JGPalmis wrote:What determine and give the ok for a country to have its own stock exchange, does Haiti can dream about that?
The answer is the market forces in the country together with government help. After the fall of the Duvalier regimes, I thought about it and quickly dismissed the idea. To me the most important factor besides the Haitian market itself is a justice system that is able to resolve disputes between market participants. Primarily, you have to be able to enforce property rights. For someone to go on the exchange and buy a financial asset, such as a share of Sogebank, he has to make sure he gets what he paid for and that he can go to court to enforce it. Our justice system is not there yet, for it cannot even enforce the laws to common criminals.
To me a real functionning stock exchange in Haiti will not be during our lifetime. Too many pieces are missing. Besides the judicial syste
m problem, you must have a market for it. By that, I mean having business people with money who want to buy financial instruments (shares and bonds). Both the people with money and the financial instruments are in short supply in Haiti. While ther is the need in Haiti to raise capital to invest in businesses, the latter must have the potential for being profitable. With per capita income of about $1 a day, there is not enough purchasing power for businesses to make money. In other words, even if you can raise the money to invest, there are very little profitable entreprises to put it in it. That is why some international leneders tell you there is not enough capacity to lend money to Haiti. Even if they they send the money to Haiti, we cannot use it.
Going back to the fiancial and economic environment, you must have rules or laws that provide full financial disclosure by the companies who issue the shares or bonds. Without dependable financial disclosures, the investors will not know what he is bu
ying. Haitians with money hate full financial disclosure. That is one of the reasons why none of the Haitian banks have an affiliate here in the US, like many other foreign banks do. Every time a Haitian group tries to open a bank here and the US Government asked them to provide full financial disclosure and source of their financial wealth, they withdraw the application.
Without rules and enforcement mechanisms to protect investors, you would have things happened similar to the Cooperatives scandal during the Aristide administration, or all kind of Ponze schemes and outright misrepresentations and thefts. In other words, nobody would buy if they are not sure of what they are buying. If there is no confidence, you cannot have a market.
Palmis, it is more complicated than that, but you have an idea. Besides, the size of our market is so small that the benefit of having the stock exchange will not be enough for a long time to absorb the cost. In addition, there is not enough business activitie
s in Haiti to justify it. Certainly, the country would have benefitted if business people can get the average guy to invest his money in a business venture. But, remember what happened in the 1930s in the US. When stock exchange market does not have the proper bases, it can destroy the economy of a country as people who invested money loses their wealth. That can lead to all kinds of upheaval.
I hope that at least, this partially answered your questions. Remember, I am not an expert in these things and have not had personal experience in them. So, do not quote me on them. I am more comfortable with banking issues.