James Smith, Minister of State in The Prime Minister’s Office with responsibility for the Ministry of Finance, only recently lamented on the weakness of the present Securities Industry Act and foreshadowed amendments designed to bring it in line with accepted international standards and best practices.
The nucleus of the amendments is to provide a degree of protection for minority shareholders. The new act is expected to highlight good corporate governance, market transparency and disclosure to shareholders.
City Markets minority share- holders are in a catch 22 position. Government regulations regarding their role are almost non-existent, and they will have to go with the flow until laws are made to properly protect them. However, there is an area in the present legislation that does seek to protect the minority shareholders from insider dealing.
Financial experts have also pointed out the “strange rise” in the price of Abaco Markets Shares.
“The shares have gone from a low $ 0.59 cents in May of this year, to last week’s close of $1.85. In short, Abaco markets has tripled it’s market cap from a market value of approximately $ 9.3 million to $29.4 million in less than three months,” a financial expert pointed out. As for consumer protection, one analyst recently went to great lengths to sell the argument that the Bahamian supermarket in-dustry was “ripe for consolidation”.
He added: “The argument asserted that there were too many food stores chasing too few customers, and took into account the vast number of convenience or petty shops spread all over The Bahamas.
“This argument seems to lose its validity when we consider a potential merger or alliance between City Markets and Abaco Markets.”
He continued: “Advocates for more comprehensive consumer protection have looked at the BSL Holdings agreement to buy City Markets, the players involved, their existing connections, and any related or affiliated interests, and concluded that if BSL Holdings were successful, it could negatively impact on the price of food in The Bahamas.”
“What makes the BSL Holdings organisation and its players interesting is the odd make-up of the group.”
The analyst went on to say: “Critical questions regarding ownership, future participation of some of the key players in BSL Holdings, and the role their companies will play in the arrangements.”
“We believe the BSL Holdings acquisition of City Markets could create a food cartel; severely limiting consumers’ choices and driving prices even higher than they are today. What, on the surface, may have started out as an attempt to purchase City Markets in Nassau, and Winn Dixie in Freeport, could well turn into a real challenge for consumers.”
If a merger or alliance does take place between Abaco Markets, City Markets and Milo Butler & Sons, BSL Holdings will control in excess of 50% of the food market in the city.
The Nassau Guardian
