Guyana’s sleepy stock exchange braces for change

first_imgThe trading bell only rings on MondayBy Kejal VyasEvery Monday, at 10:00h, George Edwards rings the opening bell at the Guyana stock market. It’s the only day of action each week, behind a glass door that barely keeps out the thumping bass of reggae music and burning incense from street hawkers outside.The bell is the cue for four young women in pink and violet uniforms—representatives of the only brokerages in this tiny former British colony—to punch, buy and sell orders into computers mounted on a dining table. On a typical week, they’ll pull off about 15 transactions and a few thousand shares will swap hands, in all worth about $47,000.“People walk by here all the time and say ‘I never knew Guyana had a stock exchange,’ ” Edwards, General Manager since 2005, said after a recent trading session that lasted 29 minutes. Sometimes people knock on the door holding US dollars trying to convert them to Guyanese ones. “I have to tell them we’re not that kind of an exchange”.But change is coming to both the local stock market and Guyana, a mostly farming and mining-dependent South American nation of fewer than 800,000 people. A massive oil boom is slated to kick off in 2020, thanks to the discovery of nearly 7 billion barrels of offshore crude by an Exxon-led consortium. It’s expected to send unprecedented revenue into the $4 billion economy, which the International Monetary Fund estimates could grow by a walloping 86% in 2020.That has operators of the sleepy exchange here thinking big. They’re hoping it draws more local and foreign investors into their market to tap what they say will be a boon for local companies thanks to more disposable income for average Guyanese. There is also the arrival of oil industry executives and workers from the Caribbean, the US and Europe in a country that has seen its population little changed since Independence from the British crown in 1966.“It means our companies should avail themselves of the increased market, and hence, more products, more money, more profits for shareholders,” said Mr Edwards, who personally answers the door at the exchange and is one of two full-time employees. The entire operation runs on a budget of about $70,000 a year.Nikkita Mangal, 33, has been trading stocks at the exchange for 10 years and said she almost never saw foreign buyers until recently. Now, she said, she often gets orders from Guyanese ex-pats in the US, Canada and the UK.Edwards says he is working on plans to digitise a paper-based stock certificate system, the kind that has been mostly phased out in the developed world.Pomeroon Trading, a start-up company that is backed by a UK oil financier and wants to cash in on demand for coconut water and oils, is preparing the first initial public offering here in more than a decade. The last company to do so, a Trinidadian cement company, pulled out in 2016, nine years after listing.Steven Grin, the managing partner at New York venture fund Lateral Capital, is mostly focused on frontier tech opportunities in Africa. But because of a four-year stint in the past working on energy initiatives for Guyana’s government, Mr Grin says he now gets weekly calls from large institutional investors looking for ways to get into the mostly jungle-covered country, which has seldom made international headlines since the American cult leader Jim Jones led a mass suicide 41 years ago.There are only 15 local companies with publicly listed shares, including commercial banks, rum distillers and packaging companies.The exchange can be hard to find. A security guard at a neighbouring building shrugged her shoulders when asked where the entrance was. It sits at the corner of a busy intersection amid street vendors selling everything from pirated DVDs to kitchen wares, between insurance buildings and Georgetown’s mouldering 19th-century gothic-style city hall.On a recent Monday morning, 44-year-old Nikhil Ramkarran popped in for his first-ever visit during a trading session at the very exchange of which he has served as chairman on a pro bono basis since 2005. “So that’s what it looks like,” he said.Mondays are a busy day at the law practice he runs a few blocks away. And trading volumes are so low, Ramkarran said, that being there never had much of a point.“I took the job because nobody else really wanted it,” he said.Lately, Edwards says he gets locals stopping by to ask him how to invest in oil stocks, and they leave dismayed when he tells them there are no oil companies listed on the Guyanese exchange.Edwards said he enjoys a lifestyle markedly less hectic than investment bankers abroad. After each workday, he said he goes home and places his cell phone in the cupboard, leaving any calls and emails until the following morning.While stock trading happens only on Mondays, Edwards spends the rest of the week filling out paperwork for Guyana’s securities regulator, registering that week’s trades, an all-manual process. He and Ramkarran said their hope is that the Government uses its oil proceeds to invest in education and the financial savviness of their compatriots.“I don’t care how much money you have,” Edwards said. “If you don’t know how to use it, you’re not going to get very far, and other people are going to take advantage of you”. (Wall Street Journal)last_img

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