VZCZCXRO5099
RR RUEHGR
DE RUEHGE #0338 0941951
ZNR UUUUU ZZH
R 041951Z APR 07
FM AMEMBASSY GEORGETOWN
TO RUEHC/SECSTATE WASHDC 5006
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHMI/USOFFICE FRC FT LAUDERDALE 2390
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC
RUEHFSC/USOFFICE FSC CHARLESTON 0771

UNCLAS GEORGETOWN 000338 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON AFSN AFIN APER BEXP ELAB GY
SUBJECT: GUYANA STOCK MARKET OFFERS LITTLE HOPE FOR LOCAL 
INVESTORS 
 
¶1. (SBU) Summary:  The four year-old Guyana stock market is 
handicapped by the tiny number of listed companies, low 
trading volume, and regulatory problems.  These make the 
market an unattractive alternative to saving accounts, real 
estate, and migration.  End summary. 
 
¶2. (U) The Guyanese Association of Securities Companies and 
Intermediaries (GASCI) opened its trading floor in 2003 with 
one Trinidadian company listed and four firms certified to 
buy and sell stocks.  At the same time, the Guyana Securities 
Council (GSC) was created to function as the market's 
regulatory body.  Both GASCI and the GSC drew early budgetary 
and organizational support from the British government. 
 
¶3. (U) Little has changed in four years.  The original 
Trinidadian company is still the only primary offering, 
joined now by thirteen secondary listings.  Stocks are bought 
and sold--only on Mondays--from four laptop computers grouped 
in the center of an otherwise barren room.  Volume averages 
about two million shares a session. GASCI plans to offer its 
first bond in 2007.  The British no longer give money to the 
project. 
 
¶4. (SBU) Efforts to attract potential investors collided with 
culture and (apparent) corruption in 2005.  GASCI launched a 
media blitz to make wage earning Guyanese aware that their 
traditional investments in savings accounts and pension plans 
earned lower returns than the rate of inflation and to draw 
them toward the market.  Its message should have been 
appealing to the middle class.  Unfortunately, a longstanding 
conflict between the GSC and Guyana's largest corporation 
(and secondary GASCI listing) undermined its efforts and 
steeled public skepticism about this new mechanism seeking 
their money. 
 
¶5. (SBU) The conflict began when the GSC suspected beverage 
manufacturer Banks DIH of insider trading and demanded to 
review its financial records.  Banks DIH got an ex parte 
court injunction preventing the GSC from reviewing the books. 
 Four years later when the injunction lifted, a mysterious 
fire in the Banks DIH records office destroyed the requested 
files.  The matter was dropped, but potential investors 
learned again to mistrust Guyana's institutions and legal 
processes:  Their money may be dribbling away in traditional 
investments, but those are still safer than an essentially 
unregulated market. 
 
¶6. (SBU) Comment:  Safer still is abandoning Guyana 
altogether:  more than two percent of the 
population--including ninety percent of all college 
graduates--leave Guyana every year for the US, Canada or 
other Caribbean countries.  Against those odds, GASCI will 
grow glacially, if at all, as potential investors continue 
choosing to lose their money in a slow trickle against 
inflation rather than risking it in a troubled fledgling 
market.  End comment. 
 
Robinson