THE revision of the corporate tax rate for listed companies to 18.5 per cent by government in the 2013 National Budget recognises the public benefit of companies listing on the South Pacific Stock Exchange.
SPSE chief executive officer Jinita Prasad said the Exchange's future prospects were likely linked to its ability to leverage off its present strategies in terms of promoting listing, capital raising avenue and trading opportunities.
"Several initiatives have already been implemented in terms of regulatory and operational foundation in the form of tax incentives and state-of-the-art trading platform which can help us be the leading capital market in the Pacific islands region — and become more vibrant," she said lamenting the stock market outlook for the year.
"Although a similar initiative for a reduced corporate tax rate was experimented in 2010, that reduction was short-lived as the government subsequently reduced the general corporate tax rate, eliminating the tax advantage for listed companies.
"In contrast, the present incentive does not have an expiry period.
"The decrease in tax rate is much clearer."
She said many private companies that had been considering listing were advised to take steps towards listing now.
The Exchange, she said, would continue to build investor knowledge and retail investor participation in listed securities on the SPSE by adjusting its investor education programmes to suit the needs of potential and existing investors.
"Current listed companies and investors recognise that the tax change will result in improved wealth distribution through increased retail investor participation as well," Ms Prasad said.
She said the exchange launched a new initiated — Investor Education Briefing — to increase the attractiveness of the exchange as an investment option.
"This briefing was the next step from popular SPSE lunch-hour seminars where the exchange partnered with listed company executives and stockbrokers to share first-hand information on how these securities are performing and give insights on future prospects," Ms Prasad said.
Using those initiatives, she said the Exchange would continue its attempt to boost investor confidence and increase the level of trading activity in 2013.