Dear Editor,
Chartered Accountant and attorney-at-law, Mr. Chris Ram, should be in the diplomatic corps. Or take up monastic life. In both instances, he would be constrained by circumstances to speak no evil. He may ponder its nuances, but speaketh it, not a chance. There is his latest foray into the world of corporate intrigue in Guyana captioned, “A serious problem with the share price of CCI” (SN, Feb 07). Indeed, sire. It is another revelation about the workings of shares, share prices, the Guyana Stock Exchange, and market participants. Whew! And I thought that I saw and knew the best of them in another climate.
By any estimate, the market for the common equity shares of companies in Guyana is illiquid. This includes the blue-chip, corporate highfliers, that are household names locally. Illiquid means a smattering of shares traded and changing hands; sometimes it is daily, often it is not even quarterly. One of the drivers of momentum for the upward or downward movement of shares is volume, as pushed and peaked by investor interest. Or by news with material significance. Where is the development impacting CCI for good or bad? What was there to generate existing shareholder or new investor enthusiasm? Mr. Ram has nothing to offer, as the company offered nothing. Nothing that can lead to a reasonable rationalization of the magnificently mouthwatering move(s) of CCI’s share. When I think of Guyana’s top-drawer companies and the spirals in their share prices, chill winds touch. There is recollection of the era of what was called the dotcoms. It was boom, boom, boom, and with no restraining ceiling, until the floor caved. Little could there have been the appreciation that the boom of common shares rising in short timespans by 400%, and prior to that by the astonishing: over 1200%, would be encountered in Hicksville Guyana. Market sophistication speaking.
Specific to CCI, the volume of shares traded was less than 1% of those outstanding. What is going on here? Something is not right, and it is not just with CCI. In another jurisdiction, there would have been a spate of investigations. This is how regulators make their bones. In Guyana, the skyrocketing trajectory of a public company’s share price provokes no more than a shrug and a yawn. What else is new, just business as usual. The diplomatic etiquette of Mr. Ram chose this juncture to come into full flower: “I am not suggesting any insider dealing or other improper conduct on the part of any person, including CCI’s management. But rather that something is wrong with the working of our Stock Exchange, its shareholdings, market participants and shareholder and investor education.” See why I say that a late career in diplomacy is befitting? Ram giveth and then Ram taketh away. Since he wouldn’t, then the dirty job is left to me (as usual).
Guyana has not progressed to the level of automated trades, or computer-triggered activities. It is mainly, if not all driven, by human hands. And human minds. There is the concern. Given my old history, and in this my old age, I am weighing stock trading in Guyana is a poker and bridge affair. To be exquisitely explicit, I sense an exclusive boys and girls club that is thinly populated by the faceless and nameless, who carry out and carry on their excitements in broad daylight. Shares passing from hand to hand, with a wink and a nod. It is more than the limitations of numbers, as in dollars and cents pricing, or soaring percentages, or paper transactions. A few folks could be playing the percentages. Perhaps, what has gone on with the share prices of a number of domestic equities is Guyana’s version of algorithmic trading. There is a whole chain reaction that reaches into other lanes and arenas of commerce in Guyana. Buttering of numbers for other purposes could be one of them. This thing has a smell about it, and it is not that of Ralph Lauren. And here it was that I thought that the PPP and PNC were the worst in the midst.
Sincerely,
GHK Lall