Many Overseas Jamaicans have been reading the various intensional media reports about the impressive performance of the Jamaica Stock Exchange, crowned by Bloomberg as the best performing stock exchange in the world for the last 5 years, significantly outperforming Vietnam and the USA.
Naturally, the next question I often get asked is how can one invest in the stock market there and benefit from this growth. Normally an investor who wishes to get exposure to an overseas market is able to find a mutual fund or an exchange-traded fund, ETF, listed on one of the major world stock exchanges, easily getting exposure to China, Brazil, India and others. A Bloomberg article pointed out that there is no such ETF with exposure to Jamaica so that means that, for now, an investor would need to research the various stock brokers in Jamaica, fill out the necessary paperwork, get two references, provide your Social Security Number or equivalent national ID number and then open the account. Some brokers require a second signatory in the account so be sure to ask ahead of time.
This realistically means a flight to Jamaica to complete and sign all paperwork. Your broker will also open your Jamaica Central Securities Depository Ltd. account which is the custodian for your shares and a subsidiary of the Jamaica Stock Exchange.
A good broker will help you plan your investment strategy based on your risk tolerance and explain the differences between the Main Market, Junior Market and the JMD listings versus the USD listings as Jamaica does have some stocks priced in US dollars and not subject to exchange rate fluctuations.
Blue Mahoe Capital Partners Inc. opened our account with JN Fund Managers, a subsidiary of Jamaica National, where I used to work, and my personal account is also there. The process was smooth and statements are mailed to me in Florida as well as available online. The account is funded via wire transfers through a US bank and credited to the local account then orders are executed as per written instructions via email to create a paper trail.
Blue Mahoe Capital is working on launching the first ETF with exposure to Jamaican stocks for launch early next year and that would allow an investor to simply use any US broker to purchase shares of the ETF and skip the additional steps if investing as an individual. This will not be for everyone and so each person will have to evaluate it at that time.
If you wish to begin investing in Jamaica right now then prepare to book a plane ticket after checking the JSE Brokers listing and deciding which broker to use.
Please speak with a registered investment advisor before making any investment decisions. This is article is for information purposes only.
David P.A. Mullings is the Founder and CEO of Blue Mahoe Capital Partners, Inc., a private investment firm based in Florida – www.bluemahoecapital.com