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Advertorial: JMMB Capital Markets seek to boost economic growth with increased Junior Market listings

Published:Friday | May 27, 2016 | 5:30 PM
Andrew Jackson (foreground), Director, Jetcon Corporation Ltd, celebrates the listing of Jetcon’s IPO on the Junior Market of the JSE. Sharing in the moment are (from left) Karl P. Wright, Director, Jetcon Corporation Ltd, Andrew Joel Jackson, Company Secretary, Jetcon Corporation Ltd and Karl Townsend, Chief Country Office, JMMB Capital Markets Unit.

The Junior Market, of the Jamaica Stock Exchange (JSE) has seen robust activity since the start of 2016, as companies rushed to meet the then March 31 deadline to qualify for the five-year tax incentive. 

This activity resulted in six companies being listed on the Junior Market, raising approximately J$926 million, according to data from the Jamaica Stock Exchange. 

JMMB Group Capital Markets through JMMB Securities Limited raised J$330M for two companies, which represents approximately 35.6% of the capital raised from these initial public offerings (IPOs) on the Junior Market over the period, according to data from the Jamaica Stock Exchange.

Marlene Street-Forrest, JSE’s General Manager, commented that the JSE expects to have a continuation of this level of activity, and expects an increase in the number of companies listed on both the main and junior markets of the JSE during 2016, compared to 2015.

Her expectation stems from the recent announcement by the Minister of Finance, that the government will continue the tax incentives for companies listing on the Junior Market, which will be retroactive to April 1, 2016. 

She adds, "The JSE expects to see increased market activity by the end of the year. We anticipate that there will be a 15% increase in market activities which is now tracking the index.” 

The JSE General Manager shared that, “In the 2014/15 financial year, with the change in corporate tax, only one (1) company listed on the Junior Market, as opposed to the 2015/16 financial year, where eight (8) were listed.

She added that the market responds to confidence and as long as companies are convinced that the policies being implemented will be stable, then they are likely to be listed.

The impact, therefore, according to the JSE, is more listings, creating further economic growth, employment and wealth creation for investors.

JMMB’s Capital Markets Unit indicated that, in addition to the tax incentive provided by the government, the macroeconomic climate augured well for small and medium-sized enterprises (SMEs).

“Now is an opportune time for companies to raise equity, via the stock market, as investors are looking for good companies to invest in,” said Karl Townsend, Chief Country Officer, JMMB Capital Markets Unit.

Sharing insight, he noted, “The success in the market has also been driven in part by favourable macroeconomic conditions and our ability, as a broker, to guide potential companies that wish to list on the JSE.”

He also indicated that during the new financial year the unit is looking forward to partnering with SMEs and large corporates to grow their businesses and increase shareholder value, by providing a wide range of investment solutions such as IPOs, corporate bonds, public and private placement of preference shares, and sale and leaseback agreements.

Townsend shared that his team brings a unique approach to the table in undertaking any transaction, noting, “We take the time to understand our client’s business, the company’s competitive advantage, long-term growth potential and corporate governance, which enables us to structure and price transactions in a way that will be attractive and a win-win for the client and investors.”

As evidence of this, he pointed to the success of the two IPOs executed by the unit since the start of 2016 – JETCON Corporation Limited and Key Insurance Company Limited – the latter of which was opened, closed and listed in a record three days.

Junior Market Gives Results

Companies listed on the Junior Market have shown growth in revenues, profits, business expansion and share price appreciation, since the establishment of that Market in 2009. 

Of note, the average share price appreciated by 145.7% in 2015, according to data provided by the Jamaica Stock Exchange.

Against this background, and the government’s decision to keep the tax incentive programme for the Junior Market of the JSE, the JMMB Group Capital Markets Unit has indicated that it is eyeing increased business opportunities with the expected uptick in market activity on the Junior Market, during the new financial year.

The JSE Junior Market’s consistent performance has lived up to its mandate to allow investors the opportunity to put capital into legitimate small and medium-sized companies (SMEs) that are listed; while giving SMEs the ability to raise capital for the growth and development of their businesses, and, by extension, the economy.

– Advertorial