Role of the South Pacific Stock Exchange
A stock exchange's primary role is to serve as an organized marketplace, where buyers and sellers can come together in a common place to provide cash and credit for companies. The market allows stocks, bonds, commodities and a wide range of financial services to be marketed and traded. The exchange provides a safe, defined structure governed by financial controls and regulations.
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History of the South Pacific Stock Exchange
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The South Pacific Stock Exchange (SPSE) was established in 1979 in the Fijian capital, Suva, as a subsidiary of the Fiji Development Bank. It was known as the Suva Stock Exchange. In 1993, two stock-broking members joined the board. In 1996, as volume increased, the market converted to a call market, typical of markets around the world, with activity concentrated on a trading floor in the SPSE. In November 2000, the exchange was renamed SPSE. It is the only formal stock market in the South Pacific.
Purpose
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The South Pacific Stock Exchange's purpose is to provide a common marketplace for companies and organizations in the South Pacific region and the Fijian government to raise capital and provide liquidity. Local corporations raise money to invest and so grow. The exchange provides a place where private and institutional investors can invest their capital and savings. Lenders, including government agencies such as the Fijian Treasury, provide credit and cash. In addition the SPSE provides regulation and oversight to ensure transparency and confidence for shareholders and enforce company compliance with requirements for financial reporting.
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Companies
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The SPSE has a total of 16 companies listed and trading publicly on the exchange. The market is very small, trading only F$44 million (US$23 million) in volume in 2009. In May 2010, over 875,000 trades were executed with a total value of less than F$900,000 (about US$400,000). Companies listed include Fiji Television, Fiji Sugar, FijiCare Insurance and Please Beverages.
Types of Trading
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The SPSE allows trading in four types of securities: local shares, government bonds, government agency bonds and government treasury bills. The trading is an open call system and the stock exchange is open to the public. Three stock brokers are registered in Fiji with rights to trade in the market. Trading in futures, options or derivatives is not carried on.
Central Share Registry
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The SPSE operates a centralized share registry. The Central Share Registry is a subsidiary of the SPSE and seeks to provide a single location where all listed and unlisted companies can list and manage all shareholders in their respective companies. The registry was introduced to help manage the increasing volume of trades in the market and ensure compliance with shareholder registrations.
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References
Resources
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