THE Jamaica Stock Exchange (JSE) is anticipating the listing of three companies on the main market and five more on the junior market this year according to general manager of the Exchange, Marlene Street-Forrest.

The GM made the announcement yesterday at the annual general meeting (AGM) of the JSE, held at the institution’s Harbour Street head office in Kingston.

“For this year the companies that will be listed on the main market are traditional companies which are not part of the financial industry,” said Street-Forrest. “We will be having some other companies which are more manufacturing in nature that will be listed on the main market. As far as the main market is concerned we have had the JMMB preference share offering and we have Proven which will be coming. We have probably two in terms of manufacturing which will be coming on the market for 2011.”

Proven, which is slated to list July 14, is so far the only financial company down to list on the main market this year and will bring with it another addition to the exchange. “This is the first in terms of a tradable US dollar security on the market,” said Street- Forrest. Other firsts announced by Street-Forrest include the trading of corporate securities for 2011 and government securities and options beyond this year.

The junior market

The junior market will be even more active than the main market as companies try to take advantage of the access to financing and the tax benefit that such listings can provide. Street-Forrest said that for 2011, there will be at least eight listings here. Last year there were also eight listings on the junior market, up from the single listing in 2009 when the market opened.

“We have had Honey Bun, which has been listed already, we have AMG Packaging, which will soon be listed. We are now having a review of CPJ and we will have five more companies. The member dealers are working on those to come to market and they are interesting companies,” Street- Forrest said. “If you notice the mix in terms of the junior market, they are manufacturing, they are non-traditional, and tourism. So we are getting that blend that we hoped that we would have gotten when we introduced the junior market.”

However, since its roll out, the junior market listings have outnumbered listings on the main market, which has a total of 43 companies, the same number as at the end of 2009. Street-Forrest said this situation is not unusual and in fact can result in more future listings to the main market.

“One of the things that we are interested in is getting companies to come to market. So whether they come onto the main exchange or the junior exchange, it’s not really that much of a problem for us. If you look at the Shenzhen Stock Exchange in China, the junior exchange is more vibrant than the main market. It is going to happen like that in Jamaica especially with many of the incentives that are given to encourage companies to list. The fact is that there is a 15-year period and companies will want to graduate to the main market to raise more capital so the main market will always be vibrant in the coming years because there is a graduation process,” Street- Forrest reasoned.

The Diaspora

The GM also said that the JSE is responding to calls from companies in the diaspora which would like to become a part of the local exchanges.

“There are many companies that are in fact Jamaican companies trading in the diaspora and so what we are going to be doing is to encourage them where we can to have subsidiaries in Jamaica and those subsidiaries then will be listed on the junior market to give persons more companies to invest in and also the opportunity to benefit from what the junior market has to offer,” explained Street-Forrest. She further added that the JSE will begin working on the diaspora companies next year.

Changing trading platform

Street-Forrest also disclosed that the JSE will be changing its trading platform by the end of November this year from the Nasdaq OMX platform to Trayport and Percival which can connect seamlessly and in real time to a fully functional clearing and settlement system.

“It is more flexible, you can do more in terms of new product offerings and it is going to bring more efficiency in terms of the registrar service. It is going to allow for a more efficient management of registrar services,” said Street-Forrest.

Lacklustre financial performance by the JSE

In the financial year ended 2010, the JSE did not perform as well as it did in the prior year, despite an improvement in the market performance. Net surplus for the year came in at $37 million, down 14 per cent from the $43 million reported last year. Operating income at $199 million improved 25 per cent however, while operating expenses decreased 11 per cent to $216 million.