BSX cements ILS dominance in 2019
The Bermuda Stock Exchange yesterday released its year-end report for 2019.
Greg Wojciechowski, the BSX’s president and chief executive officer, said highlights included Miami International Holdings’ acquisition of a controlling interest in the exchange, announced in November.
“The acquisition is in perfect alignment with our shared corporate strategy to expand our, now combined, world-class exchange platforms, derivatives trading and regulatory experience to establish a much larger international presence, to address emerging markets and other opportunities such as digital assets,” Mr Wojciechowski said.
“The BSX’s reappointment to the board of the World Federation of Exchanges was another noteworthy achievement, one which once again globally reinforces the exchange’s position as a pre-eminent offshore exchange.”
Mr Wojciechowski added that 2019 marked a resurgence in the insurance-linked securities market, especially with respect to catastrophe property bonds, and correspondingly there was a steady uptick in the listing of risk-linked securities on the BSX.
“Concurrently, the exchange actively sought out new markets and products to further expand our consistently developing listing service for structured debt products,” he added.
James McKirdy, the BSX’s chief compliance officer, said the number of ILS listed securities rose from 125 in 2018 to 155 securities in 2019, with a combined nominal value of $10.84 billion, representing year-on-year growth of 24 per cent.
“At the end of the year the total number of ILS listed securities stood at 401, with a combined nominal value of $34.72 billion,” Mr McKirdy added. “Based on a recently released report by Artemis, global ILS issuance outstanding market size stood at a record breaking $41 billion at the close of 2019, of which 84.6 per cent of the total is now listed on the BSX.
“International debt listings held steady in 2019, despite a global downturn in the sector, due in part to market uncertainty over Brexit in the UK. Notwithstanding the pause in the growth of the number of securities listed, the nominal value of the listings grew by $1.3 billion, or 17 per cent, to $8.9 billion, as maturing securities were replaced by larger issuances, in nominal terms.”
Mr McKirdy’s report added: “The exchange listed nine new collective investment vehicles, three new equities and 13 new derivatives. A further two subsequent issues were also processed by the BSX.
“As in previous years, de-listings in the year followed a normal pattern and were mainly comprised of time-limited securities which matured as part of the normal course of business.
At year end there were a total of 1,004 listed securities, compared to 988 in 2018.”
The RG/BSX Index closed the year up at 2,404.48, an increase of 22.74 per cent over 2018, in keeping with global market trends.
Trading volume on the domestic market decreased in 2019 to 3.1 million shares traded. Correspondingly share value traded ended the year at $30.6 million. Overall, the BSX ended the year with a total market capitalisation of $332 billion.
Neville Caines, the BSX’s operations manager, said: “The BSD, the Domestic Central Counter Party and Central Securities Depository, continued to ensure orderly settlement of trades and processing of all domestic corporate actions. At year’s end the BSD held 49 per cent of all domestic listed securities in custody, down 13 per cent on last year.
Mr Caines added: “Building on the results of the much anticipated America’s Central Securities Depository Association Financial Market Infrastructure on-site review completed in June 2019, the Exchange continues to work vigorously to ensure its alignment with global harmonisation of securities settlement standards.”
The BSX’s partnership with Nasdaq continues, with further upgrades to trading, settlement and depository systems planned for early 2020. The development of the website, www.bsx.com, also continues with additional information and search facilities added in 2019. The BSX added that “increasing use of virtualisation technology allowed us to increase system redundancy. Cybersecurity, always a priority at the BSX, saw several new surveillance mechanisms implemented, to further fortify the protection of the exchange’s data.”
The report said the BSX remains firmly committed to its support of Bermuda’s domestic capital market. In 2019, as part of its “Own Your Share of Bermuda” investor education awareness programme, the BSX again participated in Iosco’s World Investor Week in October. In keeping with the event’s global theme “Ring the bell for financial literacy”, the BSX, in partnership with the CFA Society of Bermuda and with the assistance of the City of Hamilton’s Town Crier, literally rang the bell in Bermuda to reinforce the importance of investor literacy and ongoing education.
The BSX noted that The Royal Gazette also supported the initiative, running a series of investor education and literacy articles throughout the week.
Mr Wojciechowski described 2019 as a busy and successful year for the BSX.
“At the close of 2018 we made a commitment to Bermuda and to all our stakeholders, to expand our international outreach with a view to creating new strategic partnerships and we have lived up to and, in many respects, exceeded that promise.
“The merger with MIH took many months of determined effort on the part of all concerned and I am exceptionally proud of how our dedicated BSX team seamlessly managed the day-to-day operations of the exchange throughout the process; ensuring there was no interruption to the world-class service on which we have built our solid global reputation.
“Today, as we stand on the threshold of not only a new year but a new decade, we look forward with even greater resolve to building on our strengths, as together with new, and established partners, we renew our commitment to the domestic capital market, which we have served for over 45 years, all the while ensuring that the BSX remains the world’s pre-eminent offshore securities exchange, and Bermuda the place where business happens.”
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