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Untitled Document

JSDA Council Bulletin (October 01, 2005)


In an effort to promptly disseminate to our members, information on critical issues in the securities sector, we have developed a Bulletin. This will be a monthly publication highlighting issues from our Council Meeting. We hope you will find this useful and we look forward to your feedback. From the President’s Desk
 
The Jsda Balance Scorecard
The JSDA has adopted the Balance Scorecard methodology which outlines the association’s objectives, performance measurements and related business owners. This document will be updated on a monthly basis to track all the association’s action items going forward.
 
Jsda Public Education Initiative
Council has agreed to engage a Public Relations professional to assist with the writing of the JSDA articles for the public education programme. It is anticipated that ten (10) JSDA articles will be published during the 2005/06 administrative year.
 
Market Analysis Report
The yield curve below is based on information gathered from 9 market players:
COMPOSITE 13.83% 13.97% 14.22% 14.85% 17.95%
The marketing committee reported that trading activity in JA$ securities in the secondary market tapered off as brokers and investors held their current position due to relatively high inflation and due to slippage in the value of the Jamaican currency. Most traders were offering a slight premium on yields to attract sales for JA$ Fixed Rate bonds. The focus continues to be on Variable Rate securities, as industry players seek to insulate their portfolio with the 1.50% margin offered on VR bonds in the event of any increases in local interest rates. It was reported also that the BOJ has adopted a re-pricing system for newly issued securities. Securities with quarterly coupons will be priced at the 90 days Treasury Bills with a margin and the securities that offer semi-annual coupons will be priced at the 180 days Treasury Bills with a margin.
Recent and current issues
 
September 23, 2005 September 28, 2005
90 day T’BILL            180 day T’BILL GOJ USD BOND 2010          
Tenure: - 90 days 180 days 5 years
Maturity date: - Dec. 23, 05 Mar 24, 06 Sept 29, 2010
Coupon/Av. yield - 12.96% 13.15% 8.125%
Int. Pymnt. Freq.  - none none Semi
 
Volume  J$300MM J$400MM US$150MM
     (Up 19 bps fr 12.77%)  (Up 12bps fr 13.03%)  
 
Oct. 4 – 6, 2005   Upcoming issue – October 14, 2005
GOJ VR Invmt Bond 2011/2012 T   GOJ Investment Debenture ‘Av’
6 years   3 years
Oct. 6, 2011   Oct. 17, 2008
12.96% + (1.50% 3 month WATBY)   13.65%
Quarterly   Quarterly
 
$5.5 B    Unlimited
 
Financial Services Commission
FSC Securities Bulletin on Early Warning Tests The JSDA has responded to the FSC’s Early Warning Securities Bulletin in a letter dated September 23, 2005. The Secretariat has circulated a copy of this correspondence to all members. Financial Services Commission (FSC) Discussion Papers The sub-committee’s comments regarding the FSC’s paper on ‘The Concept of “Qualified Investor” and its Importance to Jamaica’s Capital Markets’ was reviewed by Council and forwarded to the FSC. FSC Discussion Paper on Proposed Amendments to The Securities (Mutual Funds) Regulations A letter dated September 28, 2005 was sent to the FSC in response to the ‘Proposed Amendments to the Securities (Mutual Fund) Regulations’. The Secretariat has circulated a copy of this letter to all members. A letter from the FSC dated October 3, 2005 regarding the registration of local mutual funds has been received. Members of Council have met with the FSC to discuss issues relating to registration of local mutual funds and unit trusts. A summary of the discussions will be included in the next bulletin.
 
Caribbean Information & Credit Rating Services Ltd.
A meeting with Mr. Venkat Raman, CEO of the Caribbean Information & Credit Rating Services Ltd. (CariCRIS) and members of the JSDA was held on September 29, 2005. Members of the sub-committee assigned with reviewing the FSC’s paper on ‘Guidelines for Regulatory Oversight of Credit Rating Agencies’ were in attendance.
 
The Jsda & The Primary Dealers Association
Regarding the integration of the JSDA and the PDA, it has been decided that Mr. Lissant Mitchell, President of the PDA will be invited to attend the JSDA’s monthly Council Meetings.
 
Caribbean Securities Regulators Conference
On the invitation of the FSC, representatives from the JSDA participated as speakers, moderators and panellist at the Caribbean Securities Regulators Conference on November 7 & 8, 2005.
 
Jamaica Stock Exchange (Jse) /Jamaica Central Securities Depository (Jcsd) Fixed Income Project
Representatives from the JSE/JCSD were invited to the council meeting to discuss issues relating to the Ownership, Governance, Conditions of Participation and the Status of the Fixed Income Project. Mr. Roy Johnson, Mrs. Marlene Street, Mr. Robin Levy of the JSE/JCSD and Ms. Maxine Brown, Project Manager from PWC were in attendance. The JSE/JCSD representatives advised that the MOU has been redrafted for review by the JBA and JSDA and a special meeting was convened for Council to review the revised MOU. Mr. Johnson urged the endorsement of the MOU which he indicates is critical for the progression of the project. The meeting was advised that the software vendor Polaris, is currently engaged in the development of the system which will be delivered in 2 phases. Functionalities such as purging will be provided in the 2nd phase. The JSE/JCSD are currently engaged in the following activities relating to the project: • Arranging for training related to User Assessment Testing (scheduled to commence in January ‘06) and data migration phase. • Producing an operations manual • Drafting of legal documents Discussions ensued about the operational aspects of the system and settlement arrangements. It was agreed that the JSE would provide scripts of specimen transactions for analysis by the JSDA.

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