Chart Of The Week: A Look At The Junior Stock Market

Source: Jamaica Stock Exchange

Source: Jamaica Stock Exchange

Chart of the Week for this week is a line graph showing the performance of the Junior Stock Market from July 2010 to September 2013. During the month of September, Junior stocks performed negatively. Jamaica’s Junior Stock Market, declined 23.59 points or -3% to close at 768.83, as against August the market closed with 792.42 points. The Junior market made it to an all time high in June 2013 when it closed with 801.3 points.

The Junior Stock Market is 4 years old. It was launched on April 2009, through the collaborative efforts of the Government, the JSE Board, the Financial Services Authority and a Steering Committee composed of key stakeholders.

The market was designed mainly to provide venture capital financing for Small and Medium Size Businesses between J$50M to J$500M. Listing on the Junior Market entitles the businesses to certain incentives including tax breaks, reduced trading fees and exemptions such as no transfer tax on shares also no Stamp Duty on such transfers.

Over the years, the Junior Market has been thriving. According to the information on the JSE’s website 18 companies are listed. The market has not only enabled businesses to raise capital for equity but business persons have also accredited the Junior market with helping their companies to grow and by extent contributing to the growth of the local economy.

The implementation of the Omnibus Tax Incentive Bill which is a benchmark under the International Monetary Fund (IMF) agreement, threatens the existence of the vibrant Junior Market. The aim of the Bill is to establish a transparent and coherent regime to govern all tax incentives.

Under the Omnibus Tax Incentive Act companies listed on the Junior Market would not be able to benefit from the special tax relief and incentives that last up to 10 years. The success of listed small-medium size businesses could be at risk with the potential loss of this cushion.