At the recently concluded Jamaica Stock Exchange (JSE) Regional and Capital Markets Conference held at the Pegasus Hotel in Kingston, the CEO of NCB Capital Markets, Angus Young, gave an insightful presentation on the important role broker-dealers must play in shaping capital markets in the Caribbean.

Below is his full presentation: 

Ladies and gentlemen, as we gather to celebrate, and reflect on the 20th anniversary of the JSE Regional Investments and Capital Markets Conference, we are also witnessing the changing of the guards at the Jamaica Stock Exchange. 

It would be remiss of me to proceed without acknowledging, honouring, and saluting Dr Marlene Street Forrest, managing director of the JSE. She has led with distinction while defining her tenure as a period of transformation and many firsts. 

During the “Street Forrest Era”, the world had no choice but to acknowledge that the JSE was ranked the number one performing stock exchange in the world in 2015 and again in 2018. 

In fact, it was under her stewardship that this conference was inaugurated as a demonstration of her commitment to market education and growth of the capital markets. The ripple effect of this, was that this conference then spawned the introduction of the Trinidad & Tobago and Guyana capital markets conferences.

Dr Marlene Street Forrest, we salute you.

Ladies and gentlemen, let us also extend an acknowledgement to the participants in this room as players in the capital markets and shapers of this conference. Collectively, we have used this conference over the past 20 years to shape the narratives impacting the capital markets locally and regionally, we have spent those 20 years planting and nurturing seeds that continue to bear fruit in our economies.

Consider for a moment that provocative ideas such as a junior stock market was given room to germinate in a hall like this and is now the standard bearer for similar exchanges regionally.

Launched in 2009, to encourage investment in small and medium-sized enterprises (SMEs) in Jamaica, the junior market now boasts 46 listed companies, some of which have grown tremendously since listing. Some companies that have grown through the incubator of the junior market have now graduated to the main market. We have seen where the lessons learnt and the legislation used to form this critical element of the market in Jamaica were also used to guide the creation of the SME Market in Trinidad and Tobago.

It took ownership from all aspects of the industry to work together to bring to life the tangible outcomes of this conference over the years and this is the aspect I want to focus on for the next few minutes.

Affirming an owner mindset among broker-dealers in shaping the next era of capital markets

Over the last two decades, I have worked across the region, and based on my experience, I am of the opinion that Jamaica’s capital market is the deepest and most sophisticated capital market in the Caribbean.

While on a global scale, our capital markets aren’t considered “efficient”, Jamaica’s capital market is the most “efficient” in the region.

As broker-dealers, have to take “ownership” of our markets and we have to go against anything that will negatively affect our market’s reputation and integrity. 

There is no motherland coming to save us if we screw up, this is why we must adopt the “ownership” mindset toward the continuous development and safeguarding of our capital markets. What does this mean in tangible terms?

You will recall, that the 2008 global financial crisis highlighted how broker-dealers played a pivotal role in amplifying risk in the financial system. Their aggressive trading of complex securities, like mortgage-backed assets, and reliance on excessive leverage created vulnerabilities. When the housing market collapsed, many broker-dealers faced liquidity crises, sparking widespread panic and contributing to the financial system’s meltdown. This in turn led to tighter regulations to curb risky behaviours in the future

We, as broker-dealers, cannot let that happen to our capital markets. 

In Jamaica, the retail investor is a significant participant in our markets. They rely on us to sift through complexities, identify risks, and endorse investments that uphold the principles of transparency, accountability, and sustainability. 

Retail investors should be able to rely on the advice of their brokers, as such we as broker-dealers must always act as the first layer of adjudication, the first filter, the first underwriter. Some argue that that is not the role of the broker and that the market ought to decide what degree of risk it takes and in a perfect environment, perhaps there is an argument to be made BUT in our capital markets, where the retail segment is so involved, I am of the opinion that we as broker-dealer have a burden of responsibility to make sure that we think long, that we think “for country” and in so doing, make sure that we act responsibly in what we bring to market. By doing so, we do more than safeguard individual transactions—we preserve the credibility of the entire system…and this is something we must OWN as broker-dealers.

Our role as we move to the next decade, will become even more critical as the financial markets continue to evolve in the increasingly dynamic environment filled with new trends, pressures, and opportunities. 

For example, the GOJ will not be the serial issuer of the capital market assets like years gone by. Jamaica’s economic metrics continues to improve and improving credit ratings are a testament to this. So, the domestic capital markets will have to manufacture new assets to live off of and this brings significant opportunity for further development and sophistication. 

Broker-dealers must work with both public and private issuers to structure deals responsibly and sustainably, where the wealth creation ambitions of the investor lie at the heart of our actions.  Again, the Jamaican market continues to lead in this regard as we have seen with the public assets being brought to market in recent times.

For example, back in 2020, the story of TransJamaican Highway being added to the market, is certainly one for the history books where the average Jamaican who participated in the IPO and held it since then, saw a 205.7 per cent return, basically triple-fold from IPO. That, ladies and gentlemen is the kind of innovative and bold, yet solid approach needed to excite the market and provide buoyancy even as we look to the future.

Minister of Finance Fayval Williams recently announced that we are one step closer to raising the share capital limit on junior market listings from J$500 million to J$750 million.

In the last budget speech, the then-finance minister Nigel Clarke would have disclosed several fundraising initiatives by the government. The NMIA securitisation was one. Others are expected to come in 2025 and I encourage us all to listen carefully to PM Holness when he speaks later this evening and to Fayval Williams who joins us tomorrow morning. 

These government-related transactions will buoy the domestic capital markets in 2025 and will ensure that investors gain access to some of the best proxies of Jamaica’s progress and continued trajectory.

In like manner, broker-dealers have the responsibility to ensure private issues are vetted to produce a suitable return to investors even while being robust and sustainable at their core. To put plainly, as broker-dealers, we need to exercise a level of responsibility to ensure that the companies brought to market are fit and proper to go public.

It is this, ladies and gentlemen that will begin to attract the global capital needed to position the regional markets as a formidable force internationally. Even as these opportunities come to the market, as broker-dealers we must ensure our clients are given the tools and information to adequately participate. How will we package and position these opportunities as formidable wealth creation opportunities and how will we ensure the base of the market is sufficiently broadened with varying options to suit the appetites of different types of investors?

How is NCB Capital Markets playing its role in this regard?

Ladies and Gentlemen, I have the distinct honour of announcing that NCB Capital Markets has reaffirmed our commitment to being the title sponsor of this conference for the next five years.  

• Being fairly new to my role as CEO of NCB Capital Markets and as a director of the JSE, and having made Jamaica my home for the last 13 months, I try to bring a fresh pair of eyes and ears and it is my intention to use the office that I hold to make sure that this conference continues to evolve so that every year is more impactful than the year before. 

Truth is, as broker-dealers, we are capital allocators. To me, NCB Capital Market’s sponsorship of this conference means that we have allocated capital and thus we are very vested with an “ownership” mindset, and with this mindset, we have to ensure that our stakeholders benefit from our involvement.

For instance, one aspiration would be to have more issuers and potential issuers attend and for us broker-dealers to demonstrate, perhaps through transaction showcasing, how capital markets are a viable alternative to traditional banking. 

• To this end we at NCB would endorse and champion the introduction of an element or elements of this conference that further educates the markets about the types of deals, both debt and equity, and celebrate the innovation captured in some of these opportunities, celebrate the people and companies driving these opportunities.

• NCB Capital Markets Limited and by extension, NCB Financial Group Limited continues to put at its forefront a mandate to make wealth creation the strategic priority for our business. In 2019 we celebrated the launch of our GoIPO platform which revolutionised and digitised the IPO application process. We extended that capability to the Trinidad market which then saw us executing the first SME IPO in five years in that market in 2024. This ethos of wealth creation being made accessible to the average investor, has driven us even further. We want to see more participation in the capital markets going forward and so we are making wealth and investments easy to access and understand.
• Throughout the course of this conference, you will hear more about our exciting new tool to democratise access to investor education by the average investor. We will be launching a new WhatsApp-based investment Risk Profiler and Asset Allocator in the market. It is our hope that by making investment choices easy to access by ‘Mr Joe’ while waiting on a bus, or for that young professional just entering the market that wealth creation will be demystified for the next generation of investors. 

We laud the government of Jamaica for the bold stances taken to move the capital markets forward through the increase in the capital base ceiling of companies wanting to list on the junior market. There is no doubt that the broker-dealer community and most importantly, potential entrants to the stock market will feel more incentivised to participate in the market given these two postures. 

As a result, we at NCB Capital Markets are excited and mobilised to help the business community to tap this opportunity going forward whether through APOs or IPOs. 

What does the future look like for broker-dealers and the industry?

Ladies and gentlemen, while we pause to reflect on the past 20 years of this conference, let us also look forward as we envision a future where the broker-dealer community truly owns the goal of securing the “invest-ability” of Jamaican and regional capital markets by making sure our markets are fundamentally sound.

As we work together to secure this reality, and as one of the individuals leading the industry I envision a day when capital in Switzerland and Dubai and similar economies can find a home in the Caribbean.

•  There is no motherland coming to save us if we screw up, this is why we must adopt the “ownership” mindset towards the development of our capital markets; 

•  We are here in this position today because those before us made more good than bad decisions and we step on their shoulders to rise to a new level; and

• We have to own this vision going forward because it’s ours and we have to think long-term and to make sure those who step on our shoulders tomorrow do so in a better position than us today and do so with pride knowing that we did a fantastic job in setting the stage for them.

I hope that broker-dealers always act in the best interest of Jamaica and the other Caribbean territories because as people who are indigenous to our region, we must adopt the “ownership” mindset and in so doing always act in the best interest of our stakeholders, investors and citizens. 

Thank You!

Angus Young is the CEO of NCB Capital Markets Limited.