‘Risk factor affects stock market liquidity’

October 29, 2009 11:52:25 AM

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Liquidity on Fiji’s stock market remains low because people continue to be risk averse and long term holders of stocks, says South Pacific Stock Exchange (SPSE) chairman Pramesh Sharma.

Speaking at the SPSE’s 30th anniversary celebrations in Suva last night, Sharma said the number of securities listed on the SPSE board had not increased significantly in its 30-year history.

Chief executive officer Jinita Prasad said they had hoped to have 20 to 30 securities listed by now, compared to the 16 on the board.

Sharma said however, there were positive signs for the future including an increase in the number of institutional and retail investors.

“This increase could be attributed to the returns from the stock market becoming more competitive with other investment products,” he told guests.

The average return from the stock market was 9.5 percent in the 2008 calendar year, said Sharma.

“This is even more attractive if you factor in the dividends from listed companies being tax free in the hands of Fiji residents and also that no capital gains tax is applicable.”