Jamaica Stock Exchange (JSE) Senior Executive Andrea Kelly says that if the rate of listings of companies on the junior market continues as it is, it could overtake the main market’s listings.

The general manager for JSE’s Jamaica Central Security Depository (JCSD) and the JCSD Trustees Services made the remark yesterday morning, as she welcomed the Lumber Depot, a spin-off from the Blue Power Group, and its guests to the listing ceremony at the JSE’s downtown Kingston office, yesterday.

The Lumber Depot invited prospective investors to apply for up to 141,247,500 invitation shares priced at $1.20 each. The Depot’s board says it intends to use the proceeds for the transfer of hardware business, to take advantage of the opportunities for improvement and expansion of its business; for working capital and general corporate purposes; and, for payment of the expenses incurred by the invitation which the directors believe will not exceed $20 million.

Yesterday, the JSE welcomed the newly created company to its family of investments, as the fifth listing on the junior market since the start of 2019.

Kelly noted that Lumber Depot Limited was successful in its application to list its shares on the JSE junior market at the invitation price of $1.20 per share, effective December 13.

The company will trade under the name, Lumber Depot Limited and the symbol is LUMBER.

“With the listing of Lumber Depot, there will be 41 companies listed on the junior market and 44 securities on the junior market, and this is rivaling the main market which has 46 companies listed and 77 securities,” she told the audience.

“If the listings continue on the junior market at the speed they are going, in short order the junior market companies will overtake the main market in terms of listing,” she predicted.

Kelly also credited Mayberry Investments Limited with continuing to create history, noting that the prospectus by Lumber Depot Limited was published on November 15, 2019, with an offer open date of November 22. The Offer opened on November 22, at 9:00 am, closed at 9:01 am on the same day and was oversubscribed by 950 per cent.

“The company was looking to raise $169.49 million, by offering 141.247 million units to the public. However, there were 4,096 applications valued at over $1.78 billion. This shows that there are monies out there looking for good investment prospects,” Kelly said.

“I take this opportunity to implore companies that need to expand, purchase new equipment or get into the export market, to take advantage of the equity markets. The prospects are right and there is no better time to do so than now,” she urged the crowd.

Lumber Depot is the eleventh new company to list on the JSE in 2019, the total number of companies listed on the JSE has now increased to 87, and the total number of securities listed to 121.

Including the $169.49 million raised by Lumber Depot, approximately $1.7 billion has been raised from the companies listed on the junior market this year, and a total of $16 billion raised on the overall markets in 2019. Since inception, the total raised on the market from junior market companies amounts to $11.89 billion.

Kelly also noted that the junior market has been doing a fantastic job working for small and medium-sized businesses (SMBs) as, for example, at December 12, 2019, the market capitalisation of the junior market amounted to $151.59 billion.

She predicted that the market capitalisation of the junior market would increase to $152.44 billion with the amount raised by Lumber Depot, and the overall market capitalisation, amounting to $2.05 trillion as of Friday, December 13.

Kelly also noted that as for Mayberry, which was the lead broker for the offer, this was the third company that they were bringing to list securities on the JSE’s markets, and the second security to list on the JSE junior market, since 2019.

“Mayberry has been successful in raising almost $6 billion in total for the three companies this year. Ladies and gentlemen, they are working to build the markets,” she commented.

Lumber Depot’s managing director, Major Noel Dawes, noted that the company was not entirely new to the JSE and the junior market, as it has followed in the footsteps of parent company, Blue Power Group, starting as its lumber division before severing that umbilical link to make this major step forward on its own two feet.

“It is yet another distance covered on this journey,” he said, giving credit to Blue Power founder, Dr Dhiru Tanna, for its success. Dr Tanna was unable to attend the event.

JSE Market Surveillance and Compliance Officer, Renard Whyte, saw the achievement as another listing milestone for the stock exchange.

“Another company has decided to take a bold step into opening up its ownership base to the public, allowing for the transformation of the economy to an ownership economy,” he commented.

He said that it was significant not just for the stock exchange, but the entire Jamaican economy, as well.

He said that there were high expectations for Lumber Depot based on the wealth of corporate governance experience imbedded in the board, and that it is related to a company already on the JSE.

Mayberry Investment Limited Senior Manager McKoy Jackson, remarked that the listing was unique, as Lumber Depot was the first complete spin-off from a listed company to become listed on its own.

He said that, in addition, there was significant interest in the IPO and significant investing with a target of some $169 million eventually attracting over a billion dollars.

Also attending were Mayberry Investment CEO Gary Peart and Vice-Chairman Mark Berry.