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Untitled Document

JSDA Council Bulletin (January 10, 2006)


 

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 INITIATIVE

 

 

The general membership was invited to attend the Council meeting held in January 2006.  Mr. Duncan outlined some of the achievements of the Association and goals for the near future.

 

The JSDA will embark on a three (3) month PR Programme commencing the first quarter of 2006 and will seek to engage the FSC in these activities which will include:

 

§  Launch of the JSDA website

  • JSDA Luncheon
  • Public Education Seminar

 

A template for the JSDA website has been designed and should be completed by the end of the month.  The following were selected as possible domain names for the website:

 

             jamaicasecuritiesdealers.com

             JSDAssociation.com   

 

 

CONSULTANCY  FOR CAPITAL ADEQUACY STANDARDS

 

Members are reminded of the imminent imposition of the FSC’s 5% margin requirement which is expected to become effective March 2006.  The JSDA has committed to developing an alternate Capital Adequacy Requirement Model for the industry and has held discussions with PricewaterhouseCoopers (PwC) regarding the provision of consultancy services for this project.   As efforts to obtain funding for the project from external sources have proven futile, it has been decided that members will be charged a cess to cover the cost of the first phase.  The cess will be levied based on the existing membership fee structure and members will be requested to commit to funding the second phase in the event that the association is unable to obtain external funding assistance. 

 

 

FINANCIAL SERVICES COMMISSION (FSC)

The Executive Committee of the JSDA will follow up with the FSC at the next quarterly meeting regarding the regulator’s response to the JSDA’s submissions on Unit Trusts & Mutual Funds.

 

 

 PRIMARY DEALERS

ASSOCIATION (PDA)

 

 

 

 

 

Quarterly meeting with the Bank of Jamaica (BOJ)

The PDA held their quarterly meeting with the Central Bank on December 14 where it was forecasted that the inflation rate for the fiscal year would fall between 15% and 16% and it was acknowledged that the fiscal target for the period will not be met.   The Association continues to dialogue with the BOJ regarding issues of transferability of BOJ instruments.

 

Fixed Income Depository Project

The PDA has requested that the Jamaica Stock Exchange (JSE)/Jamaica Central Securities Depository (JCSD) stage a forum to demonstrate the flow of specimen transactions and the use of the system.  It was agreed that the JSDA will collaborate with the PDA on this venture.

 

MARKET SOUNDING REPORT

 

 

 

The yield curve below is based on information gathered from 14 market participants:

 

PIC




COMPOSITE

14.12%

14.46%

14.87%

15.70%

18.47%

 

It has been reported that based on feedback from a majority of securities dealers, this year should be a very active one for securities trading.  The results of the last Treasury Bill auction which resulted in the 90 day T-Bill being fully allotted at yields ranging from 12.98% - 14% and partial allotment up to 16.50% and the 180 day fully allotted at 13.10% - 16.50% was noted as a significant indicator. Overall market sentiment has been somewhat muted at the start of the year, with overnight rates trading at a high of 10% and 30days at 13%, this primarily attributable to the high liquidity levels for the month, $27B in OMO maturities and $6B in primary issue interest payments and maturities.

 

The USD trading market continues to experience fleeting moments of liquidity, with the dollar trading between J$64.60 and $64.85 to US$1.00 since the beginning of the year. Overall US Dollar securities trading activity could be characterized as being marginally muted, with most market players adopting a wait and see approach, this, based on market developments within the US. 

 

Recent and Current Issues

 

December 20 - 21, 2005                                 January 12 - 16, 2006

 

GOJ FR USD  Local Bond 2010A                 GOJ VR Local Registered Bond 2008/09 H

4 years 6 mths                                                 2 years 9 mths

June 21, 2010                                                  October 18, 2008

8.125%                                                                         13.34%, 1.50% WATBY

Semi-annually                                                  Quarterly                                                          

Uptake – USD$96 million                              

 


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