The Bermuda Stock Exchange has reinforced its position as the global leader and listing venue of preference for issuers of insurance-linked Securities, according to a year-end review.
Greg Wojciechowski, chief executive officer of the BSX said: “In 2017, the BSX built upon its position as the listing venue of choice for global ILS vehicles.
“In addition, the significant increase in the number of international debt issuers illustrates that the market is clearly aware of the benefits of listing securities on the BSX and this is creating new opportunities for the Exchange and its listing sponsor community.
“The accomplishments of the BSX to date and in particular this year’s results, are directly attributable to the hard work of a small, dedicated team of world class stock exchange professionals that manage and operate the Exchange on a daily basis.
“The team clearly understands the important role the BSX platform plays in the development of the Island’s domestic capital market and in particular its regulatory role which ensures investor and market protection. This and how all the pieces collectively contribute to the health and development of Bermuda’s economy.”
He added: “Furthermore, the team is committed to ensuring that Exchange remains a leader among its peers internationally by providing global capital market access and solid support for domestic market users.”
Meanwhile, James McKirdy, chief compliance officer, said: “The BSX once again saw positive listing activity across most sectors. As noted, listing activity was particularly strong in international debt and insurance-linked securities, which both reached record levels.”
Mr McKirdy said international debt listings grew to 180 securities by the end of the year, up 55 per cent from 116 in 2016, with their nominal value growing from $2 billion to $4.6 billion.
During the past year, the local exchange saw the listing of a total of 103 new ILS securities, with a combined nominal value of $11.54 billion.
“This represents growth of 69 per cent in terms of the number of new securities listed in the year and an 87 per cent growth in the nominal value. At year end, the total number of ILS securities listed stood at 227 securities with a total nominal value of $25.99 billion,” said Mr McKirdy.
The exchange also listed four new collective investment vehicles, three new equities and 20 new derivatives. A further nine subsequent issues were also processed by the BSX.
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 the total number of listed securities stood at 865, up from 753 in 2016. While The Royal Gazette/BSX Index closed the year at 2,202.19 up 14.47 per cent on 2016.
Trading volume decreased in 2017 to 3.8 million shares traded. Correspondingly share value ended the year at $40.1 million.
The BSX said it was another busy year as the Bermuda Securities Depository continued to ensure the orderly settlement of trades and processing of all domestic corporate actions. At year’s end the BSD held 62 per cent of all domestic listed securities in custody, up from 58 per cent last year.
The BSX ended the year with a total market capitalisation of $432.1 billion, $2.7 billion of which represented the domestic market.
Neville Caines, operations manager, said: “From an operational perspective the most significant highlight was the Exchange’s move from a T+3 to T+2 settlement cycle. The move was in keeping with the long-term goal of global harmonisation of exchange settlement and further aligned Bermuda with much larger CSDs seeking to reduce settlement risk and improve capital efficiency.”
Last year also saw the completion of a number of important projects within the technology group of the exchange. These included upgrades to the trading and settlement systems, signing a new contract with Nasdaq for continued use of their technology and upgrades to the gateways used by clients to access the exchange’s systems.
Ian Havercroft, IT manager, said: “Independent surveys of our infrastructure have indicated that the BSX aligns closely with the US NIST Cybersecurity framework and our overall security score is near the highest scores in our industry.
“Cybersecurity remains a priority at the BSX with continual improvements being made to all systems to fortify the Exchange’s protection. Cybersecurity remains one of our biggest concerns. Last year saw a number of high-profile global cybersecurity events, none of which affected the BSX, due to our robust defences and user education, both key to avoiding disruption.”
Domestically the BSX furthered its commitment to the development of the Bermuda capital market by initiating an ‘Own Your Share of Bermuda’ investor education programme.
Mr Wojciechowski said: “The programme was created to increase investor awareness, through education and information, with a view to ultimately increasing trade activity across Bermuda’s national stock exchange.”
He said that as part of the initiative the BSX worked with industry partners to produce an informative investor awareness guide. This was supported by a number of public forums. The exchange participated in IOSCO’s inaugural World Investor Week, and ran an investor education quiz in conjunction with The Royal Gazette.
“We were very pleased with the positive response the initial campaign received from the general public as well as our domestic listed issuers and the Exchange intends to build on that success in 2018 to further expand the programme and continue to develop and support the domestic capital market,” said Mr Wojciechowski.
He added: “2017 was another solid year for the exchange as we continued to expand our global reach and develop our domestic market.
“The focus in 2018 will be continued expansion of our international outreach with a view to creating new strategic partnerships that will enhance the exchange’s global reputation with the ultimate goal of deriving a sound return on investment for our shareholders.
“Domestically, we will continue to work with our members in a determined effort to support the domestic capital market by expanding our ‘Own Your Share of Bermuda’ investor education programme, initiating new and creative ways to expand and diversify share ownership and increase trade activity.”