In 2018, Jamaica’s benchmark stockmarket index rose by 29% in US dollar terms, the world’s best equity-market performance. In the past five years, it has quadrupled. This sort of jump usually reflects a radical improvement in the macroeconomic backdrop.
But in this case it’s chiefly due to the market’s small size and illiquidity. It “doesn’t take much investment to make a tiny market boom”, says Bloomberg. The total value of the index’s 37 stocks is less than $11bn, “smaller than the valuation of Chipotle Mexican Grill Inc”. Moreover, many companies are majority-owned by foreign conglomerates, which further reduces the number of shares available. Some stocks don’t trade “for days or even weeks”.