LUCAS STOCK INDEX
The Lucas Stock Index (LSI) recorded a slight gain of 0.30 per cent during the first week of trading in July 2013. With a mixed trading volume among seven companies, a total of 148,000 stocks in the index changed hands this week. There was one Climber and one Tumbler, while there was no movement for the stocks of five companies. The Climber this week was Guyana Bank for Trade and Industry (BTI) which rose 5.56 per cent on the sale of 4,200 shares. The Tumbler was Demerara Tobacco Company (DTC) which fell by 2.05 percent on the sale of 100 shares. Sterling Products Limited (SPL) traded 3,000 shares with no change in value. Equally light trading was seen from Bank DIH (DIH), 3,200 shares and Citizens Bank Incorporated (CBI) 100 shares. Larger trading volumes from Demerara Bank Limited (DBL), 82,700 shares and Demerara Distillers Limited (DDL), 54,700 shares also saw no change in value.
Tax policy
There is a tendency to use tax policy and not monetary policy to encourage investment in the country and to persuade foreigners to join the investment effort. Monetary policy would require that the cost of capital be cheap. This strategy means lower interest rates with the possible expansion in the money supply and the risk of inflation and loss of capital. So, Guyana, like many other countries, has used fiscal incentives to lure foreign investment to the country. It offers tax holidays where companies could pay no tax for periods between five to 10 years and, in special cases, for periods beyond 10 years. Guyana also offers special depreciation or deduction rules for expenditure on capital items such as industrial structures, plant and machinery, mineral and petroleum deposits, patent rights, scientific research and the provision of housing for employees. The focus is on large companies.
