Shaw: New 'micro market' coming at JSE

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Monday, April 23, 2018

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Senior Government minister Audley Shaw says that the Administration is working on introducing a third tier of the Jamaica Stock Exchange (JSE) — the micro level — to accommodate small companies earning up to $50 million.

Shaw, the minister of industry, commerce, agriculture and fisheries, told last Thursday's opening ceremony of Expo Jamaica 2018 at the National Arena in Kingston that the new market would build on the initiative he started in the 2007-2011 JLP Administration with the establishment of a junior market, which handles the stocks of companies valued at between $50 million and $500 million.

“I have already met with the JSE, and when I was the minister of finance I directed them to do the necessary work to develop a micro stock exchange. So the micro stock exchange will be a smaller exchange that will target companies valued at between $5 million and $50 million. They are doing the due diligence on that now,” Shaw told the large crowd at the annual exposition of Jamaican manufactured products.

He said this is important because of the current de-risking issues facing the financial sector, and the need for efforts to be made to end the high level of informality in the economy, thereby encouraging more companies to formalise their operations.

“Part of getting formal is to get disciplined: Write a business plan and allow for access to equity instead of expensive funding from various forces,” Shaw cautioned the small businesses.

He also addressed two other issues related to the development of small, medium and micro-businesses — the Government's intention to reduce the number of years after which banks and other financial institutions are required to hand over unclaimed funds to the State, as well as to provide more warehousing and operative space for businesses.

“We are in the process of engaging technical consultants to assess the efficacy and feasibility of utilising unclaimed funds held by the financial institutions as a critical financing option for the growth and development of the micro, small and medium-size sector,” he stated.

“A cursory look at what Jamaica does with dormant funds and unclaimed funds: We leave it in the banking system for 15 years before it can be reverted to the coffers of the Government. I have done a nominal survey, internationally, and the international average of unclaimed funds before they are turned over to governments is seven years. In most states of the US it is five years; in Jamaica it is 15 years, and our banks have demonstrated a consistent propensity to deplete those accounts, as much as possible, before it gets into the hands of the Government. So we are looking very, very carefully at that,” he said.

He said that with the ExIm Bank and JAMPRO being attached to his new ministry, and after listening to the pleas of the business community, he has charged the ministry to accelerate work on the matter so that the ExIm Bank can make available to manufacturers and small businesses, funds at four to five per cent interest rate.

He stated that another challenge to the small business sector is the lack of availability of space for warehousing and normal operations at appropriate locations, including prospective investors seeking over 240,000 square feet of production space.

The Factories Corporation of Jamaica (FCJ), Shaw said, has been looking at expanding the Garmex Free Zone on Marcus Garvey Drive. He added that three projects would be constructed over 1.5 million square feet of space, which will be dedicated to agro-processing, business process outsourcing, manufacturing, distribution and warehousing, with 30 per cent of the entire additional space dedicated to small enterprises.

Shaw said that the FCJ also has a major plan for an industrial technology park in Hellshire, Portmore, as well as the building of a new town centre in Morant Bay, St Thomas.

He said he has also requested a survey of abandoned and under-utilised buildings, especially in downtown Kingston, to make them available to small manufacturers.

Shaw said it is well established that MSMEs are the drivers of employment, economic growth and wealth creation, and that with several thousand MSMEs operating in Jamaica “any Government that is serious about economic growth, job creation and prosperity would be foolhardy to ignore this critical sector”.

Over 400 Jamaican companies were on display over the four days of the annual expo which, this year, took up every inch of space in both the National Arena and National Indoor Sports Centre at the National Stadium complex.

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