JSE Laying Down the Law!

Looks like the JSE naah gi no bly inna 2024! They’ve suspended two more companies from trading and are cracking down on others. But are they doing too much?

So IronRock Insurance and Productive Business Solutions have been suspended from trading since July 2. The Jamaica Stock Exchange suspended them for being more than 90 days late in filing their financial statements. 

IronRock provides general insurance for homes, cars, businesses etc. While PBS is a global distributor of document and IT supplies and solutions.

Both companies’ financial year ended in December 2023. That means their audited yearly financials were due on March 30, 2024. So when they were suspended in July, the results were three months late. On top of that, IronRock’s first quarter report was due on May 15 and that’s still not in.

So trading of IronRock and PBS ordinary shares has been suspended.  And PBS’s preference shares are also suspended.  Which means that if you own any of these shares, you’re stuck with them until they un-suspended.  You can’t sell them.  You can’t buy more.  And the price is frozen at the July 2 price.

The same thing recently happened to Edufocal and Equityline in June. Both companies were suspended after repeatedly delaying the filing of their financial results.  They both filed the statements later that month, and are back to regular trading.

IronRock said the delay was mainly caused by the change from IFRS 4 to IFRS 17. IFRS 17 is a new international accounting standard for recognising insurance activities. It went into effect in January 2023. We’ve talked about this before.

According to IronRock, the extra processes and new auditing rules have drawn out the process, and that’s why the statements are late.

PBS hasn’t explained what’s causing their delay, but said they hope to have the results published by July 31. 

Now if you watched our video about Edufocal and Equityline, then you know there could be several reasons. Make sure you watch that video to hear more.  But whatever it is, the JSE said, ‘once bitten, twice shy’. The stock exchange nah gi’ no bly!  If you’re late, you’re suspended. And that’s probably worrying a couple other companies. 

Caribbean Cream, FESCO, and Medical Disposables and Supplies just to name a few, are all late with their financial results. They’ve all committed to publishing in July but who knows?

So, it begs the question, should the JSE be more lenient in handing out suspensions? The issue before was that one or two companies were REPEATEDLY delaying their results and not saying anything except, ‘there’s a delay’. And then when they finally did publish, there were discrepancies with the numbers. 

But now with several companies all having the same issue, it kinda points to a general system issue. And suspensions can have a negative impact on the stock. Educfocal has been on a slide since it resumed trading after suspension. The stock was suspended at 81 cents and was down to 47 cents on July 15.  That’s a 42% decline in just a couple weeks!  That’s a big loss!

I think while it’s a fair question, the issue is where do you draw the line? How much grace is too much? And if you give one company a bly, it’s only fair to give the next one. And by that time, you’ve set a precedent that goes against the established rules.

Personally, I think it’s easier and fairer to apply the rules to everyone! And that’s the bottom line.