BSX sees ILS listings top $5.8b
The Royal Gazette / Bermuda Stock Exchange (BSX) Index rose four percent last year as trading turnover surged and the value of insurance-linked securities (ILS) on the Exchange climbed to $5.8 billion.
In a statement reviewing the year, BSX chief executive officer Greg Wojciechowski said Government’s decision to loosen restrictions on foreign investment through an amendment of the 60-40 ownership rule for qualifying listed companies was a “significant development” for the local capital market.
The total market capitalisation of the BSX as at 31 December 2012 (excluding fund listings) stood at over $421 billion of which approximately $1.53 billion represented the domestic market. Total trading volume for the period was 12.7 million shares with a corresponding value of $38 million compared to 6.5 million shares with a corresponding value of $25.3 million for 2010.
The RG/BSX Index closed the year at 1,090.82 which is four percent higher than 2011.
As at 31 December 2012 there were 633 securities listed on the BSX. Included in the new listings were the variable note programmes of Everglades Re, Eurus III and Blue Danube. The further listing of Queen Street Re V, VI, VII and Lakeside Re III along with programme issuances by Embarcadero Reinsurance plus Compass Re and the launch of the specialist exchange traded fund Blue Capital Global Reinsurance Fund raised the number of ILS listed on the BSX to 38 with an approximate market capitalisation of $5.81 billion.
There were 23 new collective investment vehicles, 15 international equities and three fixed income securities listed and nine subsequent issues from listed issuers.
Mr Wojciechowski said: “2012 was a challenging period for the domestic capital market largely reflecting Bermuda’s general economic climate. BSX listed issuers continued to perform, offering the services that have made them successful for many years and iconic brands in the country.”
The BSX reported that, although the Bermuda domestic capital market continued to experience pressure as a result of global and domestic market conditions, BSX international listing business, and in particular the listing of ILS, gained momentum for the BSX and Bermuda.
During the year the BSX moved into its new office premises at 30 Victoria Street, near the Bermuda Monetary Authority, creating Bermuda’s “Regulatory Row”.
Noteworthy in 2012 were the listings of the Bermuda Government Bond, Waterloo International Investment Holdings, Cambridge Energy Group, Bermuda National, Wire & Wire, Apollo Enterprise Solutions and Green States Energy. Delistings included Flagstone Re Holdings following its merger with Validus Holdings.
2012 also saw the admission of Cohort Ltd as a BSX trading member and Appleby Securities upgrading its listing sponsorship membership to full member of the BSX.
The amendment to the Companies Act allows listed companies in “prescribed sectors” to apply from the relief from the 60-40 ownership rule.
“A significant development occurred in the summer of 2012 when the Government of Bermuda enacted legislation that eased, in a deliberate and throttled fashion, foreign ownership restrictions on publicly listed companies in prescribed industry sectors,” Mr Wojciechowski said.
“Healthy markets support capital formation for companies that allow them to grow, enhance or develop products and services which in turn benefit consumers and by extension through corporate growth provides employment opportunities for a country’s work force. The ability for public companies to seek capital in the most efficient and effective manner is a significant development for the Bermuda’s domestic capital market and mirrors internationally accepted principles that underpin modern capital market and stock exchange operation.”
Discussing international business development, he added: “The BSX ended the year on an extremely positive note. Two important developments were the continued growth in our ILS listing business and the work that we have accomplished in supporting international Small and Medium Enterprises (SME).
“The BSX ended the year with a record number of ILS listed issues assisting Bermuda to firmly establish itself as a centre of excellence for the creation, listing and servicing of the ILS asset class. In respect of SME’s interest in listing and trading in their listed shares is firmly on the rise.”
BSX chief compliance officer James McKirdy said: “Year-on-year listings increased by 20 securities despite the continued difficult global economic conditions. More impressively new listings totalled 56 securities. There was continued growth in the listings of ILS and international equities, while listing of collective investment vehicles held steady through the year.”
Mr Wojciechowski concluded: “I am delighted with the place we find ourselves as we begin of 2013 and have every confidence that the hard work that has been undertaken at the BSX and in Bermuda to create and sustain a reputable and respected commercial and regulatory environment will continue to drive commercial development and assist us in adding new lines of business and further elevate Bermuda’s position amongst the major global financial centres.”