BRITISH capital markets consultant, Mr. Jonathan Miller is optimistic that Guyana will have a stock exchange by the middle of next year, when shares, stocks and other securities can be bought and sold.

"We hope that, within the early part of next year, there will be a securities market where people can more easily buy shares and sell shares if they want to," he told the Chronicle last week.

Miller is working to set up the system, with British Government funding through its Department for International Development (DFID).

A grant of between half and three-quarters of a million pounds (Sterling) are being expended on the project, British High Commissioner to Guyana, Mr. Edward Glover said.

"It is something we strongly welcome."

"A stock exchange is an institution which helps the securities market. It is designed to make it easier to match orders between buyers and sellers, centralising the process and it also makes for the fulfillment of transactions between buyers and sellers more assured. Because, you don't want a situation in which people agree to do something and they don't deliver," Miller explained.

Guyana, Belize, Haiti and Cuba are the only Caribbean nations without such a trading facility, the expert said in an interview.

He explained that the process to develop a securities market is a long one which has emerged from the privatisation programme.

Miller, who previously worked in some 35 countries, is attached to the London-based Adam Smith Institute which has an office here.

He and other colleagues are advising the Government on legislation for regulating the local stock market, for which the Securities Industry Act was passed in 1998 to create the relevant institutions.

Guyana Securities Council was established in the third quarter of last year after Guyana Association of Securities Companies.

Actual work on the stock exchange began in the mid 1990s but, while little was heard of progress towards its realisation, Miller said related activities will become more visible in the early part of next year.

According to him, the Securities Industry Act has to be implemented through regulations issued by the Ministry of Finance or Guyana Securities Council.

"When these are enforced, they help people who are professionally engaged in the securities industry to know exactly what they need to," he added.

Miller described Guyana's economy as “tiny" but said that is no reason why this country should not have one, because investing in the stock market might just be able to save companies from going into bankruptcy.

"Most Guyanese businesses are too much heavily borrowed,” he observed, saying they “owe much too much” to commercial banks.

If companies are operating at a loss, there is practically nothing left for the shareholders and it does not take much more than a bad harvest to make you bankrupt, he explained.

"But if you have money that belongs to you and not to the bank, then that can protect you against bankruptcy, in that when prices are low and competition is very severe, for the sake of economic, industrial and commercial strength, it is very desirable that businesses have access to shared capital that is not borrowed,” Miller said.

Meanwhile, a lot of work still has to be done on the stock exchange, including most aspects of the implementation, like creating the institution, establishing the facility, training the staff and putting in place the arrangements for settling trade, whereby people deliver securities and receive money.

"Those things involve a lot of work, not rocket science. But they are troublesome. They've got to be absolutely reliable and timely, " Miller stressed.

He added:"We're at the beginning of that implementation stage, looking towards a Guyana stock exchange by June 2002”.