Oversubscribed by 41 per cent, the initial public offering (IPO) of a 27 per cent stake in the Jamaica Stock Exchange (JSE) closed a day after opening.
The IPO, which opened Friday and closed on Monday, received over 150 applications for the 38.3 million that was made available for sale.Before the cost of the offer is accoutned for, the JSE will get $79 million for newly issued shares, while Jamaica Money Market Brokers (JMMB) stands to get $29 million for its 10.2 million sharesThe near bank ended up with twice as many shares as the other member dealers when it acquired Capital and Credit Financial Group (CCFG) last year.So the sale will put JMMB on even keel with the other nine existing shareholders (who will each own 7.3 per cent of the JSE after the IPO).Applicants will be advised on how the shares will be alloted by Thursday — a requirement under the main market rules.Lamar Harris, manager of investment banking at Stocks and Securities Ltd — the lead broker for the IPO — said that investor reponse was “extremely encouraging when one considers the vital role that the JSE plays in building Jamaica’s capital markets”.The JSE hopes to use the proceeds to design and facilitate planned and other new product offerings, as well as retire debt.Up to March 31, it had $215 million in liabilities, of which $73 million was for a portion of long-term debt that becomes due within the year.The remaining cash will be used to pay for the IPO.“Expenses of the invitation, which the directors believe will not exceed $9.9 million (inclusive of brokerage fees, legal fees, accountant’s fees, registrar’s fees, filing fees, initial listing fees, marketing expenses, and GCT,” said the market prospectus for the IPO.The stock exchange already launched its corporate bond market, which allows companies to list their bonds on the exchange, where they can be traded, and gives investors an easier way to exit and enter positions.The stock exchange is also in talks with the Bank of Jamaica to develop a fixed income trading platform for Government of Jamaica debt securities, and is conducting research into the development of exchange-traded products and other exchange-related products.HOUSE RULES
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JSE IPO oversubscribed by 41%
