Latest update November 8th, 2024 1:00 AM
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Banks DIH to take action over concerns of Guyana Stock Exchange trading
Delegates look on as Chairman of Banks DIH Limited, Clifford Reis, makes a presentation at the 68th Annual General Meeting on Saturday
Kaieteur News – During the 68th Annual General Meeting of Banks DIH Limited on Saturday, a shareholder raised a query about the apparent lack of synchronisation between the positive developments within the company and the movement of share prices. Banks, a leading player in the manufacturing industry in Guyana, reported that its net profit grew by 6.8% to $8.970 billion up from 2022, for the financial year ending September 30, 2023.
In response to the shareholder concern, Banks DIH Chairman, Clifford Reis, said the company is concerned about the trading of shares on the Guyana Stock Exchange (GSE). Reis expressed worry that share values were not increasing as expected.
Despite positive developments within the company, he said, “We are able to develop this company with all of this capital works without borrowing and selling shares, that means the value of your shares will increase and that’s why we are concerned seriously about what is going at the Stock Exchange.”
He added, “With the level on the value of our shares. We’ll have to take action now, now to solve this problem.”
Reis questioned the trading dynamics on the GSE, highlighting the sale of shares without substantial financial evidence. According to Reis, in December 2023, some 80,000 shares were sold among 25 persons. He added that a number of those persons who sold 1,000 shares do not have sufficient financial evidence.
He proposed the establishment of an odd-lot market to prevent small transactions from impacting overall share values.
The lack of a new operational system since the GSE’s establishment in 1998 prompted Banks DIH to consider taking action to protect shareholders’ investments.
“Last night, we discussed it at our board meeting and we’re going to take action. We have to maybe be the pacesetters, as we are known as, to go forward to have this matter corrected once and for all,” the Chairman said. Notably, Reis did not reveal what the company’s plan is to fix the aforementioned.
Moreover, Reis also addressed concerns about the last trades on the GSE consistently being the lowest. He attributed this to the Stock Exchange publishing all securities transactions, leading even small transactions to significantly affect share values. The Chairman explained, “As a result of this practice, a small share transaction can significantly affect the share value of a particular share as is the case with all companies trading there.”
He disclosed too that the concern was already brought to the attention of the Guyana Securities Council and GSE. The Chairman also called on both entities to fulfill their mandate for orderly market growth.
Notably, the Chairman called for the implementation of an odd-lot market, as seen in other Caribbean territories, to safeguard pension schemes from financial hits due to declining share prices. He warned that companies with defined benefit schemes relying on shares could face challenges meeting obligations to pensioners without such market measures in place.
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