February 5, 2025:
Managing Director of the Jamaica Stock Exchange (JSE), Dr. Marlene Street Forrest, has identified the need for capital markets and the broader financial superstructure in Jamaica and the Caribbean region to embrace change and innovation in order to continue the advance of the region’s financial ecosystem and drive growth.
In an address to the 20th Regional Conference of the Jamaica Stock Exchange held at the Jamaica Pegasus Hotel in the capital Kingston recently, Dr. Street Forrest identified the need for increased diversification of financial products and digital transformation in financial services as lynchpins in the drive to accelerate financial success and increased participation in the markets.
Speaking on the conference’s theme “Safeguarding the Capital Markets: People, Progress and Opportunities”, Dr. Street Forrest noted that it addressed “the core of our mission as a region.” “It challenges us to think beyond the present, to strengthen the frameworks that govern and sustain our markets, and to unlock opportunities to drive inclusive growth and regional financial stability. It also signals us to cement our commitment to ensuring that the financial system we steward is not only robust and inclusive, but also a dynamic driver of sustainable growth,” she stated.
She said the conference marked two decades of commitment to advancing the Caribbean region’s financial ecosystem and demonstrated the critical importance of collaboration, innovation and having a shared vision.
High returns
The Jamaica Stock Exchange, under Street Forrest’s helm, has consistently ranked as among the leading stock exchanges internationally. Top market watcher Bloomberg, has repeatedly named the JSE as among the best performing stock exchanges globally, citing its high returns on investments compared to other markets.
The JSE has seen significant index gains, with Bloomberg reporting returns exceeding 300% over a five-year period in some instances. Of the markets surveyed by the watchdog International Finance Corporation (IFC), the JSE emerged as the number one stock market in the world twice, in 2015 and again in 2018. This recognition has brought attention to the Jamaican stock market and its potential for investors both locally and internationally, as it is seen as among the most lucrative stock markets in the world with a continuous increasing trend where some stocks have doubled, some tripled and others increasing fourfold in value.
While the JSE has experienced some contraction in recent years following four consecutive years of pre-pandemic growth consequent on a shift in the economic environment from equities to fixed income which offered double-digit rates and elevated interest rates introduced by Jamaica’s central bank to curb inflation, there are signs of sustainable growth. The Bank of Jamaica reduced rates by 1.0 per cent to 6.0 per cent this calendar year, supporting a partial transition back to equities and underscoring what Dr. Street Forrest has long highlighted as the inverse relationship between interest rates and stock market performance.
Innovation and technology led development
Continuing on her theme of the need for market diversification, Dr. Street Forrest identified the global shift toward diversified financial products such as green bonds, sustainability-linked securities and alternative investment funds, as ways in which innovation could create pathways to attract new investor segments. She said that the Caribbean must prioritize creating instruments that meet global demand while addressing local needs, pointing to the latest news from the Jamaica Chamber of Commerce’s 4th Quarter Survey on Business and Consumer Confidence which continued to show a positive trend, demonstrating that there was optimism in the Jamaican capital market through enhanced strategies.
She also observed that technology-driven innovation like block chain and tokenized assets, were “reshaping how we trade, settle and invest. While we have started on the journey, it is important that our financial markets move speedily ahead to create the necessary legislation and framework to embrace it and for the framework created to be workable and not steeped in bureaucracy and red tape. It must have just the right mix to foster creativity and the willingness of market makers to want to move forward”, the JSE head stated.
Pointing to the need for enhanced financial products to fuel long-term growth, Dr. Street Forrest said that the “rapidly evolving global financial landscape challenges us to think differently. To remain competitive and to safeguard the future of our markets, we must look beyond traditional models and embrace innovation as a catalyst for long-term value creation”, she observed, noting that these included expanding the product range and digital transformation in financial services.
Turning to the matter of facilitating small and medium sized companies (SMEs) as the engine of growth in Jamaica and the region, Dr. Street Forrest noted that some efforts, such as the Junior Market, had yielded success, but there was a need to “move forward with more creative products tailored to support SMEs and then startups and the SMEs will play a more transformative role in regional economic development.”
She observed that “other products such as equity venture capital and crowd funding platforms must be contemplated and implemented to increase the number of options and access to capital that are available to micro, small and medium sized companies,” noting that investors were “shifting towards Environmental, Social and Government (ESG) compliant products that aligned financial returns with positive environmental and social impact.”
She said the Jamaica Stock Exchange had already made strides with the Jamaica Green Social and Sustainability Linked Bond Guide, but there was a need to deepen efforts to become regional leaders in ESG-aligned financial innovation. “Over the course of the conference, we will be launching the JSE Green Bond Plus market which we believe will attract companies wishing to take advantage of the green market to raise capital”, she announced, noting further that for the capital market to really work, it must be inclusive, enabling those who remain underserved by traditional markets through technology-enabled solutions, such as micro-investing platforms which could help to democratize access to investment opportunities.
