Miami International Holdings (MIH) is planning to make “major investments” in the Bermuda Stock Exchange (BSX) in 2021 and 2022, according to Thomas Gallagher, chairman and chief executive of MIH and chairman of BSX.
MIH took full ownership of the BSX at the end of 2020. Plans for the BSX going forward include open new executive offices, marketing and training facilities in downtown Hamilton and substantial upgrades to its technology infrastructure, Gallagher said.
Greg Wojciechowski, president and chief executive of the BSX, said the BSX is also moving forward with its commitment to raising awareness of, and producing guidelines for, environmental social and governance (ESG) principles on sustainability.
Wojciechowski said Bermuda has seen an influx of new capital of between $12-$15 billion into the re/insurance market, amid expectations of a continuing hardening of the market. Citing the island’s long history as a global risk management hub, he insisted Bermuda is well equipped to help businesses manage the challenges of COVID-19.
When the pandemic and lockdowns curtailed business activities, the BSX continued to function and list new securities, ensuring capital markets remained open and enabling businesses to continue managing risk.
“While there have been great challenges, there are new opportunities ahead for Bermuda and the BSX," Wojciechowski said.
The BSX's exchange platform is fully electronic and securities are dematerialised and held in electronic book entry form, meaning the restrictions imposed by COVID had minimal operational impact.
BSX chief compliance officer James McKirdy said: “The insurance linked securities (ILS) market continued to grow, with the number of ILS securities listings increasing from 155 in 2019 to 253 in 2020, with a combined nominal value of $15.77 billion. This represents growth of 63 percent year-over-year. At the end of 2020, the total number of ILS-listed securities stood at 590, with a combined nominal value of $43.01 billion."
McKirdy added: "International debt listings increased marginally from 200 to 206 in terms of the number of securities listed in 2020. However, as the BSX sought to attract premium international securities to add to our existing deep client base of blue-chip companies, the nominal value of the listings grew by $12.76 billion, or 144 percent, to $21.63 billion, as maturing securities were replaced by larger issuances, in nominal terms. This increase further underpins BSX's position as a recognised venue for international debt listings in the western hemisphere."
McKirdy noted that the BSX had listed seven new collective investment vehicles and three new equities in 2020, with a further three subsequent issues also processed by the BSX. De-listings during 2020 followed a familiar pattern, mainly comprising time-limited securities that matured as part of the normal course of business. At the end of 2020 there were a total of 1,126 listed securities on the BSX, compared to 1,004 in 2019.
The RG/BSX Index closed 2020 down at 2,031.86, a decrease of 15.5 percent over 2019. Trading volume on the domestic market increased in 2020 to 4.9 million shares, with share value traded ending the year at $25.3 million. Overall, the BSX ended the year with a total market capitalisation of $255 billion.
Meanwhile, at the end of 2020 the Bermuda Securities Depository held 46 percent of all domestic listed securities in custody, down 3 percent from 2019.
Wojciechowski noted that 2020 had seen the continued integration of the BSX into MIH’s group of securities exchanges. MIH obtained a controlling interest in the BSX in late 2019 before taking full ownership at the end of 2020.
“This acquisition will assist MIH in expanding its world-class technology, derivatives trading and regulatory expertise to address emerging markets, such as digital assets, and provide the BSX with additional support in the evolving global reinsurance risk market," said Wojciechowski.
Since the launch of its first securities exchange in 2012, MIH has been a generator of technological innovation by creating the MIAX Exchange Group to challenge legacy trading platforms. MIH's three options exchanges — MIAX, MIAX Pearl and MIAX Emerald — are ranked 14th globally by volume.
Miami International Holdings, Bermuda Stock Exchange, BSX, Greg Wojciechowski, Thomas Gallagher, James McKirdy