JAMAICA TO LAUNCH
Micro Stock Exchange by GLEN MCLEISH
A
ccess to funding is an ongoing challenge for Micro, Small and Medium-sized Enterprises (MSMEs) worldwide although according to the International Council for Small Business (ICSB), “formal and informal MSMEs make up over 90% of all firms and account on average for 60-70% of total employment and 50% of GDP.” In Jamaica, the picture is the same. Access to funding remains a sore point for small entrepreneurs who employ over 80 percent of the labour force. In the 2018/2019 Budget Debate, Minister of Finance Hon. Audley Shaw announced that plans are afoot to launch a micro stock exchange to facilitate small enterprises. This is welcome news for the MSME sector, but what are the pre-conditions for a successful micro exchange and how can MSMEs ready themselves to take advantage of using the platform to capitalize their businesses and contribute to a strengthened economy?
Before we deep dive, let’s get some context. A stock market is a place where shares of public listed companies are traded. The primary market is where companies float shares to the general public in an initial public offering (IPO) to raise capital for their businesses. Like all markets, it puts individuals and businesses with funds to invest, in contact with entrepreneurs who need funds to build and expand their businesses. The shares are traded after they are listed on the exchange. Jamaica has had a thriving stock market since its incorporation and start-up in 1968 and 1969 respectively. At present, the exchange has over one-hundred securities listed on its markets. The pinnacle of its achievements may well be its recognition by Bloomberg News as the top performing exchange, stating that “…its stock market had a better year than any other across the globe.”
JUNE 2018
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