The Guyana Association of Securities Companies and Intermediaries Incorporated (GASCI) needs 240 transactions per session or 8,000 transactions annually to break even.
This is according to Patrick van Beek, acting chief executive officer of GASCI, who said the exchange now averages ten transactions a week.
In an interview with Stabroek News last week, van Beek said that the most important issue for the stock exchange's viability is having companies listed on the exchange, and not merely registered. He added that companies seemed to be reluctant to be registered, but there was an incentive since they would be cross-listed on Caribbean stock exchanges.
He said that two companies, Banks DIH Ltd and Sterling Products Ltd were approached about becoming listed on GASCI, but no positive word was forthcoming from either company. Listing proposals were also sent to the other companies but they have not responded. "We have to change our tactics. The companies at top level do not seem too interested."
He said that if GASCI could get four or five companies listed, this would comprise the lion's share of the money that is needed. GASCI, he said, runs at an annual operational cost of $12 million.
He said that for the first quarter, GASCI charged transaction fees of $500 plus .025% of the total consideration in excess of $10,000. But from October, the fees have been adjusted and for each trade it costs .25% of the total consideration with a minimum of US$500. Van Beek said that for the first quarter GASCI made only $84,818 in transaction fees from 150 transactions.
He stated that registered companies have to pay an initial fee of $250,000 and that this includes a $100,000 subscription to GASCI's share capital. Companies also have to pay $25,000 per annum.
Van Beek said that GASCI did not apply its rules for the 14 companies registered on the exchange since they are not on GASCI's listing. When they do list, GASCI's regulations will be applied to them. As these companies would also have been registered with the Guyana Securities Council (GSC), GASCI accepts them for registration, he said. Van Beek said also that while the recent move to block banks making loans which are secured by bonds could be harmful, it could benefit the stock exchange in the long term. He said that if companies go public they could issue corporate debt on the exchange. He made the point that the banks are the best option for the restructuring of a deal at the moment and said that a corporate bond is a "tradable" instrument which should be able to be bought or sold on the exchange, but he has seen none of this so far. (Johann Earle)