Could we see more JSE suspensions in 2025?

Edutech company, Edufocal, was recently suspended from trading on the Jamaica Stock Exchange because of a delay in publishing their audited financials. It’s like deja vu because the company was suspended for the same reason last year. 

But they weren’t the only ones. MFS Capital Partners, PBS, IronRock and EquityLine were all suspended in 2024 for late submissions, which is increasingly becoming a problem for the JSE.

The Exchange has pointed out that on-time filing of financial reports for Main Market companies has dropped from 85 percent in 2019 to 64 percent in 2024. And for Junior Market companies, the fall off is even more significant, dropping from 92 percent in 2019 to just 43 percent last year!

So what’s going wrong?

In Jamaica, publicly listed companies must publish their audited financials within either a 60 or 90-day window. They choose. If they miss the first window, then there’s another 90-day countdown before the JSE can decide to suspend them.

But as I mentioned, a lot of companies are missing these deadlines.  One big reason is a shortage of auditors. Which is something that the JSE has been talking about for years now.

Auditors are also not cheap. Some larger companies can afford to have them come in every three or six months, so that the end of year results aren’t as tedious. But smaller companies may not be able to afford that. 

David Rose, Taking Stock analyst, also pointed out that the change in international accounting standards is an issue. Because now, auditors and businesses have to learn a whole new system for reporting their financials.  And those growing pains come with delays.

But the truth is, when companies don’t file on time, investors are left in the dark. And post-SSL, the aim is to rebuild trust in Jamaica’s investment landscape, making on-time reports essential.

So maybe companies need to start the process earlier, plan ahead, and work closely with auditors throughout the year. It might be more expensive, but getting suspended will “cost” more in the long run.

And that’s the bottom line.

So what do you think? Should the JSE consider relaxing the rules until the shortage of auditors is addressed?

And if you want to learn how to invest in Jamaican companies, go to investingforbeginnersja.com.  

 

Let’s get this money!