By Lara Pickford-Gordon Tuesday, September 18 2012

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TTSE CEO Wain Iton...

The TT Stock Exchange Ltd (TTSE) is lobbying to have more participation in the local stock exchange and involvement by Small and Medium enterprises (SMEs). A suggestion has been made for government to consider having SMEs getting state contracts as a “preferred supplier” to be listed on the local stock exchange.

Speaking at the TTSE Ltd shareholders’ breakfast meeting at the Courtyard Marriott, Invaders Bay yesterday, TTSE Chairman Ranjit Jeewan referred to the 2012 Budget which proposed the listing of SMEs on the stock exchange. Last September, former Finance Minister Winston Dookeran announced that a third tier would be introduced “to provide SMEs with access to the capital market.” He proposed for the first five years SMEs whose capital is greater than $5 million and no less than $50 million to be listed for trading purposes and allowed a ten percent corporate tax rate. The businesses would be required to raise capital on the Exchange through initial public offering with a minimum of 25 shareholders holding at least 30 percent of the company’s share capital up to a minimum of $50 million. Jeewan said there was “some interest” in the idea but no companies have listed.

Jeewan said governance will be one of the issues in the smaller companies coming to market.

Directing his comment to shareholders he said, “we know that you know some of these companies and we know you can help. Maybe one of the things we should be saying to the government is that we know that there are a lot of major contracts that are being given out to companies that could be listed. Why as a strategy for somebody to be a preferred supplier maybe one of the things should be to make a commitment to list.”

Jeewan asked the shareholders to encourage the SMEs and help bring them to market.

He said, “We have templates we can help with and bring them to market. There has been some interest but not the kind of progress to the extent we’d like to see from them.”

Jeewan referred to a government policy of the 1970’s in which foreign companies, banks and manufacturers were required to be listed “to a minority level” and this has contributed to the current large capitalised market.

A “major challenge” for the Exchange was increasing its listing and deepening of market activity.”

He said at present the TTSE is not meeting its daily requirement of doing $6 million worth of transactions in transactions daily to break even. Newsday later learnt from CEO Wainwright Iton that the TTSE currently makes about half of this daily from listing fees, transaction charges etc.

During his address, Jeewan identified different ways shareholders could assist the market: listing their stand-alone companies (As AnsaMcAl has done), consider stock splits and deposit and receipts, listing some of their bonds. In his presentation, Jeewan also highlighted the different platforms which were created but which had yet to achieve their full potential.

In 2010 the Corporate Bond market was established with a current face value of $800 million but to date only two bonds from Scotia are listed. “I hope to change that,” Jeewan said.

A year later, US Dollar Market was established but only one preference share was listed by Sagicor. It has a face value of $120 million. The TTSE created a repo platform in 2012 but no repos have taken place.