Press Release No. : 03/2021
Date : 12 February 2021
At its meeting on 9 February, the Capital Markets Advisory and Development Taskforce welcomed the progress reported by key capital market stakeholders and considered a number of issues, including:
- Stock market noted subdued growth in 2020. The South Pacific Stock Exchange (SPX) announced that average total stock market return for 2020 stood at 9.1 percent (tax-free) in comparison to 43.0 percent the previous year. The outturn is largely attributed to declines in share prices recorded by 9 of the 20 listed entities. However, it was encouraging to note that despite the subdued outcome, the average total market return remained positive for the tenth consecutive year as 6 out of the 20 listed entities ended the year with all-time high share prices where few yielded strong capital gains for its shareholders. The volume and value of trades also fell significantly by 67.5 percent and 65.4 percent, respectively owing in part to the impact of the COVID-19 pandemic and no new entity listings. A total of 260 new investors entered the Fijian stock market in 2020 of which 74.6 percent were individuals. On a positive note, the SPX recorded an increase in the number of new investors under 18 years of age, which represented 5.5 percent of total new individual investors in 2020. While total new investors were lower in comparison with 2019, they were higher in comparison to those recorded in 2017 and 2018.
- Managed Investment Schemes (MIS) market recorded marginal growth. The Taskforce noted that the MIS market accounted for 1.7 percent of the total gross assets of Fiji’s financial system at 31 December 2020. Total funds under management by the two MIS grew marginally during the quarter by 0.4 percent to $376.2 million but declined on an annual basis by 10.9 percent. Investment portfolio of the MIS market recorded an increase of 3.6 percent to $366.8 million in the December 2020 quarter, owing to increases in lending and investments in bonds. Unit repurchases for the December 2020 quarter stood at $5.3 million compared to $5.6 million in the prior quarter.
- Milestones in enabling Wholesale Corporate Bond (WCB) market development. The Taskforce noted a number a progress updates in the development of the WCB market including the issuance of the Companies (Wholesale Corporate Bond) Regulations 2021 by the Reserve Bank of Fiji (RBF) and the Standard Interpretation Guideline for the corporate bond related tax incentives by the Fiji Revenue and Customs Services. In addition, the Taskforce noted on-going work by SPX and RBF in developing the Listing and Trading Rule Book for the WCB Over-the-Counter Facility and a guideline for prospective WCB issuers and investors.
- Capital Markets Advisory and Development Taskforce membership: Mr Ariff Ali, Governor, Reserve Bank of Fiji; Mr Esala Masitabua, Deputy Governor, Reserve Bank of Fiji; Ms Makereta Konrote, Permanent Secretary for Economy, Ministry of Economy; Mr Pradeep Patel, Senior Partner, BDO Fiji; Ms Lisa Apted, Partner, KPMG; Mr Nitish Niranjan, CEO, VB Holdings Ltd; Mr Pretesh Prasad, Acting CEO, SPX; Mr Sakiusa Bolaira, Regional General Manager Development and Company Secretary, Unit Trust of Fiji; Mr Haroon Ali, Country Manager BSP and Association of Banks in Fiji Representative; Mr Abilash Ram; Acting CEO, FHL Group Ltd; Ms Krishika Narayan, COO, FijiCare Insurance Ltd; Mr Nemia Dawai, Acting Head of Treasury, Ministry of Economy; Mr Poasa Werekoro, Chief Manager Financial System Development, Reserve Bank of Fiji; and Mr Apenisa Tuicakau, Acting Chief Manager Domestic Markets, Reserve Bank of Fiji.