Listing With Ease: The Benefits of Listing On The JSE’S Junior Market

The percentage of firms delisted from the JSE ranged from 8% of total listed, during 2000-2009, to 28% for the 1990-1999 decade. Financial hardship was the major reason for delisting with 73% of firms reporting losses at the time of their exit from the JSE. This adversity was most severe during 1990-1999 when 57% of listed firms reported losses. However, with the advent of the Junior Market, listings have been rising steadily and this has also positively effect on the Main Market.

The challenge was, among other things, to grow listings and increase investment offerings.

The Junior Stock Market was expected to give small and medium sized businesses the best chance to raise capital and to get themselves on the right footing. It was through the persistent and steady guiding hand and counsel of Marlene Street-forrest, Managing Director that over these years of uncertainty and successes has propelled the market to its current stellar success.

There is no doubt that this Market has had a transformative value on the Jamaican capital market landscape. The Junior Market which started out with one company with an index of 100 in April 2009 now has an index 2,982.95 as at the end of March 2021. Market Capitalization of $755.17m now stands at $139.95 Billion measured by the 42 companies listed. Total permanent jobs increased by over 5,000.

Established through the collaborative efforts of the Government, the Board of the JSE, the

Financial Services Commission and with a Steering Committee composed of key stakeholders, it was launched on April 2, 2009. In October of that same year, Access Financial Services Limited was the first company to list on the Junior Market, raised $100 million.

Since then, Access Financial has come back to the market to raise funds for expansion. It has expanded its branch network to 14 island-wide, acquired the loan portfolio of Asset Management Company Limited; the hire purchase portfolio of Appliance Traders Limited (ATL) and the loan portfolio of Asset Management Company Limited (AMCL) were acquired as well as other initiatives including the Agri-loan product.

The company completed the acquisition of 100% of the outstanding shares of Embassy Loans Inc., a Florida based finance company, at a cost of US$6.4M. The transaction which was completed on December 14, 2018 was funded from the proceeds of a J$900M global bond which was issued in October 2018. This is what the Junior Market can do for small and medium size companies.

How to list on the Junior Market

● For a company to be listed, it must be incorporated as a public limited company in Jamaica or elsewhere in the CARICOM region. ● It must not have been previously listed on the Main Board of the JSE or on the main trading platform of any other stock exchange.

● The company is not an ‘associate’ (including a subsidiary) of any such listed company

● Must have stated capital of not less than $50m and not more than J$500m following its Initial Public Offer and during its life on the Junior Market.

● The company must have at least 100 shareholders holding at least 20% of the issued equity share capital in its first five years on the Junior Market.

● Unless otherwise agreed the company must appoint a mentor who will act as a compliance advisor to the Board of Directors.

● The company must appoint a Board of Directors that is suitably experienced as a collective to govern and represent the company Tax Incentives of listing Companies that list on the Junior Market will receive a full income tax holiday for the first five years after listing and a 50% Income Tax holiday in year 6-10.

On-going compliance requirements

● Timely financial reporting

● Announcement of unaudited quarterly financial information

● Announcement of annual audited financial information

● Timely disclosure of information to the market ● Disclosure of price sensitive information to the market

● Payment of JSE fees

● Continuing compliance with the Junior Market Rules.

Full details of all requirements for admission and ongoing compliance are set out in the Junior Market Rules which are available online at www.jamstockex.com