Using the JSE as a Source of Funding: A review of the period 2008-2011
In recent years, several Jamaican companies have used the Jamaica Stock Exchange as a source for business expansion capital. Using the equity market as a capital structure tool has allowed these firms to build capacity within the midst of the recession which started in 2008, and is, by many accounts, still on-going.
There are approximately 60,000 companies listed at the Registrar of Companies and of those, 60 companies are listed on the Jamaica Stock Exchange. This indicates that a scant minority of businesses employ the full toolkit of local financing sources open to them. And this is a critical issue because Jamaica was one of the world’s slowest growing economies in the past four decades, according to a 2011 report published by the World Bank. The World Bank observed that Jamaica’s ranking in terms of average real GDP growth has deteriorated from 1960 to 2008, both regionally and globally. In the region Jamaica experienced the highest growth in real GDP of 4.4% during the 1960’s. In subsequent decades GDP growth was below 2.5%. This compares with Trinidad and Tobago which grew by over 4.5% in three out of the five decades recorded.
About the Author
Dennise Williams, a doctoral student at Mona School of Business, is Vice-President, Marketing at Mayberry Investments Limited.
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