A micro stock exchange may be coming soon — Shaw

A micro stock exchange may be coming soon — Shaw

BY KELLARAY MILES
Business reporter
milesk@jamaicaobserver.com

Sunday, January 26, 2020

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As the country continues to outperform global stock market trends, new calls are now emerging for the creation of a micro stock exchange following on the success of the junior market — which has grown significantly within the last year.

Minister of Industry, Commerce, Agriculture & Fisheries Audley Shaw, while responding to questions at this year's staging of the Jamaica Stock Exchange (JSE) 15th regional conference, said that he endorses the creation of such a platform as it would aid in transforming and providing more opportunities for small businesses operating in the ecosystem.

“The question of a micro stock exchange is presently under consideration. The micro stock exchange is something that I'm very much in favour of and I'm putting together that formal proposal for the minister of finance, the prime minister and the Cabinet,” he stated.

The minister continued in saying, “It is something I like because along with the junior stock exchange, the social stock exchange— a micro stock exchange when combined are initiatives that will help to give the economy a jump-start; a jump- start that it needs to get us out of the experimental phase and move us out of low growth.

With micro- small-andmedium-sized enterprises (MSMEs) touted to become the driving force for economic growth in the future, the minister believes that any initiative geared towards financial inclusion and empowerment for these entities can only be beneficial for the country.

Shaw further expressed that it was out of a desire to let smaller businesses have the opportunity to grow and thrive in the economic landscape that the junior exchange was formed. Up to mid-December last year, the junior market had some 44 companies listed, more than half the amount listed on the main market, which stood at 78 during the time.

“In 2009 as then minister of finance, I established the junior stock exchange, despite the controversy from some quarters, as a means of boosting productivity for smaller entities coming out of a period of high interest rates which took a toll on them. During those periods high interest rates destroyed the manufacturing sector and many areas of the productive sector,” he said.

He further commented that with the advent of the junior exchange, businesses running under high interest rates were able to move to using equity participation to build a capital base and have competitiveness in their industrial or commercial enterprises — a move which saw a lot of them returning to thriving circumstances.

The minister added that it was the contribution of the junior market along with that of the main market that led to buoyancy which for two years in a row saw the Jamaican stock exchange becoming among the best in the world.

“Equity financing, rather than expensive loans, is fundamental in widening opportunities for aggressive investments and expansion and brings back the days when we experienced higher growth.

“It's now time for us to move into more enhancement of creativity. And that is why I commend the stock exchange —that having presided over the success of the junior stock exchange, they have now moved on to the social stock exchange,” Shaw aadded.

The social stock exchange he believes will narrow the gap and allow for more inclusiveness and opportunities to be created for the average citizen.

“Some of the projects that this social stock exchange is promoting includes: deaf people in the coffee industry, recycling for energy and a number of other game- changing things that give people another chance,” he stated.

The minister commented that though there is much work still left to be done, high commendations are in order for the continued work of the JSE . “The stock exchange's success, as I have shared with Bloomberg on a visit with them last year, is based on the fact the country has provided investors with a safe secure environment which is fiscally responsible and stable.”


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