8592 Fax: 960-7649TOLL FREE: 1-888-EDGAYLEe-mail: [email protected]
FIRST GLOBAL STOCKBROKERS LTD.1 St. Lucia WayKingston 5Phone: 926-1275Fax: 926-1279/929-6436e-mail: [email protected]
JMMB SECURITIES LTD.6 Haughton TerraceKingston 10Phone: 920-5039/4720Fax: 960-8106e-mail: [email protected]
M/VL STOCKBROKERS LTD.2-6 Grenada Crescent,Kingston 5Phone: 960-1570/926-4319Fax: 960-1571e-mail: [email protected]
MAYBERRY INVESTMENTS LTD.1 1/2 Oxford Road,Kingston 5Phone: 929-1908-9Fax: 929-1501/920-2103e-mail: [email protected]
PAUL CHEN YOUNG & CO. LTD.24-26 Grenada Crescent,Kingston 5Phone: 929-3261/3264/3455/3400Fax: 929-4825e-mail: [email protected]
VICTORIA MUTUAL WEALTHMANAGEMENT LTD.52 – 60 Grenada Crescent,Kingston 5Phone: 960 5000 – 3Fax: 960 4972
e-mail: [email protected]
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WHERE IS THE JAMAICA STOCK EXCHANGELOCATED?The Jamaica Stock Exchange is located at 40 HarbourStreet, Kingston.
There is a public gallery from which trading can be viewedduring the hours of trading. The Jamaica Stock Exchangealso offers a tour and talk about the Jamaica StockExchange and the stock market to schools and othergroups.
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WHO ARE THE STOCK BROKERS IN JAMAICA
REGISTERED OFFICE:The Jamaica Stock Exchange
40 Harbour StreetP.O. Box 1084
Kingston.
Telephone: (876) 967-3271-4 922-0806Fax: (876) 922-6966
Email: [email protected]
FOR MORE INFORMATION PLEASE CONTACT
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