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Financial News

Oct 2022 Financial News

More Small and Medium Enterprises (SME) Investments

Oct 20, 2022

The T&T Stock Exchange is hoping that more Small and Medium Enterprises will seek to become listed following recent tax breaks offered by the government.

Chief executive officer of the TTSE Eva Mitchell said she is hopeful that the recent tax incentives offered to SMEs in the budget would encourage them to enter the market.

“The Finance Minister would have made some refinements to the tax incentives offered to SMEs that list on the TTSE. Prior to 2021, SME companies would have benefited from a 50 per cent relaxation in their corporate tax obligations. This meant that for the first five years of listing you would pay 50 per cent of the prevailing tax rate,” she explained, “the Stock Exchange continued to lobby with the Ministry of Finance.

“Again, to show its commitment to the development of the SME sector, the Minister announced further changes to that tax incentive where the tax period has been extended to 10 years from five years, and for the first five years SME benefits from a full tax holiday for the first five years.”

She stressed that under this agreement these businesses would not be required to pay corporate tax, business levy or Green Fund contributions.

Mitchell said this an avenue that many smaller businesses could look into as a means to build capital as the business grows as opposed to seeking business loans and incurring the risk of debt.

She believed it presented a potentially strong avenue to new opportunities for SMEs, especially with a mentor programme included in the deal.

“I do think the market will take off in the same way that it did in Jamaica. It is a means for small businesses to raise funds to support the growth of their company. It comes with some attractive tax incentives and other inherent benefits. And a mentor that is available to you to provide the guidance needed from a corporate governance perspective to ensure you can comfortably exist in a publicly listed environment,” said Mitchell.

The development of the SME market is just one of the targets the TTSE is pursuing as it celebrates 40 years of operations and seeks to build on promising performances following the shock of the COVID-19 pandemic.

The company intends to further discuss strategies for SMEs this week during a one-day conference“Leveraging the Capital Markets to Enhance the Economic Potential of the Caribbean” which is a part of the TTSE’s 40th anniversary celebrations.

“We actually celebrated our 40th anniversary last year, but because of the COVID restrictions at that time, we could not have celebrated and marked the day in the way we wanted. So now given that the ease of restrictions, we celebrate this milestone, and do so by recognising the people who would have contributed to our success and history,” said Mitchell.

Apart from the SME market push, Mitchell hailed the strides made by the TTSE in recent years, namely the transition to a fully electronic trading platform.

“You have the opportunity now to trade from the convenience of your home, from the convenience of your phone 24/7. You can still access the platform and real-time market and trade information, you can access data, so that you can make an informed decision. And all of this was a part of the steps that the exchange has taken to fulfil its mandate in ensuring that trading becomes accessible to all,” she said.

“It’s a part of our overall mandate of financial inclusion where everyone has an opportunity to be an investor. Everyone has an opportunity to participate in the market and to participate in the opportunities within the market.”

She said while it was a step in the right direction there was still more work to be done for the TTSE.

She said, “It’s an innovative approach that we have taken and we will continue to make innovative strides and play a lead role in nation building in the future as our partners has done in the past.”

However she noted that there had been many promising market developments such as the recent First Citizens Public Offerings and the National Investment Fund which has pushed the TTSE in the right direction in terms of attracting different and fresh faces into the local stock market.

She said, “The last IPOs and APOs definitely brought new investors to the exchange. We have also seen an increase in regional investors that have shown interest in investing and participating in our market. And that is because of the value and opportunities that exist.

“For example, the Massy cross-listing, the GHL cross-listing, and as the markets and companies become more integrated there may be more opportunities within our cross-listed market that sophisticated investors can take advantage of,”

This has led to some record-setting numbers on the TTSE in the past year.

“From a market activity perspective, we are actually well above 2019 pre-COVID levels, so we are certainly trending in the right direction.

“Last year, we recorded about $1.4 million in total trade value, our best performance in 15 years.

“For 2022,the first two quarters were actually record performances for us with Q1 being our best quarterly performance on record ever from a trade value perspective. So what does that say? That says that there is interest and the energy in the stock market excites us in undertaking our future plans for further market development.”

The Trinidad and Tobago Guardian Newspaper
Wednesday 20 October, 2022