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Untitled Document

JSDA Council Bulletin (June 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
 
Jsda Public Education Programme
An article entitled ‘Deposit Insurance – not the only option” prepared by Mrs. Fayval Williams of JMMB, was published in the Sunday Business Gleaner on July 3, 2005. This is the first of a series of publications which will appear in the news media as part of the JSDA’s public education drive.
 
Financial Sector Assessment Programme
Members of the JSDA Council met with representatives of the FSAP Mission. It was reported that the tone of the meeting was positive. Mission representatives queried the rationale for developing a Mutual Fund Act as opposed to utilizing the existing Unit Trust Act as the legal framework for the development of the mutual funds industry. This issue sparked lively discussions.
 
Market Analysis Report

The yield curve below is based on information gathered from 10 of the players in the market:

 

COMPOSITE

13.67%

13.83%

14.12%

14.82%

17.95%

A BOJ rate cut was effected on May 26, resulting in a further flattening of the BOJ reverse repo yield curve. The difference between the 30 day and 365 day rate fell to 100 basis points compared to 155 basis points in April. The GOJ’s successful offering of a USD$300m Eurobond with a coupon of 9% maturing in 2015 was cited as the catalyst for the rate cut which led in turn to the early closure of VR Investment Bond 2011/2012 Series N, which garnered $4.7b.

30 days

60 days

90 days

120 days

180 days

270 days

365 days

 

 

 

 

 

 

 

 

New Rate

12.60%

12.70%

12.75%

12.85%

13.00%

13.25%

13.60%

 

 

 

 

 

 

 

 

Previous Rate

12.95%

13.10%

13.20%

13.30%

13.45%

14.00%

14.50%

Change in Rates (bp)

35

40

45

45

45

75

90

 
Recent and current issues
 

May 26-27, 2005

GOJ VR INVESTMENT BOND Series N        
Tenure: - 72 months
Maturity date: - May 27, 2011
Coupon - 13.45% p.a. for first 6 months
Reset - 1.50% WATBY
Int. Pymnt. Freq. - Quarterly
Amount issued - $4.767 billion
   
The fall in stock prices on the Jamaica Stock Exchange despite the fact that companies were profitable was noted and it was suggested that there was a need to inspire confidence in the market.
 
Consultancy
The JSDA will explore possible funding sources to defray the cost of engaging PricewaterhouseCoopers (PwC) to conduct research and develop an appropriate Capital Adequacy model for the Securities Industry. The FSAP Mission has expressed an interest in offering guidance in this area and the PSOJ Secretariat will anchor an application for grant funding to JAMPRO under the European Union funded Private Sector Development Programme.
 
Financial Services Commission
The JSDA sub-committee on the FSC Securities Bulletin on Early Warning Tests will meet to discuss related concerns with a view to meeting with Mr. George Roper of the FSC at a later date for further dialogue. Mr. Leo Williams of JMMB was invited to present a report on the FSC’s Discussion Paper on Proposed Amendment to the Securities (Mutual Funds) Regulations. He informed that Myers Fletcher & Gordon (MF&G) was commissioned by JMMB to examine the paper and in their findings it was revealed that the proposed changes were cosmetic for the most part and that there were fundamental gaps which would prove problematic for the industry. Council has agreed to engage the services of MF&G to do a further review of the document on behalf of the JSDA.

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