TT Chamber, stock exchange invite SMEs to take up challenge

ALTHOUGH there are thorough processes and procedures for any business to follow if it wants to be listed on the Trinidad and Tobago Stock Exchange (TTSE), the exchange is encouraging ambitious small and medium enterprises (SMEs) to realise their potential for capacity-building and take up the task.

The TTSE and the Trinidad and Tobago Chamber of Industry and Commerce (TTCIC) signed a co-operative agreement on January 5 at the chamber’s office in Westmoorings, committing their resources and sustained efforts to foster growth and innovation in the local business community, particularly that of small and medium enterprises.

TTSE CEO Eva Mitchell and TTCIC president Kiran Maharaj signed a memorandum of understanding, with Minister in the Ministry of Finance Brian Manning present as the witness.

Maharaj, delivering welcome remarks, said the agreement, which expires on December 31, 2025, clearly indicates a commitment by both parties to “cultivating entrepreneurship and a vibrant ecosystem for emerging entities to thrive…providing them with the resources, mentorship, support and exposure necessary for success.

Maharaj said the MOU will allow for investor confidence, providing opportunities for high-potential, early-stage investments.

“It is an intersection, too, of innovation and investment, where we can also create opportunities and foster inclusivity.”

Maharaj said such partnerships have “transformative potential which is much needed in the current climate of change, where new pathways to prosperity must be devised for the sake of economic prosperity for all.”

In her keynote address, Mitchell said the collaboration was not simply ceremonial but substantive, and a commitment, "a shared vision rooted in the development of opportunities (for SMEs) and business aspiring to be listed on the TTSE.

“Today’s MOU signifies our joint dedication to providing the necessary support and capacity-building initiatives essential for realising this objective.

She said by combining resources and expertise, the two parties aim to create a “synergistic environment that fosters growth and innovation within our business ecosystems.”

The agreement says both parties seek to develop opportunities for entrepreneurs, SMEs and businesses that want to be listed on the TTSE, as well as those requiring capacity-building support to achieve this objective.

Jase Torry, TTSE manager–marketing operations, explained that many SME owners are intimidated by the process or may have misconceptions about what being listed on the TTSE requires of them.

But instead of being daunted, Torry said, in a feature presentation addressing the benefits and typical concerns of SMEs flirting with the prospect of listing on the TTSE, SMEs should take advantage of the potential for expansion, the enhancement of its public image and marketability, and the strengthening of its corporate structure.

The aim of the SME market, as far as the exchange is concerned, is to "foster development of the local capital market and promote economic diversification."

“Listing on the stock exchange,” Torry said, “provides an opportunity to raise capital by issuing shares to investors – equity financing.

“This will help with expansion and the growth of business and invest in new technology.”

Perhaps the most attractive of benefits to the SME are the tax incentives, including lack of corporation taxes, Green Fund, and other tax breaks for the first five years of being listed, and a 50 per cent reduction on the same taxes for the following five years.

“Another benefit is the liquidity aspect,” Torry said.

“This can provide liquidity for people to buy and sell shares of a company.”

He said it also gives the existing shareholders an exit strategy.

Torry also addressed common concerns, such as the requirement to publicly issue quarterly financials and to host annual general meetings, and increased public scrutiny on business culture.

He said the TTSE requires the company to adopt a mentor provided by the exchange to help it navigate these and similar procedures for two years before a company director can take their place. The mentorship programme, run by the TTSE, in association with the Central Bank, was launched in October, 2022.

“The mentor is envisioned to be a qualified person approved by the TTSE to help SMEs adapt and comply with the regulations of being a public company," Torry explained.

“Before, they would have been a private company and not been subject to the ongoing requirements that a listed company does.

“The mentor will be able to guide them and help them achieve those corporate-governance standards required for a listed public company.”

Ultimately, Torry said, listing on the TTSE opens new avenues for business growth and stability.

"You have access to multiple sources of capital and you are indifferent to debt versus equity because of the tax incentive."

Newsday recently interviewed Mitchell, who formerly held Torry’s position, before being appointed CEO in 2021.

She boasted the TTSE’s growth during the pandemic, and highlighted its continuous efforts to raise awareness about the opportunities for local investors and SMEs, via tailor-made campaigns, targeting specific audiences, including secondary school students.

She spoke of the success of its digital platform – TTSE Online Platform (TOP) – which was launched in 2020, around the time of the initial covid19 lockdowns.

TOP also allows users direct access to market news and use the information to trade accordingly.

Before its launch, retail investors would have traded through a registered broker. Now, they have direct access to the platforms, allowing them to trade in real-time, using any mobile and computer devices.

“Raising investor awareness is a strategic imperative for us,” Mitchell said.“The pandemic accelerated our efforts towards this and as a result, we began to see more investors (becoming) interested and trading on the local stock market.”

She said the spike in new investors demonstrates that when people are given access and opportunity, they will take steps to participate in the equity markets, potentially benefiting from the strength of the companies listed and the opportunities the market can offer during market dips.