Is the PNP bad for business ?

On Novemeber 11, 2012 I wrote the following  ” PNP DOES NOT UNDERSTAND BUSINESS”

I have been preaching to the comrades on this blog that the PNP government and comrades in general do NOT understand how business operates here in Jamaica.

https://commonsenseja.wordpress.com/2012/11/21/pnp-dont-understand-business/

Almost one year later I am back at the same position as it relates to this present administration and their perceived lack knowledge of the way business operates.

The JLP in their wisdom and having better business acumen recognized that one sure way to move the economy forward was to provide small business with some incentive  along with cheaper access to money and so the Junior Stock Exchange was launched, the year was 2009, just two year after coming to office.

Four later later the Junior Stock Exchange has listed 16 companies and with a combined market capitalization of over  $21.8 billion moving from $522m when Access Financial Services limited was listed on the market in October 2009.

Companies like Lasco have been have been able to do massive expansion as a result of access to cheap financing thanks to the Junior Stock Exchange.

Now, almost two years into their administration, the PNP administration is about to destroy the Junior stock market and in the process , will remove  access to low cost funds for new business as well as stymieing the expansion of existing businesses currently listed on the Junior market.

This is the very same set of socialist who presided over the biggest closures of businesses in Jamaica the 1990’s, which cost this country billions and saw many multinational companies feeling our shores.

The Finance Minister appears to be saying “some working group” ( seems like a bunch of comrades to me ), have met and have decided that the Junior Stock Exchange offers an unfair advantage and as such the incentive they have, should be removed, which would all but kill the market.

Is the PNP administration really serious about moving Jamaica forward, surely if this is the way they plan to do so,  we may as well pack our bags and go elsewhere.

Where are the social partners on this, I would like to hear from the PSOJ, JMA and other groups who form part of the social partnership and who signed a document recently, because surely I cannot see them supporting this.

Here is what some of the folks in business have to say on this most backward move by this business unfriendly government.

“For Jamaica’s sake and in order to assist in providing well-needed employment in the country, we hope that this will not have the approval of the Government of Jamaica,” Chin said.

and Mr John Mahfood CEO of Jamaica Teas had this to say

“From my standpoint it is really totally crazy, I mean it in the strongest way, that they would want to kill something that for the first time is actually helping to build the private sector,” Mahfood argued.

Had the company not raised capital by way of the Junior Market, it wouldn’t have been able to turn a supermarket around and hire over 100 persons, Mahfood said.

“Very few companies are willing to grow based on bank borrowing — interest rates are still high and the banks are still very difficult,” he noted, adding “So there was an opportunity created by the stock exchange to get equity capital and I think that there has been actual proof to show that this has worked

Gary Peart, CEO of Mayberry Investments Limited, which has acted as lead broker for 12 of the companies that have so far listed on the Junior Market, believes none of the market’s current members would have made the move to go public without the incentives.

He continued ;

“Coming out of that group, they took into account all the failings and weaknesses of all the previous incentives and came out with a conclusion that it is the most democratic incentives that is on the book,” Peart said.

“With the Junior Market, it’s not industry specific, any company in Jamaica can qualify; it’s transparent, has the corporate governance principles in place et al,” Peart noted

One member of the JSE had this comment:

“The JSE has collected lots of evidence to show that the funds raised on the Junior Market have been employed to either retool, expand locally and regionally, pay down high cost debt and create hundreds of jobs. This is precisely what junior markets are intended to do — help promote growth,” added Coke, who was a member of the JSE Committee that set up the Junior Market

A  seemingly upset Mahfood did not mince words when he added:

“Nobody to my knowledge talked to anyone on the exchange. It is so ridiculous that they would do this and contemplate doing this and not even talk to the companies,” said Mahfood, adding that “jealousy” may be fuelling some of the flames against the market

It appears that the General Manager of the JSE was not consultated at all and had no input in the deliberations made by members on the Independent Working Group (IWG) and had this to say:

“We had no input into the deliberations. Our opinion was not sought on how the recommendations would impact the market nor were we provided with any information on the recommendations,” Street Forrest told the Business Observer

Credits to the Jamaica Observer.

http://www.jamaicaobserver.com/business/-Ridiculous–move-planned-to-gut-Junior-Market—-stakeholders_15137042

I am totally floored that a system that has been in place and is obviously working, providing capital for Jamaican companies and allowing them to expand and employee more Jamaicans, could be shutdown by the PNP administration.

Now how about this for a true paradox.

JAMAICA’S CASH-STRAPPED Government approved approximately $12 million in waivers to individuals and institutions for the importation of luxury vehicles during the month of June.

http://jamaica-gleaner.com/gleaner/20131002/lead/lead3.html

Should I say more?

Mi nah seh anoda word.