TT stock market a laughing stock

Strong oil rich TT had become the laughing stock of the Caribbean as it was alleged that our small local market was maybe affected adversely by non-market forces. My research and interviews with many local stock broker employees and also many angry investors uncovered the following:

Statistics show that as soon as electronic trading was introduced in March 2005, the TT market headed downwards.

Brokers could possibly now directly, from their private computer terminals move a stock downward/upwards with very small volumes crossing the floor.

There are about six stock broker firms in TT, small enough to fit them all into one room versus thousands of brokers in the USA.

Brokers can possibly have an unfair advantage over small investors who have no computer terminal and no inside knowledge.

The SEC can check this easily; just check for investors who sold off all their stocks just before the TT market “crashed.”

Well known is that local brokers also at present conflictingly sell/hawk advice, local stocks, foreign stocks and mutual funds both local and foreign all at the same time (similar to that which resulted in the USA SEC charges brought against many companies and brokers in the USA recently (eg Enron and Arthur Andersen CPA).

Our well meaning and hard working but inexperienced SEC publicly did nothing to balance the above inequality.

As a matter of fact, our experienced Ministry of Finance and Central Bank did just the opposite. Insurance companies were forced to immediately and overnight reduce their stock portfolio to under 50 percent within a short time.

This unwise decision crippled our stock market. Oh, how we lack the financial genius of the likes of the US stock expert and financial controller Mr Alan Greenspan of the USA Federal Reserve Board which is equivalent to our Central Bank. He would have met his objectives without crashing the US stock market where he could and would have been sued for his action, of course.

Strong Macroeconomics and Low PE ratio TT has the strongest macro economy and strongest corporate earnings in the hemisphere.

Yet many investors were aghast to find that Barbados (GDP 2.5 percent, PE 15) stocks went up, Jamaica (GDP 2.1 percent, PE 19) stocks went up.

The SEC and Central Bank must make it easy (as done in the USA and other developed countries) for foreign buyers to buy Caribbean stock. Company boards must also start stock buyback programmes now. Companies must also look at mergers and foreign buyers for their stocks.