1. The future of the capital markets in GuyanaBy
Enid E Bissember
GASCI
EEB

2. FUTURE OF CAPITAL MARKETS IN GUYANA
WHY DO WE NEED DOMESTIC CAPITAL MARKETS?
LARGE FIRMS CAN RAISE CAPITAL IN GLOBAL MARKETS
WHAT HAPPENS TO THE CAPITAL RAISING PROCESS OF SMALL/MEDIUM FIRMS?
EEB

3. Four Functions of Capital Market
Resource Allocation
Allocate resources efficiently to maximize welfare
Price Discovery
Generate transparent price signals consistent with efficient use of resources
Risk Management
Encourage good risk management that diversifies losses and profits
Corporate Governance
Promote sound corporate governance that provides proper incentives.
EEB

4. Characteristics of Capital Market
Accurate, timely and accessible information
Educated investor
Efficient and robust infrastructure
Efficient intermediaries
Strong issuer
Strong prudential framework with enforcement
EEB

5. Market Infrastructure
Market infrastructure includes
the institutional arrangements that are necessary for the smooth functioning of the market
the trade execution system
the systems used in clearing
payments and settlement
EEB

6. Current situation Bond market shallow
heavily dominated by government debt
Stock markets featured no new issues
most equities not been traded with any frequency
the banking sector main source of finance for both public and private borrowers
EEB

7. The bond market
The development of a bond market is an essential element in ensuring that long-term funds are available for infrastructure investments
EEB

8. Expectation
Developed domestic capital markets will lower dependence on volatile foreign capital inflows
EEB

9. THE CHANGING MARKETPLACE
GLOBALIZATION
TECHNOLOGY
EXCHANGE GOVERNANCE
The CSME
EEB

10. Support
Macroeconomic environment must provide the basis for the development of a sound microeconomic structure
EEB

11. THE IPO MARKET MARKET ACTORS REGULATOR DEVELOPMENT OF VENTURE CAPITAL
ROLE OF BANKS
PRICING & ALLOCATION MECHANISMS
EQUITY CULTURE & EDUCATION
EEB

12. THE OBJECTIVES OF SECURITIES REGULATION
The protection of investors
Ensuring that markets are fair, efficient and transparent,
The reduction of systemic risk
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13. THE IPO MARKET PREPARE” TO GO PUBLIC STRATEGIC PARTNERS
SELECT UNDERWRITER
CORPORATE GOVERNANCE
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14. Benefits from development of IPO market
ISSUERS
INVESTORS
EXCHANGE
ECONOMY
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15. Domestic Debt Market Development
Lack of robust capital markets leads to weak and unstable corporate financial structures
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16. Why?
The efforts to develop local securities markets have been motivated by a number of considerations
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17. Why? Desire to stimulate domestic savings New financial instruments
New investment opportunities
Better portfolio diversification
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18. Why?
Alternative sources of funding for both the public and corporate sectors
A vehicle for managing financial risks
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19. Recent Trends in regional Securities Markets
In Trinidad and Tobago bond market used by regional and domestic borrowers
Growth driven by the need to recapitalize some firms and to finance expansionary fiscal policies
Large refinancing needs of the corporate sector in a difficult external environment
EEB

20. Want is happening
A number of countries have adopted measures to improve transparency and corporate governance, as they see these as critical for local capital markets development
Caribbean Corporate Governance Forum
EEB

21. Recommendation Strengthen domestic financial institutions
Enhance prudential supervision and regulation in order to increase resilience to volatility
EEB

22. Recommendation
Develop local securities markets to provide an alternative source of funding for public and corporate sectors and to facilitate the management of the financial risks associated with periods of high asset price volatility
EEB

23. Recommendation cont’d
Create a “consensus” about the importance of the capital market to attract new participants
companies and investors
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24. Recommendation cont’d
Enlarge individual’s investment by facilitating the access to different instruments
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25. Recommendation Cont’d
Strengthen the domestic investment
Improve the knowledge about the market mechanisms through Strong and sustained educational activities for investors
EEB

26. Recommendation cont’d
Enhance market infrastructure
Improve corporate governance requirements
Remove policy distortions that affect the efficient allocation of domestic savings
Introduce new financial products and services
EEB

27. Recommendation cont’d
There should be clear and unambiguous rules and procedures that govern all major aspects of the market
All participants must clearly understand their respective roles within the system, with well-defined procedures specifying where the responsibility for action rests
EEB

28. EEB