The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A Caribbean private sector executive yesterday said the creation of a junior stock maket is “important” to generating financing for agricultural projects in The Bahamas and wider region.

Dr Patrick Antoine, a representative from the Caribbean Private Sector, speaking during a webinar organised by the Food and Agricultural Organisation (FAO), said: “We need to recognise that our capital and finance markets are extremely underdeveloped. Again, it is not rhetoric. We have said this, and Jamaica in the last five years has showed us the way in terms of the junior stock exchange.

“The junior stock exchange is important because the persons in the country who understand the market in which they are going to be placing funds that projects will go into, they are more comfortable with the risk being nationals or diaspora than, for instance, someone who is far away who would require a project that is of a particular size and scope, and with a number of other legal frameworks that, sadly speaking, most of our countries do not have.”

Dr Antoine was responding to questions raised by Michael Pintard, the Bahamian minister for agriculture and marine resources, on how best Caribbean countries can leverage blended financing from both the government and private sector to boost agricultural production.

In reply, he added: “The one I want to offer first is the junior stock exchange in Jamaica. There is a recent experiment in Trinidad with it, and there are two successful projects funded from that. We would like to see that extended to agriculture.”

The Jamaica Stock Exchange launched its Junior Market on April 1, 2009, to encourage and promote investment in Jamaica’s entrepreneurship, employment and economic development. The Junior Market allows investors to put capital into legitimate small and medium-sized companies (SMEs) whose shares trade in a special bracket.

The Trinidad and Tobago Stock Exchange established a market for SMEs in 2012 after its government announced special tax concession for companies listing on this exchange. The Bahamas International Securities Exchange (BISX) has long talked about establishing its own junior market but has yet to make good on this initiative.

Dr Antoine said a second option would involve investors placing their monies with an equity management firm for investment in specific agriculture projects. “We believe this is right for agriculture for this time because it is not just production - it’s also distribution and support services,” he added.

“Thirdly, there is an opportunity for government at this time to use some of the borrowing power it has, which is not a lot, and blend that with private sector funding. We have an interesting example now where the government is prepared to put some funding that was already programmed for agriculture, and a private sector firm is putting a substantial amount of funds in to create a new entity that services agriculture from the standpoint of providing critical intermediate inputs into a large industry. That is one of the ways we believe we need to move in agriculture.”