Business
Suva’s Exchange Goes Regional
Stock Turnover Has Increased 18-Fold Since 1996.
The Suva Stock Exchange (SSEX), not so long ago the world's smallest, has spread its wings by changing its name to the South Pacific Stock Exchange. Quoting only five Fiji public companies at the end of 1998, by the end of 1999 it boasted nine, thus taking it abreast of what apparently was the second smallest exchange, located in Barbados. According to Mesake Nawari, the exchange's chief executive, expressions of listing interest indicate that by the end of June, listings will be way ahead of Barbados.
2001 listings are likely to include 19 percent government-owned stakes in Amalgamated Telecom Holdings Ltd., which controls Fiji's domestic and international telecommunications operators, and Colonial National Bank, a subsidiary of Australia's Colonial finance group. Listing by at least two Pacific Islands companies headquartered outside Fiji and a Samoan brewery company are also expected.
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Handicaps of isolation and small markets will be overcome by the development of a regional electronic trading system, says Julie Apted, chief executive of the Fiji Capital Markets Development Authority. Launching the renamed exchange, Foana Tukana-Nemani, assistant general manager finance for the Fiji National Provident Fund (FNPF), told guests that the telecom and bank share floats were expected to raise $F85 million ($US36.55 million) and were "just what the market needs at this stage of its development."
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Since the July 1996 introduction of a call market average monthly stock turnover has increase 18 times. The exchange originated in1978 as a trading post operated by the Fiji Development Bank. It was restructured in 1993 to become the Suva Stock Exchange and operates now as a private company owned by several local financial institutions. Recent evolution was assisted by the Asian Development Bank and the Australian Stock Exchange to which Nawari was attached last year for experience. To encourage private companies to go public, the government now offers tax incentives for those that do and has removed tax from dividends paid to shareholders by public companies.
Lionel Yee, chief executive of the FNPF, said the FNPF would launch a scheme allowing fund members to invest two-thirds of their balance in the fund, or $F10,000 ($US4,300), whichever was smaller, in shares in listed companies approved by the fund. In years when their return exceeded the fund's overall return (currently 6.5 percent) such investors would be allowed to convert the difference to cash and withdraw it. Yee said the new scheme could channel investment of up to $F10-$F20 million ($US4.3-$US8.6 million) in company stocks.
