Jamaican Stock Market Devalued

Jamaican stocks have fallen again. This is the second time it has collapsed in the Jamaican market in 2023. Bad news for the Caribbean country, which will again affect the standard of living of its citizens and affect its international trade relations.

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Today, the most optimistic in the country argue for the short-term effects that this fall could represent for Jamaica, but we know from experience that almost all stock market falls have profound long-term economic consequences.

The fall in values that have been recorded, makes the market has been devalued even below the alarming indexes of the pandemic year 2019. It was 2019 its lowest point in recent years, a context in which its tourism industry was faced with one of its biggest crises, and the JSE Combined Index was 337 thousand 500 points for the year 2020.

In this fall, the JSE combined index closed at 334,233 points, which represents a decrease of 9.3 percent so far this year. This situation has been accompanied by one of the largest increases in the interest rate in the last ten years.

At that time, Jamaica was affected as a tourist destination, to which the bankruptcy of the British travel company Thomas Cook also contributed.

Given this situation, the Bank of Jamaica (BOJ) must take on the challenge of ensuring economic stability in order to maintain current inflation levels, according to Greig Lindo, deputy general manager of trading and treasury at JMMB Group.

Investors participating in the Jamaican economy are expected to move their capital towards other types of more stable and secure investments, until the downward trend is defined over time.

Today money market yields nearly tripled in value, from three percent in 2020, to 8.5 percent today, so they must move toward fixed income investments with bullish characteristics.

The JSE has been ranked among the worst stock exchanges in the world market. Out of a top 90 exchanges, the JSE is the fourteenth worst performer according to Country economy.