1. How do you see the South Pacific Stock Exchange contributing to economic growth, capital formation and private sector development?
The South Pacific Stock Exchange (SPX) operates Fiji's capital market. It is a national securities exchange licensed by the Reserve Bank of Fiji. One of our core functions is capital formation: directing excess savings in the economy, whether from everyday Fijians, pension funds or other investment institutions, towards companies that need capital for growth.
It is a very important mandate that the stock exchange carries out.
At the moment, we facilitate this in two main ways. The first is through equity listings, where companies list their shares and investors purchase them. The second is through corporate debt, where eligible companies can issue corporate bonds and list them on the stock exchange, using those funds to finance their growth.
For Fiji's long-term economic development, a well-functioning capital market is important because it complements the banking sector.
At present, Fiji has a relatively low-interest-rate environment, meaning companies have access to bank-based funding at comparatively low costs. In fact, Fiji has some of the lowest interest rates in the region. But over time, interest rates will increase, and when the cost of borrowing rises, companies will increasingly look for alternative sources of funding.
That is where the capital market comes in. We want to develop the capital market as a strong alternative source of funding for corporates.
On the investor side, we also want the market to provide a good investment opportunity for people to grow their funds.
Low bank interest rates are advantageous for companies looking for capital, but they are not necessarily beneficial for savers. Savings accounts sometimes pay less than 1% in interest.
We want to develop the capital market so that it becomes a meaningful investment option for Fijians.
When companies have access to capital, they become more sustainable and less reliant on bank debt. They can use that funding to expand their businesses, create jobs and generate economic activity. At the same time, when investors receive better returns, that supports greater purchasing power and broader economic activity.
Fiji is still a growing economy, and so is its capital market. We are putting the structures in place now so that we can deliver long-term value.
2. Fiji has ambitious plans to diversify its economy. What role can capital markets play in helping businesses raise funding and support long-term investment across key sectors?
The biggest value proposition that the capital market offers potential issuers, whether through corporate debt or equity, is the diversification of their funding sources. That contributes directly to the sustainability of the company.
Since mid0-2024, we have had two IPOs and one corporate bond issuance. By our standards for market based funding, that is a positive development. Obviously, we are not a market like the United States, but those issuances have been successful. They have raised the required funds and have been oversubscribed which demonstrates investor appetite
We provide a reasonably deep pool of capital in Fiji dollars that corporates can tap into when they are looking at new projects and growth opportunities.
In the future, we may also look at more project-specific funding instruments, such as green bonds or blue bonds, depending on the sectors in which the funds are being deployed.
As Fiji diversifies its economy, the capital market can play a major role, and we will continue introducing products that complement the national diversification agenda.
3. Encouraging more companies to list on the exchange is often a priority for emerging markets. What strategies is SPX pursuing to attract new listings and broaden market participation?
We take a very hands-on approach when engaging with potential issuers. We work closely with companies to help structure IPOs and, at times, go beyond the traditional role of a stock exchange because we understand that Fiji is a market where businesses need that level of support.
Many eligible and successful businesses in Fiji are family-owned. Some are concerned about losing control, while others are concerned about greater disclosure and having to make more information about their businesses public.
We therefore take a one-on-one approach. We work with investment advisers and corporate advisers who bring companies to the market, and we try to address misconceptions about listing.
The government has also provided important tax incentives. Companies listing on the stock exchange receive a 10% tax break for the first seven years of listing. There are also tax benefits associated with business restructuring, advisory fees and other related costs for IPOs
The incentives are helping. Since they were introduced, we have seen a significant increase in interest from companies considering listing.
But our message is not simply about raising money. Listing can also strengthen corporate governance, establish more sustainable business practices and elevate corporate reporting.
There are also significant brand benefits. For business owners who have built their companies over many years, listing can help them realize the value they have created. If they eventually want to exit, the share price provides a transparent basis for valuing their exit mechanism.
Our strategy is to communicate the value proposition of the stock market, address misconceptions and demonstrate how listing can benefit a company beyond simply providing funding.
We continue to work with government on maintaining these incentives and discussing what more can be done, including potential opportunities involving state-owned enterprises.
4. Investor confidence is fundamental to a successful stock exchange. How is SPX strengthening corporate governance, transparency and regulatory standards to build trust among domestic and international investors?
We understand that regulation, market integrity and surveillance are directly linked to investor confidence, particularly in a small market.
Market integrity is fundamental to winning and maintaining the trust of investors.
Over the past couple of years, we have taken a more stringent approach to market surveillance and implemented structural reforms that we believe will strengthen investor confidence over the long term.
We are also reviewing our listing rules and have engaged an international consultant to support that process. The listing rules are the bedrock of the regulatory framework that companies must meet, and corporate governance requirements are an important part of that.
At the same time, we believe regulation should be accompanied by education. Rather than simply creating rules and enforcing them, we provide training on corporate governance, reporting and sustainability so organizations understand the value of these practices beyond compliance.
We work with the United Nations Sustainable Stock Exchanges Initiative on areas including nature-related reporting, gender equality and sustainability reporting.
Every year, we also hold the SPX Annual Awards, which recognize excellence in corporate reporting, governance and related initiatives.
We want companies to see good corporate governance not simply as a regulatory requirement, but as something that creates long-term value.
5. International investors are increasingly looking at high-growth frontier markets. How is SPX positioning Fiji as an attractive investment destination, particularly for investors from the United States and the broader Indo-Pacific region?
Fiji is one of only two stock exchanges in the Pacific, and we provide geographic exposure to the region through what is arguably the Pacific's most sophisticated economy.
Fiji has established itself as a comparatively advanced economy in the Pacific, while SPX provides exposure to 21 leading Fijian companies.
We have traditionally attracted foreign investors, particularly from the Pacific region. There is still work to do before we can attract more frontier-market investors from the United States and elsewhere. We need greater liquidity, more companies and a larger market.
We participate in Investment Fiji's international roadshows in Australia, New Zealand and, at times, the United States and the United Kingdom. When Fiji is being promoted as an investment destination, we also present capital-market investment as an opportunity alongside foreign direct investment.
We are also working closely with the stock exchange in Papua New Guinea. We see an opportunity to integrate the Pacific capital markets and collectively promote investment in the region.
Our ambition is to pitch the Pacific collectively as an investment destination.
We are currently undertaking technology procurement to move towards compatible trading systems, while also exploring deeper integration with Papua New Guinea.
For investors in the United States, the key proposition is exposure to the Pacific region, including the many sustainability-related and climate-resilience projects taking place across the region.
6. Technology is transforming capital markets worldwide. What digital innovations and modern trading solutions is SPX implementing to improve accessibility, efficiency and the overall investor experience?
We are currently at the final stage of procuring a new trading system and a new depository system. These will significantly enhance the efficiency of our market operations and deliver benefits to investors, brokers, listed companies and other stakeholders.
Stock exchanges are, in many respects, technology companies. What we can and cannot do is largely defined by the technology we have.
The new systems will allow us to provide investors with better information and improved accessibility to trading.
Fiji is a collection of many islands, so SPX cannot have physical branches everywhere. Digital connectivity is therefore particularly important.
We also have a young population and strong digital penetration. With the new systems, we hope to facilitate mobile-based trading and improve access to brokers, taking market accessibility to the next level.
7. Financial literacy is key to expanding participation in capital markets. What initiatives is SPX undertaking to encourage greater investment by individuals, institutional investors and young Fijians?
At present, approximately 89% of the shares in the Fijian stock market are held by institutions, while only 11% are held by individual investors.
That is not an ideal balance. A healthier market would have a stronger combination of institutional and retail participation.
Over the past two years, we have therefore launched a campaign to take the message of the stock market to everyday Fijians, and we have received a very positive response.
Fiji has a population of around 900,000, so reaching communities is achievable. We have deliberately gone beyond commercial centres such as Suva and Nadi and reached outer villages, including communities of landowners who receive recurring income.
We want ordinary Fijians to think about savings, investment and how to make their money work for them over time.
We do not simply tell people to invest in the stock market. We encourage them to think about the value of money, inflation, savings and the importance of generating returns over the long term.
We have seen the number of investors increase consistently over the past two to three years.
Our objective is to improve that 89%-to-11% ratio and move towards a market where retail investors represent 20% or 30% of participation. Greater domestic participation will also help create the liquidity and activity that foreign investors look for.
8. Sustainability is becoming an increasingly important consideration for investors. How do you see SPX supporting ESG reporting, sustainable finance and investment in sectors such as renewable energy and climate resilience?
Sustainability reporting is an area where we want to strengthen our efforts.
We want companies to communicate their sustainability performance to investors through their annual reports. We recently organized training on IFRS S1 and S2, and we are also conducting training on nature-related reporting.
We are focused on strengthening the capacity of companies to report on sustainability, because this will become increasingly important to investors.
On sustainable finance, we can look at instruments such as green bonds, which could help attract foreign institutional investors that have mandates to invest in sustainable projects and channel some of that capital into Fiji.
Climate change and global warming have a particularly significant impact on the Pacific. Across many island nations, communities are already experiencing the consequences of an unsustainable global economy.
That creates both a challenge and an investment opportunity.
We have not yet mandated sustainability reporting, but this is something we will potentially consider as part of our listing-rules review. It is important, however, to balance regulation with capacity building.
Our immediate focus is strengthening the corporate bond market. The next natural step could be thematic instruments such as green bonds and blue bonds.
9. Looking ahead, what is your long-term vision for the South Pacific Stock Exchange, and how do you see it evolving as a regional financial marketplace over the next decade?
Fiji has a broader economic vision of strengthening integration and becoming a hub for the Pacific.
There are already examples of Fiji playing that role. The University of the South Pacific, for example, serves students from across the region, with people coming to Fiji to study and then returning to their home countries.
We want the stock exchange to become part of that regional integration.
Our vision is for SPX to become not only an exchange for Fiji, but an exchange that serves the entire Pacific.
That could mean allowing companies from Samoa to list in Fiji, developing dual listings with Papua New Guinea and working towards closer integration with other Pacific markets.
We want SPX to become the preferred place for investment and capital in the Pacific.
Our long-term ambition is that a foreign institution sitting in Wall Street would look at the Pacific and say: if I need exposure to this region through a regulated market, SPX in Fiji is where I go.
We also want to achieve frontier-market classification. Expanding our market and working with PNGX will be important in that process, and it could help attract greater international fund flows.
There are examples in Africa where one stock exchange serves multiple countries, and we believe there is potential for a similar model in the Pacific.
We need to step outside the comfort zone of the past 35 or 40 years, when the exchange primarily served a limited number of corporates and investors, and expand not only across Fiji but throughout the Pacific.
10. Finally, what message would you like to share with Los Angeles Times readers about Fiji as a stable, dynamic, investment-ready economy and the role SPX can play in supporting its future growth?
If you are looking to gain investment exposure to the Pacific, whether through capital markets or foreign direct investment, Fiji is a well-regulated and stable economy with strong foundations.
Fiji has demonstrated a degree of political stability that has sometimes been a challenge elsewhere in the Pacific. The current government is moving towards completing its full term, and that represents an important element of stability by regional standards.
The Fijian economy is relatively small, but it has strong foundations and structures. Fiji also maintains foreign-exchange reserves that provide an important buffer against economic shocks.
Recent global disruptions have demonstrated that resilience. When geopolitical events created fuel shortages and supply-chain pressures in other markets, Fiji was able to avoid some of the more severe disruptions.
Being a small economy does not necessarily mean being a volatile economy. Fiji has an economic system that works for Fiji and provides stability.
The country has a strong tourism sector that continues to generate foreign exchange, a central bank that plays an important role in managing reserves and financial-system stability, and a banking sector with international links, including institutions connected to Australia, New Zealand and France.
It is therefore a formal, well-regulated economy with established corporate governance and political institutions.
Fiji is a good place to do business if you want exposure to the Pacific.
We welcome investors and institutions that are interested in gaining exposure to Fiji and, ultimately, to the wider Pacific region.
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