BSE Newsletter Issue III

Dream Big STAKEHOLDER NEWSLETTER

8th Avenue Belleville, St. Michael BB11114, Barbados T: (246) 436-9871/2 | F: (246) 429-8942 | www.bse.com.bb

Take Stock

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CEO’s Message

The Barbados Stock Exchange and all of our stakeholders are working hard to build the brand of the Barbados market.

The Barbados Stock Exchange, our team members, fund managers, business owners, investors, brokers, and all of our stakeholders represent the benefits of actively participating in the public marketplace. In order to boost the productivity of our efforts, we must facilitate the growth of a healthy ‘investor culture’ that would further the development of the Barbados economy. We must demonstrate clearly the benefits of listing on the Exchange and gaining access to the funding to expand their operations and therefore become more profitable.

We are in a valuable position of being able to facilitate the growth of a more resilient Barbados economy through a competitive Barbados Stock Exchange. For us to take advantage of this responsibility, we must continue our efforts to demonstrate the benefits of actively participating in the public marketplace.

The Barbadian capital market continues to be challenged by a culture of low investment.

Our position as the opinion formers and main information source about the Exchange gives our work a special social responsibility. We must be consistent with our efforts to make sure the Barbadian capital market remains an accessible, inclusive space that invites the participation of all individuals. We must ensure that the successful growth of companies listed on the Exchange is applauded.

The BSE presents the opportunity for companies to access capital that can allow big ideas to be executed on a grander, more profitable scale—we must continue to make sure our stakeholders are aware of this potential.

Thank you all for your dedication. We look forward to continuing our work to build the brand of our market and the development of the Barbados economy.

Marlon Yarde CEO & General Manager Barbados Stock Exchange

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Broker of the Year 2013 Terry Williams

Terry Williams has worked for over ten years in the financial services sector beginning his career at the Barbados Stock Exchange where he spent seven years working in areas of IT and Operations.

His greatest contribution at the BSE, however, were in the area of Business Development and Training where he spearheaded several projects including the redesign of investor education brochures and the development of a Broker Training Program. after leaving the University of the West Indies with a degree in Computer Science and Management.

For the past 4 years Mr. Williams has worked at Signia Financial Group Inc. where he is the Investment and Wealth Management Officer. He holds a degree in Computer Science and Management from the University of the West Indies - Cave Hill Campus and has undertaken several courses in the area of mutual funds, banking and investment management and business administration both locally and internationally. When asked to share his thoughts on winning the Broker of the Year 2013 award he noted, “Obviously, I was very pleased to win broker of the year in 2013 especially after being a runner up in the 2012 award but for me it’s more than simply personal satisfaction. You see while I may receive the accolades, without the guidance of my manager Ayesha Maycock and Sherika Armstrong, our admin assistant, it would have been impossible to have accomplished all we did in 2013. So in a way I see it as validation of the hard work that we put in at the Trading Department and the environment that we foster at Signia in general as we strive to deliver excellent service to our customers.”

Terry has a sense of humor and relishes the opportunity to communicate with his customers, work colleagues and fellow Brokers with whom he was in competition with for the award.

While stating that no Brokers do their jobs for the award, he acknowledged the fact that healthy competition tends to bring out the best in people. “It’s a good feeling when you are recognized for excellence. From the time the award was announced, in addition to the congratulations I received I also received challenges from other brokers who threw down the gauntlet in efforts to win 2014 edition. I think that this is all in good spirits and it only serves to encourage us as brokers to raise our game since there is much work to be done in the investment landscape in Barbados.” He went on to discuss the important role Brokers play in the development of the capital markets in Barbados, “As brokers, we are key gatekeepers as customers don’t interact directly with the Stock Exchange so their initial perceptions and expectations are shaped by the way we interact with them. If it is seen as merely a transaction

4 the customer may not appreciate the intricacies of investing and may leave uninformed and unfulfilled. We are ambassadors for the investing public and we need to take every opportunity to tell those we come into contact with about the benefits they can achieve by investing.”

When asked what both Brokers and the BSE could do to improve the activity on the board of the BSE he had this to say, “Well first and foremost we need more companies listed on the exchange. Over the last few years there has been a decline in the number of companies listed through mergers and acquisitions and delisting without a corresponding increase in the numbers of new listings. There appears to be an entrenched cultural preference here in Barbados in that listing on the exchange is not really given serious consideration by many entrepreneurs and decision makers when considering raising capital. This is unfortunate given our current environment where many high net-worth individuals and companies complain about the lack of investment options while at the same time our government is seeking alternate means of raising revenue. To me, a more robust capital market would help achieve both of these objectives.

Ultimately, awareness is key and unless investing is seen as a viable means of wealth creation by a larger portion of society there is hardly going to be a clamor for more options. It is for this reason that this publication is critical since the public at large needs to know about the BSE and what it is doing. Hopefully, by sharing the success stories both companies and investors will want to get involved.” A very clear and concise response from a very clear and concise individual.

Mr. Williams is a family man, he has a wife and two young daughters under the age of five.

He is an active member of the Seventh Day Adventist Church and his personal philosophy is taken from Philippians 4:13. “I can do all things through Christ which strengthens me.”

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First Half - 2014 Stats Table 1 below, illustrates the total trading activity for the first half of 2014 compared to the activity which occurred for the corresponding period in 2013. Total trading volume decreased by 17%, while total trading value decreased by 41% in line with the declining performance which was recorded across all markets. The Put Through Market, though only recording a 1% decline in the volume traded, recorded the largest decline in terms of value of 50%. There was no trading on the Junior or Block Trade Markets for the first half of 2014.

Table 1: Total Trading Activity - 1st Half 2014

Market Regular Put-Through Junior Block Trade Total

June

June

June

June

% Change

% Change

2014 Volume

2013 Volume

2014 Value

2013 Value

Volume

Value

2,891,508

3,661,199 $

9,480,243 $

15,215,728

-21%

-38%

910,376

918,639 $

2,247,374 $

4,524,531

-1%

-50%

-

- $

- $

-

NA

NA

-

- $

- $

-

NA

NA

3,801,884

4,579,838 $

11,727,617 $

19,740,258

-17%

-41%

Second quarter 2014 market performance showed lesser declines as there was improvement in the volumes traded, however, declining share prices meant that the value of the shares traded was not up to par with the 2013 figures. As illustrated in Table 2 below, total trading volume was down 2% with a corresponding decline in total trading value of 34%. The Regular Market recorded the only increase in terms of volume traded but declines in value traded. Put Through Market activity recorded large declines and there was no activity on the Junior or Block Trade Markets.

Table 2: Trading Activity - 2nd Quarter

Market

Regular Put-Through Junior Block Trade Total

Second Quarter

Second Quarter

Second Quarter

Second Quarter

% Change

% Change

2014 Volume

2013 Volume

2014 Value

2013 Value

Volume

Value

1,689,665

1,356,675 $

5,192,242 $

5,820,796

25%

-11%

15,375

383,483 $

49,838 $

2,118,949

-96%

-98%

-

- $

- $

-

NA

NA

-

- $

- $

-

NA

NA

1,705,040

1,740,158 $

5,242,080 $

7,939,745

-2%

-34%

7 Regular Market The trading activity on the Regular Market for the first half of 2014 recorded a decrease of 21% in trading volume and a decrease in value of 38%. The total volume of shares traded at the half year was 2,891,508 as compared to 3,661,199 shares traded for the corresponding period in 2013 as illustrated in Table 3. Similarly, the total value traded decreased from $15,215,728 in the first half of 2013 to $9,480,243 for the corresponding period in 2014.

Excluding the extra-ordinary transactions occurring in the first half of 2013 (transactions pursuant to the take-over of Republic Bank Barbados Limited by Republic Bank Limited), Regular Market activity would have yielded increases in both volume and value traded of 23% and 9% respectively. The number of trades recorded during the first half rose from 579 in 2013 to 598 in 2014; an increase of 3%.

The Average Share Price decreased by 8.36% from $5.97 to $5.47 due primarily to a sharp decrease in the share prices of Barbados Dairy Industries Limited, Cave Shepherd and Company Limited and FirstCaribbean International Bank which, by the close of the half, had all fallen in price by more than 15% of their respective December 31, 2013 positions.

On February 5, 2014 Barbados Shipping and Trading Company Limited was delisted from the board of the BSE.

Table 3: Regular Market Comparison

Regular Market Year on Year Comparison 30-Jun-14

30-Jun-13

% Change

TOTAL SHARE VOLUME

2,891,508

3,661,199

-21%

TOTAL SHARE VALUE

9,480,243

15,215,728

-38%

23,701

30,010

-21%

77,707 $

124,719

-38%

579

3%

AVERAGE DAILY SHARE VOLUME AVERAGE DAILY SHARE VALUE

$

NUMBER OF TRADES

598

NUMBER OF TRADE DAYS AVERAGE SHARE PRICE ADVANCE/DECLINE RATIO

$

122

122

0%

5.47 $

5.97

-8%

7/6

6/7

N/A

LOCAL INDEX

2,161.03

3,062.33

-29%

CROSS-LISTED INDEX

1,676.68

1,442.59

16%

611.75

748.03

-18%

LOCAL MARKET CAPITALIZATION

5,423,749,949

8,662,306,420

-37%

CROSS-LISTED MARKET CAPITALIZATION

2,798,239,355

2,407,563,638

16%

COMPOSITE MARKET CAPITALIZATION

8,221,989,304

11,069,870,058

-26%

26

27

-4%

COMPOSITE MARKET INDEX

NUMBER OF LISTED SECURITIES

8 Junior Market, Block Trade Market & Put Through Market The Put Through market recorded a nominal decrease in terms of volume traded (1%) but a large decrease in performance in terms of value (50%) for the period under examination over the corresponding period in 2013. A total of fifty-three (53) trades were conducted across four (4) securities. There was no activity on the Junior or Block Trade Market during the first half of 2014.

Index and Market Capitalization Movement The results for both the Index and Market Capitalization measures were consistent when examined over the three, six and twelve month periods. For the second quarter of 2014, as illustrated in Table 4, the Cross Listed Index recorded an increase over its March 31, 2014 figure of 8.91%. When the comparison is extended to six months and twelve months (Table 5 and Table 6), the local index recorded decreases of 27.86% and 29.43% respectively while the Cross Listed Index recorded increases of 12.77% and 16.23% respectively. The CrossListed Index performance can be attributed to share price appreciation in both Neal and Massy Holdings Limited and One Caribbean Media Limited.

The market capitalization comparisons illustrated in Table 7-9, closely mirror the performance of the index comparisons discussed above over the same three, six and twelve month periods. For the second quarter, Cross-Listed Market Capitalization was impacted heavily as Neal and Massy Holdings Limited’s share price rose by 13.04% from $17.25 at the close of March 2014 to $19.50 at the close of the 1st half of 2014.

Table 4: Index Comparison 2nd Quarter

Index

30-Jun-14

31-Mar-14

% Change

Local

2,161.03

2,568.58

-15.87%

Cross-Listed

1,676.68

1,539.55

8.91%

611.75

668.90

-8.54%

Index

30-Jun-14

31-Dec-13

% Change

Local

2,161.03

2,995.52

-27.86%

Cross-Listed

1,676.68

1,486.78

12.77%

611.75

740.42

-17.38%

Index

30-Jun-14

30-Jun-13

% Change

Local

2,161.03

3,062.33

-29.43%

Cross-Listed

1,676.68

1,442.59

16.23%

611.75

748.03

-18.22%

Composite

Table 5: Index Comparison 1st half

Composite

Table 6: Index Comparison year-on-year

Composite

9 Table 7: Market Capitalization comparison 2nd quarter

Market Capitalization

30-Jun-14

31-Mar-14

% Change

Local

5,423,749,949

6,395,315,381.79

-15.19%

Cross-Listed

2,798,239,355

2,569,376,511.09

8.91%

Composite

8,221,989,304

8,964,691,893

-8.28%

30-Jun-14

31-Dec-13

% Change

Local

5,423,749,949

7,999,308,023

-32.20%

Cross-Listed

2,798,239,355

2,481,309,653

12.77%

Composite

8,221,989,304

10,480,617,676

-21.55%

30-Jun-14

30-Jun-13

% Change

Local

5,423,749,949

8,662,306,420

-37.39%

Cross-Listed

2,798,239,355

2,407,563,638

16.23%

Composite

8,221,989,304

11,069,870,058

-25.73%

Table 8: Market Capitalization comparison 1st half

Market Capitalization

Table 9: Market Capitalization Comparison year-on-year

Market Capitalization

Please click here for the full BSE 2014 First Half Report

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Q3 - 2014 Stats At the close of the first nine months of 2014 the Barbados Stock Exchange (BSE) recorded increases in trading volume but decreases in trading value. As illustrated in Table 1 below, the total volume of shares traded increased by 8% while total value of shares traded recorded a decrease of 32% when compared with the corresponding period in 2013. Excluding extraordinary transactions which occurred in 2013 (Republic Bank Barbados Limited 1,304,956 shares, $6,524,780.00) total traded volume would have recorded an increase of 41% and total traded value would have recorded a decrease of 4%.

The Regular Market recorded decreases in terms of both volume and value, the Put-Through Market experienced increases in volume but decreases in value while there was no activity on the Junior or Block Trade Markets.

Table 1 –Trading activity for first nine months

Market Regular

Year-to-Date

Year-to-Date

Year-to-Date

Year-to-Date

% Change

% Change

2014 Volume

2013 Volume

2014 Value

2013 Value

Volume

Value

4,560,366

4,706,443 $

11,988,386 $

17,983,039

-3%

-33%

1,561,161

952,350 $

3,436,192 $

4,603,446

64%

-25%

Junior

-

- $

- $

-

NA

NA

Block Trade

-

- $

- $

-

NA

NA

6,121,527

5,658,793 $

15,424,578 $

22,586,485

8%

-32%

Put-Through

Total

The third quarter of 2014 was characterized by increases in total trading activity. Total trading volume and value for the quarter rose by 115% and 30% respectively (See Table 2).

Table 2 –Trading Activity for Third Quarter

Market

Regular

Third Quarter

Third Quarter

Third Quarter

Third Quarter

% Change

% Change

2014 Volume

2013 Volume

2014 Value

2013 Value

Volume

Value

1,668,858

1,045,244 $

2,508,143 $

2,767,312

60%

-9%

650,785

33,711 $

1,188,818 $

78,915

1830%

1406%

Junior

-

- $

- $

-

NA

NA

Block Trade

-

- $

- $

-

NA

NA

2,319,643

1,078,955 $

3,696,961 $

2,846,227

115%

30%

Put-Through

Total

12 Regular Market The Regular Market recorded decreases in both the volume and value traded at the end of the third quarter of 2014. As illustrated in Table 3 below, the total share volume was 4,560,366, representing a decrease of 3% when compared to the 4,706,443 shares recorded for the same period in 2013. There was also a decrease of 33% in the value of shares traded at the end of the quarter as compared to the same period in 2013. There was a 7% increase in the number of trades occurring on the Regular Market as 898 trades occurred by the end of the third quarter.

This as compared to 840 trades in 2013.

There was an improvement in average share price as well as positive changes being seen in the Cross-Listed Market measures, however, the Local and Composite Market measures recorded year-on-year decreases. The Cross-Listed Index recorded an increase of 13% while the Local and Composite indices recorded decreases of 28% and 18% respectively. Similar results were recorded for the Market Capitalization, where the Cross-Listed measure also recorded an increase of 13% while the Local and Composite Market Capitalization measures recorded declines of 36% and 25% respectively. The number of securities listed for the period ended September 30th, 2014 decreased to 26; down from 27 at the close of the third quarter of 2013.

Table 3 – Year on Year Regular Market Statistics

30-Sep-14

30-Sep-13

% Change

Total Share Volume

4,560,366

4,706,443

-3%

Total Share Value

11,988,386

17,983,039

-33%

24,518

25,303

-3%

64,454 $

96,683

-33%

Average Daily Share Volume Average Daily Share Value

$

Number Of Trades

898

840

7%

Number Of Trade Days

186

186

0%

5.47 $

5.77

-5%

Average Share Price Advance/Decline Ratio

$

7/8

6/8

N/A

Local Index

2,136.73

2,979.25

-28%

Cross-Listed Index

1,676.68

1,486.78

13%

607.29

737.33

-18%

Local Market Capitalization

5,365,898,408

8,434,729,762

-36%

Cross-Listed Market Capitalization

2,798,239,355

2,481,309,653

13%

8,164,137,763

10,916,039,415

-25%

26

27

-4%

Composite Market Index

Composite Market Capitalization Number Of Listed Securities

13 Junior Market, Block Trade Market & Put Through Market There was no activity on the Junior or Block Trade Market during the first three quarters of 2014. At the close of the third quarter, the Put Through Market experienced an increase of 64% in terms of volume but a decrease of 25% in terms of value. The Put Through Market’s Q3 performance was exceptional as it saw increases in the total volume and value of shares traded on this market of 1830% and 1406% between the months of July and September 2014.

Index and Market Capitalization Movement There were mixed results for the indices and market capitalization when examined over the past three, nine and twelve month periods. For the third quarter, as illustrated in Table 4, only the Local and Composite Indices recorded declines of 1.12% and 0.73% respectively from their positions at June 30th, 2014; there was no change in the Cross-Listed Index measure.

When the comparison is extended to nine and 12 months (Table 5 -6), performance was similar, as the Local and Composite Indices recorded declines in the 28% and 17% range respectively while the Cross-Listed Index recorded increases of 12.77% for both the nine and twelve month respectively.

The market capitalization comparisons are illustrated in Table 7-9. The Cross-Listed Market Capitalization was the only measure to record increases over the 9 month (12.77%) and 12 month (12.77%). These results can be attributed to marked increases in the share prices of both Massy Holdings Limited (formerly Neal and Massy Holdings Limited) and One Caribbean Media Limited. Massy Holdings Limited’s share price appreciated from $17.25 at the close of 2013 to $19.50 by the end of the third quarter of 2014; an increase of $2.25. One Caribbean Media Limited’s share price rose from $4.80 to $6.20 representing an increase of 29.17% over the nine month period under consideration.

Table 4 – Index Comparison 3rd Quarter

Index

30-Sep-14

30-Jun-14

% Change

Local

2,136.73

2,161.03

-1.12%

Cross-Listed

1,676.68

1,676.68

0.00%

607.29

611.75

-0.73%

Index

30-Sep-14

31-Dec-13

% Change

Local

2,136.73

2,995.52

-28.67%

Cross-Listed

1,676.68

1,486.78

12.77%

607.29

740.42

-17.98%

Index

30-Sep-14

30-Sep-13

% Change

Local

2,136.73

2,979.25

-28.28%

Cross-Listed

1,676.68

1,486.78

12.77%

607.29

737.33

-17.64%

Composite

Table 5 – Index Comparison Nine Months

Composite

Table 6 – Index Comparison Year-on-Year

Composite

14 Table 7 – Market Capitalization Comparison 3rd Quarter

Market Capitalization

30-Sep-14

30-Jun-14

% Change

Local

5,365,898,408

5,423,749,948.68

-1.07%

Cross Listed

2,798,239,355

2,798,239,354.90

0.00%

Composite

8,164,137,763

8,221,989,304

-0.70%

30-Sep-14

31-Dec-13

% Change

Local

5,365,898,408

7,999,308,023

-32.92%

Cross Listed

2,798,239,355

2,481,309,653

12.77%

Composite

8,164,137,763

10,480,617,676

-22.10%

30-Sep-14

30-Sep-13

% Change

Local

5,365,898,408

8,434,729,762

-36.38%

Cross Listed

2,798,239,355

2,481,309,653

12.77%

Composite

8,164,137,763

10,916,039,415

-25.21%

Table 8 – Market Capitalization Comparison Nine Months

Market Capitalization

Table 9 – Market Capitalization Comparison Year-on-Year

Market Capitalization

Please click here for the full BSE 2014 Third Quarter Report

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Dream Big! Everyday!

The Barbados Stock exchange has added wristbands to its memorabilia! Remember to get your blue, yellow or green wristbands to wear at any time of the night or day!

These eye-catching giveaways can help encourage customers to “Dream Big and Take Stock�!

For more information, contact

Barry Blenman, Operations Supervisor at 436-9871 ext. 131

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Corporate Governance & Accountability Conference 2014!

The Barbados Stock Exchange hosted its second annual conference on Corporate Governance and Accountability on November 13 and 14, 2014 at the prestigious Hilton Barbados Resort, Aquatic Gap, St. Michael, Barbados.

The two-day seminar took a fresh look at the fundamentals of Corporate Governance, Internal Controls, Risk Management and Internal Audits. In addition, focus was given to Information Technology, Cyber-crime, Risk Management and other related topics as well as the strategic role of the board and board dynamics.

Returning to this year’s conference were Dr. Richard Leblanc, an Associate Professor at York University/Osgoode Hall Law School, Corporate Governance Academic, Lawyer and Board Advisor and Sylvia Groves, the President and Creative Director of Governance Studio. The were joined by Catherine Bromilow, Partner, PricewaterhouseCoopers Center for Board Governance and Meghan Herman, Senior Marketing Manager, Diligent Board Member Services. Via live video conference, participants listened intently to the presentations given by Professor Poonam Puri, Professor of Law at York University/Osgoode Hall Law School and Andrew Fastow, former Chief Financial Officer of Enron Corporation. Participants also took part in a panel discussion which featured panelists: Sandra Osborne, Q.C., Attorney-at-Law and Chartered Secretary, Ronaele DathorneBayrd, Engagement Leader – Corporate Services, PricewaterhouseCoopers Services Inc. and Dr. Axel Kravatzky, Founding Chairman of the Caribbean Corporate Governance Institute.

Attendance at this year’s conference improved as 120 persons attended; this up from 83 participants in 2013. A total of 28 representatives from six of the 20 Listed Companies attended while 2 participants from neighboring Trinidad and Jamaica were also in attendance. The remaining participants were made of members of the Barbados International Business Association (BIBA), the Institute of Chartered Accountants of Barbados (ICAB), the Institute of Chartered Secretaries and Administrators (ICSA) and the Barbados Bar Association (BBA).

Attendees, once again, commended the BSE on the quality of the conference noting the exceptional job done by all presenters as it relates to the quality of the content disseminated and its delivery. An analysis of the evaluation forms collected showed that 100% of the respondents felt the presenters were both well prepared and informative while 99% believed that the quality and delivery of the presenters’ presentations was good. 100% of respondents stated that are intent on returning to next year’s conference.

Look out for details of our Corporate Governance & Accountability Conference 2015 coming soon.

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Back Row: Marlon Yarde, CEO & General Manager of the BSE, Barry Blenman, Operations Supervisor - Business Development (BSE) & Dr. Richard Leblanc (York University/Osgoode Hall Law School) Front Row: Lynn Beauregard (CSCS), Meghan Herman(Diligent Board Member Services), Sylvia Groves (Governance Studio), Catherine Bromilow (PWC) & Ronaele Dathorne-Bayrd (PWC).

Quotes from attendees about the conference: • “Very informed speakers who were captivating!”

• “This conference was very informative and is definitely needed for corporate secretaries, governance, risk management and compliance professionals. This keeps us up to date with best practice and emerging trends globally” • “Speakers communicated information in a clear and concise manner and allowed for Q&A sessions that allowed attendees to speak to and ask pointed questions on their own peculiar experiences. Excellent conference overall.

Dynamic, engaging and eye-opening presentations from start to finish.”

• “All speakers were well versed on the particular topics and the information shared was most enlightening and informative.”

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Conference Gallery Day 1

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Conference Gallery Day 2