BALANCE OF PAYMENTS DEVELOPMENTS
JANUARY 2008

Provisional data indicate that the current account deficit widened by US$99.4 million in January 2008, compared with the deficit in January 2007. This deterioration was largely associated with respective growth of US$69.9 million (51.2 per cent) and US$15.6 million (14.6 per cent) in the value of imports of fuel and machinery and transport equipment. The increased spending on fuel imports reflected an average increase of 71.4 per cent in the price of oil on the international market, relative to the comparable period in 2007. The growth in imports was partly offset by a 4.8 per cent increase in earnings from merchandise exports, primarily reflecting an expansion of US$13.6 million (57.1 per cent) in the value of mineral fuels exports. Within the services sub-account, there was an increase in net transportation payments, associated with the higher level of imports. In addition, there was a reduction in the surplus on the travel subaccount, reflecting lower estimated earnings from tourism.

The expansion in the deficit on the income account was mainly attributed to higher interest payments on official external debt, partly offset by a decline in the estimated imputed profit remittances of the direct investment companies. An increase of US$12.2 million in net current transfers for the month partly offset the deterioration on the other sub-accounts. The growth in net transfers was associated with increases of 8.8 per cent and 17.4 per cent in inflows through remittance companies and commercial banks, respectively.
Within the capital and financial accounts, net private and official investment inflows were insufficient to finance the deficits on the current and capital accounts. As a result, the NIR of the Bank of Jamaica declined by US$58.7 million for the month. At end-January 2008, the gross reserves stood at US$1 847.2 million. Source Bank of Jamaica

Jitters over alternative investment schemes spread to World Wise
January 03, 2008

JITTERS over the uncertainty of alternative investment schemes, following a ‘cease and desist’ order against Cash Plus spread to forex exchange trading entity World Wise Partners.

AG, financial officials to meet on alternative investment schemes
January 06, 2008

An urgent meeting called between Attorney General Dorothy Lightbourne, officials of the finance ministry and Financial Services Commission (FSC), to make recommendations and guidelines to address the growing concerns over unregistered investment clubs. The instruction was given by Prime Minister Bruce Golding during a meeting with finance minister Audley Shaw, minister without portfolio in the ministry, Don Wheby, FSC officials and representatives of the banking sector.

Golding said the number one priority was to protect the integrity of the country’s financial system and establish the requisite legislative framework for dealing with other investment schemes that may develop in the future.

CMP buyer in breach – Mandatory offer from Castelo Holdings still pending
January 11, 2008

Castelo Holdings BV, a Curacao company which last year acquired 79.66 per cent of listed company CMP Industries Limited, has failed to make a mandatory offer to minority shareholders within the prescribed timeline. Myers Fletcher and Gordon, lawyers for CMP Holdings – the owner of CMP Industries – confirmed that the deal had been executed. The transaction would have given Castelo, a company incorporated in Curacao more than 16 million of the more than 20.3 million listed units.

Real estate grosses $50b
January 25, 2008

Jamaica’s real estate market recorded transactions valued at about $50 billion last year, according to realtor Deborah Cumming addressing an investment conference on Wednesday. She attributed some of its buoyancy to the slight decrease in mortgage rates, people having access to more disposable income helped by a slight decrease in the value of the currency and a number of housing completions which had to be on hold in 2006 due to the shortage in cement during that year.

Digicel projects US$434m profit on regional operations – Revenues of US$1.47b
January 25, 2008

Digicel Group Limited, the Caribbean’s top mobile company, expects to grow revenues to US$1.47 billion (J$104.4 billion), with Jamaica appeared poised to deliver just under a third of that income, and is estimating profits of US$434 million (J$30.9 billion) on operations at its financial year end March 2008, according to company information released at a Miami conference. The company refused comment on its net profit position. Jamaica remains the biggest contributor to revenues, but its share has been slipping

To list on junior market, firms must be ‘sponsored’
February 1, 2008

Prime Minister Bruce Golding sees value in the regional stock market dubbed the Caribbean Exchange Network, but conceded that the regulations and legislative support may be holding up its launch. The Jamaica Stock Exchange (JSE) says it has made sufficient headway on plans for a junior market specially tailored for small and medium-size companies to launch trading within 2008. “We think we have reached a far way and we are hoping that with the collaboration of the Government we should see the Junior Venture Market before the year ends,” Marlene Street-Forrest, general manager of the JSE said.

Castelo Holdings gets Ash Wednesday ultimatum
February 1, 2008

The Jamaica Stock Ex-change (JSE) has given Castelo Holdings BV, a Curacao company that last year bought up 79.66 per cent of listed company CMP Industries Limited, has until February 6 to make its mandatory offer to minority parties.

Markets advance, dollar continues to slide
February 05, 2008

The main JSE Index advanced. The advance-to-decline ratio was positive. Of the 37 stocks that traded 22 advanced, 11 declined and four traded firm. The Main JSE Index gained 466.86 points or (0.42 per cent) to close at 109,884.87 points, the All JA Comp Index declined by 1,648.36 points or (1.47 per cent) to close at 110,213.03 points, while the JSE Select Index lost 70.57 points or (2.28 per cent) to close at 3,017.95 points. Market volume (excluding blocks) amounted to 37,906,623 units valued at $1,557,157,707.62. The volume leader category was dominated by Seprod with 11,623,357 units (30.66 per cent) followed by Cable & Wireless with 4,700,414 units (12.40 per cent) and NCB Capital Markets 11.75 per cent with 3,933,654 units (10.37 per cent).

Angostura to pay out J$22b – In first tranche of Lascelles deal – Acquisition repriced at US$618m
February 8, 2008

Michael Carballo, executive director of Angostura Limited, says the spirits company expects to pay out US$309 million (J$22.2 billion) in the first tranche of the two-tiered deal to shareholders of Lascelles Demercado and Company. At that estimate calculations indicate that the Trinidad Company has secured more than 68.6 million shares under its mandatory offer, based on the initial US$4.50 per share payout. The shares tendered will be held in escrow by Citibank NA until the final payment of US$4.50 to US$6.15 per share.

Essentially, the company anticipates the acquisition will cost US$618 million (J$44.5 billion) or US$9 per share. The deal was initially cast as a potential US$900 million (J$64 billion) acquisition

CMP suspended – As JSE ultimatum against Castelo expires
February 8, 2008

The Jamaica Stock Exchange (JSE) suspended trading in the shares of Caribbean Metal Products Limited on Thursday, saying new owners Castelo Holdings BV had failed to comply with the rules of the exchange. CMP last traded on October 1 at a flat price of $4.25 per share on a 3,000 unit transaction.

AIC offloads 19.8 million NCB shares
February 22, 2008

National Commercial Bank of Jamaica’s parent AIC dispose of just fewer than 20 million of the bank’s shares in the past year, in what the Canadian company has said is routine trades. The transactions, at first blush, appear to be redistribution by Michael Lee Chin of ownership rights among AIC related Jamaican entities. Based on the average trading price of NCBJ over the period, the trades would have been valued at just about $440 million.

$5b ad industry to push for agency accreditation
February 22, 2008

The Advertising Agencies Association of Jamaica (AAAJ) is to push for a programme of accreditation for existing agencies, and will be creating a promotional campaign to “reinforce the value” of the sector to the economy. AAAJ president Andrew Rousseau said the plans have buy-in from executive members. “As stewards of brand and company image for enterprises of varying sizes, we are now working in a media landscape that is more dynamic than it has ever been,”

Jamaica Broilers doubles revenues on ethanol sales – But production costs weigh on profits
February 22, 2008

Jamaica Broilers Group revenues continued to be fuelled by ethanol, whose sales of $1.8 billion in the quarter ended January 5, 2008, boosted the poultry company’s turnover to $5.2 billion, or just about double the $2.8 billion earned in the comparative period a year ago. Sales by Jamaica’s top poultry producer rose 88 per cent or by $2.4 billion, largely on the back of exported fuel-grade ethanol produced at the 60-million gallon plant operational since July 2007.

Flow the face of cable – But small operators still strong, says JACCO
February 29, 2008

The expectation that Flow’s entry into the Jamaican cable market would have transformed the face of the sector, force its players to consolidate, and drive down prices to consumers has not happened, said the chief spokesman for small operators. Instead, Collin Innis, president of head of the Jamaica Association of Community Cable Operators, says more players have actually entered the market and that the monthly charges to subscribers have remained at an average of $2,000 per month.

Pulse reclaims independence – Redeems 8.9m preference shares held by backer
February 29, 2008

Hinting at concern that the Development Bank of Jamaica might have wanted to convert the holding to ordinary stock – thereby grabbing a greater stake in the entertainment and Property Company – Kingsley Cooper’s Pulse Investments redeemed nearly $30 million worth of preference shares held by the state bank. “The redemption is in line with an ongoing strategy to reduce debt and prevent the dilution of the company,” Cooper said in a statement yesterday. He has paid $24 million of the total $28.5 million due to DBJ, and is scheduled to pay off the remaining $4.5 million in April.

LOJ to pay $900 million in dividends – Says more to come
March 14, 2008

Life of Jamaica (LOJ), the financial services conglomerate, says it will pay out approximately $900 million in interim dividend against 2008 projected profit, even ahead of finalising the results for its first quarter that ends on March 31. LOJ announced its plan in a posting with the Jamaica Stock Exchange on Wednesday, saying that shareholders on record at March 18 will get a payment of 24 cents per stock.

98% say yes to RBTT, RBC deal
March 28, 2008

Exceeding expectations, shareholders of Trinidad-based RBTT Financial Holdings Limited gave a 98 per cent endorsement to the US$2.2 billion offer from Royal Bank of Canada that will merge the regional banking operations of the two companies. The deal was contingent on at least 75 per cent approval from RBTT shareholders.