Marlene Street-Forrest, general manager of the Jamaica Stock Exchange. - File

The Jamaica Stock Exchange (JSE) will today formalise a partnership with Jamaica Trade and Invest that both parties expect to position small and medium companies for listing on the exchange.

The memorandum of understanding to be signed at the offices of the JTI will see the agency's Corporate Finance Broker Unit collaborating with the JSE on the identification and positioning of companies to raise capital via initial public offerings.

"It's a good synergy between the two - the corporate finance brokerage unit giving assistance to those companies, bringing them up to speed, and being able to say that these companies are competent as part of the preparation for going public," said JSE General Manager Marlene Street-Forrest.

"On the flip side, companies that come to the JSE but still need some help in becoming more prepared for going public - we will refer them to the unit, so it's a sort of cross-referral of companies," she added.

While JTI, or the CFBU itself, will not be among the JSE's approved list of mentors for SMEs, the JTI will be allowed to designate a person to become an approved mentor.

Approved mentors so far include Sandra Glasgow, chief executive of the Private Sector Organisation of Jamaica; Sushil Jain, financial analyst; Anya Schnoor, CEO of Scotia DBG Investments, and her Senior Vice-President Lissant Mitchell; and banker/business consultant Aubyn Hill.

Technical and financial services

The CFBU, which was formed under the JTI-managed Private Sector Development Programme funded jointly by the European Union and Jamaican Government, offers technical and financial services to SMEs at subsidised cost.

Its services include financial management and planning, identifying financing sources, and business-plan analysis and development.

The MOU effectively extends the tapping of financing beyond debt to the equities market.

"It's a formal relationship - financial match-making - with JTI ... ," said Deanna McFarlane, manager of the CFBU.

"Companies that don't have the collateral strength have the option to register on the junior market to get the required financing. What we will do is to help prepare them to list," she said.

For Street-Forrest, the assistance with business plans and financial statements are key services that would position SMEs to go public and build up clientele for the Junior Stock Market.

The junior exchange was launched April 2 this year but so far has had no listings.

There has been no word on the 10 SMEs initially declared as prospects, but McFarlane says her unit has identified 30 CFBU clients that are potentials for listing - spanning the information tech-nology, manufacturing, tourism, agro-processing, advertising and family-entertainment sectors.

The 30 represents less than five per cent of CFBU's 640 clients. JTI's overall portfolio is in excess of 2,000 medium, small and micro enterprises.

Still the CFBU says it has no solid timetable on when it would deliver clients to the JSE.

Capitalisation

"Couldn't say how early we will bring a company to list but it takes a company about three to six months to prepare, so some will be ready by next quarter; some in the following year," she said.

The JSE currently has 45 listed companies on its main board whose market capitalisation is at $605 billion.

The junior exchange is meant for companies with a capital base of between $50 million and $500 million.

sabrina.gordon@gleanerjm.com