BALANCE OF PAYMENTS DEVELOPMENTS
APRIL 2008

Provisional data indicate that the current account deficit widened by US$83.5 million in April 2008, compared with the deficit in April 2007 (see Table). This deterioration was largely associated with increased spending on imports during the month, reflecting growth of US$71.0 million (47.6 per cent), US$31.1 million (47.6 per cent) and US$24.5 million (27.7 per cent) in the values of fuel, chemicals and machinery & transport equipment, respectively. The higher spending on fuel-related imports was associated with significant increases in the price of oil on the international market. The growth in imports was partly offset by a 32.4 per cent increase in earnings from merchandise exports, primarily reflecting expansions of US$31.4 million (32.4 per cent) and US$13.6 million (59.8 per cent) in the values of alumina and fuel exports, respectively.

BALANCE OF PAYMENTS DEVELOPMENTS
MAY 2008

Provisional data indicate that the current account deficit widened by US$167.9 million in May 2008, relative to the deficit in May 2007 (see Table). This deterioration was largely associated with increased spending of US$179.0 million (130.8 per cent), US$31.3 million (66.8 per cent) and US$21.2 million (32.1 per cent) in the values of fuel, miscellaneous manufactured goods and chemicals imports, respectively. The higher spending on fuel-related imports was partly associated with significant increases in the price of oil on the international market.

SECOND QUARTER REGISTERS FLAT PERFORMANCE, SAYS PIOJ
The economic performance for the second quarter – April to June 2008—was relatively flat compared with the corresponding period last year, with real GDP declining by an estimated 0.2%. Declines in output in Agriculture, Mining and the Manufacturing sectors contributed to an overall decline of 0.9% in the Goods Producing sector. The announcement was made at the Planning Institute of Jamaica (PIOJ), quarterly press briefing.

In reviewing the performance of the macro economy for the quarter, Hughes stated that this should be seen within the context of an appreciation in the exchange rate of 2.7%, a quarterly inflation rate of 6.0% and a fiscal deficit of $8.6 billion, which was $4.1 billion less than programmed and $152.1 million lower than recorded for the corresponding period last year.

Post Quarter Prospects
The PIOJ’s assessment of the economy for the upcoming quarter July -September is somewhat optimistic, although challenges are expected for the economy. GDP is expected to grow between 0.6% and 1.0%. Steady growth in the Construction & Installation sector should impact favourably on the Goods Producing sector, which is projected to increase within the range of 1% and 1.5%. Improvement in the output of Electricity & Water should result in further growth between 0.5% and 0.8% within the Services sector.

INFLATION REPORT June 2008
The All Jamaica Consumer Price Index (CPI) rose by 2.0 per cent in June 2008, relative to an increase of 2.4 per cent in May 2008 and 0.8 per cent in June 2007. The inflation outturn for the review month resulted in a calendar year-to-date inflation rate of 11.6 per cent, 6.5 percentage
points above the outturn for the comparable period in 2007.

Cash Plus in turmoil – Investment club in receivership – Investment club in receivership
April 1, 2008

The five-year-old investment club Cash Plus Limited, which has been engaged in a number of legal battles over the past 12 months, is in receivership. Kevin Bandoian, a chartered accountant employed to Price-waterhouseCoopers in the United States, has been appointed joint receiver-manager.

Jamaica Money Markets Brokers (JMMB) applies for commercial banking licence
April 4, 2008

Jamaica Money Markets Brokers Limited has applied to the central bank for a commercial banking licence, which, if approved, will grow the sector to eight licensees. “The application was submitted late Wednesday evening, March 26,” said Marguerite Cremin, the brokerage’s marketing manager.

Red Stripe moves to protect brand – Fears negative impact of dancehall on foreign markets
April 11, 2008

The decision by Jamaican brewers, Red Stripe, to withdraw sponsorship of live music shows is being driven by the need to protect the integrity of the brand globally, in the face of the company’s strategy internationally, remarks by the company’s managers suggest.
“Two years ago, the company was banned from a leading entertainment chain in the United Kingdom because it sponsored an event in which lyrics glorifying violence were used,” Red Stripe’s CEO, Mark McKenzie, told members of the Rotary Club of St Andrew in a speech.

Lewis mystified by Salada’s price
April 11, 2008

The price of Salada’s stock may have drifted downward on the Jamaica Stock Exchange closing at $90, a decline of $25, but it’s mostly sharp climb in recent weeks has mystified the market, not the least of whom is the major shareholder, Donovan Lewis.
“As far as I am concerned, it is speculative. I don’t know who is buying. Perhaps someone is trying to acquire a particular amount of the shares and wanting to buy it at any price,” he said
The stock reached $135 before it began a southward drift.

Cash Plus has no money here to repay, cop tells court
April 18, 2008

Supporters of Carlos Hill, the CEO of Cash Plus, the collapsed alternative investment scheme, protest and demand his release from police custody outside the Half-Way-Tree Courthouse where Hill, his brother Bertram and Cash Plus’ chief financial officer Peter Wilson appeared. Head of the Organised Crime Investigation Division (OCID) Fitz Bailey revealed in court that Cash Plus has no money in Jamaica to repay its investors. “Based on what we have investigated there is no money, we have not identified any money in Jamaica to repay investors,” Bailey said. “In addition, a number of companies and assets said to be owned by Cash Plus turned out to be false.”

Minna Israel sets 5-year target to narrow market gap
May 2, 2008

Minna Israel has given herself three to five years to narrow the gap between RBTT Bank and the top players in the market. RBTT is a distant third in the market behind Scotiabank Jamaica and National Commercial Bank, which together have a lock on about two-thirds of the commercial banking sector.

Viewer’s Choice goes out of business
Friday | May 2, 2008

Viewer’s Choice 2000, a DVD rental company around for 20 years, has gone out of business, citing unmatchable competition from pirated movies and Internet downloads. The business, which once operated from three venues in Kingston, was shuttered three months ago. “Piracy has shrunk the market so there is less pie for lawful businesses to share,” said Marcia McDonnough, principal in the company.

Cash Plus boss out on bail
Cannot leave home between 6:00 pm and 8:00 am
May 03, 2008

CARLOS Hill, head of the failed informal investment scheme, Cash Plus, and his brother, Bertram Hill, were granted bail in the Supreme Court, but with stringent conditions. Hill, who got bail in the sum of $15 million, was ordered to report daily to the Fraud Squad and slapped with a curfew order that requires him to be at his Norbrook, St Andrew home between the hours of 6:00 pm and 8:00 am.
His brother, who the police said is a Cash Plus director, was offered $10-million bail, with similar conditions set by Justice Bertram Morrison. Bertram Hill will have to remain at his brother’s house as he resides in the United States. Both men were ordered to surrender their travel documents.

LOJ is no more – To be rebranded Sagicor Life Jamaica
May 9, 2008

The brand Life of Jamaica (LOJ), the most visible name in the life and health insurance industry, will be no more after 38 years in the operation with the passage of a resolution at the company’s annual general meeting to give it a new identity. LOJ will now be known as Sagicor Life Jamaica, giving effect to plans put in train years ago when the insurance giant was acquired by Barbadian financial conglomerate Sagicor. The rebranding was set to take place initially in 2004, but was delayed due to reasons that were not disclosed by the company, but was said to be linked to resistance by shareholders at losing a name that was seen then as distinctly Jamaican.

Duprey joins Lascelles board – Conglomerate’s profits eroded in March quarter
May 9, 2008
Lawrence Duprey has taken a seat on the board of Lascelles Demercado, a Jamaican company soon to be absorbed into his CL Financial Group as a subsidiary. Lascelles group managing director William McConnell has said nothing would change at the company until the deal is fully consummated.

Jamaica Pre-Mix in $1.6b deal with Lafarge
Friday | May 9, 2008
Jamaica Pre-mix Limited has struck a $1.63 billion deal with a French-owned multi-national to set up four aggregate plants in the island under a new company called Jamaica Aggregates Limited (JAL).

Flow blocked – Land deal puts US$20m operations centre on hold; 500-acre free zone at risk
May 16, 2008
Columbus Communications, trading in Jamaica as Flow, is to transfer its operational base to Caymanas in St Catherine, a plan the company said would cost US$20 million ($1.4 billion). But now the cable company is complaining that its plans to buy the property are being blocked by the ministry of agriculture after two years of negotiations – putting Flow’s relocation plans on hold, at least for now.

Gleaner takes steps to improve ownership transparency
May 16, 2008
Gleaner Company shareholders approve an amendment to the company’s rules that would give directors the right to demand the identities of hidden stockholders, but the change requires approval from the Jamaica Stock Exchange before it can be implemented.
“We believe the company has a right to know who the beneficial owners of the shareholding are,” Clarke told stockholders at The Gleaner’s annual general meeting at the company’s headquarters in Kingston. “If you have people buying into the company, you have to know who they are.”

Olint at the crossroads
May 16, 2008

The alternative investment scheme Olint Corp headed by David Smith now finds itself at a crossroads, with its next move determining the very existence of the popular foreign currency trading outfit. For the better part of this year it has been unable to honour all its payout commitments, with many of its members exhibiting steadfast forbearance while the club’s founder attempts to put things right. At the same time Olint is fighting a court case against NCB, reports are that in the United States, banking house Wachovia is conducting a protracted due diligence report, thus making it impossible for Olint to provide timely payments to its members. To compound matters further, the Financial Services Commission (FSC) continues to call for Olint to register and publish audited financial statements.

“If David (Smith) does pay out everybody what he should rightfully pay them, then there will be a huge sigh of relief right across Jamaica. He would be regarded as a hero and his reputation will be enhanced both professionally and personally. If he does not, he will be stigmatised as a charlatan and rendered a pariah. His fate lies in his own hands. His word, dare I say it, has to be his bond.”

Scotia launches $586m banking centre project
May 16, 2008
Scotia Group Jamaica, the number one banking group by capital base rolls out a half a billion dollar plan for a new branch that encapsulates its banking, investment and insurance services. The company advised in a press notice that the new branch would cost $410 million to build, but has advised that the total investment to be made will reach $586 million. The other $176 million was invested in site preparation and infrastructure, the bank said ahead of last night’s launch of the construction phase, which is expected to be finalised within a year.

St Mary businessman in search of rice partners – Offering technical support for equity
May 23, 2008

Dudley Beek, who for more than a decade operated on the periphery of Jamaica’s now dormant rice growing sector, is offering to sell his expertise to investors who plan to revive domestic production, but wants a piece of their operation in return. Beek, the owner of aerial spraying firm and fertiliser distributor, Dustair Limited, offered publicly through a newspaper advertisement to provide technical support to landowners interested in developing rice farms. “We have underutilised agricultural aircraft and are looking to put this excess capacity to work.”

C&WJ loses $4b – Parent profit dips
May 23, 2008
Telecommunications Company Cable & Wireless Plc said it was considering a demerger of its business units after it posted a 5.7 per cent drop in full year net profit. The Jamaican company also released results to the Jamaica Stock Exchange that were below expectations. Released after market close, C&WJ reported a $4.2b loss off lower revenues of $23 billion. “We will look at all options,” Finance Director Tony Rice said, adding that it could include a break-up, the sale of some businesses, or borrowing money to return capital to shareholders. “We’re talking about doing something in 2008 and 2009.”

Hit by costly raw materials – GK Foods ‘scours’ the world for supplies
May 23, 2008
Leading food manufacturer and distributor, GK Foods, a division of GraceKennedy Limited, is scoping out new suppliers of raw materials in a fight to rein in operational costs, to keep shelf prices down and put profits back on track. For the past six months, the company has failed to totally inure its market from the effects of higher global prices which continue to set new records in the grain and energy markets, announcing last week that prices on six of its basic food lines sold under the Grace brand, have spiked as high as 120 per cent. Chief executive officer of GK Foods, Erwin Burton, said the company was facing direct increases on the price of raw material and the finished products it imports from overseas suppliers, and to a lesser degree, higher shipping costs.

Rodney Davis sues C&W Jamaica – Telecoms claims former boss breached authority
May 30, 2008
Rodney Davis, terminated last year as chief executive officer of Cable and Wireless Jamaica, has sued his former employers to recover £201,840 (J$28 million), or half of what he said was the agreed settlement when he was shown the door in August 2007. In court documents Davis said C&W claimed to have withheld the cash because of alleged breaches of authority by him in contracts executed while he was boss of the Jamaican subsidiary of the UK-based telecoms firm. Davis, who rejects the accusations in court papers as “disingenuous” could not be contacted for comment on the case filed on his behalf by the Kingston law firm Nunes Scholefield and DeLeon.

RBTT, RBC deal gets central bank approval – June 16 new merger date
May 30, 2008
RBTT Financial Holdings Limited (RBTT) received approvals from banking regulators in seven jurisdictions, paving the way for the merger deal with Royal Bank of Canada to be consummated in mid-June.
In a stock market filing, RBTT said central bank authorities in Trinidad and Tobago, Barbados, Jamaica, the Eastern Caribbean States, the Netherlands Antilles, Aruba and Suriname had agreed to the amalgamation of the parties’ regional assets and that “all other closing conditions are satisfied or waived as appropriate.” RBTT and RBC have subsequently agreed to finalise the deal on June 16.

Rebranding Now Miphone out Claro in
Businessuite Magazine understands that the Miphone brand is to be phased out in the coming weeks and replaced with the Claro brand. Claro is controlled by America Movil, one of the largest mobile telephony groups in the world, with approximately 125 million clients in 15 countries, including, Argentina, Chile, Colombia, El Salvador, Ecuador, United States, Guatemala, Honduras, Mexico, Nicaragua, Paraguay, Peru, Dominican Republic, Uruguay and Brazil.
Cable and Wireless Jamaica to stop the Flow
Set to roll out subscriber television

The headline of the November 2007 issue of the Businessuite magazine read
WHO CAN STOP THE FLOW CABLE MONOPOLY?
“Unless the remaining players see the wisdom in merging their operations for their survival and for the good of their customers, in the short run, when flow has completed its acquisitions, it may very well be the only game in town.”

On the cover of the same issue, the cable and wireless logo was positioned in the lower left hand corner, on a page dominated by the Flow logo. Well its now confirmed, Cable and Wireless Jamaica (C&WJ), as well as its wider regional operations, will be entering the market for subscriber television (STV) and the delivery of content, a plan that will pitch it directly against Columbus Communications, parent company to Flow, but also positions the telecoms as a ‘true’ full-service operation.

How Angostura and Appleton will conquer the sprits world

“The combination of two major brands with global access through the CL World Brands distribution platform gives the English-speaking Caribbean a major spirits and wine company owned by the people of the Caribbean,” said Duprey.

The announcement that Caribbean spirits producer Angostura, had purchased the former Seagram’s distillery and bottling plant in Lawrenceburg, Ind. USA, earlier this year, and that there were plans to make the facility the flagship of the company’s expanding operations and establish a U.S. corporate headquarters, puts the recent takeover offer for Lascelles De Mercado in a new and interesting perspective.

Scotiabank gives C&WJ exclusivity
June 6, 2008
Cable & Wireless Jamaica and Scotiabank Jamaica in a joint statement announced a deal worth $400 million that gives C&WJ exclusive rights as the bank’s telecommunications provider for the next five years. The deal announced after market close – both companies are listed on the Jamaica Stock Exchange – was struck, the parties said, after consideration of several proposals solicited by the William Clarke-led bank.

Market gobbles up JSE preference shares
June 6, 2008
The Jamaica Stock Exchange redeemable preference share offer has raised $124 million, a near doubling of the actual target. The JSE had hoped to raise $66 million from 33 million shares, or $2 per unit, but instead got subscriptions for 62.15 million units during a two week placement, May 16-30. “Persons were really excited about it,” said Marlene Street-Forrest, general manager of the Jamaica Stock Exchange and head of the commercial division.

REIT offer extended
June 6, 2008
The Carlton Savannah REIT has extended its offer of shares in the first real estate initial public offering being attempted in Jamaica’s financial market. The placement initially due to close May 30 will remain open to June 13 to, the financial advisors say, allow institutional investors more time to analyse the product. Leo Williams, executive director of Williams & Associates Investments Ltd, the financial consultants and creators of the IPO, said that the decision to extend the offer was based on the request of pension fund managers and corporate clients who wanted more time for consultations before tendering applications.

Jamaica National (JN) bidding for Blue Cross
June 13, 2008
The Jamaica National group, the large mortgage lender that has been aggressively diversifying into other financial services, is in advanced talks for the acquisition of the health insurance company, Blue Cross of Jamaica, authoritative financial sector sources say.

Jockey to pull from Jamaica by December – 575 jobs to go at Lucea factory
June 13, 2008
Jockey International, the American underclothing manufacturer, will close its last Jamaican plant by year end, slashing 575 jobs and ending a 24-year presence in the island.

Fallout in ‘investment schemes’ to impact housing demand, say realtors
Wednesday, June 18, 2008
Realtors expect slower growth in the housing market in 2008 with the fallout of get-rich schemes and high oil and commodity prices. Cash Plus, Olint and Worldwise, the three popular get-rich schemes, have suspended payments to its members since early this year. With the fallout, Valerie Levy expects housing demand to slide by about 10 per cent. “This as potential homeowners no longer have the cash flow and cannot qualify for mortgages,” said Levy who heads Valerie Levy and Associates. She added that if the schemes are to reorganise, then it will again fuel the market. Prices are expected to fall but rather rise as supply continues to lag behind demand. Real estate experts say a portion of new mortgages would have come from the get-rich schemes encasements.

Early close on Lascelles deal – Angostura to pay off shareholders July 28 – Wants to take advantage of synergy
June 27, 2008
Angostura will pay off early the former shareholders of Jamaica’s Lascelles Demercado Group it acquired in Jamaica; a move which the Trinidad-headquartered drinks company says will give it an early start in taking advantage of the synergies offered by the acquisition. “There are many interesting opportunities,” said Michael Carballo, the executive director of Angostura, which is a member of Lawrence Duprey’s CL Financial Group. “We want to work those synergies,” he said.

BOJ hikes interest rates a third time – Move to tackle inflation, strengthen dollar
June 27, 2008
The Bank of Jamaica jacked up interest rates by half a percentage on benchmark instruments, a move which it said was aimed at taming the inflationary pressures that have squeezed the economy since the start of the year. The action – which pushed 30-day certificate of deposits to 14 per cent and one-year instruments to 15.5 per cent – came during a week in which the central bank has intervened significantly in the foreign exchange market to shore up the Jamaican dollar against other currencies. The dollar closed yesterday at $71.91, two cent depreciation in a day.

Producers Group buys Dutch Juice Company
June 27, 2008
Continuing refashioning from a company known primarily for growing and distributing bananas to a serious player in Europe’s specialist juice market, Jamaica Producers Group spent €9.2 million (J$950 million) to acquire a Dutch juice and smoothie manufacturer, Hoogesteger Fresh Specialist BV — a move that it hopes will give it an important toe-hold on the continent. “We think it’s a good investment,” said JP’s managing director, Jeffrey Hall. “This acquisition further underlines the strategy of Jamaica Producers of seeking profitable growth in the premium juice and smoothie category.”

Tax amnesty 100 per cent waiver ends
June 27, 2008
Business persons and individuals who owe back taxes have until Monday to pay up in order to qualify for full forgiveness of interest and penalties on their arrears. The amnesty programme, which has been in effect since April 11, will continue to August, but the size of the waivers will diminish with each passing month. The Tax Administrative Services Department (TASD) says it has collected J$2.8 billion in outstanding taxes under the programme. “Additionally, about 1,500 new taxpayers have used the opportunity to become registered and pay outstanding amounts,” the TASD said.

Hotel Company Ackendown to be managed by Sagicor
June 27, 2008

The management of Ackendown Newtown Development Limited, a hotel company part owned by Butch Stewart but controlled by the state, is being outsourced to Sagicor Property Management Limited, formerly LOJ Property Management Company. Sagicor Property will take over all the accounting and secretarial functions of Ackendown, he said, under a $4.2 million contract.

NUMBER ONE
Why should we care?

The Businessuite magazine your now reading is the #1 business magazine in Jamaica; so what, why should you care. Google was recently acknowledged as the number one brand in the world in 2007, so what. The truth is there’s a lot at stake not been #1 and you really should care.

Recent reports confirm that search giant Google Inc. is the number one brand in the world with a brand value of $66.4 billion, a pretty amazing feat for a company less than 10 years old. Compiled by global consultancy firm Millward Brown, the Brandz Top 100 identifies the most powerful brands in the world as measured by their dollar value.

Mobile Number Portability (MNP)
Set to heat up mobile market in Jamaica and the region

“Subscribers usually churn if they are unhappy with an operator’s customer care, service portfolio or unattractive tariff rates. For that reason, building a strong brand and forging close relationships with existing customers are the fundamentals in overcoming churn.”

According to Brand Strategist, Aldo, Digicel, bMobile and Miphone should begin to prepare themselves for an increase in customer churn and the possibility of a price war when mobile number portability (MNP) becomes a reality. This he believes is where the next level of competition will go once Miphone has completed its network upgrade and has levelled the technological play field. He is of the view that Miphone will seek to press the Government to introduce a Mobile Number Portability policy, and they will get the support of consumers also. Aldo is of the view that with over 1.8 million subscribers Digicel and bMobile with 800 thousand subscribers will have the most to lose. Miphone has about 300,000 subscribers their challenge will be to grow the others will be to hold on to their subscribers.