Companies are becoming increasingly hesitant about going public, largely due to past outcomes and the pressure to deliver immediate results rather than focus on long-term growth. According to Nitin Gandhi, Chair of the South Pacific Stock Exchange (SPX), the fear of being scrutinized in the public market is a significant concern, causing many businesses to remain private longer. This shift is a response to the high compliance costs and stringent regulations that come with public listings.
Gandhi points out that while the desire for control over business operations is understandable, the sentiment towards public listing is evolving. He underscores that although some companies have encountered challenges after going public, numerous others have found success and growth through this process. Companies are now encouraged to reconsider the opportunities offered by public listings, particularly with supportive changes in the regulatory environment.
Nalin Patel, a partner at BDO Fiji, highlights that tax uncertainties previously hindered businesses from considering public offerings. However, the recently implemented binding rulings have clarified tax implications, providing a sense of security to potential issuers. Clearer and more consistent tax regulations, along with improved overall policies, instill confidence in businesses as they contemplate entering the public domain.
Although there have been concerns about entering the public market, initiatives are underway to simplify the listing process. The South Pacific Stock Exchange is working on updating its regulations to help more firms access capital via the stock market, with a particular focus on welcoming small and medium-sized enterprises. There’s an optimistic outlook as the market gears up for potential new listings, encouraging businesses to explore public offerings for sustainable growth and expansion.
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