Friday, May 16, 2008

Capital&Credit looks to secondary listing later this year

Published: Friday May 16, 2008

The Capital & Credit Financial Group (CCFG) intends to list one or more of its subsidiaries by the third quarter, revamp its unit trust product and launch an individual retirement account with a view to energise the brand.

"Both in Jamaica, Trinidad and Tobago and elsewhere we will bring value to shareholders," said Ryland Campbell, chairman of CCFG. He made these remarks at yesterday's ceremony to de-listed their ordinary shares simultaneously from the Jamaica Stock Exchange (JSE) and the Trinidad & Tobago Stock Exchange (TTSE) while re-listing the CCFG ordinary shares and Capital & Credit Merchant Bank (CCMB) cumulative redeemable preference shares.

Campbell noted, "Competition has become more intensive and it became obvious that we need to reposition the group from how we started. It is important to rise above challenges." During the listing ceremony, general manager of the JSE, Marlene Street-Forrest congratulated the CCFG team.

"CCMB is one of Jamaica's success stories. We can truly say that as a listed company, the JSE is proud of this company which has, since its listing in May 2003, traded units valued at over J$3.5 billion, creating liquidity for the market and value for its shareholders. The company has also demonstrated that it knows the value of the market when in 2005, through a Rights Issue, it raised over J$1 billion. This stands as the third highest amount of capital raised in the market."

Chief regulatory officer, Wenthworth Graham added, "In repositioning the Group on the JSE, the company has shown leadership that is nimble and responsive to change."

Looking specifically at the changes to come, Campbell stated, " We make a commitment that we will return. We are looking now and seeing that we will return to put a new listing on the JSE board or even more than one new listing before the end of the year." Speaking after the ceremony, Campbell noted that the board of directors is currently considering listing CCFG preference shares first."We have discussed it but have not finalised the decision. However, we expect to be listing something before September."

Campbell acknowledged that in addition to the heighten competition in Jamaica, other competitors were leveraging their regional connections. "Others have family members stretched out over the Caribbean and we don't have that. Instead, we will form an alliance and build on that to make significant inroads to the Florida market."

Despite the concern that the Jamaican market is being saturated with new listings that do not offer the same returns as other alternatives, Campbell notes that traditional investments have an important place in portfolio planning. "As inflation increases and people settle down to understand that traditional investment products do not provide phenomenal investment returns but stable returns, then they will want quarterly returns that are a legitimate source of non-tax income."

Looking at the stockbrokerage subsidiary, Capital & Credit Securities Limited (CCSL) executives intend to reposition the company. According to Christopher Walker, acting general manager and vice president of CCSL, "We will be a more fee-based entity as our major focus is no longer the repo business. Our individual retirement account product is ready and waiting on Financial Services Commission approval. We will also launch a portfolio planning service and present an interesting offer to our corporate clients that will see them benefiting from short-term cash that normally earns small returns."

Based on the new scheme of arrangement, CCMB shareholders will get six CCFG ordinary shares in the group company for every five CCMB ordinary shares held and CCMB Cumulative Redeemable Preference Shares, valued at $2 per share, allotted at the ratio of one CCMB Preference Share for every fifteen CCMB Ordinary Shares held on both the JSE and TTSE.

Source: Jamaica Observer

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