Boost in confidence

LACK of confidence and certainty of whether the incentives put in place previously would remain has been one of the major impediments of attracting new companies to be listed in the South Pacific Stock Exchange (SPSE).

SPSE CEO Jinita Prasad said a number of companies they met earlier in the year were interested in going public but a strategic decision such as going public was quite fundamental to any organisation and needed to be taken under the assurance that the current incentives would remain.

And now that the election is over, SPSE expects the incentives to stay in place and likely give companies even more reason to see these incentives remain in place for the long term.

“Over the last few years, a number of incentives have been granted to attract new companies to list and encourage investors to save and invest in listed securities.”

The most recent ones were announced in the 2014 National Budget where corporate tax rate for listed companies was reduced to 10 per cent and gains from sale of listed shares was exempted from income tax as well as capital gains tax.

“The platform to develop the stock market, both on the demand and supply side had already been set but with a democratically elected government now comes a much higher level of confidence and certainty that is very crucial and conducive for development of an efficient and vibrant stock market.”

While SPSE is a self-regulatory authority, she said its operations, participants and stakeholders were affected by a number of other laws, rules and regulations including the Capital Market Decree, Companies Act, Income Tax Act and Media Industry Authority Decree to name a few.

“Consistency in application of the rules and laws that form part of the greater regulatory framework surrounding the stock market is essential.

“The business community and the stock market have, in the past, been subjected to inconsistencies in application of certain laws which have had negative impact on the overall market.”

However, over the recent years, she said, some of these were corrected.

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