The Jamaica Stock Exchange (JSE) Group, which went public last April and listed on its own exchange, reported a near fourfold increase in profit for the year, to $207.7 million.

However, the JSE's bosses acknowledge that not only will such levels of growth be near improbable to match, but the walloping to which the global economic crisis is subjecting the world's bourses will make it difficult to grow business.

Tremendous buys

"Given the present global economic crisis, the current state of the performance in the market, it is not expected that the market will be buoyant," said the JSE's general manager, Marlene Street-Forrest.

"We are hoping, though, that persons will take opportunity of the tremendous buys on the stock market ... and encouraging persons to remember that the stock market always over the long term outperforms any other form of investment," she said.

Last year the market dipped a quarter as the price of equities went south as company profits retreated and the returns on securities rose with spiralling interest rates. The softening has continued in the early months of 2009.

That is likely to be bad news for the JSE, the bulk of whose earning is the transaction fees for the trading of stocks and the annual fees, linked in part of the value of their stocks, paid by listed companies.

The companies with the most expensive stocks and/or a high market capitalisation, can pay as much as $1.3 million, if their market capitalisation reaches above $10 billion. Additionally, when a trade takes place on the stock market, the JSE earns 0.19625 per cent of the transaction.

The exchange's earnings from that transaction cess last year, at $260.27 million, accounted for approximately 55 per cent of total income of $470.2 million. The fees paid by listed firms reached just under $163 million or 35 per cent of turnover. The JSE also earns from its share depository and trustee operations, as well as its provision of other services, such as its hosting of conferences and seminars.

"The Jamaica Central Securities Depository (JCSD) and the Trustees Services Company reflected improved performances for the period," Street-Forrest said. "Fees were increased by 10 per cent and there has been an increase in the usage of the JCSD pledge facility."

Having demutalised the exchange, the JSE hoped for a period of robust expansion, with more companies joining the 37 listed on the exchange. Indeed, there were nine new listings last year, but only two of these were ordinary stocks - those of regional financial services giant, Sagicor Financial Corporation and the real estate investor, Carlton Savannah REIT Jamaica. The other listings were preference stocks of firms already on the exchange.

Market conditions

Despite the difficult environment, Street-Forest still entertains hope of a raft of new listings in 2009, particularly via the junior exchange, whose rules will make listing less complex - and cheaper.

The expectation is that more lis-tings and new lines of business, including the packaging and sale of data and the provision of training, will drive income growth.

However, Street-Forrest warned that much will depend on market conditions and how these are shaped by government policy.

"Success in all these efforts will be based on the economic outlook, market conditions and government policies," she said. "But we will continue to look at creative ways of encouraging persons to come to market."