1 month ago
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More than 200 local companies are in various stages of preparation for listing on the proposed micro market of the Jamaica Stock Exchange.
It will facilitate the raising of $10 million to $49.9 million in equity capital for micro companies that are generally classified as MSMEs.
The JSE Micro Market is expected to go live in less than a year.
The JSE Group Business Development Manager Andre Gooden said the micro market would start with about 20 micro enterprises, after they had gone through preparations for listing on the exchange.
The stock exchange is collaborating with state agencies Jamaica Business Development Corporation and Development Bank of Jamaica on the effort, alongside other organisations.
“Between the JBDC and the DBJ, we have a list of about 200 micro companies that are at various stages of readiness. But we will take them in phases and bring them up to the point where they can list on the micro market,” Gooden said.
Among the boxes to be checked by the micro companies are proper governance structures, including a board of directors, as well as systems for the production of quarterly reports. Listed companies are typically required to file timely reports each quarter, as well as audited year-end accounts and annual reports.
Additionally: “All companies will be required to employ a business manager who will be responsible for the operational side of the business ...,” Gooden said of the micro exchange aspirants.
The micro stock market is expected to further ameliorate the problem of access to affordable or low-priced capital for microbusinesses.
Discussions about the micro market have been ongoing since 2019, but made headway this year when Finance Minister Fayval Williams announced that the Jamaican government had approved the JSE’s proposal.
Subsequently, the Micro Market Steering Committee, which includes public- and private-sector organisations and is spearheaded by the JSE, began deliberations on the market’s establishment just over a month ago, on June 12.
A release regarding the first committee meeting posted on the stock exchange indicates that the JSE Micro Market is expected to have its first listing in April 2026, and grow to 25 listings within the first two years of its operation.
Gooden said the JSE, in partnership with the JBDC, DBJ, Jamaica Securities Dealers Association, Bank of Jamaica, the Ministry of Industry, Investment and Commerce, and the Ministry of Finance, was providing the necessary training and mentorship to the companies interested in listing on the micro exchange.
The Jamaica Stock Exchange operates a number of platforms for equities and debt securities, with the JSE Main Index being the most populous, followed by the JSE Junior Index. The indices reflect stock market wealth of $1.68 trillion for the main market and $140 billion for the junior market up to the end of June.
The rules for the graduation of a micro company to the JSE Junior Market are also being developed, Gooden said.
The junior exchange was launched about 16 years ago to facilitate the listing of SMEs and raising of equity capital within a band of $50 million to $500 million. From one listing in late 2009 valued at $78 million, the junior market now comprises 48 companies with capitalisation of over $140 billion. The cap on junior equity capital was raised to $750 million earlier this year, but the $50-million floor is unchanged.
It’s expected that micro companies will also be offered tax breaks to list on the exchange, said Gooden. Junior companies get 10 years of tax breaks – inclusive of a full waiver of corporate income tax in the first five years of listing, followed by a 50 per cent waiver in the second five years. However, the company has to stay listed for at least 15 years, otherwise the tax authorities will claw back the foregone taxes.
Over time, six juniors have graduated to the main market, and a seventh is pending.
Commenting on the advantages of listing on the micro market, Gooden said companies would be able to access bank loans at more affordable rates, would become more attractive to stock market investors, and would benefit from being “more incorporated into the formal business system, instead of operating as a little corner business”.
President of the Small Business Association of Jamaica, Garnett Reid, said more sensitisation is needed about the market.
President of The MSME Alliance Antoinette Hamilton called for greater transparency in the planning phase, saying that, notwithstanding its remit, her organisation was not invited to the first meeting of the steering committee.
“As one of the entities that specifically includes ‘micro’ in who we serve, to have a meeting about a micro stock exchange and we were not invited, I don’t know if it shows any commitment on their part to help micro entities,” Hamilton said.
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