The Barbados Stock Exchange (usually abbreviated to BSE) is an association of Stock brokers-Members which operates a single, central marketplace for the trading of securities.
This is a main stock exchange which has its headquarters in the Barbadian capital of Bridgetown. The exchange is privately owned and is run on a not for profit basis, with both local and international companies included on the BSE.
This means that only members or brokers that they have given authorization to can trade on this stock exchange. Brokers who have their own account can trade on the exchange as long as he is acting as a principal. Members can also become an agent in order to trade on a client’s behalf.
The Third Largest Stock Exchange in The Caribbean
The Barbados Stock Exchange is the third largest amongst the four main stock exchanges in the Caribbean (the other three being Jamaica, Trinidad & Tobago and the Eastern Caribbean exchanges).
There is talk of all four merging into one unit to be known as the Caribbean Exchange Network, which would be abbreviated to CXN.
It seems that there is some resistance to this move and it is unlikely that this change will happen in the immediate future. However it is currently possible for traders from each of these four exchanges to cross trade.
The Barbados Stock Exchange is also looking into the possibility of enlarging the local exchange to include an International Securities Market (ISM) scheme.
Controlling The Capital Market
The current stock exchange started life as the Barbados Securities Exchange in 1987. This was created under the Securities Exchange Act of 1982 which created a marketplace for trading financial securities as well as promoting investment for the public and private enterprises.
The previous exchange was re-incorporated in 2001 with a revision of the Securities Act of 1982. This introduced the current Securities Act 2001-2013 and led to the installation of the Barbados Securities Commission.
The Securities Commission is now the regulator of the capital market watching all public companies, listed or otherwise. The affairs of the exchange are controlled through a Board of Directors and a General Manager.
How Are Stocks Traded On The BSE?
Up until July 2001, the Barbados Stock Exchange had been working on a manual system, known as the open auction outcry system.
At this time it switched to an electronic order routing trading system via utilization of the Nasdaq OMX trading system.
The orders placed now are queued immediately but a trade is only closed when two or more orders are matched. Orders or calls can be given at specified times with a 10% allowance above or below the previous closing amount.
Stocks on the Barbados stock exchange are traded in Barbados currency. This is the Barbados Dollar, which you will see denoted as BBD or BDS$ to distinguish it from other dollar currencies from around the world. One Barbados Dollar has 100 cents and has been traded at a fixed rate with the American Dollar since 1975.
Getting Listed On The BSE
In order to become a member of the Barbados Stock Exchange, interested businesses need to apply for listing and they need to meet the basic requirements that have been set out. This includes submitting a prospectus that is within the rules of the Companies Act and the Securities Act 2001-2013.
There are 2 markets under which a company can be listed on the stock exchange, each with their own unique requirements. These are the Regular Market, larger well established companies, and the Junior Market, for smaller companies with lower capital and less public share holders.
At present there are over 20 businesses listed on the Barbados Stock Exchange including First Caribbean International Bank, Sagicor Financial Corporation, Cable and Wireless Barbados Ltd. and West Indies Rum Distillery Ltd.
Growth And Stability
The Barbados Stock Exchange is secure and has a steady rate of growth. This is likely due to the fact that it is has quite a stable economy, is not reliant on oil prices or trading and is not affected by current affairs that have an impact on other major exchanges such as New York or London.
If you are heading to the island for work or a vacation, it is possible to change your home currency into Barbados Dollars. There are many currency websites which will help with the trade.
Visitors from the United States of America to Barbados should also note that many areas around the island will accept payment in US Dollars. This is due to the fact that the price does not fluctuate with this currency pair, thanks to the agreement made in 1975.
Many establishments around the island also accept travellers’ cheques and credit cards.