The Dominica Association of Industry and Commerce (DAIC) hosted its Chew On It Luncheon captioned, “Funding for Strategic Growth” on Wednesday, September 25th, 2019 with a primary focus to educate its Members and Stakeholders on how to utilize the Eastern Caribbean Securities Exchange (ECSE) platform to successfully launch their Initial Public Offering (IPO). This IPO workshop designed for Caribbean enterprises forms part of a series of workshops being hosted by the ECSE across the Eastern Caribbean Currency Union.
Participants were able to enhance their knowledge of the role of the ECSE in business financing, their listing requirements, procedures, due diligence requirements, how to best utilize the ECSE’s primary market platform, as well as a demonstration of the IPO Market Platform as presented by Mr. Trevor Blake Managing Director (ECSE) and Ms. Sherizan Mills, Customer Service Representative in the Operations Department.
The ECSE informed that there are currently 151 Securities listed, inclusive of 138 Debt Securities equivalent to $3.0 Billion and 13 Equities with a market cap of $1.9 Billion, of which one of these equities are domiciled in Dominica.
Businesses were encouraged to take advantage of the benefits available from being listing on the Exchange, such as the improvement of access to capital in wider regional market, enhancement of the company’s liquidity, increase in shareholder value, enabling of the use of listed shares as collateral for loans, provision of tax exemption on dividends, promotion of an investment culture, among others.
The listing requirements that businesses should adhere to in order to access the benefits of listing are that businesses need to: obtain a certificate of approval for listing, be incorporated or registered under the Companies Act, meet the requirements of one of Listing Tiers, have a minimum of 20% of the shares held by the Public, provide specified financial statements, and pay the required listing fees.
At the workshop, it was discussed that businesses are often faced with a decision between growing their potential by accessing capital through the securities exchange while giving up some control of their businesses, and the converse of not sharing the opportunity for investors to gain profit from the business in order to retain full control of the ownership of their business. It was noted that most Small and Medium Enterprises (SMEs) are family-owned businesses that may be reluctant to take the risk due to the possibility of organizational shifts.
It was highlighted that the requirements for the entry-level for Listing included a minimum capital of $1 million, the business should be operational for 18 months, and the business must be a ‘going concern’, meaning that the business is expected to continue for the foreseeable future, in addition, to be able to make a profit. The requirement that businesses should have a minimum capital of $1 million has proven to be a challenge for most businesses; hence, it was recommended to the ECSE to establish an additional tier to attract more businesses within the region.
Importantly, it was reiterated that the Private Sector is the engine of growth and is estimated to contribute over 70% of the Gross Domestic Product of the in the ECCU. The competitiveness of each country and the region is driven by the competitiveness of the Private Sector; hence, for sustainable economic development, the Private Sector must be competitive in an evolving global environment. Businesses are encouraged to invest in enhanced technologies, research and development, productivity improvement measures, expansion of their existing and new product development, and in exploiting new markets.
DAIC acknowledges its responsibility in educating the business community, startups, productive sectors and those interested in expanding their businesses through avenues other than borrowing, and in changing the “Investment Culture” in Dominica. DAIC will continue to inform and educate its Membership on opportunities that lead to growth and enhanced competitiveness.
DAIC thanks Silver Sponsor, the National Bank of Dominica for their support in hosting a successful Chew On It Luncheon.
