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Since 2019, the development and maintenance of a digital platform has become an indispensable element of brokerage house operations to cater to the flurry of companies going public via the stock market. First-mover advantage went to NCB Capital Markets and its goIPO platform.
Sagicor joined the line-up three years ago, but was forced to pull its platform offline to do fixes.
Now, Executive Vice-President and Chief Investment Officer at Sagicor Group Jamaica Limited, Tracy-Ann Spence, and Vice-President for Capital Markets at Sagicor Investments Jamaica Limited, Mischa McLeod Hines, say the financial conglomerate has found the winning formula with the reintroduction of the Sagicor eInvest platform.
The digital shift shortened the turnaround on IPO subscriptions, and made it more convenient to invest, having freed investors of having to line up in the offices of crowded brokerages.
With the launch of goIPO in January 2019, it first went live for the Wigton Windfarm Limited IPO. Over 31,200 Jamaicans applied for the offer, which largely involved paper applications. Proven Wealth Limited launched IPOPro in December 2019, just in time for the First Rock Capital Holdings Limited IPO, while Barita Investments Limited launched BaritaBoss in July 2020, just ahead of its own APO, or additional share offer.
Sagicor Investments first launched eInvest in July 2021 for the Eppley Limited preference share offer for which it was lead broker, while VM Wealth Management Limited launched Wealth Edge in January 2022 before deploying it for the Kingston Properties Limited APO and Dolla Financial Services Limited IPO, which saw more than 30,000 applications.
When Sagicor Investments entered the fray in July 2021, it acted as lead broker for Eppley Limited and their offer of preference shares. Next up was Sygnus Real Estate Finance in July-September 2021 and then Spur Tree Spices in December of 2021 – all of which were handled smoothly by eInvest, said McLeod Hines.
All was well until the One on One Educational Services Limited IPO which officially closed on August 12, 2022, the same day it opened, having garnered more than $3 billion in subscriptions from over 15,000 applications.
The keen public interest in the IPO appeared to have overwhelmed the system, prompting Sagicor to temporarily pull the eInvest platform offline.
“The main setback that we had at the time was actually the capacity, based on the load,” McLeod Hines said.
However, the arrangement Sagicor had with two other selling agents, NCB Capital Markets and JMMB, allowed investors to continue putting in their applications for One on One’s shares.
In November 2022, Sagicor set about improving the system.
“We listened to the feedback, both positive and negative, and we sought to make changes to the platform in a bid to improve it,” McLeod Hines said.
“The system currently can be used for IPOs, APOs and rights issues. We are continuing to improve the platform, so that we can use introduce other features and enhancements that will make the application process for investments much more improved,” she told the Financial Gleaner.
The revamped platform is back in play for the RA Williams Distributors IPO, for which Sagicor Investments is lead broker. The owners of the medical supplies company is offering 400 million shares for subscription at $1 per share.
EVP Spence says eInvest will undergo other improvements over the next year.
“This is just the first phase of a number of functionalities that we have in the pipeline, so our investment will not be limited to what you’re seeing now,” Spence said, noting as an example that the ‘joint applicant’ feature on the new system will allow consent to be given digitally, rather than having to download and physically sign the document for submission.
This would put the Sagicor system among the top two in the brokerage sector, according to McLeod Hines.
“While most other brokers have their own platforms, not all of them can accept applications from both their clients and non-clients. Sagicor eInvest is one of the few platforms that can accept applications regardless of where your stock brokerage account is,” McLeod Hines said.
Overseeing the project improvement is an ‘agile lab’ team led by Senior Vice-President for Group Technology and Sagicor Life Operations, Howard Gordon. He was headhunted from NCB around two years ago to help drive the digital transformation effort at Sagicor.
Spence is declining to give the specific amount spent on the platform, saying only that “it is in the multiple millions”.
English (US) ·