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Billionaire businessman Lawrence Duprey believes his CL Financial Group

2008-12-05T05:42:00.000-08:00

Published: Fridaay December 5, 2008

Billionaire businessman Lawrence Duprey believes his CL Financial Group, which recently acquired Jamaica's Lascelles DeMercado, has seen opportunities in the ongoing financial crisis around the world.

The CL Financial chairman has decided to form a network of subsidiary brokerage companies the group owns around the world to acquire new assets at bargain prices.

Brokerage and financial services firm Caribbean Money Market Brokers - a CL Financial subsidiary - will be the central node around which a network of global brokerage houses will be built.

Duprey, who is chairman of CMMB, recently met with the heads of brokerage operations in the CL Financial Group and told them the global financial crisis offered a "unique opportunity to acquire assets at greatly undervalued prices".

Duprey told his brokerage executives that CMMB, along with the other firms in the group, would be taking advantage of this situation, the statement added.
CL Financial owns brokerage operations in the Caribbean, Central America, New York and London.

With Port of Spain-based CMMB linked to these brokerages, it creates a network through which CMMB and other investment houses can access liquidity and trade in a wide range of instruments, Duprey said.

CL Financial, which owns more than 70 companies in 32 countries, is registering a brokerage house in the Middle East, which continues to have a significant amount of liquidity given its oil and gas revenues.

The CL Financial Group owns and operates a methanol plant in Oman and is seeking to establish two more plants in Saudi Arabia and Qatar.

To achieve these goals, Duprey has appointed former CMMB managing director Ram Ramesh as vice chairman of the company.

Management consultant and former chief executive at what used to be tourism promotion company, Tidco, Vishnu Ramlogan, has also been appointed a CMMB director.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081204T220000-0500_143359_OBS__B_BILLIONAIRE_BUSINESSMAN_LAWRENCE_DUPREY_BELIEVES_HIS_CL_FINANCIAL_GROUP__B_.asp

Scotia DBG joins billion-dollar profit club

2008-12-05T05:40:00.000-08:00

Published: Friday December 5, 2008

Scotia DBG Investment Limited (SDBG) has, for the first time, recorded net pro-fit above one billion dollars, a performance chief executive officer Anya Schnoor has credited to growth in funds under management and growth by acquisition.

ScotiaDBG reported net profit of $1.2 billion at financial year ending October 31, 2008.

"This reflects a credible performance for Scotia DBG," said Schnoor.

"Despite a challenging fiscal year both in Jamaica and the financial markets worldwide, we managed to produce a record year of profitability."

Schnoor and her team grew profit by 81 per cent, due in part to the merger of Scotia Jamaica Investments Management Limited (SJIM) into Scotia DBG, and general growth in product lines the company reported.

Schnoor has indicated that the company will continue to build on the strategies that worked so well in the year just ended.

"During 2009, the focus will be on expanding our distribution channels in partnership with the overall Scotia Group, looking for ways to make the organisation more efficient and bringing to the market products and services which meet the demands of our clients," she told the Financial Gleaner.

Net profit increase

The increase in net profit generated earnings per share of $2.93.

Net interest income for the reporting period amounted to $1.96 billion.

Gains were also reported on securities and foreign currency trading bringing the company's total operating income to approximately $2.6 billion.

According Scotia DBG, which is among the top ten brokerage houses, the focus going forward will be on the continued restructuring of the operation.

The company has already sold its Trinidad branch to Scotiatrust and Merchant Bank Trinidad and Tobago Limited, but did not disclose the price.

The Trinidad operation repre-sented less than one per cent of the company's revenue.

With the acquisition of SJIM by Scotia DBG funds under management moved to $84.5 billion, while its branch network grew from seven to 19 access points, leveraging on its connection with parent company Scotia Group Jamaica.

The company has approved a dividend of 27.5 cents per stock unit, totalling $116 million, payable in January to shareholders on record as at the end of December.

Source:
Sabrina Gordon
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081205/business/business5.html
sabrina.gordon@gleanerjm.com

Lascelles rakes in $3 billion profit

2008-12-05T05:37:00.000-08:00

Published: Friday December 5, 2008

Lascelles deMercado and Company, which deals predominantly in wines and spirits, made $3 billion of net profit in the year just ended, September 30, on strong performance in most business segments.

But the William McConnell-led conglomerate, for which $3 billion is a new profit record and a 13 per cent improvement on last year's $2.7 billion, said it could have done better were it not for disappointing returns from its sugar estate.

"The performance of the company overall was below expectations," said Finance Director Anthony Bell.

"The wines and spirits segment was below expectations due to losses incurred in our cane and sugar operations. Although the spirits division experienced growth, it was not sufficient to offset the losses in sugar."

Bad weather

The losses attributed to cane and sugar amounted to approximately $500 million against the com-pany's original break-even target.

"Bad weather conditions, which commenced with Hurricane Dean in August 2007, led to a reduction in cane quality and quantity beyond that which we had estimated," said Bell, adding that increased usage of fuel at higher costs also significantly affected operations.

Bell also explained that the division was dealt another blow with the passage of Tropical Storm Gustav in August 2008, and had to take a write-down of approxi-mately $220 million on future crop quantities in the company's year-end financial results.

New year investments

Notwithstanding, the broader 'liquors, rums, wines and sugar' segment, which represents the largest business unit, accounted for 59 per cent of the group's revenue, contributing approximately $13.6 billion.

In the year ahead, Lascelles will be investing $1.6 billion in capital projects, but Bell said global conditions did not allow for accurate forecasts of how the business would likely perform.

The company is planning a new distribution warehouse for its merchandise division, and new bottling equipment and additional ageing warehouses for rum for its primary operation, Wray and Nephew, said the finance director.

Within the year just ended, total revenue came within a nose of $23 billion, up from $19.5 billion in the year ending September 2007.

The "increase in the spirits segment was mainly due to growth in the international markets and price increases in the local market," said Bell.

"A very small amount of Angostura products would have been included in this segment," he added.

Some 92.01 per cent of voting rights in Lascelles is now owned by CL Spirits Limited, a holding company created by Angostura and its parent CL Financial group of Trinidad to effect the takeover that was initiated last December and finalised seven months later on July 28.

Synergising operations

Since then, Angostura and Lascelles have been devising plans to synergise their operations. Lascelles, for example, is now Angostura's chief distributor of spirits in this market. CL Financial's owner, Lawrence Duprey, has taken over as chairman of Lascelles, replacing George Ashenheim.

Lascelles' general merchandise and investment segments both reflected huge jump in earnings. Investments for the reporting period more than doubled, moving from $485 million to in excess of $1 billion, though some was credited to book adjustments.

New principals

The general merchandise segment which markets products for several local and international companies, with its latest addition being 3M, reflected an increase of 55.2 per cent.

"The increase in general merchandise is all due to growth in business and the addition of new principals," said Bell.

"The investment segment performed beyond our expectations primarily due to a significant increase in dividends from Carreras and also a significant increase in our IFRS adjustments," he added.

Insurance and transportation services moved by 12.5 and 15.4 per cent, respectively, and performed to expectations, said Bell.

During the financial year, the company also disposed of the Lascelles Telecoms division on July 31, for $93.6 million, resulting in realised gains of $100.8 million, exiting the telecommunications market it had entered in July 2003.

The buyer was not disclosed.

Planned merge

Duprey, on a visit to Jamaica last November, told Lascelles share-holders that he envisions the marriage of its spirits business with that of Angostura's to build a company large enough to comfortably take on big international markets.

Within the expenditure laid out by Lascelles in 2008 was a new half a billion larger bill for administrative and selling expenses.

Those charges, now at $6.2 billion, would continue to climb in 2009.

"Administrative, marketing and selling expenses increased by a moderate seven per cent, but is expected to increase by more in 2009 due to significant planned investments in the international market," Bell explained.

"The planned investments would be a combination of increased marketing spend, in particular in the US market, and capital investments totalling approxi-mately $1.6 billion."

Source:
Sabrina Gordon
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081205/business/business4.html
sabrina.gordon@gleanerjm.com

Cement crisis... again!

2008-12-05T05:35:00.000-08:00

Published: Friday December 5, 2008

The local cement industry is yet another victim of the global financial crisis which has seriously impacted the Jamaican economy. According to the general manager of Caribbean Cement Company (the largest supplier of cement in Jamaica) Anthony Haynes, the sector has seen a 30 per cent decline in sales and continues to experience turbulence.

"Without getting into hyperbole, the construction sector is collapsing. If one looks at the first quarter of this year, compared to last year, sales are down 30 per cent and I'm not talking about just Carib Cement, I'm talking about the entire sector! This is, of course, anecdotal because when I talk to people in steel and lumber, they validate these figures. Over the course of this year we have seen a month-by-month steady decline," said the Carib Cement boss.

He further pointed out that total volumes are down 12 per cent compared to last year and the sector continues to contract. But by no means is this peculiar to Jamaica alone. The construction industry the world over is seeing a downturn.

"I was speaking with a colleague who is a cement supplier in Florida who told me that cement production and sales are down 40 per cent there and 30 per cent in other states across America," added Haynes.

Faced with rising input costs, inflation and the precarious state of the local economy, Caribbean Cement took the decision to raise the price of cement by six per cent in August of this year. This followed an earlier increase in January.

During the first half of its financial year, Carib Cement recorded a net profit of $271 million, an increase on the $252 million reported last year. However, for the September quarter this year it suffered a loss of $57 million mainly due to high input costs.

Caribbean Cement has weathered a number of calamities - both natural and man-made - over the last two years, but continues to remain resilient. It has had to endure lower local demand while seeing an increased supply of cheaper cement, particularly from China and Thailand. Last year, a 29 per cent increase in prices assisted in offsetting its decline in revenues. The Government also took measures to eliminate the 40 per cent tariff on imported Portland Grey Cement thus levelling the playing field and so stemming the tide of cheap and, in many cases, substandard product flooding the market.

Over the years 2006 and 2007, there was a boom in construction, so much so that Caribbean Cement's ability to supply the market was called into question. The company announced that it would add a new kiln and would be expanding its production of cement from 900,000 tonnes a year to 1.8 million tonnes a year which would more than adequately supply the market. This exercise will come in at a cost of US$150 million a year.

"All the big construction projects began in 2006 but are now nearing completion," said Haynes. "All these projects such as work on Sabina Park, the Riu hotel have not been replaced with other sizeable projects. What exacerbates the situation in our industry is that the big projects are great but we have always enjoyed good sales with home construction, which we are not seeing now.

This can perhaps be traced back to the collapse of the unregulated financial organisations, the fall-off in remittances and the financial crunch which is gripping the country. I can tell you that the inflows from the unregulated financial organisations certainly had a positive impact on home construction and in turn the cement industry."

Importers of cement have often complained that Caribbean Cement enjoys a monopoly and is protected by the Government. When Caribbean Cement had quality and supply issues many claimed they were vindicated and that the law of supply and demand should prevail. Haynes maintains that the importers of cheap cement do the industry a disservice.

"The market is currently contracting and there is still significant imported cement here in Jamaica; however, in the last quarter these importers have seen their supplies dry up," he said. "In most cases these importers are opportunists and are very unreliable. Last year, in the same quarter when they had supply issues which caused a ripple in the market, we were able to supply all of Jamaica with 225,000 tonnes in sales.

"I predict for this current quarter - that is in 2008 - we will see a market of 185,000 tonnes, which is 40,000 tonnes down on the same quarter last year. Back in 2006 when we had a severe crisis, particularly in the months of March, April and May, the market took 189,000 tonnes. Now you see we are selling less cement than we did during that unfortunate period which caused a lot of grief and strife. Also, the market is taking in 25 per cent less than in the last quarter when Carib Cement supplied the entire market."

In 2004 the Government imposed a 90 per cent duty on imported cement because it deemed dumped cement as unfairly traded. Haynes notes that at this time when the market is contracting, anti-dumping legislation is not being enforced, allowing cheap dumped cement to proliferate. This he sees as being very unfair and should be addressed expeditiously. He points out that if one should raise pricing issues, then Caribbean Cement has always honoured its commitment to keep prices at a certain level and it did so when it was experiencing difficulties.

"What we have found is that every time we have corrected prices the importers have followed us, so the consumer never really gains. Also, the question has to be asked, why is the Government forgoing millions of US dollars in duties from these importers at a time when it is in desperate need of revenues?"

Although he concedes that the global financial crisis has its part to play, Haynes is of the view that the crisis is of itself a failure of globalisation.

"This crisis is not about toxic assets and people defaulting on their loans and mortgages," he argued. "It's about greed, corruption and an absence of regulation. What we continue to see is developing nations seduced by cheap goods to the detriment of national development. Very often these developing countries support regimes that are suppressive and indulge in child labour.

"Then you have manufacturers coming under pressure from trade unions, or environmental groups. Their solution is to shut down the plant and set up in so-called "friendly countries" where they can turn a blind eye to environmental and labour concerns. As you can see, we are now reaping what we have sown. All this financial witchcraft has led to failed policies, which we still continue to pursue.

Albert Einstein once said, 'You can't solve a problem with the same level of thinking that got you into the problem'. The solution to everything is not the free market and globalisation. There must be boundaries and regulations. You must have a conscience and ask yourself what cost are you willing to pay for development."

Carib Cement continues to engage in dialogue with the Government and put forward its position. Haynes went on to say that the country's leading cement supplier has found it extremely frustrating that government policy-makers have not been exactly accommodating.

The company has met with other stakeholders, more notably the Ministry of Labour, not to announce possible lay-offs but to point out that over the last quarter the market has dried up and that there is now a serious risk to the industry. The aim, Haynes says, is to stabilise the industry then get it out of the quagmire and into growth.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081204T190000-0500_143334_OBS__B_CEMENT_CRISIS____AGAIN___B_.asp

Broilers to triple capacity at cogeneration plant

2008-12-05T05:34:00.000-08:00

Published: Friday December 5, 2008

Jamaica Broilers Group has a plan to triple capacity at its power co-generation plant in St Catherine, with targeted investment of US$4 million to US$5 million (J$312 million to J390 million).

But Chief Executive Officer Robert Levy says the addition of another 10 Megawatts rests on the finalisation of a power purchase agreement with monopoly Jamaica Public Service Company, which manages the national electricity grid.

Broilers, whose main business is poultry, produces its own electri-city, but generates more than it needs to power its operations.

"Right now, we are producing five MW and we are selling to JPS and using some, and there is real potential of expanding that by another 10 MW," Levy told the Financial Gleaner.

But Levy said the expansion would not commence until he has a deal with JPS, which he hopes to finalise early next year.

No comments from JPS

"We have sent them a whole proposal, however I think they are also assessing (developments)," he said.

JPS chose not to comment, saying the relevant officer was unavailable.

"They might be looking at potential downturn in usage. So, they might be looking at when they are going to need the 10 megawatts," said Levy. "They have promised to get back to us pretty shortly."

Source:
Dionne Rose
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081205/business/business2.html
dionne.rose@gleanerjm.com

Jamaica group to track economic fallout

2008-11-28T05:10:00.000-08:00

Published: Friday November 28, 2008

Jamaica expects to soon appoint a group of union leaders and employers that would track the effects of the global financial crisis.

Labour Minister Pearnel Charles says the group will report to the government and suggest ways to prevent layoffs. The government recently warned that companies will start dismissing workers but was not specific.

Confederation of Trade Unions president Winston James said job loss forecasts were not available because employers from the tourism and bauxite sectors did not attend Tuesday's meeting.

The government expects to ask multilateral lenders for help in closing a US$250 million budget shortfall.

Source: Nation Newspapers
http://www.nationnews.com/story/296788219277154.php

$431.8m profit:Scotiabank beats economic crisis...

2008-11-28T05:08:00.001-08:00

Published: Friday November 28, 2008

Despite a faltering global economy and inflation woes on the domestic front, Scotiabank Trinidad and Tobago Limited and its subsidiaries have raked in an after tax profit of $431.8 million for the year ended October 31, 2008, the bank said in a statement yesterday.

The company has made 16.4 per cent more profit than last year, the statement added. Every shareholder got $2.44 cents Earnings Per Share (EPS) for the year thus far.

This year marks Scotia's sixteenth consecutive year of record profitability.

The rate of return on shareholders' equity for the bank's common shares was on par with the previous year, while the Return on Assets (ROA) dipped slightly from 3.58 per cent to 3.45 per cent.

An indicator of how profitable a company is relative to its total assets.Â

Scotiabank's Managing Director, Richard Young, attributed the group's growth to their drive to sustain revenue growth, wise management of Scotia's capital and good leadership skills.

Based on the group's performance, the Board of Directors approved an interim dividend of 25 cents, making a total dividend of 96 cents per share for the year.

According to the website investorwords.com, a dividend is a taxable payment declared by a company's board of directors and given to its shareholders out of the company's current or retained earnings, usually quarterly.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161406846

Imports must be duly labelled

2008-11-24T07:44:00.001-08:00

Published: Monday November 24, 2008

ALL ITEMS IMPORTED into or manufactured in Barbados must comply with local labelling and standards laws, says the Department of Commerce and Consumer Affairs.

In a release issued recently, the departent sought to remind importers and local manufacturers of their obligations under local laws, and that failure to comply would result in products being confiscated or denied entry into the island.

Under the Barbados National Standard, Compulsory Labelling Standards and the Standards Act, importers and manufacturers are required to ensure that dates of minimum durability, of manufacture, of packaging and use-by dates all be declared on labels for all prepackaged food items sold in Barbados.

Those labels should have the day and month for items for consumption within three months, and the month and year for those for consumption within a period longer than three months.

Months should be represented using the first three letters of the word, and where the year is declared, the complete four-digit representation should be used.

Julian Code

The department also clarified its position on allowing importers who bring in items whose labels carry date markings using the Julian Code.

"The Department of Commerce and Consumer Affairs has agreed to grant a grace period, not exceeding December 2008, to all importers and local manufacturers to allow their products to become compliant . . . with respect to date markings. During this period, importers will be allowed to affix stickers to the products to convert the date markings to the required format. However, the [department] must be notified of all products to be modified," the release said.

Source: Nation Newspapers
http://www.nationnews.com/story/294920939463040.php

Citigroup stock plunges on uncertainty

2008-11-24T07:41:00.000-08:00

Published: Monday November 24, 2008

Shares in Citigroup, one of the biggest banks in the US, plunged on Friday amid uncertainty about the firm's future.

The firm’s stock rose in early trade but later tumbled 28 per cent as investors awaited the outcome of a meeting of the firm’s board members.

The Wall Street Journal reported that Citigroup was considering selling parts of the firm. There are also rumours it might merge with another firm.

Earlier in the week the firm announced 52,000 job losses worldwide.

These cuts came on top of previously announced reductions of 23,000 positions.

The total 75,000 job cuts represent a cut of about 20 per cent of its staff, leaving it with 300,000 jobs worldwide "in the near term.”

Bank’s future

Chief executive Vikram Pundit told employees on Friday that the firm did not want to change its business model, Reuters reported, citing two employees.

Shares in the firm have fallen sharply since the start of the year and are trading more than 80 per cent down since January.

Saudi Prince Al-Waleed Bin Talal's decision to buy about US$350 million of its shares on Thursday did not calm investors' nerves.

The firm insisted on Thursday that it had “very strong capital and liquidity position and a unique global franchise.”

But Pandit has come under increasing pressure from critics who doubt his ability to turn around the company and survive the financial crisis.

‘Bloodletting’

Citigroup has lost more than US$20 billion in the past year because of the global financial crisis.

The bank has reported four straight quarterly losses and some analysts believe it will not return to profitability until 2010.

Investors are worried that further losses could threaten the bank’s future.

“Its fear and panic at this point,” said Gerard Cassidy, a banking analyst at RBC Capital.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business3.html

Challenging times for GKC

2008-11-24T07:39:00.000-08:00

Published: Monday November 24, 2008

GraceKennedy Limited

Jamaican conglomerate, GraceKennedy Limited (GKC), in its recently released third quarter financials reported weak results. For the period ended September 30 2008, the Group reported a relatively flat year on year diluted EPS of J$5.06, compared to J$5.09 at the close of September 2007.

Revenue for the nine-month period totaled J$40.2B, representing a 13.5 per cent increase from J$35.4B. The growth in Revenue was matched by a 14.2 per cent increase in Expenses to J$38B, with the Expense margin increasing by 0.5 per cent to 94.7 per cent . Cost containment proved to be an ongoing issue for the Group as the Expense margin of Q3 2008was 1.3 per cent higher than the comparable quarter of 2007. Other Income experienced growth of 9.2 per cent to J$582M. The net effect on Operating Profit was a mere 4.3 per cent improvement from J$2.6B to J$2.7B.

Interest Income from non-financial services grew by 15.3 per cent to J$312.5M, while Interest Expenses from non-financial services declined year on year by 17.7 per cent to J$423.1M.

Overall, GKC achieved a Profit before Taxation of J$2.7B, a 9.9 per cent improvement over the J$2.4B for the nine months of 2007. Net Profit totaled J$1.8B and represented a 6.8 per cent increase from J$1.7B. Minority Interest of J$152.6M, led to an insignificant 0.1 per cent increase in Profit Attributable to Shareholders.

The first nine months of the year presented a challenging operating environment for GraceKennedy. The following Exhibit 1 gives a clear graphical picture of how the Group's top line and bottom line growth has moved from September 2007 to September 2008.

The Insurance arm of the Group was the only sector to record declining Revenue growth year on year. However, the Money Services business was the sole segment to produce growth in earnings for the period under review.

The Food Trading sector remained the main Revenue generating segment but recorded a decline in Profit before Tax for the period of 1.7 per cent . Escalating costs continue to present a challenge as supplier prices increased in products manufactured in Jamaica. The downturn in the UK has also lowered sales levels in that region.

The chairman indicated that sales levels in the Grace owned brands have grown 12 per cent year to date when compared to the comparable period of 2007.

A few of the developments which have taken place within the Group include:

l The GK Foods division launched a number of new products under the Rio Pacific brand.

l Progress was also made into the Indian, Ghanaian, and South Korean markets.

l The Turks and Caicos subsidiary, First Global Insurance Brokers Limited purchased the insurance brokerage portfolio of United Reliance International Limited, the largest insurance broker in the Turks and Caicos Islands.

The Jamaican economic environment has gotten even more testing over the past few months. The economy continues to experience challenges from a macroeconomic point of view. The impact of the fallout of the international markets has definitely been felt by Jamaica. Domestic GDP growth projections for the fiscal year 2008/2009 have dwindled with the last projection by the Bank of Jamaica being between 1.2 per cent and 2.2 per cent from 2.5 per cent to 3.5 per cent . Inflation projections were also adjusted from 11.5 per cent to 14.5 per cent to a revised projection of 15 per cent to 17 per cent .

A depreciating currency has also been a key concern for the economy. The Bank of Jamaica has continued to take measures to assist in mopping up excess liquidity which could threaten the stability of the currency. International ratings agency, Standard & Poor's recently revised its outlook on Jamaica from B stable to B negative. Furthermore, Moody's Investors Service placed Jamaica's ratings on review for downgrade this month. Declining international commodity prices have also lowered earnings in areas such as bauxite exports, while remittances to Jamaica are anticipated to fall between 10 to 15 per cent by December 2008.

It is worth noting however that Jamaica being an importer of oil would reap the benefits of this commodity's falling price.

Shares of GKC are currently trading at a price of $5.30 and a forward P/E multiple of 9.1 times compared to a market multiple of below 10 times. Economic conditions continue to weaken in Jamaica, and the currency faces further devaluation pressures. Although GKC generates 25 per cent of revenue outside Jamaica, the global economic slowdown may affect these revenue streams, BOURSE revises its recommendation to a SELL.

Jamaica Money Market Brokers (JMMB)

On October 2008 Jamaica Money Market Brokers Limited (JMMB) made a significant adjustment to their operations with the sale of its 45 per cent stake in its Trinidad affiliate Caribbean Money Market Brokers (CMMB). This transaction reflected a gain of J$2.3B on their income statement for the half year ended 30 September 2008. As a result, for the period JMMB recorded an EPS of J$0.77 which represents 141 per cent increase over 2007.

It must be noted that in the second quarter of 2008 JMMB recorded a provision of J$1.9B for the impairment of bond holdings in the Group's investment portfolio as a result of its exposure to Lehman Brothers. Excluding this one-of item as well as the gains on sale of its shareholdings in CMMB, JMMB Profit before tax for the half year would have amounted to approximately J$620M a mere 18 per cent increase over 2007.

JMMB's main revenue source Net interest income grew to J$993.6M from J$686.9M a 44.6 per cent increase over 2007.

However, JMMB other three sources of revenue reflected varying results. Gains on securities trading fell approximately 43 per cent compared to same period last year, a reflection of the dampened regional and international markets. Fees and commission income were up a marginal 0.5 per cent while Foreign exchange margins from cambio trading increased 39 per cent.

Administrative expenses continue to be a challenge for JMMB in the current financial year. For the half year ended 30th September 2008, there was a 25 per cent increase in Administrative expenses compared to prior year. Of greater concern, expense margin as a percentage of Operating Revenue was 80 per cent for the period versus a 68 per cent margin in 2007. As a result, Operating Profit fell 35 per cent to JA$288M in 2008 compared to JA$443M in 2007.

The future success of JMMB lies on the Group's ability to generate alternative revenue streams. Management has indicated that they would be exploring several investment schemes which would serve as additional sources of revenue. These include the expansion of the commercial bank IBL, the build out of JMMB Dominicana as well as entering into commercial banking in Jamaica.

BOURSE revises its recommendation to a SELL on this stock.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161405221

Caribbean faces squeeze from financial crisis

2008-11-21T07:17:00.000-08:00

Published: Friday November 21, 2008

The international financial crisis is putting a squeeze on cash-strapped governments across the Caribbean as the region braces for a steep economic slowdown.

A severe spillover from the crisis will be seen in the Caribbean's important tourism market during the winter high season, with the economic deterioration in the United States and Europe causing hotel bookings to plummet, analysts say.

The leisure industry will also lose business as airlines have cut flights and raised prices, prompted by the surge in oil prices earlier this year.

Making matters worse, the region is just coming out of an active Atlantic hurricane season that killed about 800 people in Haiti, the poorest country in the Americas, and caused an estimated US$10-billion damage in Cuba alone.

Crop destruction from the busy storm season caused food prices to spike throughout the region.

"It's really been a double whammy. The Caribbean has been hit hard by the tropical storms and hurricanes," said Kal Wagenheim, publisher of the 23-year-old Caribbean Update newsletter.

The full force of the economic turmoil, in the form of lost jobs, is only just beginning to be felt by Caribbean residents, said Maurice Odel, an economic adviser to the Organisation of Eastern Caribbean States.

He pointed to a November 13 announcement by the iconic Atlantis Hotel in Bahamas that it had laid off 800 workers, or roughly 10 per cent of its work force due to decreased business, as a concrete example of the coming effects on regional employment levels.

"The impact is slowly accelerating. Hotels are beginning to make layoffs, so the man in the street is more likely to be without a job," Odel said. "We feel all sectors will feel the pinch. The retail sector will see people buying less and may have to reduce jobs."

Meanwhile, the International Monetary Fund (IMF) said last month that the global economic problems are already decreasing remittances sent home to the region by Caribbean migrants in the United States and Europe. The Dominican Republic received US$3.12 billion of remittances in 2007, Haiti US$1.83 billion and Jamaica US$1.97 billion, according to the Inter-American Development Bank.

The economies of Jamaica, Haiti and Guyana are among those most heavily reliant on remittances, Odel said.

"The worsening global financial conditions are increasingly clouding the regional outlook," the IMF said in a recent report.

"With the large shock to US financial conditions still playing out, the effects of the financial tightening in the United States on growth in the region could still be in the pipeline," it said.

Real economic growth in the region is expected to be 3.25 per cent for 2008, the IMF said, with most of it fuelled by a strong first half, but still down from the average four per cent from 2003-2007.

Even Trinidad and Tobago, the twin-island Caribbean nation that has seen growth averaging 9.2 per cent per year over the last five years, said this week that it now sees growth at no more than 3.5 per cent in 2008.

The IMF sees growth slowing to two per cent in natural gas-rich Trinidad and Tobago in 2009.

Big resort construction projects have been halted or delayed in the Dominican Republic and the Bahamas recently, and in Bermuda Finance Minister Paula Cox said the country faced "unprecedented economic challenges" that could delay capital projects as the government looks to save cash.

In Jamaica, meanwhile, the two main Wall Street credit rating agencies, Standard & Poor's and Moody's Investors Services, have put the country's debt on credit watch for a possible downgrade because world market conditions are expected to erode the government's fiscal position.

Moody's said Jamaica's debt burden exceeded 125 per cent of gross domestic product, leaving it very little room to absorb an economic shock of the current magnitude.

Puerto Rico, a US territory that sells bonds just like other local governments across the United States, had to turn to its Government Development Bank for cash to fund its operations when the floor fell out of the market in September.

It was shut out of the market for more than a month before it could place a US$1 billion issue of tax revenue anticipation notes on November 6 in the tax-exempt market.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081120T200000-0500_142820_OBS_CARIBBEAN_FACES_SQUEEZE_FROM_FINANCIAL_CRISIS.asp

Fitch aligns NCB credit rating with Jamaica's

2008-11-21T07:15:00.000-08:00

Published: Friday November 21, 2008

National Commercial Bank (NCB) has fallen victim to Fitch's downgrade of Jamaica's sovereign rating.

The bank's issuer default rating has also been cut from B+ to B, in line with Jamaica's, consistent with the policy of international ratings agency whereby companies cannot be rated higher than the countries in which they are domiciled.

Fitch highlighted NCB's exposure to government as a factor in its decision to bring the bank in line with the creditworthiness of the sovereign.

Positive qualities highlighted

But NCB in a statement Wednesday acknowledging the downgrade stressed that its "strong domestic franchise, adequate profitability, good asset quality and capital levels" were also highlighted by Fitch.

The Patrick Hylton-led banking group, Jamaica's largest by assets, but No. 2 in deposits and the loans market, has just reported another record year of profits of $8.7 billion, up 32 per cent.

Billion-dollar writedown

Net earnings would have been even more fulsome were it not for a writedown of $1.2 billion reported by its investment arm, NCB Capital Markets Limited, relating to downturns in the bond market and global financial system.

"The revision in rating was not surprising given Fitch's recent announcement on Jamaica and in light of the global economic challenges being experienced at this time." said NCB group managing director Hylton.

"However, we are very confident that the measures that we have adopted for several months now to deal with the market conditions being experienced are more than adequate to maintain our strong performance."

Rating maintained

The ratings agency has maintained its 'BBB-' rating on Jamaica Diversified Payments Rights Company, which represents future remittance flows that have been securitised by the bank, which NCB said is Fitch's recognition that the bank can survive future economic stresses.

The Bank of Jamaica also reaffirmed this week that the financial system was "adequately capitalised".

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081121/business/business4.html

GK sales top $40b, but profit sluggish

2008-11-21T07:13:00.000-08:00

Published: Friday November 21, 2008

Conglomerate GraceKennedy Limited reported a slight dip in earnings in the July-to- September quarter, but its nine-month result indicate signs of a company with strong sales and a slightly better profit outurn.

GraceKennedy's bottom line grew 6.7 per cent, from $1.71 billion to $1.83 billion, within the nine-month period when sales topped $40.1 billion (9M 2007: $35b).

In the third quarter, however, net profit slipped from $591 million to $556 million on revenues that were basically flat - moving from $12.4 billion to $12.8 billion.

"The world is in a global financial crisis and we need to prepare ourselves. In GraceKennedy we make sure that everything is done in a systematic way," said Douglas Orane, chairman and chief executive officer of GraceKennedy.

Higher sales

Markets have softened in Jamaica and worldwide because of the crisis, but GraceKennedy still tweaked 13.5 per cent higher sales from loyal customers, putting the group on track for another record year of revenue.

Last year, the company averaged turnover of $12.2 billion per quarter, but is averaging $13.4 billion so far this year, with its most lucrative quarter left to come.

According to the company, GK Foods which contributed 60.5 per cent to overall revenue at the end of the nine month period had increases of four per cent and 15 per cent increase in sales and profits amidst a challenging environment.

Indeed, the insurance segment was the only business division recording a fall in sales, from $3.1 billion to $2.8 billion year-on-year.

GraceKennedy says its major concerns are the impact of rapidly increasing prices from suppliers in Jamaica and downturn in the United Kingdom food service business, due to recession.

"We have seen a whole range of increases," said Erwin Burton, chief executive officer of GK Foods.

And there has been pass through to prices.

Vienna sausage increased by 15 per cent for the year, corn beef produced in Brazil went up by 70 per cent, mackerel by 26 per cent and dairy products an average of 50 per cent, said Burton, who says it has taken a toll on sales.

"There has been a small reduction in overall volume in terms of the number of cases - a 5 per cent reduction in volumes," he told the Financial Gleaner.

Downward price adjustment

Burton, however, would not disclose the number of cases, but said a downward adjustment in prices was likely early next year, depending on the performance of the dollar.

"We have had unprecedented increases in the UK in the last 12 months," he said.

"In some cases, we have been able to pass on the increases to pubs and restaurants, but in supermarket chains, for example, they have not been accepting the price increase," said the GK Foods boss.

"To that extent, we have had to cut cost as much as possible," he added.

Expenses for the quarter amounted to $12.2 billion, a 4.2 percentage increase over the $11.7 billion recorded last year.

UK food service business

The company further reported that the food service business in the UK saw a downturn particularly in the pubs and restaurants.

"People are not eating out anymore, they are drinking and buying pre-package food to take home," said Burton.

For FunnyBones, one of the three food companies in the UK, there has been a 12 per cent reduction in sales.

FunnyBones contributes approximately 38 per cent to GK Food business in the United Kingdom.

The entire UK food business, which comprises Enco Products, Chadha Oriental Foods Ltd as well as FunnyBones, contributes approximately 23 per cent to total revenue from the food trading segment.

Food trading earned the company $24 billion in the nine months to September, representing 60 per cent of revenue.

To counteract the decline in business, Gk said that the company has launched several new products in Jamaica and for the export market.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081121/business/business8.html

First Citizens seeks big bond investors

2008-11-20T23:28:00.001-08:00

Published: Friday November 21, 2008

Commercial bank, First Citizens is in the process of drumming up investor support for two of the biggest investor bonds to be launched in Trinidad and Tobago.

Earlier this year the bank issued a bond worth $500 million, last month another bond for the same amount of money was also launched.

First Citizens remains the only indigenous bank that has previously floated two US$100 million bonds (February 2004 & January 2005.)

All attempts to contact CEO Larry Howai to find out what the bond issues would be used to finance once the public pools their money into these debt instruments proved unsuccessful yesterday.

The bank is offering public investors an interest payment of 8.35 per cent per year for the first bond which was launched in August and will mature in February 2014. This means investors will receive a payment worth 8.35 per cent of their investment every year for the next six years.

When the bond matures in February 2014, the investor will be re-paid the initial sum that he "lent" to the bank.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161403901

TCL disappointed Insider traders scot-free:

2008-11-20T23:26:00.000-08:00

Published: Friday November 21, 2008

Trinidad Cement Ltd is disappointed that individuals who were allegedly involved in insider trading of its shares could not be prosecuted by authorities.

The Claxton Bay company was responding yesterday to a statement by the Securities and Exchange Commission in which it noted that a three-year investigation into allegations of insider trading in TCL stock had found unacceptable market conduct.

The trades took place during an attempted takeover by Mexican cement giant Cemex in 2002.

Chairman Osborne Nurse said in a statement the SEC decided to close the matter after legal counsel determined that the evidence in the matter did not support the required standard of proof.

TCL noted as interesting an extract from the SEC's notice, published in yesterday's Express, which indicated that external advisers and representatives of institutional investors and their colleagues, associates and family members conducted trades in TCL during the takeover bid.

Group chief executive Dr Rollin Bertrand said yesterday: "We are very disappointed that it has not been possible for the regulatory authorities to initiate prosecution of those persons, (including a number of high profile individuals), who were involved in insider trading of its shares. A properly functioning stock market requires a strong regulatory environment to prevent abuse by market actors, which can seriously undermine investor confidence."

In a statement, he added that TCL was nevertheless heartened by the fact that the SEC recognised there was considerable evidence of unacceptable market conduct and made recommendations for the strengthening of securities regulation.

The company urged the authorities to implement the recommendations.

Congress of the People political leader Winston Dookeran said the party was dismayed by the SEC's statement and its decision to close the matter because of insufficient evidence to meet the requirement of the law.

"This is preposterous; it is up to the courts to make the determination of this matter and not the SEC," a statement signed by Dookeran said.

The party called for a public investigation into the matter and urged Prime Minister Patrick Manning to expose the evidence of unacceptable market conduct in the TCL trades.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161403903

Uncertain future for natural gas

2008-11-20T06:27:00.000-08:00

Published: Thursday November 20, 2008

The future for natural gas is grim.

That's the view of BP's group chief economist and vice president, Christof Ruhl.

Ruhl predicted yesterday that natural gas demand will decline and prices will soften in the coming year as liquefied natural gas (LNG) projects in Quatar and Indonesia come on stream putting pressure on prices.

But he said he was not willing to speculate about how much pressure and what the price of natural gas would be.

He said that while oil prices have jumped about 300 per cent over a five year period, the same did not apply to natural gas. Instead, he said the gas price grew a bit slower but steadily and the current natural gas price average of US$6.81 per million metric British thermal unit (mmbtu) was just a 100 per cent increase.

"The demand decline, as a result of a recession, is different from oil because it is harder to calculate because there are several different (LNG) contracts. The reaction will be differnet," he said.

Since the passage of the 2008/9 budget, the Patrick Manning Government has responded to criticism of the US$70 per barrel price it had used to estimate Government revenues from oil by saying that T&T was now a gas-based and not an oil-based economy. The Government has insisted that the figure to watch was the gas price which was pegged at US$4 per mmbtu.

Ruhl said that the US was looking at its own energy security and would seek to increase its LNG production which could impact its demand.

Energy Minister Conrad Enill has previously dismissed the notion that T&T's preferrential LNG market in the US was threatened. T&T exports 70 per cent of its LNG to the US and the US gets 58 per cent of its total LNG imports from T&T.

Enill says if T&T's loses access to the US market, there are more markets available.

But T&T already faces revenue losses in the energy sector as several plants in the Point Lisas Industrial Estate have ceased production and are using the downtime to do maintenance work. More importantly, the National Gas Company already has excess gas on its hands.

Ruhl said, "Because of the recession, consumption is doubtful. It would be dishonest to say that consumption would decrease, we can't know. That's a risk to the downside. There will be a situation where there will be no additional demand for enegry from the US but there may be a need to cut down domestic production.

"Gas markets in the short term are in a difficult position. In the long term, they will continue to do what they do at the moment which is an increasing amount of global integration. In particular, the LNG market becomes more globally integrated and more and more susceptible to changes in cargoes given changes in spot prices," he told reporters at a luncheon hosted by bpTT yesterday at its headquarters at Queen’s Park West, Port-of-Spain.

In its 2008 report, the International Energy Agency noted that global demand for natural gas will grow more quickly than oil, by 1.8 per cent per year, its share in total energy demand rising marginally to 22 per cent.

Most of the growth in natural gas use comes from the power-generation sector, it said.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business3.html

Insider trading found...But TCL's hands tied

2008-11-20T06:26:00.000-08:00

Published: Thursday November 20, 2008

A three-year investigation into allegations of insider trading of Trinidad Cement Ltd shares has found evidence of improper stock market behaviour.

But a legal shortcoming and insufficient proof will prevent the alleged perpetrators from being brought to justice.

The Trinidad and Tobago Securities and Exchange Commission in Port of Spain said it concluded its investigation into insider trading allegations of TCL stock in 2002.

On July 5 that year, the SEC said it received a complaint from the Claxton Bay-based cement producer alleging insider trading in relation to two attempted takeovers of TCL by Mexican cement giant Cemex in February and June.

TCL alleged that insiders illegally used price sensitive information about the takeovers to trade in TCL shares.

A team from the SEC launched an investigation in February 2005, the first of its kind under the existing Securities Industry Act, 1995 and submitted its report to the SEC in March 2006.

The SEC also sought external legal advice from Senior Counsel in Barbados and Canada.

In a statement signed by chairman Osborne Nurse, the SEC said yesterday that the investigation found "considerable evidence of unacceptable market conduct" in the two trades of TCL shares six years ago.

But legal advice from the Senior Counsel indicated that the current Securities Act required the SEC to prove intent.

This established a higher standard of proof than is usually required for administrative proceedings and that the evidence in the matter and the evidence in the matter did not support the required standard of proof.

The SEC stated that the evidence was also insufficient to overcome defences provided in the law and that the probability of success in prosecuting these matters was extremely low.

"As a result, the Commission has accepted the advice and recommendations of its legal counsel and has decided to close the matter," the SEC said.

While evidence "clearly demonstrated behaviours that were unacceptable and violated the intent of the law", the SEC said it was not enough to meet the test of the Act.

The SEC has recommended that the law be revised to ensure that insider trading is not provided with any defences within the securities regulation.

TCL Group chief executive Dr Rollin Bertrand could not be immediately reached for comment yesterday.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161403464

Economy flagging despite Q3 blip

2008-11-18T05:25:00.000-08:00

Published: Tuesday November 18, 2008

Economic growth in the third quarter of the year was flat, rounding out overall growth for the first nine months of the year at a -0.3 per cent, according to the Planning Institute of Jamaica (PIOJ).

However, Dr Wesley Hughes, director general of the PIOJ, yesterday said the performance of the local economy actually improved over the review period when compared against the previous quarter, where growth was a negative 2.7 per cent. Hughes explained that a 0.1 per cent growth in services for the third quarter helped slow the decline of the local economy, which has been affected by the shocks created by the global financial meltdown and soaring commodities prices - mainly oil and grains - which have been trending downward in recent months.

Speaking at a press conference at the PIOJ's New Kingston offices, Hughes pointed out that services grew by a minute 0.5 per cent over the nine months, while the goods-producing sector contracted by 2.2 per cent over the same period.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081118/business/business2.html

Citigroup to shed at least 50,000 jobs

2008-11-18T05:21:00.000-08:00

Published: Tuesday November 18, 2008

Citigroup Inc is shedding approximately 50,000 more employees in the coming quarters as the banking giant struggles to steady itself after suffering massive losses from deteriorating debt.

The New York-based bank, which has already reduced its assets by about 20 per cent since the first quarter of the year, also plans to trim expenses by 19 per cent in 2009 from third-quarter levels to US$50 billion. The plans, posted on the company's website, were discussed by CEO Vikram Pandit at the company's town hall meeting in New York on Monday with employees.

The company said it is shrinking its workforce by 20 per cent from its 2007 peak of 375,000. The company had already announced in October that it was eliminating about 22,000 jobs from that level.

Sell businesses

About half the expected workforce reductions will come from businesshttp://www.blogger.com/img/blank.gif sales; Citigroup already announced that it was selling Citi Global Services and its German retail banking business, accounting for about 18,000 jobs. Citi is planning to sell other businesses, too, but has not announced them yet, a spokesman said.

The other half of the workforce reductions will come from layoffs and attrition, the spokesman said.

The New York-based bank has posted four straight quarterly losses, including a loss of US$2.8 billion during the third quarter.

In an effort to instil confidence in the company, Citigroup emphasised in its presentation on Monday that its Tier 1 capital ratio, a measure of financial strength, is 10.4 per cent after a US$25-billion nvestment from the government - part of the US$700-billion financial rescue package passed by Congress last month.

That ratio is higher than peers, Bank of America Corp and Wells Fargo & Company, after their purchases of Merrill Lynch and Wachovia Corp, respectively.

Citigroup also stressed that it has doubled reserves in a year to US$24 billion; that its revenues are stable; and that Citigroup has lower exposure to US consumer mortgages than JPMorgan Chase & Co, Bank of America and Wells Fargo.

Share price falls

But the announcements were not met with enthusiasm from investors. Citi shares fell 46 cents, or 4.8 per cent, to US$9.06 in morning trading. The company's shares have been trading at 13-year lows.

Shortly before the town hall meeting in New York, Citigroup Chairman Win Bischoff said at a business forum in Dubai, United Arab Emirates, that it would be irresponsible for Citi and other companies not to look at staffing in the event of a prolonged economic downturn.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081118/business/business1.html

IMF advises Govt to cut spending

2008-11-18T05:20:00.000-08:00

Published: Tuesday November 18, 2008

The International Monetary Fund (IMF) has called on the Government to cut back its infrastructure expenditure as well as the range of subsidies.

The IMF said that after seven consecutive years of economic growth, T&T’s growth rate would slow as a result of a detriorating external environment.

“Recessions in advanced economies, their spillovers to the tourism-dependent economies of the region and sharply lower prices for energy products are projected to slow growth to 3.5 per cent in 2008 and 2 per cent in 2009,” said Christina Daseking, deputy division chief in the Western Hemisphere Department of the Washington-based IMF.

She said the IMF expected oil prices to average about US$60.

Prime Minister Patrick Manning said last week that the Government would have to revisit its $51 billion 2008-2009 budget because of falling oil and natural gas prices. The budget is pegged on an oil price of US$70 and a natural gas price of US$4 per million metricc British thermal units (mmbtu).

With fertilizer prices declining sharply over the past few months, several plants in the Point Lisas Industrial Estate, have ceased production and are using the downtime to do maintenance work. As a result, the National Gas Company has excess gas to on its hands and service companies in the energy sector are feeling the pinch.

Daseking was speaking during a news conference at the Ministry of Finance tower, Eric Williams Financial Complex, Independence Square, Port-of-Spain, following the completion of the IMF’s regular Article 4 Consultation with the T&T Government.

She said that T&T’s current account surplus is expected to decline by 13 per cent to about 15 per cent of gross domestic product (GDP) in response to falling energy export earnings. Under its present budget, T&T will move into a deficit of 2 per cent of GDP.

She said that fiscal policies need to be adjusted to already lower energy prices and the possibility of a considerable economic slowdown in 2009.

“Fiscal revenues and trade surpluses are projected to decline significantly as a result of falling energy prices. Thus, even though the government has cushions to weather shocks, spending adjustments are warranted to contain the deterioration in the fiscal position and safeguard sustainability under more difficult circumstances,” she said.

She said there was a need to reduce the large non-energy deficit to generate adequate savings in the Heritage and Stabalisation Fund that would allow the country to benefit from its existing energy wealth.

Daseking said the main policy challenges are to prepare for the risk of contaigon and preserve macroeconomic stability in the face of declining energy revenues and still high inflation.

“The most pressing need is to prepare for the possibility of more severe spillovers from the global financial crisis by strengthening the crisis-response framework and developing contigencies measuers,” she said.

She said the Government has scope for reducing expenditures while targeting them more efficiently to support its development objectives.

“In this light, the recent increase in electricuty tariffs and the price of premium gasoline are steps in the right direction and should be built upon by adopting a comprehensive approach to phase out unproductive subsidies over time,” she said.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business3.html

Wall Street falls on US economic woes

2008-11-11T03:22:00.000-08:00

Published: Tuesday November 11, 2008

Wall Street’s initial enthusiasm about a US$586 billion Chinese stimulus package fizzled out yesterday, as investors caved in to anxieties about how US companies will survive a severe pullback in spending.

Stocks got a short-lived boost by China’s plans to boost its economy through a mix of spending, subsidies, looser credit policies and tax cuts. The package could benefit multinational companies with business in China such as General Electric Co and Caterpillar Inc.

But Wall Street’s optimism quickly waned, as it has tended to do since the mid-September downfall of Lehman Brothers Holdings Inc and government takeover of the troubled insurance giant American International Group (AIG). Market participants realised that while China’s stimulus is a positive sign that governments around the world are working to fix the global economy, the stimulus itself will likely have only a limited effect in the US.

There was little news yesterday to placate investors worried about the health of corporate America. AIG got more money from the US government yesterday, but the nation’s struggling automakers have yet to hear whether they, too, will get federal aid. And electronics retailer Circuit City Stores Inc filed for bankruptcy protection yesterday.

With few signs of recovery in the economy, there are not many investors confident enough yet to make big bets on stocks, although they look cheap; the major indices are down about 40 per cent from their October 2007 peaks.

“They’d like to be optimistic, but individual investors are still very worried,” said Hugh Johnson, chief investment officer of Johnson Illington Advisors.

Uncertainty about the economic outlook is “likely to hold any recovery somewhat in check. We’re arguably undervalued, so we can work our way higher. But it's not going to be with a lot of gusto.”

According to preliminary calculations, the Dow Jones industrial average fell 73.27, or 0.82 per cent, to 8,870.54, after rising by 215 points in early trading and tumbling by as many as 183.

But trading was fairly orderly in the last hour — in recent weeks, stocks have often seen high volatility late in the day.

Broader indices also ended lower. The Standard & Poor's 500 index fell 11.78, or 1.27 per cent, to 919.21, and the Nasdaq composite index fell 30.66, or 1.86 per cent, to 1,616.74.The Cross Listed Index shed 0.65 points on its way to 77.92.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business1.html

Central Bank official says compliance vital

2008-11-11T03:20:00.000-08:00

Published: Tuesday November 11, 2008

Inspector of Financial Institutions at the Central Bank, Carl Hiralal, yesterday said T&T has much work to do to build a culture of compliance in local financial institutions.

Hiralal made the comment at the opening of a two day conference hosted by the Caribbean Regional Compliance Association (CRCA) at the Hyatt Regency Trinidad hotel, 1 Dock Road, Port-of-Spain.

“In T&T it is clear that we still have a way to go before we make a culture of compliance within our institutions, although we have come a long way from where we were. We recognise that compliance is an important function for all corporations,” he said.

Hiralal said the current global financial crisis had shown that there is a need for good governance and risk management capability.

“In recent times the financial services industry has experienced numerous challenges that has tested compliance and risk management capabilities. There are a number of well known examples of breakdown of compliance culture in financial institutions.

“The current financial crisis which Alan Greenspan referred to as a ‘financial tsunami’ has underscored the need for good governance,” he said.

He said compliance risk management systems are important safeguards against financial losses.

“Compliance is a critical factor for any country. In the financial services industry you need more effective compliance systems given that public confidence is a critical factor. Therefore, it is evident that robust and comprehensive and compliance risk management systems are a critical defence system against significant losses,” he said.

He said financial institutions now operate in a complex world.

“Increasingly globalisation, trade, interests with corporate governance and complex institutions, changing laws and regulations, the understanding of what constitute sound risk management creates a complex situation for financial institutions particularly those that operate on a cross border basis,” he said.

Hiralal said that the cost of non-compliance could be costly.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business3.html

China stimulus plan fuels hopes for new investments

2008-11-11T03:16:00.000-08:00

Published: Tuesday November 11, 2008

Stocks surge

China's massive stimulus package is its "biggest contribution to the world," Premier Wen Jiabao said Monday, as hopes rose that heavy spending on construction and other projects would help support global growth by fuelling demand for imported machinery and raw materials.

With Sunday's announcement of the four trillion yuan (US$586 billion) package, China staked out a bold position as President Hu Jintao prepared for next weekend's Washington meeting of leaders of 20 major economies to discuss a response to the global financial crisis.

"China has really set the pace for expansionary policies elsewhere," said Tim Condon, Asia regional economist for the Dutch bank ING.

Stocks rose

Stocks rose in major markets on news of the stimulus. US shares opened strongly, but later retreated.

The FTSE 100 index of leading British shares finished up 38.96 points at 4,403.92.

The DAX closed up 87.07 points, or 1.8 per cent, higher at 5,025.53. And France's CAC-40 gained 36.63 points, or 1.1 per cent, to close at 3,505.75.

Asian stock markets surged Monday on news of the plan. Japan's Nikkei index rose 5.8 per cent and Hong Kong's Hang Seng index gained 3.5 per cent. In China, the Shanghai Composite index jumped 7.3 per cent to 1,874.80.

Wen, the country's top economic official, said the plan is meant to boost investment and consumer spending, maintain export growth and promote corporate competitiveness and financial reform, state television reported on its national evening news.

It said he made the comments at a meeting of government leaders.

"We must implement the measures to ensure a fast and stable economic development," Wen said in comment read by an announcer.

"They are not only the needs of the development of ourselves, but also our biggest contribution to the world."

The plan calls for higher spending through 2010 on airports, highways and other infrastructure, more aid to the poor and farmers and tax cuts for exporters.

That could boost demand for iron ore from Australia and Brazil, factory and construction equipment from the United States and Europe and industrial components from throughout Asia.

"Faster growth in China will be better for its neighbours. For every country in the region, it's either their top trading partner or is on the way to becoming the top," Condon said.

On a global scale, "countries that supply capital equipment look like they will be the front line beneficiaries of this package."

The dramatic Chinese plan was motivated by growing government alarm at an unexpectedly sharp downturn in the country's fast-growing economy that raised the threat of job losses and social unrest.

Economic growth slowed

China's economic growth slowed to 9 per cent in the last quarter, down from last year's stunning 11.9 per cent growth and its lowest level in five years.

Export orders have fallen sharply as global demand weakens, leading to layoffs and factory closures.

Analysts have slashed forecasts of next year's economic growth but said Monday that with the new stimulus it should be at least eight per cent.

The slowdown has rippled through Chinese industries and outward to foreign suppliers.

China is the world's biggest steel producer, but mills responded to weaker demand this year by cutting output 20 per cent, which eroded demand for imported ore.

The spending package is "definitely positive news for all steel companies.

It will boost demand for steel and iron," said a spokesman for steelmaker Beijing Shougang Group, who would give only his surname, Wu.

China's announcement came as economic officials from the Group of 20 leading economies, which includes major wealthy and developing nations, called Sunday for increased government spending to boost the troubled global economy.

At the weekend meeting in Brazil, G20 finance ministers and central bank governors also said emerging economies deserve a prominent role in talks to overhaul the world financial system.

Hu plans to press that demand in Washington at the leaders' meeting on Saturday, a Chinese government spokesman said last week.

Beijing's stimulus package represents another drastic step away from lending curbs and other anti-inflation measures that it imposed over the past three years, but has been rolling back since mid-2008 as growth slowed.

Wholesale inflation eased in October, which gives authorities more leeway to stimulate the economy without igniting new price rises, according to data reported Monday. The government said producer prices rose 6.6 per cent in October from the year-earlier period, down from August's 12-year high of 10.1 per cent.

China switched its official goal in mid-2008 from a single focus on fighting inflation to a dual target of ensuring fast economic growth while also containing price rises.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081111/business/business2.html

Pollard appointed to Republic Bank's board

2008-11-11T03:14:00.000-08:00

Published: Tuesday November 11, 2008

Former president and chief executive officer of Caribbean Nitrogen Company Limited, Stephen Pollard, has been appointed to Republic Bank's board of directors, the bank's chairman, Ronald Harford, said yesterday.

Pollard has 25 years' experience in the energy sector, with most of his business career being in the ammonia-manufacturing industry. He also spent six years in the commercial sector at executive management level in companies listed on the Trinidad and Tobago Stock Exchange, and has held several board appointments in both the private and State sectors in Trinidad and Tobago. Pollard is also a member of the American Institute of Certified Public Accountants and formerly served as the institute's president for over two years.

Speaking about his appointment, Pollard said, "I am happy for the opportunity to join the Bank's board and to contribute in whatever way that I can."

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161399699

US, world stocks fall on bleak spending and jobs

2008-11-07T04:26:00.000-08:00

Published: Friday November 7, 2008

Slumping retail sales, poor corporate earnings and trouble in the auto industry conspired to darken the outlook for the American economy yesterday. But investors bet that the worst was yet to come.

The Dow Jones industrial average plummeted 443.48 points, bringing its total loss since Tuesday to nearly 1,000 points. The Standard & Poor’s 500-stock index, a broader measure of the stock market, dropped five per cent; in two days, the S.&P. has lost nearly 10 per cent of its value.

But analysts said that investors may be selling off ahead of today’s report on the job market, which economists expect to be grim. Forecasters believe the Labour Department will report that employers cut hundreds of thousands more jobs in October, bringing the simmering problems in the labour market to a full boil.

European investors sent stocks down more sharply than their American counterparts. Stocks in London fell 5.7 per cent; Paris’ were down 6.4 per cent. The benchmark index in Germany tumbled more than seven per cent.

In Asia, where stock markets had several sessions of modest rises before the US presidential election, the Nikkei 225, Hang Seng and Kospi indexes all dropped more than 6.5 per cent, wiping out most of a recent rally.

In Tokyo, the Nikkei 225 share average closed 6.5 per cent lower after weak US economic news on Wednesday spelled tough times for Japanese exporters.

Investors in Australia joined the retreat with the S&P/ASX 200 index down 4.3 per cent. The Kospi index in South Korea dropped 7.5 per cent.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business2.html

JMMB posts handsome profits of J$1.1 billion for six-month period

2008-11-07T04:25:00.000-08:00

Published: Friday November 7, 2008

Jamaica's largest brokerage house, Jamaica Money Market Brokers (JMMB), saw a boost in its profits for the six-month period ended September 2008 largely due to the sale of Caribbean Money Market Brokers (CMMB) and a jump in its net interest income.

Unaudited financial statements for the period under review show the Group reporting gross revenues of J$6.15 billion, generating a net profit of J$1.1 billion. This compares favourably with gross revenues of J $5.12 billion producing a net profit of J$473.6 million for the six-month period ended 30th September 2007.

JMMB's Group CEO Keith Duncan made it clear that this 140 per cent jump in profits was primarily due to two one-off events, namely, a realised gain of J$2.32 billion from the sale of CMMB, and a write-down of the impairment of bond holdings in the Group's investment portfolio of J$1.87 billion as a result of its exposure to Lehman Brothers. However, the Group profit grew 44 per cent over the prior period, irrespective of the two major one-off events.

Net interest income increased by 45 per cent and came in at J$993.6 million for the six-month period ended 30 September 2008. This represents a J$306.6 million increase on the J$687 million registered for the same period last year.

Gains on securities trading have been steadily falling throughout the brokerage sector and JMMB was not immune.

Here the Group saw this revenue stream fall to J$323 million compared to the J$562.5 million it booked for the corresponding period last year. Fees and commission income made a marginal increase on the previous year, coming in at J$98.4 million compared with J$98 million for the same period last year.

JMMB's cambio trading operations put in a creditable performance, raking in J$72 million - J$20 million more than the J$52 million posted last year. Operating revenue net of interest expense increased by 6.3 per cent to J$1.5 billion despite a 42.6 per cent decline in trading gains.

Like many of its competitors JMMB saw an increase in its administrative expenses. Expenses rose to J$1.19 billion compared to J$956 million for the same period last year, an 18.5 per cent increase due to increase in staff costs and spiralling inflation.

Operating profit of J$288.2 million spelt a decline of 35 per cent largely due to an increase in administrative expenses. The Group's total assets of J$118 billion were boosted by a J$23 billion increase in investments and resale agreements, representing a 27.8 per cent increase on the J$92.3 billion posted last year for investments and resale agreements.

Speaking at a press conference held at its Kingston headquarters, Group CEO Keith Duncan outlined JMMB's strategy of focusing on different revenue steams and becoming an integrated financial service provider. The aim is to package a suite of services for corporates, which will help to grow the Group's asset base.

The private sector has long bemoaned the absence of reasonable financing facilities in Jamaica and cites this as one of the reasons for the anaemic performance of the productive sector. JMMB intends to address this with a special focus on small and medium enterprises. With 120,000 clients, JMMB is able to diversify its product offering and not allow it to be stymied by car loans serving as its leading credit facility. It sees opportunities in the agricultural sector and energy-saving measures, and is actively encouraging people to come forward with their plans and ideas. It will in effect be offering practical corporate solutions.

Later this month, JMMB will launch its dual currency ETMs at three locations within the city.

Looking to the next fifteen years JMMB will be employing a five-pronged strategy, namely:

1. Asset management (providing access to global investment opportunities for its client base including pension fund management);

2. Brokering;

3. Financing (consumer, commercial and corporate finance together with securitisation and syndication;

4.Greenfield expansion (JMMB bdi Americana (Dominican Republic), Central America (CAFTA);

5. Commercial banking (Application to the Bank of Jamaica for a licence to operate commercial banking facilities).

JMMB will continue to extend its footprint across the Caribbean. It currently has a 50 per cent stake in Trinidad's Intercommercial Bank Limited together with management control. It has an option to increase its holdings in this institution of which the steel magnate Mittal also has an interest. Next month, JMMB will open a new branch of IBL in Trinidad's capital Port-of-Spain.

Speaking with Caribbean Business Report yesterday, Duncan said: "We are very pleased with these financial results as we have taken prudent provisions which you can see have paid off. We are well capitalised to move forward.

Over the next six months the financial markets will face their fair share of challenges and we at JMMB are well equipped to face them."

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081107T020000-0500_142256_OBS_JMMB_POSTS_HANDSOME_PROFITS_OF_J_____BILLION_FOR_SIX_MONTH_PERIOD.asp

Charles Johnston - A business titan joins the pantheon of greats

2008-11-07T04:22:00.000-08:00

Published: Friday November 7, 2008

Chairman of the Jamaica Producers Group Charles Johnston is one of the true heavyweights of corporate Jamaica, a man who has left an indelible mark on both the agricultural and maritime sector. He has been a transformational figure in that he has brought both sectors, out of a colonial paradigm into the age of the modern free market where competitiveness is the true baromoter of success. There are very few people who can help shape two major industries simultaneously and no one in Jamaica readily comes to mind but Charles Johnston.

Johnston has never rested on his laurels and has continued to seek business opportunities - he is the embodiment of the entrepreneurial spirit who brings a sharpened pragmatism to the task at hand. His lineage tells a story but not the whole story. He has built on successive generations, learned from them and forged a most enviable career on his own terms. His forebears would be most proud of him for taking the family business into both a new century and new millennium.

But industry and commerce does not totally define Charles Johnston - that would be looking at him through a one- dimensional prism. He is that rarest of men, one able to walk among princes and paupers and still win their affection and respect effortlessly. The next generation of Jamaican entrepreneurs can learn much from him and it will be many years before someone sits astride two major economic drivers and make it look so easy. Below is the full text of his address to the PSOJ Hall of Fame Banquet, which took place last week at the Kingston Hilton Hotel.

I am extremely honoured and proud to be inducted into the PSOJ Hall of Fame as this award can very well be considered the premier award of the private sector in Jamaica. I am joining a list of esteemed and respected Jamaicans and I wish to thank the president Chris Zacca and his selection committee for this honour.

Chris, I must comment, however,that the Observer and the PSOJ need a more recent photo library.

I am also very surprised, because frankly, there are a few persons who, had I been on the selection committee, would be standing here instead. Surprised also, because I have never been heavily involved with this organisation.

I ran for vice-president one year, and was elected, but never went back for a number of reasons:

My year as VP was the year of the bankers' cabal, with Delroy Lindsay, Elon Beckford and Cliff Cameron. Billy McConnell, the perrenial VP, was the only non-banker with me. So I did not feel too comfortable. Douglas Orane was the one who convinced me to run for the VP post. You know how it goes - we really need people like you, there is no one else etc etc - so I fell for it. I was fully immersed in the paper that the PSOJ sends out when it dawned on me that Douglas really wanted to distract me from the waterfront.

In announcing my selection, the Gleaner had two headlines on the same page. "Jamaica Producers quits banana exports" and below that "Johnston for PSOJ Hall of Fame".

I was wondering if Oliver was trying to make a connection and what that connection would be. I am still trying to figure it out.

The Johnstons have been exporting bananas for over a century. Pat Johnston and Charles Johnston (great grand and grandfather) started shipping bananas out of Mosquito Cove in Hanover in the 1890s, then switched to Port Antonio.

Jamaica Fruit was formed in 1919 and partnered with Di Giorgio Fruit Co to export and run ships to the US. This continued until 1929 when Jamaica Producers was formed.

It is therefore very painful for me to have to announce the cessation of banana exports from Jamaica, by JP. It is also very painfull because of the loss of jobs that results from the closure of the farm in St Thomas and though it will be switching to cane, cane does not employ the same volume of workers and on such a steady basis.

This decision had to be made because of the change in the weather pattern in Jamaica. And believe me, if the weather goes back to us having a hurricane every 10 years, we will be resuming the export of bananas from Jamaica.

One of the things we are proud of at Jamaica Producers is our involvement in the formation of the Jamaica Welfare Ltd, which is now the Social Welfare Commission. That was in the 1930s. In 2008 JP was spearheading a similar system.

JP Farms had achieved fair trade status, which allowed us to brand our bananas with the Fair Trade brand. To quote the Fair Tade website: "Fair Trade is a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers and workers who have been economically disadvantaged or marginalised by the conventional trading system. If fair access to markets under better trade conditions would help them to overcome barriers to development, they can join Fair Trade."

Fair Trade standards comprise both minimum social, economic and environmental requirements, which producers must meet to be certified, plus progress requirements that encourage continuous improvement to develop farmers' organisations or the situation of estate workers.

The Fair Tarde premium is money paid on top of the Fairtrade minimum price that is invested in social, environmental and economic developmental projects, decided upon democratically by a committee of producers within the organisation or of workers on a plantation.

All this had been put in place and the first shipments were on the dock the week of Gustav.

We will be looking to see how we can assist other products with Fairtrade registration. Kingston Wharves has recently been in the news and the issue of redundancy is being well ventilated so I will leave that alone, except to say that management must have the right to make jobs and positions redundant, under the law, and in a fair and equitable manner.

I wish to comment on the article in The Sunday Observer, which wondered why Jamaica Fruit was "competing with KW in stevedoring, and that this represented a conflict of interest".

Jamaica Fruit was one of the founding shareholders in Kingston Wharves in 1938, and have operated there continuously, bringing ships to KW then loading and unloading those ships, which process is known as "stevedoring". The shipping lines contract the stevedoring companies, and the lines pay for the service.

Until the year 2000, KW only took the cargo after it was landed, stored it, and delivered it. The consignees pay KW for this service. In 2000 when KW started to stevedore, they were now competing with their customers, but we have not objected to their right to stevedore.

We do however, vehemently object to anyone saying that we do not have that same right.

We were there first.

We all know that crime is the biggest problem in Jamaica, and there are endless studies and initiatives which have been developed to reduce the crime rate.

But there is another problem which Jamaica suffers from which may be as damaging to our economy.

Jamaica has the fastest runners in the world and the slowest approvers in the world. We are natural sprinters on the track but we are marathon runners with development.

I'll give you a classic example. In 1980 Prime Minister Edward Seaga appointed a maritime task force to look into and set up a ship's registry. The task force decided that it was an excellent project but the registry came into being in 1999.
In the meantime, Panama has 6,000 ships registered and the Bahamas 1,200. We lost 19 years.

You will notice the time span covered two goverments, so the problem is not specific to one party.

I am very happy to see that the government may be finally deciding on what sources of fuel to use in the future. This has swung back and forth between coal, LNG, CNG and now back to coal, while all the time we are taking to decide, we are using the most expensive fuel to generate electricity. this decision has been pending for at least six years. again not confined to one government, but a Jamaican problem.

The problem is also not specific to governments. It is a Jamaican problem, with the private sector contributing to it in our own way. We used to only have the Chamber of Commerce, now we have the JMA, JEA, PSOJ, SAJ.

A company like Producers has to pay fees to all, send reps to all, we all come away saying that was a good meeting. We have too many good meetings and too few good results.

I would like to make two recomendations. One to the government:

That is, no new studies should be commissioned by any ministry until they have read all the old studies and rejected them. If they approve any then logically there would be no new study.

To the private sector, can we put a stopwatch on projects, measuring them so that records can be set and broken. Publish the times in the paper monthly so that we can see the progress or lack of it. Nothing should take 19 years to happen. If we can solve our productivity and bureaucracy problems, I am of the opinion that Jamaica has been looking in the wrong direction with our trade, by looking to English-speaking Caricom for our markets, with a population of three million.

The entire Caricom market is smaller than Jamaica, whereas the Dominican Republic is 9.5 million, Cuba is 11.5 million, Costa Rica four million, Honduras 7.6 million, and Panama 3.3 million with total markets of over 36 million. They are our true geographical trading partners, all of them are a day or day and half away by ship. Trinidad is three days away.

In truth we are an English-speaking island in a Latin sea. What has prevented us from trading is largely cultural they are multilingual and we are not. To remedy this our children need to learn Spanish and our government and our schools should make that language mandatory.

Although I am the one being honoured tonight, this award is not just about me. I would not have been able to achieve all that I have achieved alone, and I would like to take the opportunity to recognise some of the persons who have helped me along the way.

Firstly, my colleagues and staff members, past and present, at the Jamaica Producers Group and the Jamaica Fruit and Shipping Group, as well as my business partners, who have worked with me throughout the years.

I would especially like to thank the former MD of Jamaica Producers, Marshall Hall (who unfortunately could not be here tonight). together, Marshall and I made a great team and I am glad to be able to continue to exchange thoughts and ideas with him, as he still sits on the JP board. I would also like to thank my secretary, Andrea Anderson. I may not be an easy person to work with, but this does not alter her ever sunny disposition.

I am eternally grateful to my father and my grandfather, who laid the foundations of my business education and taught me many valuable lessons about life. To my mother Anna, for her unconditional love and support. To my brothers, sisters, nieces and nephews, my thanks. we have had our disagreements, but have always managed to overcome, and there are now 5th generation family members in the business. To my former wife Sakina, for her support over the years, and for being a wonderful mother to our children.

My sons, Edward, Aaron, Marek and Liam who are constant reminders of what life and family are really about, I am really proud of my sons. And to my beautiful wife Lisa, who continues to work by my side , as we enjoy our lives together, thanks for your patience and understanding.

My gratitude to all of you for the parts you have played in my life, this honour is as much yours as it is mine.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081107T020000-0500_142251_OBS_CHARLES_JOHNSTON___A_BUSINESS_TITAN_JOINS_THE_PANTHEON_OF_GREATS.asp

Angostura looks to export one million cases of Appleton rum a year to the US

2008-11-07T04:21:00.001-08:00

Published: Friday November 7, 2008

Angostura, the new parent of both Appleton Rum and J Wray & Nephew, is expecting to export one million cases of Appleton rum to the United States within the next three years said its new chairman Lawrence Duprey.

Speaking with Caribbean Business Report en route to the Middle East, Duprey said: "We have high expectations for our recent acquisition of Lascelles de Mercado's Appleton rums. The United States is a lucrative market and one where you have to position your premium brands. We are expecting to export one million cases of Appleton rum a year there and we should be able to do so in two to three years time. Angostura is in the United States showcasing all its brands. We want our 1919 Rum to be a global brand."

This is in keeping with Duprey's vision of PanCaribbean brands that go on to becoming global in recognition. Earlier this year he said at a special business luncheon in Jamaica, "Our vision is to create a drinks company that produces high-quality spirits marketed in niches where we can maximise the profit from quality products. This is not Caribbeanisation in theory, it is Caribbeanisation in practice."

With Angostura enjoying a presence in 178 countries, he sees it being able to create strong brand recognition which will create jobs in marketing, advertising and production for people of the Caribbean.

Duprey has ambitions of placing both Appleton and J Wray & Nephew rums in markets in the Far and Middle East, East Africa and Eastern Europe. The Colonial Life (CL) financial boss already has an office in Taiwan and will use it as a springboard into that side of the world.

"Jamaica was fantastic in the recent Olympic Games held in China and reggae music is everywhere. We can ride on the popularity of Jamaica and create a platform for our Caribbean brands. We can target small countries and get them familiar with our product line. I have always felt that Africa, particularly South Africa, and Ghana present many opportunities for Angostura.

"We will be looking to place J Wray & Nephew in both Russia and the Balkans and have its over proof rum go up against Russian vodka. Now that would be a battle indeed!

Duprey went on to say that he expects Angostura/Lascelles to cross list on the region's leading stock exchanges next year. With its stable of leading brands he predicts it will be an attractive stock that will excite not just Caribbean people but international investors.

"We will be undertaking a global advertising campaign supported by CL Financial. This should help us when we eventually list as a major Caribbean company on the London Stock Exchange. I have received many offers to sell Angostura but the truth be told, I want to keep it as a Caribbean company that champions West Indian brands with top management from the region.

Duprey has said on many occasions that the Angostura / Lascelles deal gives both Jamaica and Trinidad an opportunity to partner in an enterprise that can go global.

Lawrence Duprey's CL Financial Group created a holding company, CL Spirits Limited for its acquisition of Lascelles de Mercado. The deal at close to US$900 million and at US$9.25 a share is the largest seen in the Caribbean.

CL Spirits is 100 per cent owned by CL Financial, which now holds 86 per cent of Lascelles. The second and final tranche of US$4.75 per share was paid at the end of July this year. Lascelles produces US$2 billion in net income annually.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081107T020000-0500_142266_OBS_ANGOSTURA_LOOKS_TO_EXPORT__ONE_MILLION_CASES_OF_APPLETON_RUM_A_YEAR_TO_THE_US.asp

Sagicor aims to tighten - Revenue strong but inflation worries insurance group

2008-11-07T04:19:00.000-08:00

Published: Friday November 7, 2008

Sagicor Life Jamaica will pay out dividends of $1.65 billion or 44 cents per share on nine-month results that saw only a slight gain in profit for the insurance group.

Sagicor Jamaica grew profits attributable to shareholders by two per cent to $2.3 billion off revenues of $14.5 billion.

Minority companies contributed another $424 million to the bottom line pushing net profit to $2.7 billion.

Top line income rose by $2 billion or 17 per cent year-on-year, suggesting robust growth in sales, but the company also said that over the same period inflation was at 16 per cent, essentially handing it real growth in revenue of only one per cent.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081107/business/business9.html

Margin calls weaken weaken Jamaica dollar - Currency slides 5% in a month

2008-11-07T04:17:00.000-08:00

Published: Friday November 7, 2008

Five per cent decline in value of the Jamaican dollar over the past month was triggered by demands from US brokers that their Kingston counterparts pay up for government bonds bought on their behalf, analysts here say.

"Thirty to 50 per cent for overall emerging market brokers who offered margin on securities overseas made calls, basically sending up demand for US dollar currency to cover positions," said Mark Croskery head of the Kingston brokerage, Stocks and Securities Ltd.

Although it floats freely, the Jamaican dollar benchmarks primarily against the US greenback, and in recent years has slipped annually in a range of between three and five per cent.

But in the past month, as the credit crisis in America caused institutions there go sour on emerging market assets - including normally well-prized Jamaican government bonds - the Jamaican dollar has been in something of a free fall.

At October 8, it hovered at J$72.87 for US$1, but the next day passed the psychologically important J$73 to US$1.

By Wednesday of this week, it had tumbled to J$76.54 to US$1, a full five per cent drop since the end of the first week of October. On Thursday, the JMD fell even further to $76.72.

Precipitous decline

The precipitous decline of the Jamaican currency came despite the island's central bank having dipped into its reserves to sell US dollars directly to local brokers to cover their foreign obligations.

It also, during the second week of October - when the Jamaican dollar was trading at around J$74 to US$1 - announced its willingness to lend financial institutions up to US$300 million for the same cause.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081107/business/business7.html

FSC approves Blue Cross deal - Now it's all up to Audley Shaw

2008-11-07T04:15:00.000-08:00

Published: Friday November 7, 2008

Sagicor Life Jamaica has got the go-ahead from regulators to acquire Blue Cross of Jamaica's health insurance portfolio, but still needs the imprimatur of Finance Minister Audley Shaw before it can declare the transaction a done deal.

"This agreement has been approved by the Financial Services Commission and now awaits a vesting order from the Ministry of Finance and the Public Service to complete the process which will broaden the service offerings to former Blue Cross clients," said SLJ Chairman Dodridge Miller in a company statement issued Tuesday.

The Financial Gleaner understands that Sagicor made its final submission to the finance ministry just about a week or so ago.

In the normal course of events, Shaw's decision could be handed down within a month, giving Sagicor an early Christmas present.

"We are still waiting on the vesting order," said Karl Williams, assistant vice-president of Sagicor Jamaica on Thursday.

On the market

Blue Cross, which is controlled by Dr Henry Lowe, has been on the market for several years - hunted at different times by at least three suitors - and had come close to being sold before.

An earlier deal with National Commercial Bank, for example, was said to have been killed by regulators, but the FSC stamp of approval suggests that Sagicor Jamaica has hit the right note in its takeover bid.

But asked what put Sagicor's proposal over the top, Williams said that was a question for President Richard Byles.

Byles was off the island and unavailable for comment.

Sagicor has not disclosed the buy price, but Blue Cross pulls in some $2.6 billion in revenue annually, and has assets of $1.9 billion.

Within the Jamaican market, the diversified Sagicor Jamaica is number one of five life insurance companies, measured by the sheer volume of business done, while Blue Cross, whose business is solely in health insurance, is number four.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081107/business/business1.html

JTI looking buyers for over US$1.2b of beachfront property

2008-11-05T06:04:00.000-08:00

Published: Wednesday November 5, 2008

Jamaica Trade and Invest (JTI) is actively seeking local and emerging market investors to buy beachfront lands worth over US$1.2 billion earmarked for tourism investments.

JTI is focusing mainly on Chinese, Russian, and Indian investors that can withstand the US market credit crunch. Most of the lands are at various stages of divestment, said head of communication at the JTI.

"We are actively marketing these projects abroad and where possible we try to encourage local investors," said Thomas.

Some of the lands which the JTI is marketing include:

.Tan Marj lands which is bordered by Sandals Dunn's River and has potential for large-scale hotel development of 870 habitable rooms, with an estimated cost of investment at US$25 million;

.Laughlands in St Ann on 124 acres with sea frontage; it is next door to the Chukka Cove polo grounds, has an available air strip with an estimated cost of investment at US$26 million;

.San San in Portland which has 600 acres and an additional 10 acres of unsold villa lots and 18- hole golf course with the cost of investment at US$45 million;

.Holland East in St Thomas which has six reef protected bays, 200 acres of mangrove/wetlands, 480 acres of flat scrub land areas with flat rocks close to the surface and 120 acres of pure beach lands with a US$35 million estimated cost of investment; and

.Mahoe Bay, on 38-acre property situated in St James, already partially used by Spanish tourist developers, with an estimated cost of investment at US$40 million.

But the mega project is for The Negril Peninsula Resort, it has an estimated cost of US$1.1 billion. It is a mixed luxury villa and resort providing approximately 6,702 habitable rooms on 361 acres.

"It is a unique concept which brings together the natural resources of Jamaica with first class resources in leisure, technology and both physical and spiritual well-being, to create a vacation lifestyle experience. The coastal shoreline of approximately one kilometre, fronted by the Caribbean Sea to the south, is to accommodate a medium-sized marina to accept keeled yachts and medium-sized ocean-going vessels. In addition, five new beaches will be created to complete this new coastal destination," noted the JTI which added that currently environmental permits have been granted and outline planning approvals granted. It expects the project to be at some stage of completion by 2010.

These projects were listed within JTI's recently updated brochure on investment opportunities to overseas missions and local investors. The document is also on the JTI website.

The properties were posted in collaboration with the owners.

"Our role is vetting and facilitating and working with the investors," said Thomas. "We receive no commission from selling the lands. We are promoting the country. I am sure that many of the owners of these properties are also in collaboration with real estate firms. What we want to be is a broker. We are not in any way competing with real estate firms."

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081104T200000-0500_142145_OBS_JTI_LOOKING_BUYERS_FOR_OVER_US____B_OF_BEACHFRONT_PROPERTY.asp

Gov't missed revenue target again

2008-11-05T06:02:00.000-08:00

Published: Wednesday November 5, 2008

The central government missed its revenue target for the fifth consecutive month in September, making April, the first month in the fiscal year, the only one where cash flows into the government coffers was in line with budget.

Government's revenues and grants was $2.2 billion short of target during September and $5.4 billion below budget for the first half of the fiscal year.

Total income of $131.4 billion was 15 per cent higher than the corresponding period, however, while the central government's ability to contain non-interest expenditure at $9.6 billion below target allowed the state to beat its fiscal deficit target of $48.8 billion for the first half of the fiscal year by $3.1 billion.

Interest expense on the other hand totalled $59.2 billion for the six months to September 30 or $1.1 billion more than projected.

Taxes earned from income and profits was better than programmed by $417 million, although PAYE was $333 million less than planned.

Alternatively, earnings from taxes on production and consumption and international trade was lower than targeted by $3.6 billion and $1.7 billion respectively.

Jamaica's bauxite earnings were negatively affected by lower commodity prices on the international market and thus tax on bauxite/alumina companies was $877 million lower than expected while bauxite levy underperformed $1.4 billion.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081104T200000-0500_142144_OBS_GOV_T_MISSED_REVENUE_TARGET_AGAIN.asp

SVL expects $15-m starting jackpot to boost lotto revenues

2008-11-05T05:57:00.000-08:00

Published: Wednesday November 5, 2008

Gaming company, Supreme Ventures Ltd (SVL) says that doubling the starting lotto jackpot to $15 million will increase its revenues.

"With a starting point at $15 million, then the jackpot will grow more aggressively because persons usually come into the game at $25 million," said Sonia Davidson SVL vice- president of corporate communications. "And based on the revenue coming in, we will be able to grow the jackpot higher and faster."

Lotto revenues languish because the jackpot which is sales driven, does not get much public interest at $7 million.

"Can you buy a house with $7 million?" she asked. "The game is jackpot driven and we realised that $7 million is no longer attractive staring point and made more relevant at $15 million."

In order to support the increased jackpot, SVL increased lotto tickets to $50 from $30. SVL asserts that the benefit of increasing the jackpot will outweigh the increased cost to play the game. Lotto contributes some eight per cent of total SVL revenues, or about $1.28 billion of the $16.12 billion made over nine months up to July. The campaign is geared at increasing those revenues. Its flagship game, Cash Pot accounts for 80 per cent of total revenues.

"We are expecting revenues to increase," said Davidson who declined to give a revenue target. "No, we have not really gone there yet."

SVL launched an ad campaign to usher in the changes which became effective Monday. The campaign used a red-coloured eye, which represents desire and greed in Jamaican parlance. The campaign also updated the lotto logo.

"The gimmick of the campaign was playing on the red-eye concept. The eye has nothing to do with the logo. But we did do just a small tweaking of the colour of the balls for the logo," she said.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081104T190000-0500_142135_OBS_SVL_EXPECTS_____M_STARTING_JACKPOT_TO_BOOST_LOTTO_REVENUES.asp

PCFS commercial banking arm launched

2008-11-05T05:55:00.000-08:00

Published: Wednesday November 5, 2008

Pan Caribbean Financial Services (PCFS) officially launched its commercial banking arm with five branches nationwide, targeting an existing 15,000-strong customer base.

Speaking at the launch Pan Caribbean chief executive officer Donovan Perkins said that the 25-year-old financial institution was projecting another year of $1 billion-plus profits, following the $1.2 billion recorded last year. Part of the Sagicor Group Pan Caribbean claims to be the best capitalised bank in Jamaica and pledges to improve upon the level of customer service offered by existing commercial banks.

"Banking is personal again, and you are the reason!" deputy chief executive officer Phillip Armstrong told attendees at a reception held Monday night at the Terra Nova All-Suite Hotel in St Andrew. Armstrong promised that there would be less hassle in applying for one of the new accounts and that interest would be paid daily on each dollar deposited with the bank.

"People are being underserved and what I do think is that there is a lack of good service and I think is where the possibility for us to exploit," he told Business Observer.

The bank has begun holding official launches this fortnight at its branches in Kingston, Ocho Rios, Mandeville, Savanna-la-mar and Montego Bay.

Amid the global financial crisis, PCFS earlier reported mixed financial results for the nine-month period ending September 2008 with 13 per cent growth in revenues to J$5.06 billion compared to last year's J$4.49 billion.

At the end of the third quarter, the group's net interest income grew by 17 per cent to J$1.45 billion, up from J$1.24 billion over the same period last year. However, its non-interest income declined by 14 per cent to J$587 million compared to J$679 million in 2007. Non-interest income comprises its trading activities in fixed income, foreign exchange and stocks, and includes asset management fees from its top-performing Sigma funds, as well as banking-related fees for transactions.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081104T180000-0500_142133_OBS_PCFS_COMMERCIAL_BANKING_ARM_LAUNCHED.asp

2008-11-05T05:53:00.000-08:00

Published: Wednesday November 5, 2008

Milton Brady, the CEO of FirstCaribbean International Bank's subsidiary in Jamaica, has been promoted to be group managing director for corporate investment banking across the Caribbean and is to join a new eight-member executive management committee (EMC) at the FCIB's headquarters in Barbados.

Move to Barbados

FCIB disclosed Brady's elevation in a statement announcing the EMC and naming the head of the Jamaica operation as the MD for corporate investment banking, but gave no details.

However, an insider at First-Caribbean Jamaica confirmed that Brady would move to Barbados and that the bank was not in the process of recruiting a new boss for the Jamaica subsidiary.

Brady's new appointment became effective November 1, but: "he will continue to work from Jamaica until January," said the insider. "He will stay there until a replacement has been found."

Brady himself was not immediately available for comment. He is travelling within the region.

FCIB was created out of the merger of the Caribbean operations of the Canadian Imperial Bank of Commercial (CIBC) and Britain's Barclay's Bank.

However, Barclays has since sold to CIBC its 50 per cent stake in the vehicle that they used to hold their majority ownership in FirstCaribbean, an institution with assets of over US$12 billion.

The Jamaican subsidiary, at the end of July accounted for J$48.57 billion or around $674.6 million of the regional group's asset base.

For the nine month to the end of July, FirstCaribbean Jamaica reported profit of $636.6 million, a mildly decline of the $649 million for the similar period last year, when its full-year profit reached $771 million.

Restructuring

The management restructuring of the FCIB's management, including Brady's promotion and the naming of the eight-member executive management committee, was likely to be part of effort of the parent CIBC to respond to recently muscle-flexing in the Caribbean by its big Canadian competitor, Royal Bank of Canada (RBC).

RBC has acquired RBTT, the Trinidadian-owned Caribbean bank that emerged in the 1980s from Royal Bank's divestment of its operation in Trinidad. RBC, at the same time, sold its business in Jamaica.

RBTT expanded from Trinidad to elsewhere in the eastern Caribbean and into Jamaica, where it now has a substantive presence.

Once finalised, the merged RBC/RBTT operation will eclipse FirstCaribbean to become the largest bank in the Caribbean with assets of US$13 billion.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081105/business/business1.html

NCB grows profit to $8.7 billion - Despite write-down of $1.2b by subsidiary

2008-11-05T05:49:00.000-08:00

Published: Wednesday November 5, 2008

National Commercial Bank (NCB) Jamaica Limited has reported a strong year-end performance, chalking up a 32 per cent increase in profits, in the face of a challenging financial environment that company executives say is likely to remain within the short to medium term.

"The year has been mixed," said group managing director Patrick Hylton, "but we have taken opportunities to guard against the risks."

$2b more than last year

NCB this week reported net profit of $8.7 billion, some two billion more than last year's $6.7 billion. It will be a dividend of 40 cents per share, totalling $987 milion, on December 1.

But the bank's results would have been even better were it not for the financial meltdown in the United States, which forced the group to take more than a billion in write-downs on investments.

Revenues were up by 20 per cent to $24.7 billion, of which net interest income accounted for $15.8 billion - an increase of 23 per cent over the $12.8 billion generated in the prior year.

Fees and commission

NCB also amassed $4.9 billion in fees and commission income due, the company said, to increased point-of-sales transactions and ABM usage.

The bank's loan portfolio also reflected robust growth, moving from $56.5 billion at the end of September 2007 to $82.2 billion.

"The retail growth is reflective of the kind of focus that we have been placing on that area," said Yvonne Clarke, group chief financial officer.

According to Clarke, strategies to grow loans and deposit accounts include meeting customer needs more efficiently so that they don't have a need to go other institutions, thus a keen focus on customer retention.

Also, in the area of corporate banking, Clarke said the bank has been able to structure some new deals.

NCB Capital Markets, the group's wealth and funds management arm, contributed $855 million in operating profits, notwithstanding a $1.23 billion write-down in the fourth quarter relating to investments held with bankrupted international investment bank Lehman Brothers.

"Recovery seemed unlikely, so we have decided to make a 100 per cent provision for the Lehman Brothers impairment," said Clarke.

Pledge assets

"Under repurchase agreements with Lehman, GOJ bonds with a value of US$44.88 million were pledged as security for a liability of US$27.92 million with Lehman Brothers. Full recovery of the excess of the value of the pledge assets is considered doubtful and accordingly, a full provision for this amount has been made."

Consequently, NCB Capital Markets had a 50.5 per cent decline in net profit to $776 million when compared with the similar period last year.

The insurance segment of the operation contributed approximately $766 million to the group, an increase of 38 per cent, compared with the previous year.

NCB Insurance Company was the major contributor, which according to the company, reflects impact of the recent restructuring as the company positions itself for greater focus on 'bancassurance', that is insurance provided through a bank as well as pension and investment management services.

Source:
Sabrina Gordon
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081105/business/business3.html
sabrina.gordon@gleanerjm.com

Bank profits spur JSE - Barbados, Trinidad still in decline

2008-11-05T05:46:00.000-08:00

Published: Wednesday November 5, 2008

On a day when National Commercial Bank (NCB) reported its biggest profit, notwithstanding a large write-down by its wealth management arm, trading on the Jamaica Stock Exchange soared by 1,366 points or 1.5 per cent.

On the foreign-exchange market, the dollar continued to slide, hitting $76.47 against the US dollar; $64.95 against the Canadian and $121.15 against the pound sterling.

NCB was Tuesday's volume leader on the Kingston-based exchange, and one of 12 stocks adding gains to investors' portfolios, but the biggest capital gain was recorded by hotel company Pegasus, which rose by $6.50 to close at $20.

Most vibrant

All three Jamaican indices rose on Tuesday, with the broad index closing at 94,826 points, while the All-Jamaican ended at 94,193 after a 2,531 point or 2.76 per cent gain. The blue-chip index, however, was the most vibrant with three per cent growth to close at 2,572 points.

Transactions on 2.9 million shares amounted to $37 million, while the market's advance replenished the market to add back $10.7 billion of capitalisation to close at $707 billion.

Market cap is computed by the number of issued shares per stock times its current price.

Shaken and uncertain

But even as the adrenaline rush in Jamaica tracked with global markets in places like Europe (see related story on Page C10), its sister exchanges in the region were still struggling to shrug off the anxieties of nervous investors, whose performance tracked that of Europe. The picture at exchanges elsewhere in the region indicated that those markets were still shaken and uncertain.

Barbados dropped almost two-tenths of a point on its composite index to close at 997.9, while the market lost another 2.73 per cent of value, leaving its composite listings capitalised at $14.8 billion.

In Trinidad, the composite lost 1.43 points to close at 915, while the All T&T was down 2.38 points to close at 1,236.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081105/business/business4.html

Global crisis triggers panic selling on TT Stock Exchange

2008-11-05T05:41:00.000-08:00

Published: Wednesday November 5, 2008

THE GLOBAL financial instability is creating panic selling by stock market investors in Trinidad and Tobago.

West Indies Stockbrokers Limited (WISE) says the "strong signs of panic selling" is an indication that investors are trying to mitigate risks to their portfolios.

"This has resulted in low investor confidence and lowering of demand for shares," the brokerage said in its outlook on the fourth quarter.

Significant fluctuation

WISE, a subsidiary of RBTT Financial Group, said there has been a significant fluctuation in the value of shares traded over nine months, and that the current conditions represents an oppor-tunity for investors.

"Some of the listed securities remain fundamentally healthy and the decline in the market presents favourable buying opportunities for the medium- to long-term investor," it said.

In its local market summary for the period to September 30, WISE reported that Trinidad's two main indices closed up 8.5 per cent, 1,066 points for the composite; while the All T&T index rose 20.3 per cent to 1,444.

But within the third quarter, the market closed in negative territory: the composite dropped 7.4 per cent or 85 points while the All T&T Index fell 3.9 per cent or 58 points.

The volume of shares traded amounted to just under 106 million units, relative to 88 million in the prior year period, but their value was substantially reduced. Sagicor Financial Corporation and Trinidad Cement Limited and National Commercial Bank of Jamaica were the most heavily traded stocks, respectively.

But it was Readymix (West Indies) Limited that was the most outstanding performer, rising 351 per cent to close at TT$31.60.

Serious downturn

Leading the declines were Prestige Holdings Limited, First-Caribbean International Bank Limited and National Flour Mills Limited.

Transactions in the current nine months were valued at TT$1.64 billion, down from TT$1.7 billion a year ago.

The third-quarter performance was even more indicative of the downturn.

Market activity declined in the three-month period by more than 31 million shares. And the value of those trades, TT$534.8 million, was substantially below the TT$622.8 million in transactions recorded in the prior year period.

The Trinidad Stock Exchange has continued to experience declines, ending the week of October 31 at 921 points for the composite and 1,243 on the All T&T index. Market capitalisation was down by TT$12 billion to TT$83.5 billion.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081105/business/business7.html

KFC pledges control of rising costs

2008-11-05T05:38:00.000-08:00

Published: Wednesday November 5, 2008

Glenn Maharaj, senior vice president of Prestige Holdings Limited, owner of the Kentucky Fried Chicken (KFC) franchise in T&T, yesterday said the company has made a commitment not to transfer the company’s high production costs to consumers.

He said high costs have impacted on the company’s margins but Prestige Holdings Limited had decided to take the hit.

“A price increase in a goods does not mean an automatic price adjustment,” he said.

He made this statement as the company marked the 35th Anniversary in T&T of KFC, its most popular brand.

Maharaj said that labour: attracting and retaining staff, remained the company’s biggest challenge. He said there was competition in the retail sector for staff but Prestige Holdings was looking at creative ways to keep its staff.

Asked how the company was dealing with the view that it was plagued by bad customer service, Maharaj said, “We believe at KFC that customer service is key and that is something we are working hard at.

“We will continue to do training and invest in people,” he said.

A major highlight of the 35th anniversary celebrations is the presence of Colonel Sanders lookalike, Colonel Baxley.

He is here for a three day visit which would include a stopover in Tobago. He will visit schools to distribute computers and take part in KFC’s customer appreciation day on Thursday.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business1.html

T&T braces for fallout from US recession Mariano Browne: We will deal with this

2008-11-05T05:35:00.000-08:00

Published: Wednesday November 5, 2008

Scared and out of money.

This was how experts described American consumers last week as they stopped buying everything from cars to corn flakes and cut back spending by the biggest amount in 28 years.

It was the strongest signal that the US economy had hurtled into recession as GDP-which measures the value of goods and services produced-contracted as consumers turned back their spending by 3.1 per cent.

The operative definition of a recession is two straight months of contracting GDP.

If that applies, then the United States is already there.

And as a collapse in the US housing market, nationwide retrenchment and locked-up lending have produced the worst financial crisis in the United States in more than 70 years, there are concerns that Trinidad and Tobago-already interlocked with the US economy-is on the edge of a brewing financial storm.

In an exclusive interview with the Business Express, Minister in the Ministry of Finance Mariano Browne underscored the possibility of the economic decline continuing in the United States.

"There is the likelihood it will decline. The last quarter has been short," he said. "But things go up and down and (the US economy) can rebound."

He was speaking to the Business Express last Friday following a breakfast discussion on the global financial crisis at the Chamber of Commerce building at Westmoorings.

He did not dismiss the potential effects of a worldwide financial meltdown on an island economy like Trinidad and Tobago's.

"There is a need for concern. There is always a need for concern," Browne said. "But we can't panic. There are always going to be ups and downs. We will deal with this."

Government is confident the country is well prepared to combat the raging economic crisis impacting most of the developed world these days.

"From an investment point of view, we are starting off this round from a strong position. We have a strong surplus balance," Browne told the Business Express.

There are also opportunities to capitalise on the economic turmoil affecting money markets in the United States, Europe and Asia.

"We have strong Heritage and Stabilisation Fund and as prices depreciate, we can get value for money," he said, adding that there were also opportunities for businesses to expand.

His argument was that Trinidad and Tobago exporters came into their own in the post-depression era of the 1980s when the country struggled through its own recession after oil dollars dried up.

Browne maintained that Trinidadians possessed a strong work ethic that was a distinct advantage at a time when the rest of the developed world was struggling against inflationary pressures and a rising cost of living.

He pointed out that while Trinidad was not as recognised for its tourism product, Tobago thrived on the industry and there was the need to implement that positive work ethic to enhance the tourism offering a greater part of the all-round Trinidad and Tobago economic package.

Other Caribbean territories, who have started bracing for the fallout.

Protecting jobs and shielding the poor are aspects of a plan by Barbados prime minister David Thompson to weather the effects of the global financial crisis on the island.

He told an economic consultation last week that his administration was prepared to take pre-emptive action to mitigate against any secondary economic and financial fallout.

Other financial experts believe that Government will have to keep close tabs on Trinidad and Tobago's economic health in the coming weeks and months because of the recession in the US.

Ian Collier, president of the Trinidad and Tobago Chamber of Commerce, says of the recession: "I think they are going to have to monitor the situation and respond to it. It is very fluid at the moment."

He said in an interview at the Chamber's office last Friday that the US elections would also play a role in determining how the world's largest economy dealt with the financial crisis.

Government will also have to continue to be very aware of the ongoing economic developments and "monitor the situation 24/7", Collier said.

Economist Indera Sagewan-Alli noted last week that the US was showing the signs of serious decline.

Speaking to the Business Express last Friday, she pointed to the links between the US market and local manufacturing and exporting.

With demand shrinking in the US, and particularly with the possibility that West Indians who purchase products from the Caribbean losing their jobs, there could be economic fallout in the region.

Sagewan-Alli also suggested that as the result of the US election would have an impact on the economy in the United States.

"We will see a strong effort to revitalise the US economy. But we will have to wait and see," she said.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business_mag?id=161396733

Prof: Brace for US recession backlash

2008-11-05T05:33:00.000-08:00

Published: Wednesday November 5, 2008

A United States economics professor is telling the Caribbean to brace for the effects of a United States recession, warning that things could get worse before they get better.

Professor of economics at Northeastern Illinois University, Dr Edward Stuart, said it will be at least another full year before the United States emerges from a recession.

"We will have more inflation," he said yesterday, as voters across the country went to the polls to elect a new president to lead the country through the economic turbulence.

"The statistics that I look at and the people that I pay attention to say that the United States will be in recession throughout 2009; that the debt of the typical American household – credit card and mortgage debt – is probably at unsustainably high levels, so people will have to cut back on spending and increase on saving and repaying loans and that's not good for recovery.

"My suspicion is that we'll come out of the recession somewhere around the beginning of 2010 and that's being optimistic," he said, responding to questions by a group of foreign journalists.

Stuart said that whoever emerges victorious in the presidential race – either Democrat Barrack Obama or John McCain of the Republican Party – will have a hard task.

"I wouldn't want to be the president next year because that's going to be a tough job," he said, noting that although the president will be able to slightly influence the direction which the economy takes through fiscal or monetary policy, it will take some time to see results.

"The shortest possible effect is probably six to 12 months. Let's say that in January there is a new fiscal stimulus package and it is very robust and powerful, it will have an effect by summer at the earliest," Professor Stuart explained.

Meantime, the economics expert has suggested that Obama critics who charged that the African American will bring socialism to the United States through his tax policies are off the mark. Obama has been accused by Republicans of having a socialist agenda ever since he said that his plan is to "spread the wealth around".

Source: Nation Newspapers
http://www.nationnews.com/story/315313285448876.php

US credit woes remain

2008-11-05T05:31:00.000-08:00

Published: Wednesday November 5, 2008

The credit markets gave mixed signals on Election Day yesterday, showing more gradual improvement in interbank lending but further troubles in such areas as corporate debt.

Lending rates between banks sank yesterday, suggesting a growing willingness to lend among financial institutions. The London Interbank Offered Rate, or Libor, on three-month loans in dollars fell to 2.71 per cent – the lowest level since June 9 – from 2.86 per cent on Monday.

But skeptics pointed out that rates remain far above their benchmarks set by central banks of 1 per cent in the United States, 3.75 per cent in the euro zone and 4.50 per cent in Britain. The spreads are actually twice as large as they were in mid-September, when Lehman Brothers Holdings Inc. went bankrupt.

Investors, still averse to risk, are tightly clinging to Treasury bills. The three-month bill, considered one of the safest assets around, saw its yield tick up marginally to 0.48 per cent from 0.47 per cent. A low yield suggests high demand.

Meanwhile, corporate bond rates keep rising. Because investors are growing more concerned about companies being unable to pay back their debt, those companies will have to pay more to get loans.

Even highly rated companies are feeling the pain – ratings agency Standard & Poor's said yesterday that the spread, or difference, between rates on investment-grade corporate bonds and treasury yields broke above five percentage points Monday to a new five-year record.

The United States corporate bond default rate rose again in October, bringing the tally of defaults so far in 2008 to 65, said Standard & Poor's.

Treasurys were mixed ahead of the election results. Analysts said that no matter who was elected president, the country is facing a huge deficit that will require the treasury to issue large amounts of debt, further complicating the debt markets.

When the supply of government debt rises, prices fall and drive up yields.

Source: Nation Newspapers
http://www.nationnews.com/story/337605203954744.php

Business development division set up for CUs

2008-11-04T07:23:00.000-08:00

Published: Tuesday November 4, 2008

The Ministry of Labour and Small and Micro Enterprise Development has set up a business development unit for credit unions with its Co-operative Development Division.

Labour Minister Rennie Dumas said the unit will provide assistance and guidance to credit unions for the development of their strategic and business plans.

“The strategy aims to build the capacity for forward planning to better weather the socio-economic challenges.”

Dumas made the comments as the feature speaker at a cocktail reception last Friday at the Cascadia Hotel, St Ann’s to mark the end of International Credit Union Month (October). The theme of the celebrations was ‘My credit union, it belongs to me’.

He said that strategic and business plans should aim to capture varying and relevant management systems which prepare the organisation with strategic decision making support and knowledge management systems.

“I urge all societies to further develop scenario planning strategies which aim to cushion the environmental impacts on the credit union,” said the minister.

“We must no longer rely on the good luck approach to success. We must no longer rely on hope of doing the right thing at the right time, as may have been the case of Caroni-based co-operatives after the closure of Caroni (1975) Limited. Although these societies may not have employed scenario planning, the fact that they survived speaks volumes to the leadership and member resilience. The use of scenario planning approach may have put these societies in an even better position today.”

Credit unions have been in existence in T&T for sixty years, with varying degrees of success. Credit union membership now stands at more than 500,000 people.

Dumas said that a major benchmark in the life of the movement was the challenge of the economic slowdown of the 1980s.

“This period proved to be the catalyst for strengthening of the co-operative movement,” he said. “During those trying times, credit unions became the economic pillars upon which the people continued to realise their goals, improve their quality of life and overall standard of living. Credit unions became a safe haven for the savings and investments of the people and a dependable source of credit.

“This recessionary period of the 1980’s saw the positioning of the movement as the ‘backbone’ of the economy.”

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business2.html

Don’t blame us: Chamber, SATT deny responsibility for high food prices

2008-11-04T07:22:00.000-08:00

Published: Tuesday November 4, 2008

The T&T Chamber of Industry and Commerce said yesterday it was “highly unrealistic” to expect an immediate lowering of local food prices because of the fall of global food prices.

And the Supermarket Association of T&T (SATT) also disclaimed responsibility for high local food prices.

Both bodies were responding to charges by Labour Minister Rennie Dumas, who on Friday accused local food suppliers of refusing to reduce prices despite the fact that food prices had declined in other countries in response to falling international commodity prices.

Dumas made the charge while addressing the Lower House during a debate on a motion on food prices. He said international food prices had been falling in recent times, but this was not being reflected on the grocery shelves of T&T.

He said, “Suppliers are abusing the population, knowing that food prices are returning to the level they were in October/December 2007. But this is not showing up in the prices we see on the grocery shelf,” Dumas told the House.

The chamber said it was surprised at Dumas’ statements, adding that “the Government is fully aware that traders in every commodity still have pre paid inventory at former prices. They also have goods intransit at old prices because of significant lead times which foreign suppliers place on local businesses. This can be further compounded by increases in other components of the supply chain, which again takes time before the benefit of global reductions filter through to local business. Hence any immediate lowering of food prices in response to changing global commodity prices is highly unrealistic.”

SATT said that supermarkets have no control over food prices, pointing out that supermarkets are the last link to the consumer.

SATT said the chain which brings products to the consumer is often controlled by cost of raw materials, cost of manufacturing, cost of distribution and by the operation of retailers.

SATT said that based on the pictures used in the background of the news report, Dumas seemed to be talking about fruits and vegetables. It said that the increases on those products were due to the recent flooding in which farmers lost most of their crops, resulting in a shortage.

SATT complained that although supermarket operators work long hours, seven days a week, providing what they consider an essential service “they are subjected to unfair statements, which can have an adverse effect on businesses and their employees.”

SATT said that prices are also controlled by demand and supply.

It said that as long as Russia and China continue to buy out world food supplies, world production prices would continue to climb.

“At present all we can do is play the waiting game and hope that the global economic downturn would slow down the demand for supplies, therefore creating more supplies than demand,” SATT said in a statement.

The association pointed out that recently supermarkets responded immediately by lowering the price of flour when the price was cut by one of the suppliers.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business1.html

C&W rebrands as 'LIME'

2008-11-03T11:02:00.000-08:00

Published: Sunday October 2, 2008

Cable & Wireless unveiled their rebranding in the Caribbean as 'LIME' on Friday representing their four services: Landlines, Internet, mobile and entertainment/cable television - for which they have applied to the Broadcasting Commission for an islandwide license in Jamaica.

The new brand will launch on Monday across its 13 Caribbean markets: Anguilla; Antigua; Barbados; British Virgin Islands; Cayman Islands; Dominica; Grenada; Jamaica; Montserrat; St Kitts and Nevis; St Lucia; St Vincent and the Grenadines; and Turks and Caicos.

Speaking at the Jamaican press launch held on Friday at the Hilton Hotel in New Kingston, C&W executives stressed that this was a break from the old, the telecommunications monopoly which had become unpopular by the time the sector was liberalised earlier this decade, ushering in competitors Digicel, MiPhone (recently rebranded as Claro) and Flow.

Consumers can now "chill out" with Lime, said executive vice-president commercial Mariano Doble, referring to the new brand name's association with Caribbean vernacular.

"We changed everything!" declared Doble of the rebranding exercise.

"The business we are creating really doesn't bear a great deal of resemblance to the Cable & Wireless of old. The slow, indifferent, aloof business is being replaced by an organisation built around customers and their needs. a promise that we will deliver the best service and the best communications solutions across the board," said LIME chief executive officer Richard Dodd whose video presentation was screened to journalists at simultaneous events across the Caribbean.

Dodd said that customers could expect similar levels of service to that enjoyed by their counterparts in North America and Europe.

C&W's operations and locations will undergo a gradual rebranding to be completed next year - part of an overall regional transformation plan valued at US$300 million. The company is scheduled to begin its phased islandwide roll-out of its 3G GSM network by the end of November, starting with the Kingston and Metropolitan Area.

The company is yet to unveil its new packages but future offerings will include bundles of the services, confirmed Doble. He also unveiled a manifesto, reflecting the new corporate culture including the following promises:
. All calls to customer service centres will be answered within one minute.

. No customers will go without the ability to communicate via at least one LIME service for longer than 24 hours.

. Customers will not be sold services they do not need.

. All children in LIME markets will have access to a computer and the Internet to help their education.

. Annual investment of US$5 million in regional community activities, such as Carnival

. Yearly financial statements, which show where investments have been made.

. 'Caribbean supplier first' policy.

. Affirmative action in the employment and promotion of Caribbean residents.

. Reduce paper wastage by 15 per cent among other environmental initiatives.

. All employees will be committed
to recovery efforts following national disasters.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081101T200000-0500_142046_OBS_C_W_REBRANDS_AS__LIME__.asp

Jamaica's banana future looks bleak

2008-11-03T11:01:00.000-08:00

Published: Monday 3, 2008

Prime Minister Bruce Golding painted a bleak picture of the future of the banana industry last Tuesday, during a sitting of the House of Representatives.

"What we need to do is to move with the land resources we have, the infrastructure that is there to see how we can diversify," Golding told the House.

Already, the chief producers of banana for export have pulled out of production. The straw that broke the camel's back was Tropical Storm Gustav, which destroyed a vast percentage of banana crops in eastern Jamaica.

Massive losses

Jamaica Producers, in announcing the end of its participation in banana export, cited massive losses as a result of several hurricanes in the last four years. The company said it would now concentrate on growing crops such as cassava and breadfruit.

Golding said small farmers may still feel the need to remain in bananas but has advised against it.

"While we don't prevent people from entering upon any kind of enterprise that they want, we have to tell them in clear, unemotional terms that the banana situation is moving against us. It is now like swimming against the tide," Golding said.

Better quality life

"What we want to do is to secure an orderly disengagement, but a new engagement into something possible and that can offer a better quality of life for the farmers that are involved," he added

Caribbean and other countries in the 77-nation African Caribbean and Pacific (ACP) group are fighting to have its bananas enter European markets at a preferential rate.

Under a regime that came into effect two and a half years ago, the ACP group of countries can export up to 775,000 tonnes of bananas annual to the EU duty-free. Other exporters have to pay a tariff of €176 a tonne. However, a WTO dispute panel this year, on a complaint by Ecuador, ruled that the EU quota tariff was unfair and incompatible with its regime.

Import tariffs

The EU has said it would accept a WTO proposal for the European trade bloc to reduce banana import tariffs from €176 per tonne to €116 by year 2015. However, according to Golding, banana producers here would still not be able to compete even with that protection.

"We have been buying time but we are not going to be able to sustain those challenges indefinitely. The €176 per tonne is not going to last," the prime minister said.

Golding told the House that leaving banana should not become a political issue.

"This is not a issue that needs to offer the political podium as if there is any choice and there is any option because there is none," the prime minister said.

Source:
Daraine Luton
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081103/business/business2.html
daraine.luton@gleanerjm.com

H&L planning holiday blitz to rescue profits

2008-10-31T09:23:00.000-07:00

Published: Friday October 31, 2008

Hardware and Lumber Limited is projecting that its markets will continue to soften into the high shopping season, but says it will ratchet up its marketing campaign to "stimulate consumer interest" over the Christmas and New Year holidays, traditionally one of its most lucrative seasons.

"We normally allocate a substantial amount of our advertising dollar around the last quarter of the year, as this is our high activity period," said Chief Executive Officer Anthony Holness.

"Approximately 40 per cent of the total advertising budget which is $70 million goes towards the forth quarter."

H&L, which is majority owned and controlled by conglomerate GraceKennedy Limited, has been experiencing slower sales since Hurricane Gustav in August and later as the economy continued to tighten locally and internationally, inflation ballooned, and disposable incomes eroded.

But the company, which owns the Rapid TrueValue chain of stores, says some of the pressure is from new competition.

Holness chose not to clarify who his new rivals were.

"While there were new players in the market, whose name I don't want to call, the main competition within the period came from existing players in the market who are scrambling to retain market share in a declining market," he told the Financial Gleaner.

But he also said that Tank-Weld which is entering the lumber market does represent new competition, but that their operation had no impact on H&L in the September quarter.

"We expect to see some effects in the future but only minimally," he added.

In the nine-month period just ended, H&L's revenues are up by more than $350 million to $5.15 billion, a seven per cent improvement, but the third quarter figures are where H&L's slowdown is manifested.

Decline in revenue

Revenue for the July-September quarter was $1.59 billion, a five per cent decline relative to the 2007 third quarter's $1.68 billion.

The quarter erased $23 million of the hardware company's after tax earnings, leaving H&L with just $5 million of profit in the nine-month period. A year ago, the company had reported profit of $61 million within nine months, 12 times the income Holness is reporting for the same period this year.

Growth in nine-month revenue was recorded in all three business segments, led by the agriculture division where turnover increased 23 per cent to $969 million, notwithstanding slowed sales of fertiliser and animal feeds; retail household was up two per cent to $3.13 billion; while hardware added 10 per cent year-on-year for sales of $1.05 billion, notwithstanding that the latter segment was said to be under pressure.

"Wholesale hardware revenues were further affected by increased competition from existing and new entrants into the marketplace," said Holness in a statement accompanying the September earnings report.

To ramp up business in the final quarter, Holness says the promotional blitzes will centre on 'dressing up' the home and projects, but the company will also focus, he said, on reining in operating costs and better deployment of working capital.

"We will also continue our focus on customer service training and periodic measurement of customer satisfaction in order to assess overall effectiveness of our efforts," Holness said.

Hardware and Lumber is a $2.5 billion business by assets. It's a profitable operation but experienced substantially depressed profits in 2005 and 2006 when the hardware and construction sectors were hit by the 'faulty cement' crisis when quality controls derailed at the Rockfort plant of monopoly cement producer Caribbean Cement Company.

H&L used the opportunity to restructure its systems, which included a replacement of its inventory and customer information system that would better track demand to ensure a better fit with customer needs and products on Rapid TrueValue store shelves.

In 2007, the company recovered to quadruple net profit from $30 million to $133 million. This year, the company reported profit of $28 million in the six-month period, but the dismal third quarter erased five-sixths of it.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081031/business/business4.html

Junior stock market steers toward early 2009 roll-out

2008-10-31T09:21:00.000-07:00

Published: Friday October 31, 2008

Marlene Street-Forrest, general manager of the Jamaica Stock Exchange (JSE), has been selected by Senator Don Wehby to head a steering committee tasked to implement a junior stock market, the Finance Ministry said Thursday.

The junior exchange, to be managed by the JSE, will open up to small and medium companies the opportunity to raise capital on the equities market through public offerings.

The market, Wehby has said, offers a new opportunity for SMEs to develop. Such companies, which are usually owner-operated, have long found it difficult to access debt financing for their companies, which is often scarce and expensive.

Street-Forrest said in a late September interview that at least 10 companies were expected to list on the junior exchange at start-up.

Big board

The JSE itself has 39 ordinary stocks on its big board, and 18 preference stocks.

Wehby, minister without portfolio in the Ministry of Finance, expects that the junior exchange will become functional within five months, by March 2009. Thecommittee will have its first meeting next Tuesday.

The steering committee he has named comprises nine members who straddle the government services, the accounting, securities and legal fields (see list).

Cabinet approved the junior exchange on September 29, signalling that the regulatory hurdles had been cleared after years of planning.

"We believe that the Government has now put their money where their mouth is in encouraging the growth of small and medium size businesses," said Marlene Street-Forrest in an interview after the Cabinet decision was announced.

"Many companies have shown an interest ... and we expect up to 10 companies at start-up," she said.

The junior exchange is for companies with a capital base of between $50 million and $500 million.

To list, the company must identify a 'mentor', which is not necessarily a JSE listed company but a corporate broker with the necessary experience to guide a younger or smaller operation.

Fit and proper

The mentor must be approved by the Financial Services Commission (FSC) under the 'fit and proper' criteria established with the Securities Act.

Initially, the plan was for the companies to have 'sponsors' but it was thrown out.

"A 'sponsor' would have included a FSC approved investment professional, but the sponsor regime typically involves formal confirmation of the junior market company's compliance to the JSE," according to the JSE junior market working document.

"It is unlikely that any FSC approved investment house in Jamaica would be willing to take the liability risk arising from acting as a formal sponsor. So the exchange proposes to impose a lesser 'mentoring' requirement instead."

The junior listed companies can look for mentors within the 'SME development' sector, such as the Private Sector Development Programme jointly sponsored by the Government of Jamaica and the European Union or its Corporate Finance Brokers Unit, which helps small companies tap financing.

The junior market is expected to be guided by a similar set of rules as the JSE companies, but it is also expected that some procedures will be simplified, such as the filing of a prospectus and tax exemptions.

Exemption

Among the tax concessions are: a full income tax holiday for half of the incentive period, which is up to 10 years from the date of listing; and a 50 per cent income tax holiday for the remaining period.

The junior company will also be given an exemption from tax on dividends, transfer tax and stamp duty on transfer of shares on the exchange.

The company may have no less than 25 minority shareholders. And minority partners may hold no less than 20 per cent of the company's issued share capital.

Its prospectus for a share issue may, unlike JSE companies, take the form of a submission to the exchange or an upload to the JSE's website.

But like the main exchange, annual and quarterly presentation of financial reports are required.

Wehby sees the junior exchange as a way to broaden the stock market while offering capital to 'stimulate the development' of small companies.

The junior market company will be periodically assessed as to whether it can be graduated to the main JSE board, a movement that will be triggered by its market capitalisation.

Source:
Sabrina Gordon
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081031/business/business6.html
sabrina.gordon@gleanerjm.com

J Wray&Nephew GM steps down

2008-10-31T09:19:00.000-07:00

Published: Friday October 31, 2008

J Wray&Nephew's General Manager for Jamaican operations, Michael Benjamin has stepped down from that position after a year at the prestigious spirits company in what appears to be a management restructuring of the subsidiary of the conglomerate Lascelles deMercado.
Earlier this year Lascelles was acquired by Angostura, a subsidiary of Trinidadian powerhouse CL Financial for close to US$1 billion.

Speaking about the deal late last year, Executive Director of Angostura Holdings, Michael Carballo said: "What we want to do is merge all the Appleton and Wray&Nephew brands with the Angostura brands and list that new company on the Jamaica Stock Exchange (JSE). We are looking to create something like a Caribbean Diageo. The aim is to get to the point where something is not really rum unless it comes from the Caribbean, rather like Scotch whisky is only the real deal if it comes from Scotland."

Benjamin's role will now be assumed by J Wray&Nephew's managing director for Global Marketing, David McConnell. J Wray& Nephew has a complex management structure. The top boss is managing director of Lascelles de Mercado, William Mercado. Young David McConnell serves in the capacity as a joint CEO taking responsibility for the global marketing team, while Paul Henriques serves as managing director for production and agriculture. Three general managers report to David McConnell: a GM for local business, one for international and another global marketing. Roger Thompson, formerly of Red Stripe and Caribbean Broilers, has been recruited to help out with the international aspect.

Speaking with Caribbean Business Report last night, David McConnell said: "We felt there was a need to streamline our management structure given the uncertainty in the global financial markets. We have made one or two line managers redundant but there has been no widespread redundancies of our workers.

"We have to become leaner and I will be taking a more handson approach. I must take this opportunity to say that Michael Benjamin did a great job here and I thank him most sincerely."

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081031T000000-0500_141976_OBS_J_WRAY_NEPHEW_GM_STEPS_DOWN.asp

Lascelles sales boost Mayberry's profits

2008-10-31T09:18:00.000-07:00

Published: Friday October 31, 2008

Local brokerage house, Mayberry Investments saw a huge jump in its net profit for the nine-month period ended September 30th, 2008, driven by net interest income and net trading gain on investment.

According to unaudited results for the period under review, Mayberry - headed by chairman Christopher Berry - posted a net profit of J$766 million reflecting a 310 per cent increase on the J$187 million posted for the corresponding period last year. For the third quarter of this year, Mayberry posted a net profit of J$96.1 million, a marginal increase on the J$94 million posted for the same period last year.

According to CEO Gary Peart's executive commentary on these financial results, this profit growth was due to an increase of Mayberry's total operating income to J$1.2 billion compared to J$560 million for 2007, an increase of 117 per cent. Peart attributes the diversification of the company's revenue streams for the uptick in operating income. Realised income has increased by J$970 million over 2007.

Net interest income proved to be a winner for Mayberry with the brokerage posting a figure of J$358.5 million for the nine-month period ended 30th September, 2008. This repre-sents an 84 per cent increase on the J$195.2 million posted for the corresponding period last year.

Fees and commissions registered mixed fortunes. For the third-quarter period this revenue stream declined, coming in at J$13.1 million as opposed to J$18.3 million for the same period last year. The nine-month period painted a rosier picture. Here, Mayberry netted J$131.6 million, a huge increase on the J$56.6 million registered for the same period last year.

The sale of Lascelles De Mercado to Trinidad & Tobago's Angostura served as a boon to Mayberry, helping to bolster its financial performance this year. Here, net trading gain on investment brought in J$719.2 million for the nine-month period under review. For the same period last year, the figure was just J$51 million. Fixed-income trading activities helped to propel this segment in the third quarter of this year where Mayberry registered J$164.4 million as opposed to a negative 19.6 million last year.

As far as net interest income and other operating income was concerned, it was again a case of Mayberry faring better over the nine-month period than in the third-quarter period. For the third quarter of 2008, the net interest income and other operating revenue fell to J$218.4 million when compared to the correspon-ding period last year which came in at J$242.8 million. Over the longer stretch, the nine-month period, this year Mayberry posted a whopping J$1.2 billion whereas last
year that number was just J$560 million.

Like most of its competitors, Mayberry saw its administrative expenses rise to J$370.2 million for the nine-month period under review compared to J$320.7 million for the same period last year. Increasing operational cost may well have been a big factor here, in addition to rising staff costs brought on by spiralling inflation.

For the third quarter, it
would appear that Mayberry was able to curtail administra-tive spending, recording a figure of J$126.6 million, an eight per cent increase on last year's J$117.4 million.

Total assets increased by J$5.8 billion to J$27.2 billion for the nine-month period under review. Mayberry's CEO attributes this to increases in cash resources, investments and promissory notes and loans and other receivables. The loan portfolio jumped to J$1.3 billion, a 48 per cent increase on the J$856.6 million posted for the nine-month period last year. Mayberry made a provision for loan impairment of J$20 million, bringing its total provision to J$35 million.

The global financial raises the question, what will the likely impact be on brokerages such as Mayberry Invest-ments? Anticipating that question, Peart wrote in his executive commentary, "Con-sequent on the crisis in the world financial markets, management has taken a conservative outlook on the market. We have not experienced any impairment arising from the crisis; our portfolio is well diversified and we continue to exercise strict risk management practices to ensure our portfolio remains shielded."

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081031T000000-0500_141974_OBS_LASCELLES_SALES_BOOST_MAYBERRY_S_PROFITS.asp

Capital & Credit records big jump in profits

2008-10-31T09:16:00.000-07:00

Published: Friday October 31, 2008

The Capital & Credit Financial Group, headed by Ryland Campbell has, recorded un-audited after-tax profits of J$72 million for the quarter ended September 30, 2008 (third quarter), as opposed to J$33 million for the same period last year, thus representing a 118 per cent increase. This profit figure was generated from gross operating revenue of J$1.449 billion.

Its flagship subsidiary, Capital & Credit Merchant Bank also posted stellar net profits which came to J$72 million, a 191 per cent increase on the J$25 million recorded for the same period in 2007.

These results come against the background of a turbulent financial crisis gripping both the US and Europe which will have far-reaching consequences for the Jamaican financial landscape. Capital & Credit took steps to realign its revenue-generating activities and it seems to have paid off.

For the nine-month period the Group's profits increased to J$341.39 million compared to J$291.25 million for the same period last year. Executive chairman Ryland Campbell attributes the improvement in the group's bottom line to an increase in net interest income.

For the third quarter, the group's net interest income grew by 66 per cent to J$339 million contributing 79 per cent of total revenue. For the same period last year, net interest income contributed J$204 million. Commission and fee income jumped from J$28 million last year to J$40 million for the period under review . Capital & Credit staged a turnaround as far as foreign exchange trading was concerned, coming from a loss of J$19 million last year to generating J$25 million for the period under review. Year to date net income grew by 76 per cent to J$997.47 million, a significant increase on the J$567.41 million recorded for the same period in 2007.

Capital& Credit's total assets as at September 30, 2008 fell to J$49.83 billion from the J$57.83 billion recorded for the same period last year. It has made a concerted effort to expand its corporate and retail lines while acquiring higher-yield assets.

The merchant bank under the stewardship of CEO and president Curtis Martin also fared well, with year to date profits coming in at J$261 million, an increase of 20 per cent compared to the J$218 million for the corresponding period in 2007. The bank recorded gross operating revenue of J$625 million, a slight improvement on the J$616 million recorded for the same period last year.

For the nine-month period the merchant bank benefited from improved margins resulting in a 141 per cent growth in net interest income to J$628.40 million compared to J$260.98 million in 2007. Commissions and fees doubled this quarter to J$12.4 million from the J$6.8 million registered for the same quarter last year. Foreign exchange trading moved to J$19.8 million, a notable increase on the J$7.7 million bagged for the corresponding quarter of 2007.

With inflation on the rise it came as no surprise that staff costs at Capital & Credit Merchant Bank continue to trend upwards. For the period under review staff costs came in at J$83.4 million, a significant increase on the J$58.8 million posted for the three-month period last year. The bank's total assets as at September 30, 2008 stand at J$25.65 billion compared to J$32.28 billion in 2007. The bank's senior management puts this down to a focus away from low-yielding treasury activities and placing greater emphasis on corporate business lines.

Martin has chosen to look more to the bank's loan book portfolio and for the nine-month period under review, loan interest income registered a 29 per cent increase moving to J$757 million from the J$588 million posted for the same period last year.

For the third quarter of this year, the loan book portfolio saw a 19 per cent increase netting J$260 million compared with J$217 million for the same quarter last year.

Capital & Credit have turned things around and it is a far different story from a year ago. Speaking with The Business Observer last night, Capital& Credit Merchant Bank CEO and President, Curtis Martin said: "For more than a year now we have been shifting our business model from securities trading to net interest income and placing greater emphasis on core business. For the last two years 50 per cent of our revenue stream has been from securities trading. Recently there have been fewer opportunities in trading as prices continue to fall.

"Our foreign exchange trading department is now much better trained with greater focus and this has paid off for us. Our unit trust continues to do well bringing in about J$30 million a year."

Deputy Group President Andrew Cocking added: "Our remittance operation is running a little behind but we expect to break even or make a slight loss. You must remember we don't work with the likes of a Western Union although we have partnered with two Caribbean companies, namely ABI and Laparkan.

Capital & Credit International Inc, the Group's international broker, which handles US treasuries and such, is expected at the very minimum, to break even or should make a profit this year.

We have been focused on integrating the entire group and we have good momentum going into next year."

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081030T220000-0500_141962_OBS_CAPITAL___CREDIT_RECORDS_BIG_JUMP_IN_PROFITS.asp

Trinidad's Central Bank tightens credit

2008-10-31T09:14:00.000-07:00

Published: Friday October 31, 2008

As the Trinidad & Tobago Central Bank continues to make it more expensive for commercial banks to lend money, there has been a slowdown in credit in the twin island republic.

And with loans more expensive now, a leading banker has suggested that Trinidadians are becoming more conservative in how they borrow money and spend on credit, but they may shortly have to pay even more for loans.

Private sector credit expansion by the financial system has been slowing within recent months because of tighter monetary policy measures, the Central Bank said in a statement.

"The 12-month increase in credit expansion was 13.7 per cent in August, compared to a rate of increase in excess of 20 per cent at the beginning of the year," the Bank stated.

"Consumer and business credit posted year-on-year increases of 11.6 per cent and 12.6 per cent respectively in August, while real estate mortgage loans rose to 18.4
per cent in the 12 months to August."

The real estate market in the country has slowed within recent months, as consumers found it difficult to repay monthly mortgages for million-dollar homes which were hundreds of thousands of dollars cheaper a couple of years ago.

Last Friday, the Central Bank announced that beginning November it will increase the cash reserve requirement for commercial banks to 17 per cent, up from 15 per cent, to dampen bank credit expansion and absorb excess cash in the financial system.

Commercial banks increased lending rates several times this year, as the Central Bank raised the reserve requirement the banks must deposit.

Banks recently announced increases in the prime lending rate to 13 per cent.

Richard Young, managing director of Scotiabank, acknowledged the slowdown in private sector credit expansion.

He said the latest increase in the cash reserve requirement suggested that the Central Bank believed it could suppress demand and this was the strategy it intended to pursue.

Young, in an interview on Monday, said that even as infrastructure projects and spending continued in the country, it was apparent that the public was adopting a "more conservative approach" toward taking credit.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081030T220000-0500_141957_OBS_TRINIDAD_S_CENTRAL_BANK_TIGHTENS_CREDIT.asp

Caribbean exports rise in spite of global crisis

2008-10-31T09:09:00.000-07:00

Published: Friday October 31, 2008

The repercussions of the global financial crisis are taking its toll throughout the world, and Latin America and the Caribbean are no exception. However, in spite of the unfavourable prospects, exports from the region will continue to increase during 2008 at an estimated 23 per cent, according to the Economic Commission for Latin America and the Caribbean (ECLAC).

This is one of the conclusions of the report Latin America and the Caribbean in the World Economy. 2007 Edition: 2008 Trends, released Monday in Mexico City by ECLAC Executive Secretary Alicia Bárcena. The report estimates export volumes to rise two per cent this year, while the volume of imports will increase nine per cent. The value of imports will go up 22 per cent.

Higher commodity prices during the first semester of 2008, particularly of metals and fuel, led to a 25.5 per cent increase in export value, much higher than the 10 per cent rise during the same period last year. With this, the trade surplus is expected to reach US$51 billion.

However, the global slowdown will have negative effects on the region. The drop in commodity prices during the third quarter this year and falling demand for Latin American products, primarily from the United States, and to a lesser extent, from Japan and the European Union, have already impacted the region's economies during the second semester this year, and will lead to lower growth rates and less favourable trade balances in 2009.

According to ECLAC, the world scenario is forcing Latin America and the Caribbean to face short and long-term challenges. In the short run, and as a result of international financial and economic turbulence, governments will have to deal with less access to external financing, higher interest rates, hard-hit stock exchanges and a shift of capital to safer destinations and into less risky assets, as well as lower remittances and foreign direct investment. As a result, credit lines for exports and investment plans will be restricted, limiting growth.

To avoid contagion from industrialised economies, governments must ensure liquidity in the financial system and reinforce prudent supervision of the soundness of the banks and financial institutions with the most links to international financing and risky operations.

In order to deal with external shocks, says ECLAC, governments should strengthen their countercyclical macroeconomic policies, maintain sound fiscal accounts and monitor external account trends. In the medium term, governments of countries that maintain favourable terms of trade should improve the management and use of additional income from higher commodity prices by promoting activities that boost competitiveness, human resource development and export diversification.

The world economic slowdown may ease inflationary pressures, which will tend to decrease during the rest of 2008 and 2009. However, the aim of curbing inflation should not be neglected.

The report underscores that the current financial crisis and the menace of recession for 2009 pose an enormous challenge to the soundness of the economic reforms the region has implemented in recent decades. Thanks to these reforms, the region is relatively better prepared to face this adverse scenario.

These reforms must be maintained, particularly those contributing to fiscal responsibility and control of inflation, trade openness - especially intraregional trade - and market diversification, debt reduction and accumulation of international reserves. These assets will allow Latin America and the Caribbean to deal with a potential recession in the United States and the European Union on more solid ground.

It is difficult to fathom that the world economy could remain the same after 2008, says the report. Changes need to be made in terms of financial regulation, energy efficiency, the search for renewable energy sources and the provision of international funds to reduce hunger and increase food supply in the poorest countries. Moreover, if the world were to fall into recession next year, efforts to achieve the Millennium Goals could be seriously compromised.
Doha Round

The ECLAC report also analyses the failure of the last "mini-ministerial meeting" of the WTO Doha Round in July 2008. The uncertainty about the capacity of the protagonists of the negotiations to make the multilateral trade system more governable may serve as justification for regional policies and bilateral negotiations, weakening the positive complementarity between multilateralism and regionalism.

Once again, questions are being raised about the ability of WTO to handle the international agenda of the future. With this, the Doha Round and its pro-development agenda will be delayed until late 2009 or 2010 at the earliest.

It is in times of international crisis when the stabilising and orderly trade rules provided by the WTO - which have been seriously questioned in recent years - are most needed to prevent the real effects of the financial crisis from worsening and spreading. In this regard, reactivating the Doha Round negotiations and concluding them soon would be a very good sign to a world economy craving good news.

ECLAC assures that Latin America and the Caribbean could strengthen their internal consensus in order to play a more prominent role in the Doha Round, which could facilitate the negotiation of other trade talks, such as those with the European Union.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081030T210000-0500_141955_OBS_CARIBBEAN_EXPORTS_RISE_IN_SPITE_OF_GLOBAL_CRISIS.asp

Fed cuts key rate to 1% - Extends US$30b credit line to foreign banks

2008-10-30T04:16:00.000-07:00

Published: Thursday October 30, 2008

The Federal Reserve has slashed a key interest rate by half a percentage point as it seeks to revive an economy hit by a long list of maladies stemming from the most severe financial crisis in decades.

The central bank on Wednesday reduced its target for the federal funds rate, the interest banks charge on overnight loans, to one per cent, a low last seen in 2003-2004.

The funds rate has not been lower since 1958, when Dwight Eisenhower was president.

New lines of credit

The Federal Reserve also said Wednesday it will supply new lines of credit to the central banks of Brazil, Mexico, South Korea and Singapore to help those countries deal with the global credit crisis.

The Fed says it will provide up to US$30 billion to each of the central banks.

It is the latest in a series of "swap" arrangements where the Fed provides dollars in exchange for reserves of the other nations' currencies.

The Fed said Wednesday that the new credit lines, like those already established with other countries, were designed "to help improve liquidity conditions in global financial markets" by increasing the global availability of US dollars.

Second reduction

The rate cut marked the second half-point reduction in the funds rate this month.

The Fed slashed the rate by that amount in a coordinated move with foreign central banks on October 8.

In a brief statement explaining Wednesday's action, the Fed said the "intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and business to obtain credit".

The central bank said it had room to lower rates because the spreading economic weakness was lowering the risks that inflation would get out of control.

Dramatic declines

Indeed, the weakness has caused dramatic declines in the price of oil and other commodities.

While many economists believe the US has already fallen into a recession, they think the aggressive efforts by the Fed to cut rates and take other actions to unfreeze credit markets will keep the country from plunging into a prolonged and deep downturn.

The Fed's action was expected to be quickly followed by a reduction by commercial banks in their prime lending rate, the benchmark for millions of consumer and business loans, by a similar half-point.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081030/business/business1.html

Firms urged: Take stock

2008-10-30T04:14:00.000-07:00

Published: Thursday October 30, 2008

BARBADIANS NEED TO put aside their complacency, face the reality of the global financial crisis and plan for the worst.

This clarion call was made by chairman of the Barbados Private Sector Association, Ben Arrindell yesterday, as he painteda graphic and gloomy picture of what could happen to the economyif the Government, private sector and other stakeholders didn't take stock.

Addressing a full house of participants at the Public/Private Sector Consultation at the Lloyd Erskine Sandiford Centre yesterday, he said "some of you may regard the picture I have painted of the challenges that we face as extremely gloomy. If so, that was deliberate because I believe we need to put aside our complacency, face up to reality, and plan for the worst case scenario".

Arrindell said yesterday's talks not only needed to proactively examine the economic impact of the global crisis, but the social impactas well, particularlyas it related to the disadvantaged.

He said the United Nations Trade And Development Report 2008 had predicted the global financial crisis "could become even more difficult if large movements in the exchange rates of major currencies add to the turmoil in the financial market" – a risk that had increased in the first half of this year.

He said Barbados could, as a result, take its worst hits in construction, tourism and international business, with "a severe slowdown" expected in the construction industry next year because of the cancellation of several projects.

"This in turn could result in large job losses and a falloff in foreign currency earnings," he said.

He added that in tourism, Barbados was likely to experience a reduction in visitor arrivals, and although many visitors had already pre-paid and would come for the winter season,a major decline in bookings was expected for next year.

"I understand from the Barbados Hotel and Tourism Association that bookings for the coming season are currently down by 15 per cent to date and the expectation is that those will reduce to ten per cent per month for the rest of the season," he stated.

He added that those visitors who come would be likely to spend less, particularly those from the United Kingdom which is one of Barbados' main markets and which is being crushed by job losses, a credit squeeze, mortgage foreclosures, investment losses andthe falling value of the pound sterling.

"Being the major driver of the economy, a severe impact on tourism will have a knock-on effect on various other parts of the economy: retail and distribution, particularly for small businesses," he explained.

Arrindell also predicted challenges for international business, noting that this sector would be influenced by the possible election of Barack Obama as US president, and the announcement last week by 17 Organisation for Economic Cooperation and Development (OECD) countries that they would be calling on the OECD to reinvigorate part of its harmful tax intitiative.

Noting there was a lack of public awareness of the potential impact of the global crisis on Barbados, the private sector head called on Government to help the construction industry by accelerating its capital works project with the help of the private sector; and to consider a temporary relaxation of the exchange control policy in relation to the ability of local banks to lend to foreign investors who are investing in large projects here.

Noting that the UN report had advised co-operation among trade unions, employers, governments and central banks in order to prevent a wage inflation spiral, Arrindell described Barbados as "lucky to have the mechanism of the Social Partnership" through which to address these issues.

"I hope we can start to formulate plans for not only lessening the adverse impact of the current crisis on our society, but also to examine ways in which we can work together to create the kind of investment and social climate that will serve to continue to stimulate both foreign direct investment, greater levels of entrepreneurship, creativity and competitiveness within our local business community," he said, calling for high productivity, efficiency, fairness and trust.

Source: Nation Newspapers
http://www.nationnews.com/story/331862111488622.php

Exports could go up 30% should transportation cost drop 10%, says IDB

2008-10-29T05:29:00.000-07:00

Published: Wednesday October 29, 2008

The Inter-American Development Bank (IDB) says that Jamaica, as part of the Latin American region, could increase exports up to 30 per cent if transportation costs were lowered by 10 per cent.

The IDB says that a shift away from only negotiating reduced tariffs to one focussing on reducing transportation costs will lead to greater exports.

"Politicians need to look at transportation costs, as we can see. that it is now more important than tariffs," said Juan Blyde Inter-American Development Bank trade economist to public and private sector workers at the National Productivity Conference 2008 in Jamaica yesterday.

Blyde was referring to an IDB report released last month entitled 'Unclogging the Arteries: A Report on the Impact of Transport Costs on Latin American and Caribbean Trade'.

According to the report, "A 10 per cent reduction in freight costs in nine Latin American nations - including Brazil, Argentina, Chile, Colombia and Bolivia - would allow exports to the United States to soar 39 per cent on average, the study said. In contrast, exports to the United States from those countries would rise less than two per cent on average if import tariffs were reduced 10 per cent".

The statistics focus mainly on latin America, but Blyde said the findings apply to Jamaica. Essentially that the region is not taking full advantage of its logistical proximity to US.

The IDB cites as reasons: Poorly maintained roads; congested airports and ports; and inefficient custom services which increase shipping time and costs.

Over the decade, countries like China and India have reduced their transport costs in shifting from primary to secondary products. "One dollar of iron is going to be cheaper to transport than $1 of semiconductors because it weighs less," argued Blyde.

He also stated customs in Jamaica takes too long to clear products which affects productivity and adds to cost: "In Jamaica, it takes 21 days for products to be exported and 22 days for products to be imported which does not include the time to ship it."

Said the IDB: "The emergence of China and India as leading exporters in the world economy coupled with the growing fragmentation of production and time-sensitiveness of trade, has reshaped Latin America's comparative advantages and has given investments in the transport infrastructure an unprecedented strategic importance to the region. This new reality imposes heavy penalties for Latin American economies with high transport costs."

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081029T010000-0500_141907_OBS_EXPORTS_COULD_GO_UP_____SHOULD_TRANSPORTATION_COST_DROP______SAYS_IDB.asp

Johnston to be inducted in PSOJ hall of fame

2008-10-29T05:20:00.000-07:00

Published: Wednesday October 29, 2008

Charles Johnston, chairman of Jamaica Fruit and Shipping Company and of the Jamaica Producers Group, will be officially inducted into the Private Sector Organisation of Jamaica (PSOJ) Hall of Fame tomorrow evening, making the 15th inductee since inception.

The Private Sector Hall of Fame was established by the PSOJ to honour Jamaican businesspersons who have made significant contributions to the development of the private sector and the country, and has been in place since 1992. Nominees should have served in Jamaica's private sector for at least 25 years. Awards are made annually and made only to individuals.

Johnston has been at the helm of Jamaica Fruit and Shipping Company Ltd since 1976 and has successfully steered the company into the 21st century with a course steadily set for the future. He has proved himself as a pioneer in the local shipping industry, expanding the Jamaica Producers Group into the UK market and acquiring a Dutch juice company recently.

A graduate of the Wharton School of Finance, he has led the diversification of JPG into a Global food trading company, and aims to develop new marketing opportunities outside the UK.

Johnston was honoured with the presentation of the Order of Distinction, Commander Class, by Governor General Professor Kenneth Hall in 2006; this for his contribution to agriculture and specifically to the banana Industry.

The Jamaica Freight & Shipping of the 1980s represented three companies -Jamaica Producers Shipping Company among them. The Group now represents many more lines, contributing to approximately 60 per cent of the cargo passing through Kingston Wharves terminal, and owns Shipping Services Stevedoring.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081029T000000-0500_141902_OBS_JOHNSTON_TO_BE_INDUCTED_IN_PSOJ_HALL_OF_FAME.asp

Big problems needs big solution

2008-10-29T05:18:00.000-07:00

Published: October 29, 2008

Until early September the international financial crisis had had only limited impact on the emerging debt markets, despite the very sharp falls in the emerging stock markets.
As a consequence, and partly due to good timing, over the past year since the election, Jamaica had been able to borrow money twice from the international capital market, a major achievement considering its low rating.

Since the collapse of Lehman Brothers in mid-September however, the full force of the international financial crisis has begun hitting the Jamaican economy, in common with other hitherto unscathed emerging markets. The international capital market is now essentially closed for virtually all emerging market issuers, even for the better credits.

Last week Thursday US-based Trinidadian broker Mark Scott noted with respect to emerging markets "Panic is in the air. EM Mutual funds and hedge funds are facing massive redemptions, which is forcing selling into a market with no bid. Everything is getting thrown over the side."

The depth of the fall in broader emerging debt prices is best captured by Brazil. As late as the end of last month, President Lula appeared to believe the crisis was a US phenomenon that would not affect Brazil. Commenting specifically on the Brazilian 7.125 per cent coupon bonds due in 2037 bonds last Thursday, Scott noted these benchmark bonds were above 110 (well above their issue price) all year up to September, and were still 103 at the beginning of this month.
Over the last two day, however, (up to last Thursday) they had fallen 17 points to 68, and traded as low as 66 on Thursday morning. He noted that the yield at the time was over 10.5 per cent, for a total price drop this month of 35 points.

Jamaica's internationally traded debt has seen similar falls over the same period. Commenting on the current situation yesterday, Oppenheimer's Greg Fisher notes:

"My gut tells me that we are finally seeing some sort of bottoming process here with respect to the GOJ curve in general." Fisher bases his assessment on the fact that "the shorts have all covered and the curve is now left with local buying with not too much selling abroad".

Fisher believes that the key as to whether this is a price bottom is "How much is actually left out there in non-Jamaican hands?" and guesses that the only Jamaican US dollar Eurobonds not mainly held by the Jamaicans are the 2019s and 2039s.

Despite this externally driven bond market volatility, the Jamaican currency has so far been relatively stable, neither seeing the falls the pound and Euro have seen against the dollar over the past few months, nor having suffered from the major currency/debt crisis driven falls seen in a number of emerging market countries eg Hungary and Pakistan.

There is no room for complacency, however. The huge external economic shock from the massive rise in food and energy prices over the past 12 months since the election has led to a sharp reduction in consumer purchasing power, and an emerging squeeze on the profitability of many businesses.

Over the past six months, this external shock has been compounded by the internal shock of the demise of the Ponzi schemes. The immense financial strain that the business sector is currently under from falling consumer spending has now been compounded by financing stresses from a reduction in working capital eg overseas supplier credit, whilst local banks are also becoming more reluctant to lend as their non performing loans eg credit cards, are rising sharply.

Some importers are already unable to finance the increased working capital now required, and may be forced to liquidate their inventories to meet increased rent, electricity and other costs, destroying their chances of staying in business, and paying taxes. The current high level of duties means that many goods are now beyond the reach of hard-pressed Jamaican consumers, a situation likely to be worsened by any further weakening of the Jamaican dollar.

Reduced consumer purchasing power also means that September will probably mark the end of the out performance of local tax revenues against budget, even without the expiry of the tax amnesty in October. The next six to twelve months will instead be one of the most difficult periods in Jamaica's recent financial history, where businesses will have to choose between paying tax penalties, the light or wage bill, and closing.

In the light of the success of the tax amnesty in bringing in 4,000 new taxpayers, and the extraordinarily difficult economic conditions now emerging, the government may be well advised to extend the period of the amnesty to the next budget.

Jamaica is of course not the only country to have faced tough times. Last week former Trinidad Finance Minister Wendell Mottley, now managing director of investment banking for the region at Credit Suisse, noted that Jamaica has "a big problem so you must have a big solution". Mottley, who was minister of finance in the early 1990's, has just written a very timely book entitled "Trinidad and Tobago Industrial Policy 1959 - 2008". Mottley is widely seen as the minister of finance who put Trinidad on the path to its current economic success through a combination of taking extremely tough and courageous decisions on spending and public sector employment, combined with an innovative and far sighted industrial policy. He also presided over the liberalisation of Trinidad's exchange controls, which occurred a little under two years after Jamaica abolished exchange controls, but unlike Jamaica did not involve any fall in the value of the Trinidad dollar.

In a short interview for the Business Observer after his presentation at NCB's function last week, Mottley noted that he believed "Governments have a critical role far beyond just creating the right macro-environment".

In addition to their responsibility for creating macroeconomic stability, Mottley's own experience suggests governments must focus on promoting foreign investment, including the need for "some kind of picking" of the key areas to push, which in Trinidad's case was clearly energy.

To ensure the success of their investment promotion efforts, the Trinidad Government appointed one man for foreign investors to deal with. This investment "Czar" was "operating in a structured fashion", supported at the Cabinet subcommittee level by an "interlocking directorate" with the ability to straighten out the road blocks faced by foreign investors in areas such as water, electricity, and the ports.

The third critical attribute was a sense of urgency. In the Trinidad of the early 1990s, 80 cents out of every budget dollar was going to pay debt service and public sector wages, leaving very little for everything else. In order to create the fiscal space for needed infrastructure and other investments, Mottley successfully negotiated with the Paris Club to restructure Trinidad's debt. Mottley described Jamaica today as "being in pretty much the same pickle" as Trinidad was at the time. In his view, our Government needs to actively engage in getting things done, focusing on implementation so things actually happen.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081028T230000-0500_141876_OBS_BIG_PROBLEMS_NEEDS_BIG_SOLUTION_.asp

Barbados says it could be hurt by America's woes

2008-10-29T05:15:00.000-07:00

Published: Wednesday October 29, 2008

The Central Bank of Barbados has warned that the growing likelihood of a recession in the United Sates poses danger to the island's economy.

"As the US economy slows or goes into recession as it copes with these difficulties, the result could be a slowdown in the growth of the Barbados economy going forward," central bank governor Dr Marion Williams said Wednesday.

The problem would be compounded by a recession in the United Kingdom and some European economies , impacting negatively on Barbados' tourism prospects and investment inflows.

Loss in value realised

"However, the Barbados financial system should remain sound, although there may be some loss in value realised and unrealised on US dollar fixed income securities held by financial institutions, including the central bank, as securities prices in the US markets tumble," the central bank boss said.

Williams noted that efforts by the US government to provide a US$700 billion bailout to the troubled businesses could also affect the island in the longer term.

President George Bush, who says the massive government intervention is needed to stave off economic catastrophe, planned to address Americans Wednesday night about how the crisis affects them, said White House press secretary Dana Perino.

The Barbados Central Bank governor said that given the high cost of that rescue, it was expected there would be larger US fiscal deficits, a possible further depreciation in the US dollar and a likelihood of a longer US recession than anticipated.

Global slowdown

"The likelihood of a global slowdown will also become greater in those circumstances. However, given the healthy level of Barbados' foreign exchange reserves, this is unlikely to be significant for Barbados given the level of official borrowing at this time, but foreign investors into Barbados, who were depending on borrowing on the international markets may be put on pause," she said.

Williams suggested that Barbadian investors holding direct deposits with commercial banks in the US could take comfort from the fact that the Federal Reserve Bank appears to be taking a protective stance and is unlikely to allow any large US commercial bank to fail.

The central bank governor said the one positive outcome of the financial situation was that if there is a global slowdown as expected and, therefore, a lower demand for oil, prices for that commodity should drop.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081029/business/business6.html

IMF expects St Lucia to grow again

2008-10-29T05:14:00.000-07:00

Published: Wednesday October 29, 2008

The International Monetary Fund (IMF) says although economic activity was 'flat' in St Lucia in 2007, growth is likely to accelerate over the next two years.

The IMF says agriculture, the tourism sector and related support activities would spur the economic growth in 2008 and 2009.

The Washington-based financial institution noted, however, that while medium-term growth prospects are favourable, risks were "tilted to the downside given the uncertainties in the external environment, in particular with regard to the effect of energy price increases on tourist arrivals".

It said that it had considered that the reforms envisaged by the authorities, aimed at strengthening the tourism infrastructure, improving the investment climate and diversifying exports would broaden the bases of economic growth and reduce exposure to external shocks.

The IMF said it welcomed the recent improvement in fiscal performance and stressed the need to maintain a primary surplus to ensure debt sustainability, and to help dampen inflationary pressures.

Call for broader tax base

The financial institution has called for a broadening of the tax base, along with stepped up preparations for the introduction of the Value Added Tax (VAT), and has urged the Stephenson King administration to follow through on commitments to introduce a "more flexible retail fuel-pricing mechanism to achieve greater pass-through of world oil price increases, as well as market valuation-based property taxation".

The IMF said that achieving fiscal and debt sustainability would also require greater prioritisation of capital spending, limiting the civil service wage bill and enhancing debt management, noting that the acceleration in inflation appears to be due largely to the high prices of imported food and fuel and the ongoing depreciation of the US dollar.

Given the negative impact of inflation and the erosion of trade preferences on the purchasing power of the poorest segment of society, the IMF welcomed the government's plan to sharpen its poverty-reduction programmes and commended the authorities' efforts to strengthen social safety nets.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081029/business/business7.html

New insurance product for disabled credit union borrowers - Cuna Mutual will pay up to $1.2 million on debt

2008-10-29T05:13:00.000-07:00

Published: Wednesday October 29, 2008

Cuna Mutual Group, which specialises in insurance coverage for Jamaican credit unions and cooperatives, has launched a new product that will provide a cushion to borrowers who become temporarily disabled and can't meet their payments while helping to protect the portfolios of lenders.

"It reduces delinquency ratios and costs associated with delinquent accounts," said Nicola Johnson Young, Cuna Mutual's account relations managers in touting the policy at its launch last week.

There are 46 registered credit unions in Jamaica with approximately 932,000 members and over $38 billion savings and $33 billion in loans insured under various loan protection and savings insurance contracts. The default rate on credit loans around five per cent.

The new Cuna Mutual policy will prevent institutions having to transfer to the bad debt and columns loans that would hitherto not be serviced because borrowers become temporarily incapacitated and without incomes.

Cuna, under the programme, provides credit unions and co-ops with a master policy into which borrowers are enrolled. To be eligible, a borrower must be no older than 65, with a loan that is to be repaid in no less than six months but a maximum of 10 years and should not be in delinquency for more than three months.

In exchange for this coverage, the insured borrower pays a premium of $2.75 for every $100 of loan cover. In the event of the borrower becoming disabled, Cuna Mutual undertakes to repay the loan at up to $50,000 a month for a maximum of two years. In other words, Cuna Mutual would pay out over a 24-month period a total $1.2 million.

Protection from delinquency

"It offers protection from the likelihood of delinquency in the event a member should become temporarily disabled," said David Wan, Cuna Mutual's country manager.

Prior to the launch of the product a pilot run was done among eight of the 46 credit unions in Jamaica. Six of the pilot group have already signed contracts to take a master policy. Wan said that credit unions will be given an administrative reimbursement of between eight and 10 per cent of the accumulated monthly premium to administrate the policy.

He projected that 3,700 credit union members would enrol in the first year.

"From our research, 37,500 accidents happen every year translating into 102 per day requiring hospital visits," Wan said. "From this we have estimated that we can get at least 10 per cent, which is 3,700 enrolling in the first year of operation."

Cuna Mutual brought in just a little over $600 million in revenue last year and has projected revenue to climb to $800 million at the end of this year.

Life saving plan

"The payment protector further augments the coverage offered under the loan protection and life saving plan," Wan said.

The Family Indemnity plan (FIP) and the Golden Harvest savings plan are two of Cuna Mutual's most noted products offered to the societies.

But without giving specific data Wan said that the Golden Harvest has not build up to the level of the FIP. His projections for the end of this year put FIP to $600 million and Golden harvest to $50 million.

To date over $207 million in claims has been settled under the FIP. Overall, Cuna Mutual Insurance Society has total sum insured of $86 billion.

Source:
Sabrina Gordon
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081029/business/business3.html
sabrina.gordon@gleanerjm.com

Group slams PM's decision to sign Economic Partnership Agreement

2008-10-29T05:11:00.000-07:00

Published: Wednesday October 29, 2008

The Civil Society Network of St Lucia (CSNS) has criticised the decision of Prime Minister Stephenson King to sign the controversial Economic Partnership Agreement (EPA) with Europe.

CSNS President Flavia Cherry said she had hoped that the government would have had more consultation with the public about the accord that had been negotiated on behalf of the Caribbean forum (CARIFORUM) countries by the Barbados-based Caribbean Regional Negotiating Machinery (CRNM).

Last week regional leaders, including King, met in Barbados to discuss the initiative and, with the exception of Guyana, agreed to sign the accord before the October 31 deadline.

St Lucia was among a handful of Caribbean Community states that had previously raised concerns about the agreement, but King later told reporters that those issues, including the future of the vital banana industry, had been addressed.

Government blamed

But Cherry said that the agreement which would have a significant impact on the lives of St Lucians should have been discussed more and blamed the government for refusing to "consult with constituents on the ground, and say this is what is being proposed, what do you think or how do we best engage with the EPA.

"I think it is a shame what is happening to us, that people should feel so empowered to sign something on the people's behalf, yet also feel that they do not have to even explain what is it that they intend to sign," she added.

But Cherry said that she was still optimistic that the government would listen to arguments from other sectors before signing the accord.

"I think the fact that the governments have indicated their intention to sign, that does not preclude civil society and concerned citizens from saying to our leaders what we think about the EPA agreement, including what we think of them who are prepared to sign us over under such an agreement with a refusal to consult with those who have shown some interest in that agreement.

"It's a real sad day for us, but I believe that the fact that the agreement is not yet signed still leaves a window of opportunity for us to continue hammering on the issue in the hope that the government can again change its position on signing the agreement," Cherry added.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081029/business/business8.html

Cable and Wireless eyes Nov 15 for launch of 3G network

2008-10-29T05:07:00.000-07:00

Published: Wednesday October 29, 2008

Cable and Wireless Jamaica (C&WJ) is to roll out its cutting edge 3G cellular network on November 15, according to a top executive at the one-time monopoly telecoms.

Speaking at the Private Sector Organisation of Jamaica's Job Creation Awards ceremony at the Terra Nova hotel in St Andrew yesterday, C&WJ's senior vice-president of business sales, Leroy Reid, announced the rollout, but did not provide details of the launch that will be done on a phased basis, starting with the Corporate Area, St Catherine and St Thomas.

Errol Miller, C&WJ's vice-president for corporate communication and corporate affairs, confirmed that the new service would be launched next month when contacted yesterday.

"That, at this time, is our planned launch date, (but it will be) before the end of November," he told Wednesday Business.

C&WJ's launch of its 3G network, which provides mobile users with cutting edge features, such as video conferencing calls, multimedia emails, faster transfer of files and TV streaming, among other features, is expected to come out near or around the same time as América Móvil's - the new com-pany that acquired the Miphone network.

C&WJ is spending US$30 million ($2.1 billion) to upgrade its network to 3G which it contracted Ericsson to do.

President and CEO Phil Green had said the company would take three years to build out the techno-logy first in Kingston and St Andrew, St Catherine and St Thomas, then to Montego Bay and the northcoast, thereafter the remaining parishes.

High-speed transmission

The 3G network operates much like broadband Internet, offering high-speed transmission up to 14 megabytes per second.

With the new technology, the once-monopoly player is expecting to slice off as much as 15 per cent more market share in two years. It currently has about 660,000 mobile customers, compared to archrival Digicel, which controls the lion's share with 1.9 million customers.

C&W is also expected to change its name to LIME, but that has not yet been confirmed by the company.

"We have been having some consultations with our staff and as soon as we are ready, we will go public," Miller said yesterday.

But with the entrance of América Móvil in the Jamaican market, it could prove even more difficult for C&WJ to achieve its target. América Móvil, operating as Claro is looking to shake up the market when it launches its 3G network next month. It has promised to slash mobile rates by as much as 50 per cent as well as offer exclusive handsets such as the popular Apple iPhone.

Source:
Dionne Rose
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081029/business/business2.html
dionne.rose@gleanerjm.com

Mortgage interest rates to be cut

2008-10-29T05:06:00.000-07:00

Published: Wednesday October 29, 2008

MORTGAGE interest rates are soon coming down.

Central Bank Governor Dr Marion Williams announced yesterday that commercial banks had agreed to drop all lending rates including interest on home construction loans by 0.5 per cent.

The interest rate reduction will also be applied to credit cards and personal loans, she said.

At a Press conference at the Tom Adams Financial Centre to review the economy's January-September performance, Williams said however that people with fixed rate mortgage contracts may have to wait some time see a reduction.

The Governor also disclosed that the last minimum deposit interest reduction which usually leads to a drop in interest on loans, was imposed because borrowers were showing signs of "stress".

The island's lead economist said, "Borrowers are experiencing some stress in meeting their obligations and the reduction in interest rates will help to prevent some of the defaults that are possible.

"We have indications that banks are doing more provisioning [for bad dept] and this is usually an indication that there may be an increase in late payments and so on. We want to stop that from happening."

Source: Nation Newspapers
http://www.nationnews.com/story/312026458266127.php

Harder to borrow

2008-10-29T05:04:00.000-07:00

Published: Wednesday October 29, 2008

As the Central Bank continues to make it more expensive for commercial banks to lend money, there has been a slowdown in credit in Trinidad and Tobago.

And with loans more expensive now, a leading banker has suggested that Trinidadians are becoming more conservative in how they borrow money and spend on credit, but they may shortly have to pay even more for loans.

Private sector credit expansion by the financial system has been slowing within recent months because of tighter monetary policy measures, the Central Bank said in a statement.

"The 12-month increase in credit expansion was 13.7 per cent in August compared to a rate of increase in excess of 20 per cent at the beginning of the year," the Bank stated.

"Consumer and business credit posted year-on-year increases of 11.6 per cent and 12.6 per cent respectively in August, while real estate mortgage loans rose to 18.4 per cent in the 12 months to August."

The real estate market in the country has slowed within recent months, as consumers found it difficult to repay monthly mortgages for million-dollar homes which were hundreds of thousands of dollars cheaper a couple of years ago.

Last Friday, the Central Bank announced that from November, it will increase the cash reserve requirement for commercial banks to 17 per cent, up from 15 per cent, to dampen bank credit expansion and absorb excess cash in the financial system.

Commercial banks increased lending rates several times this year, as the Central Bank raised the reserve requirement the banks must deposit.

Banks recently announced increases in the prime lending rate to 13 per cent.

Richard Young, managing director of Scotiabank, acknowledged the slowdown in private sector credit expansion.

He said the latest increase in the cash reserve requirement suggested that the Central Bank believed it could suppress demand and this was strategy it intended to pursue.

Young told the Express in a phone interview on Monday that even as infrastructure projects and spending continued in the country, it was apparent that the public was adopting a "more conservative approach" toward taking credit.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161394140

T&T Stock Exchange implements rule change

2008-10-28T04:02:00.000-07:00

Published: Tuesday October 28, 2008

The T&T Stock Exchange yesterday implemented a rule change to prevent small transactions from affecting the prices of stocks.

The change to Rule 207 will set volume thresholds at which price changes can take place.

For some time there had been consternation in the investing community over the ability of small transactions to cause big changes in the price of a stock.

The transaction which triggered the rule change happened four Mondays ago on October 6, when three trades in shares of Republic Bank Limited amounting to 365 stock units caused the price of the bank’s stock to fall by $9.20 cents (9 per cent), wiping out $1.5 billion of the bank’s market capitalisation.

In a statement, the TTSE said those kinds of price movements were “a phenomenon common to most small illiquid markets,” but “There is little doubt that such transactions erode public confidence in the exchange and the market.”

Under the new system the price of a stock costing up to $4.00 can only be changed up or down on a volume of at least 5,000 shares of that stock. The price of a stock costing between $4.01 and $10.00 can only be changed after 3,000 stocks are traded; for a stock priced between $10.01 and $20, the volume which would trigger a price change would be 2,000; for a stock priced between $20.01 and $50.00, there must be trades of 1,000 stocks before the price can change and in the case of a stock priced at $50.01 and above, 500 shares must change hands before a price change is registered.

This system is called the “board lot” and the exchange said it will not affect how shares are traded, only the closing price of the stock. It said a broker can still trade as little as one share, if necessary, but that such a trade will not be able to change the closing price of the stock.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business2.html

Watch out for higher interest rates, says analyst

2008-10-28T03:59:00.000-07:00

Published: Tuesday October 28, 2008

General manager of Caribbean Money Market Brokers Securities and Asset Management Limited (CMMB), Brent Salvary, said yesterday that the Central Bank of T&T’s recent attempt to absorb excess liquidity in the local economy will not neutralise the effects of government spending.

Salvary made the comment in an interview with the T&T Guardian at his office at CMMB, Richmond Street, Port of Spain.

He was commenting on last Friday’s “Repo” rate announcement by the Central Bank in which the bank increased the reserves which commercial banks are required to hold at the Central Bank from 15 per cent to 17 per cent of prescribed liabilities with effect from November 5.

In making the announcement, the Central Bank said that the country’s inflation rate rose to 14.8 per cent at the end of September, up from 13.5 per cent at the end of August.

Salvary said that net fiscal injections into the domestic economy needed to be curbed in order to reduce the level of inflation.

He added that Friday’s Central Bank action to tighten monetary policy should see further increases in the prime lending rate.

“Basically what the Central Bank is trying to do, they are using one of their tools from their monetary policy kit to control inflation and we have seen the last inflation numbers coming out at 14.8 per cent.

“This is Central Bank’s reaction to trying to curb that (inflation). Of course, one of the big problems is that one of the drivers of inflation in the local economy is government (spending) and this would not affect their spending,” Salvary said.

“What this move is intended to have an impact on is credit, since banks would have less funds to lend, given that the reserve requirement has been increased from 15 per cent to 17 per cent.

“Credit expansion, which has been very significant over the past three to four years would probably tend to be lower.

“It will affect the consumer and companies. Basically what they will have is an increase in interest rates, in borrowing rates, because since you are raising the reserve requirement, banks would lend less, therefore what you do is create a shortage of dollars to be lent and therefore increase the cost of borrowing,” Salvary said.

“I mean it (the prime lending rate) has been increased several times over the last couple of months and it probably might increase.

“The prime lending rate is probably one of the things that you have to look out for as a result of this, although, prime has been increasing over the past few months. “But generally it should increase interest rates to discourage people from borrowing and limit the amount of demand that we have seen in some parts that has driven up prices and inflation as a result.”

Salvary added that the Central Bank action was “intended to save the economy.”

He said, “What you want to do, you want to control inflation, you want to control price increases which have gone through the roof.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business1.html

Pound, Canadian $ fall; US $ stays firm

2008-10-28T03:56:00.000-07:00

Published: Tuesday October 28, 2008

It is a good time to buy Canadian dollars and British pounds.

The TT dollar yesterday appreciated against the Canadian dollar, which sold at local commercial banks for as low as TT$5 for one Canadian dollar.

Customers also paid less for pounds sterling at local banks.

First Citizens sold sterling at TT$9.89 to one pound, while Republic Bank's rate was TT$9.88.

Sterling currency has slipped from a high of almost TT$13 to one pound in recent months, while Canadian dollars recently almost levelled the US dollar in trading both in Trinidad and Tobago and around the world.

The 15-nation euro currency also lost ground both against the US greenback and the TT dollar yesterday.

Customers bought euros for fewer TT dollars at commercial banks, paying TT$8.02 for one euro.

The euro has traded at more than TT$9 within recent months.

During this time, the US dollar has held firmly, trading at around TT$6.28 to TT$6.30, as the country continued to manage the floating currency.

Scotiabank's managing director Richard Young said yesterday it might have been expected that the US dollar would have weakened amid the ongoing financial crisis in the United States, but instead the currency seemed to have held steady.

International financial experts have suggested that the US dollar may have regained its status as a safe-haven asset, even as the euro lost ground and the pound was battered.

Young told the Express in a phone interview that the Canadian dollar seemed to be losing ground because it was pegged to natural resources like oil, and with lower demand for crude, the currency seemed to have lost some ground.

The pound has also taken a hammering amid the ongoing financial turmoil in Great Britain.

Young suggested there was a psychological "comfort level" with the US dollar and this, in addition to the rate being managed, kept the greenback high while other currencies were stricken by fears of a global recession.

He said. however, that the lower rates might help importers obtain goods at lower prices from mainland Europe and England and consumers might see lower prices.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161393699

Govt moves to improve tax collection

2008-10-27T12:05:00.000-07:00

Published: Monday October 27, 2008

Government is moving to set up a Revenue Authority to improve efficiency in the collection of income tax.

The announcement was made by Trade Minister Dr Lenny Saith during a PNM meeting to explain details of the 2009 budget. The meeting was one of 41 held in various constituencies on Thursday night.

Saith, who spoke in the San Fernando West constituency, said too many people had been engaged in corruption by trying to avoid tax payments.

He said a lot of the corruption in T&T started at the Licensing Office where people were able to obtain fake drivers’ permits.

He said, “The failure of the system is part of deficiencies in public administration. Part of the problem of society is the way some people are willing to pay money to get ahead. Some people believe that the only way to make money is to take advantage of people. That is why we have to improve the way we do business.”

Saith said Government planned to deal with inefficiencies in both revenue collection and expenditure.

“Our system of collection, in particular our income tax collection system, needs to be reviewed,” Saith said.

Saying that everyone would be cross referenced, Saith said the new authority would ensure that taxpayers’ dollars were well spent.

He said much of the corruption in society was caused by people who wanted to “beat the system” by paying money to “jump the line.”

He said two women recently visited his office to complain that they were evicted from a house by the Housing Development Corporation (HDC).

He said investigations revealed that one of the women had paid an official to get a house.

Meanwhile, a member of the audience, Satanan Maharaj, called on Saith to deal with white collar crime.

He called on Government to deal with the lawyers who were not VAT-registered and were not declaring their true income and were constructing huge buildings in San Fernando.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business2.html

JMMB disposes of stake in CMMB

2008-10-27T12:02:00.000-07:00

Published: Monday October 27, 2008

Jamaica Money Market Brokers

Jamaica Money Market Brokers (JMMB) has announced that it has sold its 45 per cent stake in its Trinidad affiliate Caribbean Money Market Brokers (CMMB) to majority partner CL Financial for US$41.37M or JA$3B, following discussions for about a year and a half.

This sale effectively injects liquidity into the brokerage firm at a time when many international financial institutions are experiencing capital and liquidity problems. JMMB indicated that the cash will be used to boost its balance sheet by increasing its capital base. The Group CEO expressed the view that the additional capital during this time of uncertainty in the financial markets is important in order to give shareholders a level of confidence. The regulator, The Financial Services Commission has assured investors that JMMB and the securities industry are fundamentally sound.

The sale comes at a time when the brokerage firm is in the process of building its business to enter into commercial banking at home. If the Jamaican Central Bank signs off on its plans for a commercial bank, it would cost JMMB at minimum JA$1B in start up costs. The Group CEO also indicated that JMMB will still have a presence in Trinidad through Intercommerical Bank Limited (IBL) in which it has 50 per cent ownership. The CEO went on to say that the sale proceeds will also support the expansion of the commercial bank IBL, as well as the build-out of JMMB Dominicana, its 2005 acquisition in the Dominican Republic.

Share of Profits of Associated Companies, which comprised CMMB and its securities subsidiary, accounted for approximately 19 per cent of Pre-tax profits of JMMB at the end of the 2008 financial year (See Exhibit 1). At the current price of $0.76, shares of JMMB are trading at a forward P/E multiple of 9.3 times on projected earnings. BOURSE maintains a HOLD recommendation at this time.

Local Market Update

The international financial meltdown and the fallout of the international capital markets have rapidly become a hot topic among investors and even the non-investing public. While no one is immune to the immediate and long term effects of this international crisis, the extent of these effects varies and are unique to every country.

On the local arena, some of the local and cross listed companies have publicised minimal exposure to some of the failed international investment banks. Among them include Sagicor Financial Corporation (SFC), who in a recent statement from its Barbados headquarters said that its exposure to financially distressed companies such as Bear Stearns, Lehman Brothers and Washington Mutual was limited, and that any potential loss would be immaterial to the performance of the Group. SFC has already accounted for a loss of US$2.4M and has estimated potential further losses of US$3.3M. This represents 0.14 per cent of its total assets.

In a letter to shareholders of Guardian Holdings Limited (GHL), the Group CEO pointed out that while its foreign investments are not immune to the volatility of the world markets, in total they represent less than 2 per cent of the Group's investments. Jamaica Money Market Brokers (JMMB) indicated that the exposure of its own account investment portfolio to the collapse of the international financial sector was approximately 3 per cent. Despite the relatively insignificant exposure outlined by these companies, investor reactions were much more adverse, with SFC, GHL and JMMB share prices falling 21 per cent, 22 per cent and 22 per cent respectively.

Domestic GDP growth was recently revised downward in the Annual Budget presentation to 3.5 per cent by fiscal year end 2008, with a 5.5 per cent growth rate projected by fiscal year end 2009. Whether or not this kind of economic growth is achievable with falling world oil prices remains questionable. Even in a situation where economic growth flattens out, our local economy still remains relatively robust when compared to other Caribbean countries and the United States. Other macroeconomic indicators point to our ability to withstand the global financial instability. According to the Finance Minister of T&T, our import cover stands at 11 months, while we have experienced a decline in external debt from 41 per cent in 1994 to 6 per cent at the end of 2007. The country's external current account surplus is approximately 26 per cent of total GDP. It must be said that certain sectors such as Manufacturing may experience slower growth as trading partners such as North America and Caricom suffer from sluggish economic growth.

In spite of these market and macroeconomic factors, our local capital market has continued on a downward spiral over the last two to three months. International events and the extreme volatility of international capital markets have had a psychological effect on local investors, instilling fear and uncertainty.

Thin volumes coupled with large price declines suggest many investors are panic selling. On October 6, shares of Republic Bank Limited fell almost 10 per cent in that one day on just 3 trades totaling 365 shares. To prevent very small trade volumes from moving share prices up or down materially, the Securities and Exchange Commission has approved a rule which sets volume thresholds based on price intervals for a share price to change on the Trinidad and Tobago Stock Exchange (TTSE).

The decline in share prices over the past few months has had a negative effect on valuations. Low investor demand and the lack in investor confidence is expected to continue as long as uncertainty and volatility persists in the international financial landscape. As long as low investor confidence in the market endures and supply outstrips demand, further declines can be expected.

These declining valuations present an opportunity for local investors to come back into the market. However, the circumstances surrounding the current market and economic environment are unique. Although similarities may exist between the current situation and past periods, investors must realise that we are in uncharted territory with no precise indication of where the market is headed, both locally and internationally. Investors are advised to keep a cautious eye out for valuable buying opportunities in the local equity market.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161393260

IDB launches liquidity facilities for Caribbean

2008-10-24T07:40:00.000-07:00

Published: Friday October 24, 2008

The Inter-American Development Bank (IDB) plans to approve a record volume of loans in 2009 and is setting up a new fast-disbursing US$6-billion liquidity facility to help Latin American and Caribbean economies sustain growth in the face of the global financial crisis.

In addition, the Andean Development Corporation (CAF) has announced a liquidity facility of US$1.5 billion and the Latin American Fund of Reserves (FLAR) has offered US$1.8 billion as part of its liquidity arrangements.

"We are rallying to respond to our clients' needs," said IDB President Luis Alberto Moreno. "The origin of the crisis is outside of the region but can have potentially serious repercussions in Latin America and the Caribbean. Our countries have made strides in recent years to promote growth and reduce poverty. Those gains need to be protected, and that is why the IDB and its sister institutions are moving quickly."

The IDB's US$6 billion Liquidity Programme for Growth Sustainability will be provided to member governments. The aim is for the funds to be made available to domestic firms via commercial banks that may face transitory difficulties in accessing foreign and inter-bank credit lines as a result of the financial crisis in the United States and Europe.
Countries eligible to borrow from the bank's ordinary capital can tap the fund. The loan amounts would be determined by the IDB on a case-by-case analysis.

In addition, the IDB said it is prepared to accelerate loans to finance projects and enhance social programmes and approve up to a record US$12 billion in 2009, up from about US$10 billion this year.

If the liquidity facility is fully utilised, the resulting flow of committed funds to Latin America and the Caribbean would amount to about US$18 billion in the course of 2009, an exceptional effort by the IDB prompted by the international financial circumstances. This would be an almost 80 per cent increase in lending to the region and would be the largest and most rapid mobilisation of resources in the IDB's 49-year history.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081023T220000-0500_141679_OBS_IDB_LAUNCHES_LIQUIDITY_FACILITIES_FOR_CARIBBEAN.asp

IMF says financial crisis in the US will impact tourism in the Caribbean

2008-10-24T07:39:00.000-07:00

Published: Friday October 24, 2008

The International Monetary Fund (IMF) has indicated that the financial crisis in the United States and elsewhere should be expected to impact the tourism sector in the Caribbean and overall.

Given the importance of the tourism sector to the economies of most Caribbean islands, IMF Division Chiefs for the Caribbean stressed the need to develop effective policy responses.

The Antigua Sun reported that Antigua's finance minister, Dr Errol Cort was on hand at the series of IMF/World Bank meetings held in Washington DC to participate in the bilateral and multilateral discussions concerning issues of importance to Antigua and Barbuda.

Among the topics discussed were the ongoing international financial crisis, debt strategy and economic infrastructural development.

When the financial crisis was discussed, it was stressed that although the Eastern Caribbean Currency Union (ECCU) did not appear to have significant exposure to the institutions at the heart of the crisis, some indirect effects may show up in the "real sector".

In the light of this, according to the Antigua Sun report, the IMF indicated its readiness to work with countries of the region to provide "policy, technical and financial support to minimise any negative impact".

It was emphasised that the impact felt by countries in the Caribbean would differ based on a number of factors including the level of economic growth and productivity.

With regard to reducing debt in the Caribbean, representatives of the region focused on the need for the IMF and the World Bank to work with the region in order to develop more innovative approaches to dealing with the issues of debt.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081023T210000-0500_141665_OBS_IMF_SAYS_FINANCIAL_CRISIS_IN_THE_US_WILL_IMPACT_TOURISM_IN_THE_CARIBBEAN.asp

Trinidad can withstand global slowdown - finance minister

2008-10-24T07:37:00.000-07:00

Published: Friday October 24, 2008

Trinidad and Tobago's economy, which has enjoyed over 10 successive years of positive economic growth, is in a better position to withstand a global slowdown, the country's finance minister, Karen Nunez-Tesheira said this week.

However, the slowing down of growth in their major trading partners, including North America and the CARICOM region, has implications for the domestic manufacturing sector.

"In particular, a slowing of growth in the North American and European economies may negatively impact receipts from tourism and remittances in many countries of the region.

"However, the situation at present remains unchanged and we are closely monitoring developments with a view to proactively countering any negative movements that may materialise," the finance minister said during a wide-ranging statement to the Senate.

Performing remarkably

She said the current global financial instability comes at a time when the economy of Trinidad and Tobago is performing remarkably well and that the macroeconomic indicators place Trinidad and Tobago as well positioned to withstand the effects of the crisis.

Trinidad and Tobago, she said, has enjoyed more than 10 successive years of overall balance of payments surpluses, driven primarily by strong performance of the merchandise trade account, and high oil and gas prices.

The external current account remains in surplus and the stock of foreign reserves stand at US$8.5 billion which provides the country with more than 11 full months of import cover of goods and services.

She added that the country's foreign reserves will help to bolster the banking sector, should liquidity become strained and would help to service international debt.

The country's external debt has declined from 41 per cent of gross domestic product (GDP) in 1994 to approximately 6.0 per cent at the end of 2007.

In 1996, the fiscal balance was -0.2 per cent of GDP compared to 7.6 per cent at the end of 2007.

Nunez-Tesheira said the country's external reserves of US$8.5 billion have not been affected by the financial turmoil in the United States.

Varying risk profile

As part of its approach to risk management, the Central Bank of Trinidad and Tobago allocates reserves among three tranches of varying risk profile. In addition, highly reputable money managers, including the World Bank, are responsible for managing 32 per cent of the total official reserves.

"The composition of the investment portfolio for international reserves has provided significant insulation from any loss," she added.

Nunez-Tesheira also reassured that there was very little immediate risk facing Trinidad and Tobago's banking system, which she described as well capitalised with a capital asset ratio of about 18 per cent, a low level of non-performing loans and a high liquidity position.

"The commercial banks have limited direct exposure abroad withforeign assets representing only 18 per cent of total assets. The impact of the credit crunch is also muted by the commercial banks' limited reliance on foreign borrowing reflected in the fact that foreign liabilities amounted to a mere eight per cent of total commercial bank liabilities as at end of May 2008," she said.

No undue risks

The normal flow of dividends from subsidiaries to parent bank also does not create any undue risks for the domestic banking system.

In the unlikely event that there is a demand for uploading of payment between the domestic subsidiary and parent, Nunez-Tesheira said the central bank has the authority to intervene to protect the domestic banking system.

The finance minister also told the Senate that the US$2.8 billion Heritage and Stablisation Fund (HSF) reserves have not suffered any capital loss and are at no undue risk.

"A few months ago, the HSF board approved a strategic asset allocation policy, however, whilst the procurement of services of external managers is proceeding, the board took a decision that, in the interim, 95 per cent of HSF funds would be invested in short-term money market instruments and five per cent in US treasuries.

The holdings are subject to the same prudential guidelines. Consequently, these reserves have suffered no capital loss and are at no undue risk.

"The growing financial contagion, however, has impeded a more aggressive approach to investing HSF resources, and we are currently monitoring with a view to preserving value for future generations," according to the finance minister.

Won't resort to hsf

Government also does not plan to resort to the Heritage and Stablisation Fund in the event of oil prices falling below budgeted target, although the legislation provides for withdrawal in such cases.

The fund generates savings for future generations and helps to insulate fiscal policy from fluctuations in revenue from the energy sector.

In response to calls for the government to review its budget which was based on oil prices remaining at US$70 a barrel on average, the finance minister said the price was determined on the basis of an established process and on information available at that time.

In arriving at the oil and gas prices for the budget, the Ministry of Finance set as its ceiling the 11-year moving average for oil and gas prices based on IMF data taken from its World Economic Outlook publication.

Medium-term projection

It also took into consideration information from the medium-term projection for oil and gas prices of the Organisation of Petroleum Exporting Countries (OPEC), and the planning prices being utilised by major companies operating in the Trinidad and Tobago jurisdiction.

"While the consensus on oil price trends remains uncertain, there is general agreement that high volatility will continue to be a feature of oil prices which will continue into the medium term. For oil exporting countries such as Trinidad and Tobago, an immediate challenge is to ensure that such volatility does not impact government's planned infrastructure programmes, " she said.

While the country grapples with issues related to its traditional trade channels, the government official said it must embrace new opportunities.

The global financial turmoil, she said, also makes the establishment of the Trinidad and Tobago International Financial Centre even more of an imperative.

Moving to leverage dynamism

Government is also moving ahead to leverage the growing dynamism of the domestic financial sector, by providing the requisite infrastructure and deliberate policy direction leading to the creation of the offshore centre.

"The TTIFC will be an intense concentration of a range of international financial businesses and other transactions, specifically tailored and sufficiently marketed to attract financial business from around the globe.

In going forward, bearing in mind the lessons learned from this international crisis, we are strengthening the design of the TTIFC in respect of effective risk management and governance," she added.

Nunez-Tesheira insists there is nothing complacent about Government's approach to the international crisis and to the impending conditions that are expected to feature in the global economy over the next two years and more.

The Ministry of Finance, she said, is currently undertaking the research and analysis that will form the basis of informed judgements regarding the policy responses that will best serve the interest of the country.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081024/business/business8.html

Haggling begins on C&W pension properties

2008-10-24T07:35:00.000-07:00

Published: Friday October 24, 2008

Handlers working on the sale of four prime properties put on the market by Cable & Wireless Pension Fund trustees are in negotiations with two potential buyers arising from bids that closed off at the end of September, the Financial Gleaner has learned.

The Towers, New Kingston Shopping Centre and the former drive-in cinema, all on Dominica Drive in New Kingston, as well as the Fair View Shopping Centre in Montego Bay, were advertised for sale in July.

The Financial Gleaner estimated the value on the properties at no less than $2 billion, but WIHCON, one of the firms handling the sale, has said the values were understated.

Derrick Jones, chairman of the Cable & Wireless Pension Fund, would not comment on the status of the negotiations.

"The process is ongoing and where we are in that process, would not be appropriate for public discussion at this time," he said Tuesday.

However, the Financial Gleaner was otherwise advised that more than five bids were received, both from local and overseas interests on all four properties, that "full-fledged negotiations" were under way with at least two bidders, and that a year end deadline had been set to offload the properties.

Built sometime in 1985, The Towers have become something of a landmark in New Kingston. Its twin structure - one 10 storeys and the other 12 - has a combined area of 112,850 square feet which sit on 73,976 square feet of land.

The cinema land, which sits opposite The Towers, is a 7.58 acre property which accommodates a theatre, a parking lot and an automobile showroom.

Property experts say that land in this area would value between J$5,500 and J$6,000 per square foot.

Adjacent to the defunct cinemas is the New Kingston Shopping Centre, a 175,848 square-foot shop and office complex which is situated on 2.26 acres of land.

Fair View Shopping Centre, in Montego Bay, on the northwest coast, comprises a series of buildings on a combined 101,000 square feet on 5.96 acres.

Source:
Dionne Rose
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081024/business/business6.html
dionne.rose@gleanerjm.com

PanCaribbean profits flattened by new bank

2008-10-24T07:34:00.000-07:00

Published: Friday October 24, 2008

Brought down by disappointing profits in the third quarter, a bigger wage bill and other expenses year to date, Pan Caribbean Financial Services recorded flat profits of $901 million or earnings per share of $1.64, in its newly released nine-month earnings report.

Pan Caribbean at the end of September had paid out half a billion dollars in salary - up 35 per cent year-on-year - its biggest spend inside total expenses of $851 million, which were up 27 per cent.

The expanded cost of running PanCaribbean undercut the 13 per cent improvement in revenue which rose from $4.5 billion to $5.1 billion, and sliced four million or half a point off net profits.

Pan Caribbean said its staff cost rose because of additional personnel taken on for its new commercial banking operations launched in July, but also included adjustments for inflation.

"Our commercial bank has completed its first full quarter," said chairman Richard Byles and Chief Executive Donovan Perkins jointly in a statement appended to the accounts.

"This investment will enhance the future profitability of the group and give us the capability to better compete entering 2009."

Smallest commercial bank

PanCaribbean Bank Limited is Jamaica's seventh and smallest commercial bank with assets below $10 billion.

The group's net interest income, a measure of the core strength of brokerages and other financial sector firms, was a near 17 per cent improved at $1.45 billion, "influenced by balance sheet growth," the company said.

Balance sheet assets grew by $8 billion to $58 billion because of an expanded securities portfolio, but the company also saw a depletion in the value of its bonds which forced a write-down of $273 million. Shareholder equity was disturbed as a result but not substantially, falling to $7.4 billion from $7.5 billion within the nine-month period.

Capital to assets ratio

Pan Caribbean also stressed its capital to assets ratio, saying that at 15.6 per cent, the company was well capitalised.

"Pan Caribbean's balance sheet consists of cash equivalents, high-quality loans, Bank of Jamaica instruments and Government of Jamaica bonds," said its statement.

"Our capital to assets ratio at 15.6 per cent is amongst the highest not just in Jamaica, but within the Caribbean region. In addition to being well capitalised, we maintain conservative levels of liquidity and our franchise is supported by strong and diversified business lines that protect our profitability."

The company said if the global downturn descended into recession, it would impact equity and bond markets, but sought to assure shareholders that its team was capable of steering investors, depositors and borrowers through the period.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081024/business/business7.html

Pulse banking on new projects to diversify income

2008-10-24T07:32:00.000-07:00

Published: Friday October 24, 2008

In five years, Pulse Investment Limited is projecting that it will add $2 billion to its stream of revenues, and is working to diversify its income beyond the sponsorships and advertising contracts on which it is so heavily reliant.

A model and fashion agency, chief executive officer Kingsley Cooper wants to branch out into being agent for sports figures, but in a briefing to financial journalists and analysts last week, he indicated that his plans were most heavily pinned on hospitality through his property, Villa Ronai, which is now being expanded.

Cooper has at least three projects in varying stages of execution, Villa Ronai being one of the more advanced.

For now, his income, which reached $1.35 billion in the financial year just ended in June 2008, is 85 per cent in sponsorships and advertising deals.

"We do not view their profit and loss as a true statement of income," said Michelle Hirst, analyst with Kingston brokerage Stocks and Securities Limited.

Redefining business mix

But now Pulse, the only model agency listed on the Jamaica Stock Exchange, is redefining its business mix to marry fashion, real estate, television, merchandising and hospitality, and focussing more centrally on the latter.

Cooper says his new projects will bring in half of new revenues but by his own reckoning, it seems he really is banking only on Villa Ronai receipts.

"At a relatively modest growth rate of 20 per cent per year current, Pulse business should earn approximately $3.4 billion at the end of fiscal year 2013," he said.

"Assuming the projects in development achieve the level of success anticipated, we estimate that earnings from these new projects should be approximately 50 per cent of total revenues by 2013."

In a nutshell, Pulse is projecting $2 billion of additional revenues, half of which is to come from new projects.

Expected income

But Cooper has also said that he expects Villa Ronai Spa and Suites to add $1 billion to top-line income, which would fully cover the 50 per cent from new sources.

"The Villa Ronai project is expected to be completed in three years, at the end of 2011," he tells the Financial Gleaner.

"Our projections for $1 billion in earnings would be in the second year of operation, 2013."

But Hirst has questioned whether the projection is realistic, saying the suggested US$1,000 to US$,2000 per night charge to stay at the property reflects top-end prices, which the market might not be willing to pay.

Cooper, it appears, also acknowledges he could face challenges in meeting his broader targets.

"We recognise that there are serious global and local economic challenges at this time," he said, "but based on the nature of our business, its structure, our low-debt model strategy and the potential of Caribbean talent, we are very optimistic regarding the future," he added.

His other projects include merchandising under the Pulse brand, the establishment of a social networking website, and a Peter Tosh museum.

Capital expenditure

The agency says its capital expenditure would reach $150 million over two years ending FY 2009, but says Villa Ronai will end up being a $300 million to $500 million project.

Cooper projects that he will spend $130 million per year up to 2011, making it the largest project on Pulse's books.

"We are in the process of completing fairly extensive refurbishing of existing buildings which will house about 15 suites as well as the main spa buildings, and restaurant," said Cooper, with additional suites to come from completely new buildings, already approved for construction in 2009 and 2010.

Television currently represents Pulse's top income earner but Cooper hopes to position Ronai at the top of the ticket as venue for certain events and functions.

Television, which consists of five shows sold to cable stations, free-to-air television and Internet broadcasters, both regionally and internationally, currently contributes $800 million to revenue.

Sponsorship revenues, which according to Cooper are "in kind" as well as "cash", are next in line, contributing $350 million.

Shows such as Caribbean model search, Miss Jamaica Universe and Caribbean Fashionweek which are ongoing projects for the company, generate approximately $110 million.

Rental and storage fees brought in $30 million at June 2008.

The company further expanded into real estate investment with the development of its Trafalgar Road property with a 150-unit storage facility, which became operational in early 2008.

The facility, built for $60 million, has less than 20 units occupied.

"With full occupancy, we expect earnings between $3 milion and $5 million per month," said Cooper.

Commission from international model agencies contributes $12 million to revenue, while 'other' business brings in $50 million.

Pulse made $429.9 million, up 62 per cent from $266 million made in 2007.

The stock has traded as high as $8 but last sold for $6.

Source:
Sabrina Gorodn
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081024/business/business5.html
sabrina.gordon@gleanerjm.com

ANALYSIS - Putting the squeeze on Jamaica - Impact of external slowdowns, credit crunches

2008-10-24T07:31:00.000-07:00

Published: Friday October 24, 2008

One of the critical issues facing Jamaica is the extent to which the recent financial crisis in the United States and the subsequent global financial meltdown will impact the economy.

There has been a great deal of discussion in the media on the subject, but very little empirical research available to provide insights on possible outcomes.

An exception, however, is the country report entitled 'Jamaica: Selected Issues' published June 2008 by the International Monetary Fund (IMF), as part of the background documentation for the Article IV Consultation with the Government of Jamaica.

The two chapters of the report examined the question of how exogenous shocks such as natural disasters and other unanticipated developments, such as expenditures which were not adequately provided for in the approved budget, can affect economic outcome.

First chapter

The first chapter used statistical modelling and historical data to evaluate the possible impact of economic slowdowns and credit crunches in the United States on Jamaica; the second analysed the relationship between the fiscal effort and debt reduction.

The IMF staff found that: "The impact of US macroeconomic stress is small on Jamaica's GDP but larger on the budget, exports and capital flows."

In essence, an examination of historical data showed that regardless of where the initial shock occurs - whether starting with a credit crunch or with a slowdown in US economic growth - negative shocks have had limited impact on growth in the Jamaican economy.

However, they have tended to be associated with a worsening of the fiscal balance. This deterioration in the primary balance is due to a great extent to lower revenues.

Impact differed

It should be noted that the magnitude of the impact on the Jamaican economy differed from shock to shock. A decline in credit in the US economy, or a reduction in US wages have had a "significantly negative impact on Jamaica", the report said.

The shocks in the past have resulted in reduced export receipts as well as remittances, but imports were also reduced, thereby limiting the overall impact on the current account deficit.

In essence, tourism receipts, revenue from bauxite exports and customs receipts would be adversely affected by a US slowdown.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081024/business/business10.html

Investors in combatant mood - Monthly inflation down, but push on for higher interest rates

2008-10-24T07:27:00.000-07:00

Published: Friday October 24, 2008

Inflation moderated in September to 0.6 per cent, its lowest monthly out-turn this calendar year, but investors continued to push for higher interest rates to offset some of the negative returns on their investments.

The market this week bid up interest rates at the latest Treasury bill auction by one and a half points, relative to September.

The six-month T-bill was under- subscribed by 1.1 per cent.

The consumer price indices for utilities, fuel and housing, transportation, as well as communication, which captures cellphone usage, showed no increase, while food and beverage, where spending tends to be high, rose only 1.5 per cent.

The 'alcoholic beverage and tobacco' category rose by just 0.3 per cent, the lowest movement since the start of the fiscal year in April.

Inflation data

September

Monthly 0.6 per cent
Year to Date 16.8 per cent
Fiscal YTD 11.0 per cent
Annual 25.3 per cent

Interest rates

October

BOJ signal rates

30-day 14.65 per cent
90-day 14.40 per cent
180-day 14.70 per cent
365-day 15.50 per cent

Treasury bills

90-day 15.4 per cent
182-day 16.96 per cent

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081024/business/business1.html

$21m in profit for OCM group

2008-10-24T07:25:00.000-07:00

Published: Friday October 24, 2008

One Caribbean Media Ltd has posted a group profit for the third quarter of 2008 of $21 million.

This was 16.7 per cent higher than profits recorded in the third quarter of 2007, OCM chairman Sir Fred Gollop said yesterday.

The third quarter results brought group profit attributable to shareholders for the first three quarters of 2008 to $60.4 million, 14 per cent higher than the out-turn in the corresponding period in 2007.

OCM is the parent company of the CCN Group of Companies, which includes the Express newspapers and the TV6 television station.

The group achieved solid sales growth in the third quarter of 14 per cent, compared to the third quarter of 2007, while for the first three quarters of 2008, sales and other revenue were 12 per cent higher than in 2007.

Earnings per share, inclusive of unallocated ESOP shares were $0.91, a 14 per cent increase on the $0.80 achieved in 2007.

"While we remain confident that our full year targets for 2008 will be met, we acknowledge that the global and regional economic environments have taken an adverse turn," Sir Fred said in a statement. "As such, we must intensify our focus on cost containment while the quality of the content we provide to our loyal audiences is maintained."

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161392065

Oil rises to US$69 a barrel

2008-10-24T07:24:00.000-07:00

Published: Friday October 24, 2008

Oil prices swung back above US$69 a barrel yesterday, rebounding from a 16-month low as the Organisation of Petroleum Exporting Countries (OPEC) members met to decide whether to slash production to halt crude's slide.

Members of OPEC were gathering in the Austrian capital of Vienna ahead of official talks today. Iranian oil minister Gholam Hossein Nozari called on the cartel to cut by two million barrels a day to stop a steep slide that has left prices more than 50 per cent lower than their peak of US$147.27 on July 11.

Source: Nation Newspapers
http://www.nationnews.com/story/309610711145791.php

Pulse to list on Trinidad stock exchange in 2010

2008-10-22T08:14:00.000-07:00

Published: Wednesday October 22, 2008

Pulse Investments expects to list on the Trinidad & Tobago Stock Exchange (TTSE) in 2010. The entertainment and real estate development company relisted on the Jamaica Stock Exchange back in 2006 and today is one of the best performing stock on that bourse. Pulse ended last year with a share price of J$2.30. Today it stands at J$6.00 after the company has cleaned-up its balance sheet, restruc-tured and reduced its debt burden.

At an investors briefing held at Knutsford Court Hotel last week, Chairman and CEO Kingsley Cooper announced that Pulse expects to earn up to $1 billion a year from converting Villa Ronai into a luxury spa within five years.

The move would add hospitality to the fashion company's core activities. But it is also looking to offer athlete management services.

The spa will offer 50 rooms with prices ranging from US$1,000 to US$2,000 a night.

"Our best case scenario in two years (after completion) is J$1 billion, and our worst case scenario is J$500 million,"

said Copper speaking at the investors briefing.

The worst case scenario would represent 35 per cent of this year's record J$1.35 billion in revenues. What is more is that over 88 per cent of Pulse's revenues are non-cash. The expected revenue streams from the spa would thus transform the cash focus of the business from fashion to hospitality, all things remaining equal.

"It will be three years before completion: Two years of construction and one year of outfitting and training of staff. It is a beautiful property and the experts say Villa Ronai could be the mecca of spas," said Cooper.

The property will cost between "J$300-J$500 million" to construct and outfit. Cooper will fund the project without debt.

"There is equity coming from related parties and we may go back to the stockholders if necessary," he said. "We are committed to a low-debt model."

Cooper recently raised some J$126 million in a Rights Issue.

Pulse was caught in a debt trap in the 90s when it borrowed and its loan interest shot up, chocking its cash flow. That led the company to restructure and delist from the stock exchange.

In June 2006, it was relisted and is currently one of the top performing stocks. Its year end net profit stood at $429.8 million, a 62 per cent increase over 2007.

However, there is controversy surrounding its non-cash revenues. On Wednesday last week, Cooper issued a two page FAQ sheet on this topic. Most of the non-cash revenues represent advertising entitlements and market sponsorship. Cooper focused on advertising entitlements, which are available ad slots during the broadcast of Pulse television productions.

Producers have two ways to earn money from broadcasting television shows. They can sell the shows directly to the broadcaster or split the advertising slots with the broadcaster. Pulse says it earns more by splitting the advertising slots with television stations.

"For example, a half-hour television show of similar quality to Pulse's product would sell to broadcasters in the Caribbean for somewhere between US$500 and US $1,000," said Cooper whilst outlining the benefits of splitting adverting slots.

"By splitting the six minutes of advertising (legally allowed in such a programme) between Pulse and the broadcaster, as is the usual agreement, Pulse ends up getting three minutes of ads (six 30 seconds ads) every time the show is broadcast or rebroadcast. Given the fact that some of these programmes are looped and rebroadcast several times on cable and at least twice on free to air TV and, given ad rates of anywhere between US $100 and US$500 per 30 second spot, Pulse earns between US$3,600 and US$6,000 per programme per broadcast. This is much more than the company wold have received in a cash sale," he said.

Pulse does not expect the financial downturn in the US economy, Europe and Jamaica to negatively affect its operations. Instead it foresees TV stations offering more entitlements instead of opting to buy shows.

"TV entitlements are perfect for us, TV stations will be happy to offer entitlements because of the downturn and cash shortage. If we manage this skilfully we can come out ahead," he said.

Cooper added that he was in talks with a local sporting entity to manage athletes. He said the Olympic success spurred this interest.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business_mag?id=161390873

2008-10-22T08:11:00.000-07:00

Published: Wednesday October 22, 2008

Pan Caribbean Financial Services' (PCFS') financial results for the nine-month period ending September 2008 was one of mixed fortunes as the global financial crisis continues to take hold. PCFS reported 13 per cent growth in revenues to J$5.06 billion compared to last year's J$4.49 billion.

At the end of the third quarter, the group's net interest income grew by 17 per cent to J$1.45 billion, up from J$1.24 billion over the same period last year. However, its non-interest income declined by 14 per cent to J$587 million compared to J$679 million in 2007. Non-interest income comprises its trading activities in fixed income, foreign exchange and stocks, and includes asset management fees from its top-performing Sigma funds, as well as banking-related fees for transactions.

Speaking with the Business Observer last night Deputy CEO of PCFS Phillip Armstrong said: "The growth in our balance sheet year over year is coming from just under J$50 billion to just under J$58 billion. This was due in part to growth in our net interest income and tighter expense management.

The company reported that its non-interest income was overall adversely impacted by difficult trading conditions.
President and CEO of Pan Caribbean Donovan Perkins explained that while its foreign exchange unit and equities-related activities had performed well year-to-date, they were offset by a decline in fixed income trading as a result of an unfavourable market and rising interest rates.

Looking at PCFS' trading activities, its fixed income business has been a drag on this revenue strean while both FX and equities have performed above target, added Armstrong.

The decision to launch commercial banking operations earlier this year saw PCFS' non-interest rise as a result of its related project-costs. Personnel costs rose 35 per cent, influenced primarily by a 15 per cent increase in staff levels for its new commercial banking operation (PCFS employed an additional 30 persons for its commercial banking operations) and the 2008 salary adjustments reflecting the prevailing inflationary environment. The commercial bank will have its official launch in the first week in November this year and PCFS has said that it has reconciled all technology issues there. Overall, non-interest expenses increased by 27 per cent to J$852 million compared to J$670 million for the prior year.

Despite the prediction that there may be a global recession, Perkins said his company is ready to face it. "Jamaican businesses and its consumers will face some challenges. However, I think our team is well seasoned and we have experience in managing and thriving during difficult times by protecting and helping our customers," he said.

The group's balance sheet grew by 16 per cent to J$57.7 billion in assets compared to J$49.8 billion at December 2007, supported by their J$1.26-billion preference share issue in the first quarter of 2008. Stockholders' equity closed the quarter at J$7.4 billion after dividends amounting to J$658 million (J$1.20 per stock unit). In addition, Pan Caribbean's securities portfolio grew by 15 per cent during the period to J$46.1 billion while loan and leases increased by three per cent to J$7.4 billion since December 2007.

Pan Caribbean is a member of the Sagicor Group and was recently rated jmA+ by CariCRIS, the regional rating agency.

"We are proud of the fact that during this present tough environment we have managed the group conservatively and we should come out of this unscathed. We had no exposure to the institutions mentioned in the US financial crisis and we have no financial instability issues," said Armstrong.

Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081022T000000-0500_141608_OBS_PAN_CARIBBEAN_SEES_____PER_CENT_REVENUE_INCREASE__BUT_TRADING_INCOME_FALLS_.asp

Warren Buffett sees brighter future

2008-10-22T08:08:00.000-07:00

Published: Wednesday October 22, 2008

Warren Buffett has been moving his personal investments from safe Treasuries into US stocks, he wrote in an opinion piece in last Friday's New York Times.

"If prices keep looking attractive, my non-Berkshire net worth will soon be 100 per cent in United States equities," he wrote.

The piece, titled "Buy American. I am," reiterated one of the legendary investor's favorite maxims: Be fearful when others are greedy; be greedy when others are fearful.

"To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions," he wrote. "But fears regarding the long-term prosperity of the nation's many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now."

Since stocks began to tumble in September, Buffett, and his investment company, Berkshire Hathaway Inc, have made large bets on US companies, exacting rich dividend payments in the process. Berkshire Hathaway agreed on Oct 1 to invest US$3 billion in General Electric Co's preferred shares, which carry a hefty 10-per cent dividend. In late September, Berkshire Hathaway also bought US$5 billion in preferred shares of Goldman Sachs Group Inc, which also pay a 10 per cent dividend. He also bought warrants to purchase another US$5 billion common shares at about $115 each.

"Let me be clear on one point: I can't predict the short-term movements of the stock market," he wrote. "I haven't the faintest idea as to whether stocks will be higher or lower a month - or a year - from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over."

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business_mag?id=161390869

Guyana gives in

2008-10-22T08:06:00.000-07:00

Published: Wednesday October 22, 2008

Guyana on Monday signed off on the Economic Partnership Agreement (EPA) with Europe, choosing to do so in Brussels at the headquarters of the European Union Council, five days after its Caricom partners had inked the agreement.

Guyanese Ambassador Dr Patrick Gomes signed on behalf of the South American country, which is home to the Caricom Secretariat.

The European Commission, in a brief statement, said it was delighted by Guyana's move.

"The commission welcomes the decision by Guyana, which will now join the EU and its member states and the other 13 Caribbean countries that signed the EPA in Barbados last week in implementing the agreement by the end of the month," the statement said.

Preferential status

Haiti is the only Caricom country that has not signed on to the EPA, but Europe has said this would not adversely affect the Caribbean's poorest country, which already has preferential status under the Everything But Arms agreement for least developed countries.

Still, Port-au-Prince has said that it also intends to sign the agreement before the October 31 deadline expires.

The signing of the agreement by Guyana effectively ends months of uncertainty that has surrounded the agreement which will govern future trade between Europe and Cariforum, a bloc that includes the 15 members of Caricom and the Dominican Republic.

'Bully-boy' tactics

Having accused Europe of using 'bully-boy' tactics President Bharrat Jagdeo opted out of the October 15 signing in Bridgetown, but later promised that "in the spirit of compromise" and given his government's "strong commitment" to regional integration and solidarity, he would finalise the deal by October 31.

Jagdeo also expressed satisfaction over the fact that he had fought and won a mandatory review of the agreement every five years.

The Guyanese leader had also demanded that the Revised Treaty of Chaguaramas (the Caricom treaty) must take precedence over the EPA, in cases where conflict arises. But this position did not find favour with the Europeans.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081022/business/business5.html

Grenada to relaunch offshore sector

2008-10-22T08:03:00.000-07:00

Published: Wednesday October 22, 2008

Grenada's prime Minister Tillman Thomas says he is determined to re-launch the island's offshore finance sector six years after a multimillion-dollar fraud scheme had crippled it.

Thomas says his government is "prepared to take the necessary steps to make sure our compliance matches international standards".

Thomas told the Caribbean Financial Action Task Force on Monday that such an action will allow Grenada "to get involved in the financial sector in a legitimate way".

In 2002, Grenada suspended its financial sector's operations after First International Bank of Grenada collapsed and investors were cheated out of US$170 million.

The offshore bank took money from investors but never paid them back, leaving a trail of ruined retirements and even personal bankruptcies.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081022/business/business6.html

Investors should stay the course

2008-10-22T08:01:00.000-07:00

Published: Wednesday October 22, 2008

For most average Trinis stock market dealings are not a main topic of conversation, but economists are now saying it is time for Trinidadians to realise that stock market fluctuations affect even the most "average Joe."

All over the world the global financial crisis has been rocking stock markets shares. The number of active stocks that were traded fell to major lows this week all across the globe from as far as Japan, the United States, France and Germany, all the way back to the Trinidad and Tobago Stock Exchange.

An average of ten securities were traded per day last week. On some days traders only choose to bid on as little as six of the more than 30 securities listed on the local market.

The turbulence of share prices and investment trading which has come as a result of the global economic slow down, the Wall Street financial crisis and the array of natural disasters which took place this year and are affecting commodity prices every where have seen traders running scared, afraid to put their money out there to be devoured by market instability.

With traders having less disposable income as a result of both the recession and trade market slowdowns, local economists have explained on several occasions that tourist arrivals will shrink, foreign direct investment will be reduced and foreign capital loans will be harder for businesses in developing countries to secure.

Local economists have explained that Americans, Europeans and Asians will have less money for consumption and therefore the oil and gas demand will fall. The price of energy commodities will fall and Trinidad and Tobago's economy which is energy based will suffer.

Last week, saw oil prices dropping below US`$70.

This drop has local economists and business chambers alike debating whether or not this country will have to adjust it's budget which is based on an ambitious oil price of US $70. While Minister in the Ministry of Finance, Mariano Browne told the Express on October 10 that there is no need to adjust the budget, the instability of the financial world has made it hard for even the best financial analysts to accurately predict the outcome of commodity prices this year.

The big question

Many are now wondering however, if the budget has to be cut, what will go?

Will the promises of post graduate degrees for all our first class students be withdrawn, or will it be the ferry passes for the elderly and/or the several highways that have been promised.

While the stock markets stand in limbo, so do energy prices, so does the T&T economy and so does the fulfillment of the 2008/2009 budget promises to the nation.

And the retirees?

Employees who are paid bonuses in shares also will be affected by the slow down in trading. Global financial experts have said employees set to retire soon could be the ones losing the most from these financial conditions if the share prices at their company plummet while they are packing up shop and taking cash on their shares to buy an annuity.

An annuity is a contract which will provide someone with a steady income stream over the years (salary), in return for one initial lump sum payment.

Global predictions showcased by the BBC show that those buying an annuity now will receive an annual sum that is at least 15 per cent less than they would have gotten only a month or two ago.

Positive outlook:

However, Ramcharan Kalicharan, Chief Operating Officer at regional financial company, Caribbean Money Market Brokers (CMMB) told the Business Express he did not see the short-term stock market slow down affecting local securities holders in a big way as a slow down in buying and selling also means that locals are not getting scared and selling out their shares, "which is a good thing."

"People are not exiting the stock market which is a good sign. If we see trading volumes increase significantly we can take that to be an indicator of panic and panic selling, and that's when we need to be worried."

Don't panic sell:

Economist Jwala Rambaran also commented on the effect of panic selling within the local stock market during the First Citizens Bank launch of their El Tucuche Fixed Income Fund at the Hyatt Regency Hotel on October 9.

He said, "In this dark and uncertain environment investors are perhaps tempted to sell everything and flee into cash, waiting for better days."

He said that while he understands the logic behind that feeling he was urging investors not to let "indiscriminate and emotional selling over power all rational, analytical thinking."

Rambaran urged investors to "stay the course" as it is never smart to exit a market in a panic as both research and past economic outcomes have shown the folly and ill effects of attempting to do so.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business_mag?id=161390887

Next Treasury boss will feel power - and stress

2008-10-22T07:59:00.000-07:00

Published: Wednesday October 22, 2008

The next US president's choice of a treasury secretary may well be the most important appointment he'll make - someone to grab the reins of a trillion-dollar-plus program to shore up the world's largest economy, probably in the middle of a severe recession, and at the right hand of a chief executive who'll be a rookie himself.

In normal times, the job can be demanding enough. In an economic crisis, as now, it can be one of the most powerful and stressful jobs in the government. Just ask Henry Paulson, the former investment banker who's made it clear he's not interested in keeping the title.

If not Paulson, then who?

Both Republican John McCain and Democrat Barack Obama showered praise on legendary investor Warren Buffett when asked during a presidential debate whom they might put at Treasury. Buffett says maybe Paulson should stay for a while.

Obama has a couple of Bill Clinton's treasury secretaries as economic advisers: Robert Rubin and Lawrence Summers. McCain has current and former CEOs of major companies, including Meg Whitman of eBay and Carly Fiorina of Hewlett-Packard.

As for Buffett, McCain said when asked in the debate, "He has already weighed in and helped stabilise some of the difficulties in the markets and with companies and corporations, institutions today." Buffet and his company, Berkshire Hathaway, are bailout machines second only to the US government, pumping billions into Goldman Sachs, General Electric and other troubled companies.

Obama agreed that "Warren would be a pretty good choice - Warren Buffett, and I'm pleased to have his support."

It's a little hard to imagine the oracle of Omaha putting his money in a blind trust - or leaving Omaha for that matter. He has previously responded to such suggestions by saying he loves running is company and a government position would be outside his "circle of confidence." Would he respond to an appeal to help his country in a time of need? Who knows.

On PBS' "The Charlie Rose Show" recently, Buffett said Paulson would do the next president a favor by staying in the job at least a year.

Paulson has appeared to rule this out in television interviews, saying he's told both candidates he would "start working with whoever the new treasury secretary is as soon as he is appointed and work to make the transition a first-rate transition."

"There are other folks out there," Obama said when asked specifically about Buffett. "The key is making sure that the next treasury secretary understands that it's not enough just to help those at the top. Prosperity is not just going to trickle down."

Obama and McCain are both surrounded by experienced economic advisers.

Obama's team includes Buffett, former Federal Reserve Chairman Paul Volcker and the two former treasury secretaries, Rubin, now an executive with Citigroup, and Summers.

Summers has been put before the public a lot by the Obama campaign. But he's not without controversy. After serving as Clinton's final treasury secretary, he became president of Harvard. He drew worldwide attention for his comments that biological differences may partly explain the dearth of women among the very highest achieving scientists, a controversy that led to his resignation.

Two seasoned economic professionals who might be tapped for the post regardless of who wins: Timothy F Geithner, president of the Federal Reserve Bank of New York and Sheila Bair, head of the Federal Deposit Insurance Corp.

Both, along with Paulson and Fed Chairman Ben Bernanke, have played major roles in putting together the government's series of bold steps to restore financial order in a world coming unglued.

Geithner is a registered independent and Bair is a Republican. Also mentioned as a possible contender: JPMorgan Chase CEO Jamie Dimon.

McCain is close to eBay chief executive Whitman - the only other person he mentioned at the presidential debate as a possible treasury secretary. "She knows what it's like to be out there in the marketplace," he said. "She knows how to create jobs."

McCain also counts as a principal economic adviser former Hewlett-Packard CEO Fiorina. The company's board fired her in 2005 after a string of earnings disappointments. She also drew criticism for launching an effort at Hewlett-Packard to identify company employees who were speaking to reporters anonymously.

Texan Phil Gramm, a close friend of McCain and a former Senate Banking Committee chairman, was also considered a possible candidate for Treasury secretary - until he was forced to leave McCain's campaign team during the summer after he decried some Americans as a "nation of whiners."

Two long-shot possibilities if McCain is elected: New York Mayor Michael Bloomberg, a former Democrat, and New York Attorney General Andrew Cuomo, the Democratic son of former Gov. Mario Cuomo. He suggested both of them, as well as Buffett, to head a bailout oversight board.

For Obama, other possibilities include Daniel Tarullo, his top adviser on financial issues, and New Jersey Gov. Jon Corzine, who is a Goldman Sachs alum. Like Paulson.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business_mag?id=161390913

Wall Street ends lower on earnings news

2008-10-22T07:58:00.000-07:00

Published: Wednesday October 22, 2008

Dimming confidence in the corporate sector sent stocks sharply lower yesterday as investors digested a discouraging batch of earnings and a new initiative from the US central bank, the Federal Reserve, to shore up money-market mutual funds.

The Dow Jones industrials closed down 231.77 points or 2.5 per cent to 9,033.66 after Caterpillar and DuPont, two members of the blue-chip index, said their earnings declined in the third quarter and suggested a bleak outlook for the economy. Caterpillar, a top maker of earthmoving equipment, called the current situation “the worst in years.”

Policymakers and economists have warned that the economy is in for a rough ride over the next few months as the credit crisis hurts businesses and consumer demand. The job market is expected to weaken further and the housing slump has shown no signs of improvement.

In the credit markets, however, signs of improvement continued to appear. Borrowing rates between banks dropped again, a crucial show of confidence among financial institutions. The benchmark rate for overnight interbank loans, known as Libor, dropped to its lowest level in more than a month, a significant improvement from just a few days ago when it neared its historical highs.

But stock investors seemed more focused on earnings, including a report that the billionaire investor Kirk Kerkorian had started to sell his stake in Ford, the motor giant. Kerkorian said his investment company, Tracinda, sold 7.3 million shares of Ford stock on Monday at a huge loss, and intended to further reduce its remaining 6.1 per cent stake. The move underscored the weakening state of Ford and its two Detroit rivals, General Motors and Chrysler, which are in merger talks.

The broader Standard & Poor’s 500-stock index lost 3 per cent or 30.35 points to 955.05 and the Nasdaq composite dropped 4.1 per cent or 73.35 points, to 1,696.68. Technology stocks led the declines, a day after Texas Instruments said sales would fall short of expectations. Texas Instruments shares declined 6.2 per cent.

Shares of Ford fell 7.7 per cent. Caterpillar stock dropped 2 per cent and DuPont was off by 7.9 per cent.

Investors were also expected to sell shares in order to lock in some gains from Monday’s 413-point rally in the Dow.

European stocks ended mixed, turning mostly lower in the afternoon a day after France announced a big injection of cash into French banks.

Under the plan announced late Monday by the French finance minister, Christine Lagarde, the government will buy 10.5 billion euros, or about US$14 billion, of subordinated debt from six major lenders in exchange for a pledge that they will increase lending to businesses and consumers.

Shares in London and Frankfurt fell more than 1 per cent. Paris stocks rose 0.8 per cent. The Tokyo benchmark Nikkei 225 stock average rose 3.3 per cent, powered by a big day on Monday and continued easing in the credit market. The main Sydney market index, the S&P/ASX 200, rose 3.9 per cent. In Hong Kong, the Hang Seng fell 1.8 per cent.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business1.html

RBTT names Darryl White Head - RBTT Merchant Bank

2008-10-22T07:53:00.000-07:00

Published: Wednesday October 22, 2008

Suresh Sookoo, Chief Executive Officer, RBTT Financial Group has announced the appointment of Darryl White as Head, RBTT Merchant Bank with effect from October 16, 2008.

White is a career banker with over 20 years' experience spanning Commercial, Retail and Investment Banking. He joined the RBTT Group in 2004, and currently, is the Vice President, Capital Markets Distribution.

White is a graduate of the University of the West Indies with a BSc in Industrial Management, a qualified member of the Chartered Institute of Financial Services, UK, and holds an MBA from the University of Warwick, UK.

This announcement follows the departure of Filippo Alario, who was acting in this position since May 2008.

Sookoo thanked Alario for his contribution to RBTT and wished him well in all future endeavours.

Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business_mag?id=161390891

'NOT FAIR'

2008-10-22T07:51:00.000-07:00

Published: Wednesday October 22, 2008

BARBADOS' top regulatory agency has rapped a practice by commercial banks of keeping a "selected list" of valuers for clients seeking to obtain property loans.

Such a practice would likely lead to a "distortion of competition" in the market for the supply of property valuation services, says the Fair Trading Commission (FTC), a body set up by Government in January 2001 with an expanded mandate to monitor fair competition and consumers' rights – on top of utilities regulation.

The FTC is to discuss the preliminary findings of its own investigation into the matter of selective lists with representatives of the Bankers' Association, the Association of Valuers and other interested stakeholders tomorrow from 10 a.m. at Sherbourne Conference Centre.

Following the probe the FTC developed a set of recommendations that would inform the process of selecting valuers to "make it more consistent with the requirements of the Fair Competition Act".

"The Bankers' Association, acting on behalf of the commercial banks," reports FTC chief executive officer, Peggy Griffith, "has accepted these recommendations and has proposed criteria to govern the standards to be met by valuers who peform valuations for clients seeking to obtain property loans from commercial banks.

"This meeting will fully discuss the proposed criteria and agree [on] the way forward on this matter."

Unfair or anti-competitve conduct by businesses is covered by Section 13 (2) of the Fair Competition Act, which prevents agreements between businesses that have or are likely to have the effect of preventing, restricting or distorting competition in a market.

Among other things, the law prohibits agreements that provide for the artificial "divvying" up of markets or sources of supply.

Source: Nation Newspapers
http://www.nationnews.com/story/356821803034455.php

BICO to come up with cost-cutting plan

2008-10-22T07:50:00.000-07:00

Published: Wednesday October 22, 2008

BICO LIMITED INTENDS to find a long-term solution to fluctuating energy prices so its ice-cream production can remain competitive.

The company is hoping to be able to do this within six months.

At a press briefing yesterday, British High Commissioner Duncan Taylor visited the Bridgetown Harbour plant to get an update on an energy audit being undertaken by two visiting British engineers, Thomas Akomeah and Jonathan McFarlane of Akome Energy Build Limited.

Bico chairman Edwin Thirlwell said the constant rises in the price of oil meant they lost $500 000 that they could not recover because if they raised the price of their ice- cream too much, sales would go down.

He added that they had a freezer packed with three months' supply of ice-cream manufactured when energy costs were higher. They could not reduce the price because fuel costs had just dropped because costlier milk powder and shipping were also factored into the manufacturing price.

Also present were BICO's commercial director, Robert Weekes, and Barbados Investment Development Corporation officials, Beverley Alleyne, senior business development officer, and Samuel Harrison, business development officer. BIDC is sponsoring the engineers through its technical assistance fund.

Thirlwell explained that the company had six plans to help conserve energy and the engineers would do the audit and determine the best way forward.

He said the options were being calculated on US$70 per barrel as the going price for oil.

Natural gas is among the options they are considering by converting one of the generators. He said there was also a solar option.

Source: Nation Newspapers
http://www.nationnews.com/story/308892775015506.php

Agri fund proposed for regional development

2008-10-21T06:24:00.000-07:00

Published: Tuesday October 21, 2008

Caribbean agriculture ministers have proposed the establishment of an agri fund to help to build capacity within the region.

The suggestion was among a raft of measures agreed on during recent meetings of the Alliance of Regional Agriculture Ministers, at the eighth Caribbean Week of Agriculture in Kingstown, St Vincent and the Grenadines.

Jamaica's Minister of Agriculture, Dr Christopher Tufton, who chairs the alliance, says the proposals have been forwarded to the Council for Trade and Economic Development to be passed on the heads of government in the region for their consideration and implementation.

"We believe that agriculture has been talked about, but in too many cases, it has not been given appropriate support through financing," Tufton said.

Repositioning the sector

He said his Caribbean colleagues believe that a regional agriculture capacity-building fund, consistent with World Trade Organisation rules, would help to reposition the sector.

The agriculture minister said, given the recent international developments, including the United States financial meltdown, it is imperative that agriculture be viewed as a strategic move to secure the well-being of the Caribbean and to reduce the level of vulnerability.

Tufton said against this background, his colleagues want their governments to expressly commit to helping to build the sector through the recommended avenues.

Turning to the so-called Jagdeo Initiative - a regional plan aimed at strengthening agriculture - Tufton said there had been some progress. He said member countries have now been assigned specific tasks to identify the constraints to productivity and trade in the region.

Jamaica, for example is looking at the issue of marketing.

According to Tufton, the terms of reference have now been drafted and over the next six to eight months, individual countries will provide recommendations to be forwarded to the Caribbean Community (CARICOM) for implementation.

Source:
Damion Mitchelle
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081021/business/business3.html
damion.mitchell@gleanerjm.com

UN: 20 million more jobless from crisis

2008-10-21T06:21:00.000-07:00

Published: Tuesday October 21, 2008

The global financial crisis will raise world unemployment to 210 million people by the end of next year, its highest rate in the past decade, the United Nations labour agency said yesterday.

That new figure will include at least 20 million who lose their jobs between now and the end of 2009, said officials of the International Labour Organisation (ILO).

That will be the first time in a decade of record-keeping that the global total has been above 200 million people, said officials of the ILO.

Also yesterday, Miguel d'Escoto Brockmann, president of the UN General Assembly, said in New York that he would establish a high-level task force to suggest steps to reform the global financial system to reflect 21st century economic realities – including greater clout for developing countries.

Brockmann said there was growing recognition that the current financial turmoil could not be solved through piecemeal responses at the national and regional level but requires coordinated global efforts that are best led by the United Nations.

He announced that Nobel Prize-winning economist Joseph Stiglitz of the United States would chair the task force and take part in a panel on the financial crisis at UN headquarters on October 30.

In Geneva, Juan Somavia, director-general of the ILO, told reporters that global leaders needed to focus on the impact on individuals rather than just financial institutions when they devise rescue plans.

"We thought it was not good to talk about the financial crisis exclusively in financial terms," Somavia said.

"We have to talk about the financial crisis in terms of what happens to people and in terms of what happens to jobs and enterprises."

He said it is already clear that people are going to be hurt by the financial crisis and that measures should be taken to provide unemployment compensation and other social protection.

"If we have enough resources to pump into the financial system, this is not the moment to say, 'Yes, but we don't have the resources to care about people,"' said Somavia.

He said the first step in a global rescue plan remains getting out of "the credit paralysis."

"The financial system has to go back to its fundamental function," he said, providing credit to people with entrepreneurial spirit to set up a company that will produce goods and services and create jobs."

Source: Nation Newspapers
http://www.nationnews.com/story/308196685289823.php

2008-10-21T06:20:00.000-07:00

Published: Tuesday October 21, 2008

BARBADOS is moving quickly to liberalise controls on the movement of foreign currency in and out of the country, in order to ease regional transactions.

As a result, the Central Bank said yesterday it would allow commercial banks and authorised foreign currency dealers to grant CARICOM Single Market & Economy (CSME) residents the funds required for settling-in purposes, such as purchase of items such motor vehicles, furniture and equipment.

The facility does not allow for the purchase of real estate.

Moreover, companies operating in Barbados and controlled by CSME residents are now allowed a maximum of $1 million annually. The exception again is for acquisition of real estate.

In what could be described as an important move in the process, the Central Bank also announced that it would allow Barbadian residents who earn foreign exchange to keep some of that money and not have to hand it over to a bank or authorised dealer.

Apart from attempting to level the playing field between foreign residents and Barbadians, the Central Bank said it hoped the move would encourage Barbadians holding foreign currency in accounts overseas to return that money to Barbados.

Regarding the impact of the move on the island's foreign reserves position, the bank said it was "mindful of the weak international environment and has therefore decided to implement only such measures as might facilitate the private sector, without significant risk of adverse impact on the foreign reserves".

Additionally, the bank said authorised dealers could continue to open foreign currency accounts funded by non-residents and Barbadians and CARICOM nationals permanently living outside Barbados.

In addition, the Central Bank said non-residents could continue to place the full amount of funds brought into Barbados on their foreign currency accounts.

However, CSME residents living in Barbados for three years will be treated as residents for exchange control purposes and will be subject to surrender requirements.

Source: Nation Newspapers
http://www.nationnews.com/story/308292328955798.php

Stocks finish with a flourish on W Street

2008-10-21T06:18:00.000-07:00

Published: Tuesday October 21, 2008

Stocks surged on Wall Street yesterday, pushing the Dow Jones industrial average back above the 9,000 level, as investors welcomed talk of a second economic stimulus plan and an improvement in key lending rates.

The Dow Jones industrial average (INDU) added 413 points, or 4.7 per cent according to early tallies. The Standard & Poor's 500 (SPX) index gained 4.8 per cent. The Nasdaq composite (COMP) added 3.4 per cent.

After the close, American Express reported quarterly earnings from continuing operations of 74 cents per share, topping forecasts of 59 cents and down from 94 cents a year earlier. The company reported revenue of US$7.2 billion versus forecasts for US$7.31 billion.

Investors cheered comments from Federal Reserve Chairman Ben Bernanke that suggested a second economic stimulus package could be up for discussion. Additionally, comments from Treasury Secretary Henry Paulson and an improvement in lending rates added heft to bets that the credit market freeze is starting to thaw.

But the volatility of recent weeks isn’t over, analysts said. Yesterday’s gains reflected the need for traders to take a break from last week's wild swings, if nothing else, said Dean Barber, president at Barber Financial Group.

He said that the huge Dow swings last week of sometimes 1,000 or more points in a single session - between the highs and the lows - have really worn people out.

In testimony before the House Budget Committee, Bernanke noted that “with the economy likely to be weak for several quarters and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate.”

The Bush administration said it was open to the idea. Congressional Democrats have previously said a second stimulus package is needed.

Shortly after Bernanke’s speech, Secretary Treasury Henry Paulson gave a statement that a “broad group of banks" is interested in participating in the government's plan to invest US$250 billion directly into lending institutions. Paulson also reiterated that the investments should eventually earn a good return for taxpayers.

These announcements helped propel Wall Street. But on a broader level, stocks were up because investors were starting to express optimism, said Dave Rovelli, managing director of US equity trading at Canaccord Adams.

He said investors were encouraged by a weekend cover story from financial weekly Barron's that suggested that the recession won't drag on as long as feared. However, the main factor restoring confidence was an improvement in lending rates over the past week, he said.

He added that the recent drop in Libor, a key bank lending rate, on both an overnight and three-month level, was critical: “We’re seeing that the government's efforts are starting to work,” Rovelli said.

The morning brought an improved report on the economy as well. The September index of leading economic indicators (LEI) rose 0.3 per cent after falling a revised 0.9 per cent in the previous month. Economists surveyed by Briefing.com thought LEI would fall 0.1 per cent.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business3.html

Barbados knocks region on CSME

2008-10-21T06:17:00.001-07:00

Published: Tuesday October 21, 2008

Barbadian Foreign Affairs Minister Chris Sinckler has expressed frustration that many Caricom leaders were still dragging their feet on the full implementation of the Caricom Single Market and Economy (CSME).

Addressing a meeting of regional and international policy makers in Bridgetown on Sunday, he said that there had been “too much hesitance” and second guessing when it came to the regional integration movement. He warned that “time is running out on the Caribbean.

“If we do not act now to claim our stake in this global economy, we may never get the opportunity again,” Sinckler said.

He said the CSME presented the opportunity for small states in Caricom to overcome obstacles presented by globalisation.

“What empirical data and analysis shows us will be the benefits of economic integration and definitely too little aggressiveness by our business people and indeed, our policy makers, in taking advantage of the opportunities,” he said.

Last month, Barbados’ Prime Minister David Thompson – who has lead responsibility for the CSME in the Caricom quasi-Cabinet – said leaders would meet later this year to discuss the state of the initiative, especially the thorny issue of the free movement of skills and labour across the region.

Source: Trinidad Guardian Newspapers
http://www.guardian.co.tt/business2.html

NCB appeals Olint ruling

2008-10-20T06:49:00.000-07:00

Published: Monday October 20, 2008

THE NATIONAL Commercial Bank (NCB) has filed an appeal against a Supreme Court ruling, which quashed its application last month to close the personal accounts of Olint's boss, David Smith, and his wife, Tracey.

NCB's application was based on a Supreme Court ruling in December last year, which upheld the cease-and-desist order which the Financial Services Commission had issued in 2006 against investment club Olint Corporation Limited.

NCB, in seeking to have the accounts closed, said it did not want to continue to operate accounts for persons who were associated with Olint based on the ruling by the Supreme Court.

Application denied

The Smiths, who were represented by attorneys-at-law Gordon Robinson and Georgia Gibson Henlin, opposed the application.

Justice Patrick Brooks heard legal arguments in chambers and ruled that he could not grant the application based on a Court of Appeal ruling in July.

The court had ruled that Olint's accounts with the bank must remain open until the Supreme Court heard the civil suit which Olint has filed against NCB.

NCB, which is being represented by Michael Hylton, QC, filed an appeal last Tuesday against Justice Brooks' ruling on the grounds that he ignored the settled common-law principles when he concluded there was a serious issue to be tried.

It states further that the judge said the serious issue was: "Can a bank in Jamaica in the 21st century, by merely giving reasonable notice, lawfully close an account that is not in debit, where there is no evidence of that account being operated in breach of the law?"

NCB is appealing the July ruling of the Court of Appeal, and the appeal is set for hearing on November 6 before the United Kingdom Privy Council.

Olint is appealing the cease-and-desist order. The Court of Appeal is to hear the appeal next month.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081020/business/business2.html

CARIFORUM, European Community sign EPA

2008-10-16T08:39:00.000-07:00

Published: Thursday October 16, 2008

Thirteen of 15 member states of CARIFORUM yesterday signed the Economic Partnership Agreement (EPA) with the European Community, ushering in a completely new trading relationship between the region and Europe.

The signing ceremony took place at the Sherbourne Centre, Bridgetown, Barbados.

Guyana and Haiti were the two CARIFORUM countries which did not sign yesterday.

Guyana has indicated that it will sign the agreement in the coming days, following its support for a joint declaration, which addressed some of its concerns about the EPA.

Little time to consider

Haiti has asked for time, given the fact that its new government has been battling the effects of four consecutive hurricanes that struck the island, leaving the relatively new government little time to consider the agreement.

Speaking at the signing ceremony, CARIFORUM Secretary General Edwin Carrington called for a change in attitudes and work ethic as the region moved to implement the agreement.

"This approach to the implementation of the EPA may yet provide the stimulus and the foundation for the region's effective insertion into the global economy," he said.

ABOUT THE EPA

3 The EPA was negotiated over a period of almost four years and initialed in Barbados last December.

3 The agreement allows for reciprocal trading arrangements between the countries of the European Community and CARIFORUM, including goods and services, among other things.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081016/business/business2.html

Bartlett upbeat on tourism

2008-10-16T08:37:00.000-07:00

Published: Thursday October 16, 2008

Despite jitters in the hospitality industry that the global financial crisis could affect Jamaica, Tourism Minister Edmund Bartlett said the sector would survive the mammoth threat to the country's top income generator.

"Tourism is accustomed to these periods as we went down the road of 9/11 and we got out of it quickly and now are in the lead," Bartlett told members of the Association of Jamaica Attractions Limited (AJAL) Tuesday during their annual general meeting at the Grand Palladium Hotel and Resort in Hanover.

It was just last week that top representatives at the Ministry of Tourism, Jamaica Hotel and Tourist Association (JHTA) and the Jamaica Tourist Board (JTB) met at an emergency meeting in Ocho Rios, St Ann, to discuss the possible impacts on the sector because of the financial meltdown in the United States.

He was quick to note that the solutions lay in market diversification, attraction development and airlift security will separate the country from its competitors.

Tourist attraction

As such, some $250 million from the Tourism Enhancement Fund will be used to refurbish the Milk River Bath in Clarendon, according to Bartlett in an effort to boost the health and wellness tourist attraction.

President of the AJAL, Marc Melville, echoed similar sentiments and reminded the members of their importance in the success of the industry in Jamaica.

"No other Caribbean country can boast the attraction diversity that Jamaica has and this sets us far apart from our competition," the AJAL president reiterated to its members.

Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081016/business/business4.html