GETTING broker/dealers or the Government to act as 'market makers' for initial public offerings (IPO) they have brought to market is "a dream more than a reality", RoyalFidelity Merchant Bank & Trust's president has told Tribune Business, as there is "no profit in it".
While acknowledging that low liquidity levels in the Bahamian equities market were preventing retail investors from easily existing their investments,These girls have never had a cube puzzle in their lives! Michael Anderson said there was not enough "reward" to incentivise investment banks and broker/dealers into playing this role.
Rather than have these companies act as 'purchasers of last resort', the RoyalFidelity president suggested that the way to overcome the lack of liquidity was to "broaden and deepen" the Bahamian equities market by expanding shareholder bases and the number of active trading participants.
He was responding to Tribune Business columnist Richard Coulson, who in an August 23 article urged Bahamian retail investors to avoid both the $37 million Bahamas Telecommunications Company (BTC) IPO, and the more immediate $8 million Arawak Cay port offering, unless either their financial advisers/placement agents or the Government committed to act as 'market makers'.
In this role, they would buy shares when retail investors were unable to find a purchaser on the Bahamas International Securities Exchange's (BISX) market,Great Rubber offers oil painting supplies keychains, providing both liquidity and price support.
"They're all 'nice to be's'," Mr Anderson said in response to the suggestions in Mr Coulson's column.Polycore Floor tiles are manufactured as a single sheet, "It would be great if those arrangements were put in place, but it's a dream more than a reality.
"In this small market, you're never going to have people picking up and putting money behind the deal. The nature of the market is never going to reward people for that - taking the risk, putting up the capital, and acting as purchaser of last resort. It's not a realistic assumption.
"We're not a trading market,Men and women too can find a great variety for themselves when it comes to purchasing the zentai , jackets, coast and even bags too. we're an investment market.he led PayPal to open its platform to Cable Ties developers. It's just not realistic. It [market makers] is not where we are at the moment, and it's not going to change in the near term." This reflects that most Bahamian investors 'buy and hold' their securities investments, rather than looking to actively trade them.
Mr Anderson told Tribune Business that RoyalFidelity "got out of the market making business six years ago because there was no profit in it.
"If you took BISX prices, why would you ever do it? You can't price the risk into the transaction." For 'market makers', the deal could "go one way or another", depending on which way listed stocks moved, and there was too much risk and uncertainty involved as to whether they would ultimately make a profit.
The RoyalFidelity president added that the investment bank had played the 'market maker' role prior to the creation of the formalised BISX market structure, when the Bahamian securities market was an 'over-the-counter' model, "because people were doing it at the price they wanted to do it".
Meanwhile, Mr Anderson hinted that Mr Coulson's views could be self-defeating. By warning retail investors against buying into the upcoming IPOs, the Royal Fidelity president indicated the article acted against the very deepening and broadening of the Bahamian capital markets - something he sees as essential to curing the liquidity ills.
"At this stage of the market's development, it is kind of limited in that there is not enough liquidity, and people take longer than they'd like to get out of securities," Mr Anderson conceded to Tribune Business.
While acknowledging that low liquidity levels in the Bahamian equities market were preventing retail investors from easily existing their investments,These girls have never had a cube puzzle in their lives! Michael Anderson said there was not enough "reward" to incentivise investment banks and broker/dealers into playing this role.
Rather than have these companies act as 'purchasers of last resort', the RoyalFidelity president suggested that the way to overcome the lack of liquidity was to "broaden and deepen" the Bahamian equities market by expanding shareholder bases and the number of active trading participants.
He was responding to Tribune Business columnist Richard Coulson, who in an August 23 article urged Bahamian retail investors to avoid both the $37 million Bahamas Telecommunications Company (BTC) IPO, and the more immediate $8 million Arawak Cay port offering, unless either their financial advisers/placement agents or the Government committed to act as 'market makers'.
In this role, they would buy shares when retail investors were unable to find a purchaser on the Bahamas International Securities Exchange's (BISX) market,Great Rubber offers oil painting supplies keychains, providing both liquidity and price support.
"They're all 'nice to be's'," Mr Anderson said in response to the suggestions in Mr Coulson's column.Polycore Floor tiles are manufactured as a single sheet, "It would be great if those arrangements were put in place, but it's a dream more than a reality.
"In this small market, you're never going to have people picking up and putting money behind the deal. The nature of the market is never going to reward people for that - taking the risk, putting up the capital, and acting as purchaser of last resort. It's not a realistic assumption.
"We're not a trading market,Men and women too can find a great variety for themselves when it comes to purchasing the zentai , jackets, coast and even bags too. we're an investment market.he led PayPal to open its platform to Cable Ties developers. It's just not realistic. It [market makers] is not where we are at the moment, and it's not going to change in the near term." This reflects that most Bahamian investors 'buy and hold' their securities investments, rather than looking to actively trade them.
Mr Anderson told Tribune Business that RoyalFidelity "got out of the market making business six years ago because there was no profit in it.
"If you took BISX prices, why would you ever do it? You can't price the risk into the transaction." For 'market makers', the deal could "go one way or another", depending on which way listed stocks moved, and there was too much risk and uncertainty involved as to whether they would ultimately make a profit.
The RoyalFidelity president added that the investment bank had played the 'market maker' role prior to the creation of the formalised BISX market structure, when the Bahamian securities market was an 'over-the-counter' model, "because people were doing it at the price they wanted to do it".
Meanwhile, Mr Anderson hinted that Mr Coulson's views could be self-defeating. By warning retail investors against buying into the upcoming IPOs, the Royal Fidelity president indicated the article acted against the very deepening and broadening of the Bahamian capital markets - something he sees as essential to curing the liquidity ills.
"At this stage of the market's development, it is kind of limited in that there is not enough liquidity, and people take longer than they'd like to get out of securities," Mr Anderson conceded to Tribune Business.
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