NCB targets family businesses in T&T
N CB Financial Group, through one of its regional firms, plans to target the listing of family businesses on the Trinidad & Tobago Stock Exchange, TTSE, by replicating the Jamaica experience.
On Tuesday, June 8, NCB Merchant Bank Trinidad and Tobago Limited, formerly known as NCB Global Finance Limited, became a member of Trinidad stock exchange, making it one of seven brokers.
Jamaica’s junior stock market, operational since late 2009, has grown in listings to 43, many of them family operations, nearly replicating the number of companies on the main market of about 46.
TTSE also has its own junior market, called the SME Exchange, but the listings are sparse. Since late last year, however, TTSE has been offering increased incentives to encourage junior listings, said NCB Capital Markets CEO Steven Gooden. NCB Capital is the immediate parent company for NCB Merchant Bank.
As Jamaica did more than a decade ago, the Trinidad government last year introduced legislation to reduce the corporate tax rate to nil for five years for new junior market listings, and then waive 50 per cent of the taxes in the following five years.
The TTSE has over 30 equity listings, inclusive of two SME stock and cross-listings of regional companies, such as NCB Financial Group itself.
Most of the companies listed on TTSE are large businesses, while small and medium companies largely remain privately held, and are heavily reliant on bank loans and other forms of debt financing, said NCB Merchant.
“NCBMB recognises that our domestic environment is currently largely debt-centric and, going forward, the narrative may likely make shifts towards more patient capital,” NCB Merchant Bank said in a press release.
“Also happening at the same time is that in many instances, the second-generation owners of family businesses in Trinidad & Tobago are retiring and the third generation is coming to the forefront. Going public allows family-owned businesses to solve for continuity issues born by the reluctance of third-generation successors to operate family businesses,” it said.
NCB Merchant CEO Angus Young expects to leverage the experience of NCB Capital in IPO transactions for its market push.
“We also believe that our market entrance is timely, as the patient-capital agenda, family-business transition challenges, and the Government of Trinidad and Tobago’s accommodative fiscal policy via the SME Exchange, all make for the right environment,” he said.