BSX: “2010 Was A Challenging Year”
The BSX reported today [Jan .5] that although the Bermuda domestic capital market continued to experience pressure as a result of the global market dislocation, BSX international listing business and in particular the listing of Insurance Linked Securities continued to gain momentum and generate positive attention from the global capital markets forBermuda.
The total market capitalisation of the BSX as at December 31, 2010 (excluding fund listings) stood at over $319 billion of which approximately $1.4 billion represented the domestic market. Total trading volume for the period was 64 million shares with a corresponding value of $112 million compared to 5.7 million shares with a corresponding value of $50.9 million for 2009.
The RG/BSX Index closed the year at 1149.49 which is 45 percent lower than 2009.
As at December 31, 2010, 807 issuers were listed on the BSX. Included in the new listings was the Variable Note programme of Lodestone Re. This listing and others from Montana Re and Merna Reinsurance II raised the number of Insurance Linked Securities listed on the BSX to 19 with an approximate market capitalisation of $1.83 billion.
In addition, the Exchange listed a further 124 international derivative warrants.
There were also 55 new collective investment vehicles listed and seven subsequent issues from listed issuers.
Noteworthy in 2010 was the Bank of Butterfield’s $550 million capital raise, its subsequent successful rights offering as well as the listing of $500 million of the Government of Bermuda’s 5.603 percent Senior Notes and the delisting of the shares of Bermuda Container Line.
Commenting on the year, BSX Chief Compliance Officer James McKirdy said: “This activity continues to underscore that the domestic capital market works and that Bermuda based investors have an investment appetite for well structured and regulated investment opportunities. Also, despite challenging economic times, new listings continue to be attracted to the BSX and the year ended with a record number of listed
issuers, 807.”
In 2010, the BSX continued to enhance its data dissemination capabilities to the international financial markets by adding RSS and XML feeds for trade data reporting.
The Exchange implemented a new platform supporting the electronic submission of listed fund pricing data and more content was added to the Exchange’s website making issuers’ historical pricing more readily available.
In addition, a data feed to the IDC Group was established further expanding the BSX’s global data coverage.
In making the year-end announcement, BSX President and Chief Executive Officer Greg Wojciechowski stated, “2010 was a challenging period for the domestic capital market. Trading volumes and values hit lows as investors reacted to financial market news and results posted by BSX listed issuers. “The RG/BSX index fell by 45 percent to one of its lowest levels since 1997.”
He went on to note “Historically, the domestic capital market tends to lag developments (negative or positive) in the larger financial markets.
Encouragingly, many markets have ended 2010 in much stronger positions. Although the Bermuda economy is in the midst of a negative economic cycle, Bermuda companies continue to operate and provide their clients with the products and services which have made them successful over the years.
“During times of severe economic pressure, investor sentiment wanes, but those that are cautious, deliberate and prudent in their analysis may find solid long term investment opportunities.”
Discussing developments in the Exchange’s international business platform he went on to note. “The BSX ended the year with a record number of listed issuers of which we are very proud.
“We are equally as proud of assisting in raising Bermuda’s profile in the global financial markets for the creation, listing and capital market support services of
Insurance Linked Securities, such as Catastrophe Bonds. Bermuda has an important role to play in supporting this dynamic and growing market which saw over $5 billion in new structure issuances in 2010 alone.
“The BSX entered this market much later than its competitors and the results to date have been impressive further deepening the Exchange’s commitment to this space. The BSX will work hard and closely with the insurance industry to provide additional levels of stock exchange support for these and other instruments so that Bermuda solidifies itself as the logical location for the convergence of the capital and insurance markets”
In closing he stated, “I look forward to 2011 and have every confidence that the hard work that has been done in Bermuda to create and sustain a reputable and respected commercial and regulatory environment will drive the country forward, assist us in adding new lines of business and further elevate Bermuda’s position amongst the major global financial centres.”
