Initial public offers, or IPOs as they are generally called, usually signal “the next stage” in a company’s development. There is a general perception by both seasoned and novice investors alike that publicly traded companies are “more prestigious” or market leaders.

Since the advent of the Junior Market on the Jamaica Stock Exchange in 2009, opportunities to become shareholders in listed companies in Jamaica exploded with a record number of companies going to market in 2017.

In 2015, Bloomberg.com reported that the Jamaica Stock Exchange was the best-performing stock exchange in the world, and each year subsequent to that Jamaica has ranked in the top tier of high-performance stock exchanges worldwide. This creates a perfect storm for an exciting environment for economic prosperity for investors and business operators.

With interest rates being so low, the bond or fixed-income markets are currently not doing so well. It is difficult to find high-yielding instruments without taking on serious risk. This fact forces investors to look towards the equity market for a haven for their money.

Over the past three to five years, in particular, we have been experiencing a bull market, which is investment speak for the state of the stock market where prices for stocks have been increasing rapidly over a consistent period of time.

This is not only a good sign for the economy, but also for investors as it signals positive market sentiments. As a result, this generates renewed interest amongst existing investors and sparks new interest in people who may be new to the investing game.

The number of Jamaicans choosing to participate in the local stock market is on the rise. This is signalled by the vast increase in the number of IPO applications over the medium term. Five to six years ago brokers would receive approximately 300 applications per IPO, whereas in 2017 the average number of applications for a given IPO was over 1,000!

Although the IPO process can be arduous for business owners, the exercise does come with a number of very attractive incentives such as bringing in a large influx of cash to be used as capital to service debt and/or to put towards expansion of the given business; a 10-year tax incentive (Junior Market listings only); increased corporate governance through an active board of directors; audit and compensation committees; the guidance of a mentor; as well as increased publicity.

All of the aforementioned factors go a long way in transforming the business and growing its profits. For many companies, the initial IPO price is the lowest that the stock will trade at and will only increase in value over time.

This is great news for investors seeking to capitalise on growth in the business sector.

Over the last 12 months there have been a number of IPOs. Those that have garnered much attention include: Wisynco, Fosrich, Victoria Mutual Investments and, most recently, Everything Fresh Ltd. This means that there is no time like the present for an investor to get in on the opportunity before it is too late.

Matthew Williams is an Investment Banking Associate at Stocks and Securities Ltd.