Guyanese Stock Exchange Row: Banks DHI reports agency in doldrums

 

A Guyanese company is asking for new stock exchange registration rules in that nation. It took Banks DIH , foods and beverages manufacturing company, 18 months before it was registered as a holding company on the Guyana Stock Exchange (GSE) , having only received its Certificate of Registration from the Guyana Securities Council on January 3, 2025.

The company is disgruntled by trading trends on that Exchange and also overall regulatory challenges.

According to newssourcegy.com, Chairman and Managing Director of Banks DIH, Clifford Reis, is calling for the laws and regulations governing the capital market to be reviewed, after his company experienced challenges in its bid to fully register and have its shares traded on the Guyana Stock Exchange.

Newssourcegy outlined, ”He explained that although public companies have been trading their shares for over 22 years, no additional public company has been listed or bond issued to date. He said to compound the situation, there is no mechanism for price stabilization.”

Analyst Theon Alleyne, writing at demerarawaves.com says said urgent action was needed in relation to the operations of the GSE.

He wrote, “Recent events surrounding the Guyana Stock Exchange (GSE) have raised eyebrows, and rightly so. As a former regulator with a significant tenure in listing and trade regulation, the dilemma of the GSE must be addressed with a sense of urgency. The dramatic fall in Banks DIH’s stock price, from $180GYD to $160GYD on the sale of just 5 out of 895 million shares, initially appeared to be an abnormal market fluctuation.

“Interestingly, Banks DIH’s stock price further declined a week later to $155GYD. This further decline occurred one week before the last annual meeting where the company reported successful financial results. This development raised the Company’s ire. However, it was soon evident that these were not typical trades of listed securities, but rather transactions in a less-regulated Over-the-Counter (OTC) market.”

His assessment was as follows: “In my regulatory career, which included overseeing public company investigations, I learned the critical importance of liquidity and market integrity. The deep discount sale in the OTC market, although not unusual, raises questions in this case because of concerns about corporate governance adherence, especially considering the company’s suggestion that odd-lot sales are prohibited.

“A deeper issue at the GSE is the absence of genuine listed issuers, an anomaly for a stock exchange. The GSE’s website, with its ticker-tape and trade reports, paints a picture of listed entities subject to robust governance and compliance, which, in reality, is misleading. This misalignment calls for an immediate and transformative approach to align the GSE with global best practices.”

He concluded “ I advocate for GSE’s adaptation of a multi-tiered market system, learning from the models in the UK, USA, and Jamaica.”

Banks DIH Group recorded $8.9B in profits last year

As outlined by Kaieteur News – Banks DIH Limited, grew net profit grew by 6.8 per cent to Guy $8.970 billion up from 2022, for the financial year ending September 30, 2023.

Profit after tax for the Group, attributable to shareholders of the parent company, witnessed a surge from $8.395 billion in 2022 to $8.970 billion, reflecting a 6.8 per cent increase.

The manufacturer’s products include beer, shandy in five flavors, rums, wines, water, soft drinks and is also a licensed bottler of Coco Cola. Guinness. Vita Malt is also produced and bottled under license.

Its foods include Trisco Foods: Cookies, Crackers, Snacks (Cheese and Onion, Spicy Bar-B-Q, Chicken Tikka, Nacho, Cheddar) It also produces Assorted Bread Products and Rolls, Novelty Ices (Frostee Pop-Cream and Fudge) and Ice Cream in assorted flavours.

The group’s Demico Restaurant Operations nationwide.

Chairman of Banks DIH Holdings said, in relation to the Stock Exchange problem, that it was important for other public companies to raise their voices, and not to be silent on the need for reform.

“It cannot be seriously disputed that Banks DIH Limited before being replaced by Banks DIH Holding Inc. was the icon of public companies in Guyana. It has 15,393 shareholders, 69 years as a public company, and it pays an average of $51.5 million per day in excise taxes, corporation taxes, VAT, environmental levy, and PAYE. Notwithstanding all of that, it took 18 months after the shareholders’ approval for Banks DIH Holding Inc to be fully registered as a public company, and to be activated so that its shares can be trade on the Guyana Stock Exchange,” Reis said.

The GSE trades on Mondays, compared to Jamaica and other jurisdictions where trading occurs Monday to Friday.

Photograph: Members of the Guyanese Stock Exchange.

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