Jamaican equities are in the doldrums right now and are not proving a good bet for investors.

Some of the leading companies find their stock undervalued.

Though the Jamaica Stock Exchange itself is run well and has proven to be a champion of Jamaican companies, many of those listed are falling short, failing to meet corporate governance benchmarks and failing to report audits in a timely fashion.

Today, the Jamaica Stock Exchange held its AGM, and it was revealed that 10 per cent of the companies listed have not paid shareholders dividends.

“Some of these companies have not paid dividends for over 14 years, and that’s why we are seeing investors today moving into the bond market, happy to make between 6 to 8 per cent. Something has to be done about this. It cannot continue,” said an attendee at today’s AGM.

Less than ten years ago, the JSE was hailed as the best in the world and won plaudits. Over the last year, there have been no IPOs, dividends have shrunk, and returns have been anaemic. 

In 2018, the JSE Main Index was the best-performing of 94 national benchmarks tracked by Bloomberg, rising 29 per cent in U.S. dollar terms. Over a five-year period, it advanced by over 200 per cent. 

Mayberry’s CEO Gary Peart is anticipating a turnaround beginning in the last quarter of this year with battleships full steam ahead in 2027. 

Responding to listed companies not paying shareholders dividends, Chairman of the JSE, who is also CEO of Grace Kennedy’s Financial Group, Stephen Whittingham said: “ We at the JSE cannot mandate listed companies to do so. I would advise minority shareholders to attend AGMs and quarterly briefings and take the matter up with management and the Board of Directors.”

Some listed companies have pointed out that the reason they are late in reporting their accounts is that there is now a lack of able auditors able to carry out the necessary work, rendering them late in reporting to the JSE.  There are those who say many of these companies are negligent and that the JSE should crack down on this unacceptable tardiness. 

Many Boards of listed companies will state why they were unable to pay a dividend and had to resort to withholding capital. Some argue that they have to meet debt obligations or plough money back into the business.

This year has been a chaotic one with the world roiled by uncertainty, financial instability and wars. This has seen capital conservation, which is prudent in turbulent times. President Trump continues to point out that the Dow Jones and other American markets are surging, thus debunking that notion.

It is instructive to note that Berkshire Hathaway, Amazon and Alphabet, some of the biggest and most successful companies in the world, do not pay dividends.

On not paying dividends, legendary investor and former Chairman of Berkshire Hathaway, Warren Buffett said: “Berkshire shareholders have participated in the American miracle by foregoing dividends, thereby electing to reinvest rather than consume. Originally, this reinvestment was tiny, almost meaningless but over time, it mushroomed, reflecting the mixture of a sustained culture of savings, combined with the magic of long-term compounding.”