CVI’s Caribbean Financial RoundUP : Week of July 29- August 03 2018
Making the News
Some of the TOP Stories of the week past (July 29-August 03) that Caribbean Value Investor has been reading.
The Story: Tax on Tourism
Summary: In an effort to combat the economic crisis facing the country, the government of Barbados placed a mandatory room rate levy on Tourism accommodation providers. The levy became effective on Sunday, July 1, 2018. The levy was applied to all bedrooms per night on the island. The rates are as follows:
- Villla Sub Sector and all other Vacation Rental Properties however defined – 2.5 % of the nightly rate, capped at USD $10.00
- Luxury Class Hotels – USD $10.00
- “A” Class Hotels – USD $5.00
- “B” Class Hotels, Apartments and Guest Houses – USD $2.50.
Also effective July 1, a 2.5 % Product Development Levy on Direct Tourism Services will go into effect. This includes island tours, cruises other than international cruises, meals, drinks and dining services, as well as goods and services provided by spas, retreats and marinas as outlined under legislation.
Source: Please see reference #1
The Story: Debt Turmoil
Summary: Foreign creditors have joined forces in an effort to protect their interests as the Government of Barbados solves its debt problems. Newstate Partners LLP, an independent advisory firm based in London, said that it was advising several external investors with Barbados debt holdings and who had formed a creditor committee to protect their interests. The group is seeking more information on Barbados’ debt restructuring effort from the Barbados government. Complaints were made about the decisions taken by government which they said had been unilateral in nature, and did not involve prior consultation or seek to gain inputs from members of the committee, the external commercial creditor community at large, or other key stakeholders.
The creditors joined forces in response to the Barbados government suspending payments of interest and principal on all external commercial debt, while continuing to pay interest on all domestic debt”. Government recently announced that it had appointed White Oak Advisory Ltd, based in London, to act as its financial advisor in the debt restructuring process. The Mia Mottley administration also said it had retained the services of New York-based Cleary Gottlieb Steen & Hamilton LLP as external legal advisor. In an update to investor the Barbados Government Information Service, said White Oak “is in the process of establishing initial contacts with affected creditors, and is expected to soon commence creditor engagement on the basis of the medium-term macroeconomic projections to be finalised by the Government in the coming weeks”.
Source: Please see reference #3
The Story : Sagicor Life Inc Launches Pilot Internship Programme
Summary: Sagicor Life Inc this week launched the pilot of its business internship programme. The programme will see 16 young leaders ranging in age from 16 to 23 getting hands on training in business best practices as well as other skills. The programme has been dubbed “The Green Leaders Internship Programme and is expected to run for ten weeks.
Source: Please see reference #4
The Story: Fishy Business
Summary: The Government has unveiled measures to boost the $78m crawfish industry, with increased wholesale profit margins and greater Bahamian dive participation among the key targets. Michael Pintard, Minister of Agriculture and Marine Resources, speaking just before the crawfish season’s August 1 start, said the government is spearheading a new training initiative that will grow the number of Bahamian divers and reduce reliance on foreign nationals in this profession. Mr Pintard said the average lobster landing over the last five years has been in the vicinity of 5.5 million pounds, with an average value in the vicinity of $61 million per year.
The Story: J$ Traded at a new All Time Low to the USD
Summary: The Jamaican dollar last traded at $135.54 per US dollar. It has fallen by $10 year to date from $125.0004 at the end of 2017.
Source: Please see reference #6
The Story: TAJ Beats Revenue Expectation
Summary: The Tax Administration of Jamaica (TAJ) has filed a preliminary report indicating that it has surpassed the first quarter target. The Administration reportedly collected 79.2 billion Jamaican dollars (US $ ) for the period April 2018 – June 2018. The figure is some 9.2% higher than the revenue target of 73.2 billion.
Source: Please see reference #7
The Story : SSL Makes Regional Move
Summary: SSL subsidiary Dolla Financial is now looking to neighbouring Caribbean islands, Haiti and not so close neighbour, Guyana to foster growth in its micro-financing operations. Denise Williams sat down with SSL portfolio CEO Kadeen Mair to get some insights into the prospects for the company.
Earlier this year, SSL acquired C2W in a reverse takeover bid for 0.01 per share and rebranded the company as SSL Ventures. The mandate of the newly acquired subsidiary is to identify companies in which it can take a stake, grow them and then list them on the Jamaica Stock Exchange. SSL further created a holding company, SSL Barbados Limited which will serve as the ultimate parent company for both Dolla Financial, SSL Brokerage and SSL Ventures.
Source: Please see reference #8 & #9
Trinidad and Tobago
The Story: T&T strengthening links with Africa
Summary: Trinidad and Tobago is seeking stronger ties with Africa. Speaking at the the Emancipation Support Committee’s 18th Annual Trans-Atlantic Trade and Investment Symposium at the Hyatt Regency in Port-of-Spain on Tuesday rade Minister Paula Gopee-Scoon highlighted trade relations with the island nation and the continent. During 2014 to 2017, the average exports and imports with the African continent were $1.4 billion and $7.5 billion respectively, resulting in a trade deficit of $6.1 billion. The top exporting markets to the continent in 2017 were Morocco, Senegal, Liberia, Ghana and South Africa while the top import partners were Gabon, the Democratic Republic of Congo, Congo, South Africa and Morocco. She stated that energy and downstream energy products form the economic backbone of Trinidad and Tobago-Africa relations. The trade minister highlighted the Republic Bank Holdings T&T Limited acquisition of Home Finance Company (HFC) Bank in Ghana as a prime example of a prosperous partnership between the island the continent
Source: Please see reference #10
The Story: T&T sees decline in productivity
Summary: According to Camille Robinson-Regis Minister of Planning and Development, Trinidad and Tobago is falling behind in productivity and work ethic. She expressed concerns about the levels of productivity over the past 10 to 15 years and the progressive deterioration in the quality of work ethic being experienced in all sectors nationwide.
As a result National Tripartite Advisor Council (NTAC) has made several recommendations. NTAC’s recommends for a disciplined approach to a resolution of the nation’s productivity and work ethic shortcomings. The country’s work ethic appears to be challenged mainly by absenteeism, unpunctuality, traffic congestion and inappropriate management styles. Dr. Ramesh Ramdeen, CEO, T&T Manufacturers’ Association (TTMA) and the business representative on NTAC, agreed that productivity needs to be improve.
“Based on statistics we have we see that national productivity is relatively low and it is falling. Low productivity means increases in prices, increases in our livelihood and in a number of areas we are falling in competitiveness according to Dr. Ramesh Ramdeen, CEO, T&T Manufacturers’ Association (TTMA) and the business representative .” However, Vincent Cabrera, President of the Banking, Insurance and General Workers Union, defended workers’ productivity by saying there is no there is no research data or survey to prove that we are unproductive. Cabrera claimed major banks and conglomerates are making “fantastic” profits while complaining about labour productivity.
Source: Please see reference #11
Financial Deep Dive:
Maberry Jamaica Equities Lists on the JSE (JSE: MJE)
On July 31st MJE a subsidiary of Mayberry Investment Limited was listed on the main market of the JSE. Share priced opened at JMD $7.56 and closed at JMD $9.07 after touching a high of JMD $9.82 on Tuesday July 31st 2018. At the end of the trading session on Friday share price closed at JMD $8.53, down 15% from the high on Tuesday. In the six months financial results ending June 30th, 2018 MJE. Net profits for the 6 months period was JMD $474,717,000 up from JMD $4,285,000. This showed a 10,979 % increase over the previous period. Profits were boosted by dividend income from holdings in Supreme Ventures Limited and Caribbean Producers Limited as well as unrealised gains on investments of $336,011,000. EPS for the period ended at JMD $0.40 and book value at JMD $9.90.
Goddard Enterprises (BSE: GEL)
Goddard Enterprises Limited this week announced a stock split. The Barbados Stock Exchange Inc. (BSE) advised that trading in the security – Goddard Enterprises Limited – had been unsuspended having successfully completed the Shareholder approved stock split of all issued and outstanding shares of Goddard Enterprises Limited (GEL).
The BSE also advised that as a result of the stock split, 169,955,781 additional common shares of GEL were listed. Thus the total issued and outstanding shares listed in GEL was increased to 226,607,708. The opening market price of the stock on August 02 was therefore adjusted to $3.13
Point Lisas Industrial Port Development Corporation Limited (TTSE: PLD)
PLIPDECO reported earnings ending June 30th. There was a 82 % increase in net profits for the quarter and a 112.5% increase in net profits for the 6 months ending June 30th. This was driven by a 74% and 78 % increase in exports and imports respectively. EPS for the period stood at TT $1.52. Price closed at $3.70 at the end of Friday session.
In The Markets
Here are the changes in the major Caribbean Stock Market For the week ended August 03, 2018. Changes are in respect to the previous week ended July 27, 2018.
- The Changes in the The Barbados Stock Exchange (BSE)
- The Barbados Stock Exchange
- The BSE Local Index fell by 0.04 points.
- The Cross List Index recorded no changes and ended Firm at 1442.80 points
- The BSE Composite Index remained largely unchanged falling by 0.01 point from its July 27 level.
The Changes in the The Jamaica Stock Exchange (#JSE)
- JSE Main Market Index edged higher this week. The index closed 4,204.98 points above its July 27 level. An increase of 1.36%.
- The JSE Junior Market increased by 1.20%
- The JSE Combined Index increased by 1.34%
- The JSE Select Index ended 93.11 points higher. A gain of 1.00%
Trinidad and Tobago :
- The Changes in the The Trinidad and Tobago Stock Exchange (#TTSE) as against the week ending July 27 were as follows:
- The All T&T Totals index fell 0.56% or 9.54 points from its July 27 level closing at 1,718.84 points.
- The TTSE Composite Totals rose by 1.18% closing the week up 14.45 points.
- The TTSE Cross Listed Totals were also up but by 2.66 points. It ended the week past 2.71% higher than when last reported.
The Story: APPL reaches $US 1 Trillion Market Cap
Summary: Apple Inc this week reached the astronomical market value of $1,000,000,000,000.00 Apple is only the second company to hit the landmark and the first in the United States. The first company to achieve the feat was PetroChina in 2007. AAPL shares last traded at $US 207.99 with a Price Earnings (PE) ratio of 18.84 times.
Source: Please see reference 13