Drumbeat grows for mobile banking in the Caribbean

“Mobile banking will make it easier for Haitians to get to their funds. Our partnership with Digicel will be a good one. Scotiabank’s presence in Haiti is limited to the capital of the country where we have four branches. We do have plans to go beyond Port-au-Prince. Right now we are focusing on the mobile wallet aspect because many Haitians are in dire need of funds and need to access them as expeditiously as possible. What we do is outsource some of the services to the super agents. The agents are the ones who can charge the accounts for the mobile wallets. The account on your phone acts like a wallet. The agent opens the account for you, provided you can provide a piece of identification and a minimum of 100 gourdes. Once the account is set up on your mobile phone you can begin to make transactions. You can also top up your account and transfer funds to and from someone who has a “Tcho-Tcho” mobile account. It is a very convenient service which we will be formally launching in March of this year.

Country Head of Scotiabank Haiti, Maxime Charles
Read more: http://www.jamaicaobserver.com/business/Drumbeat-grows-for-mobile-financial-services-in-the-Caribbean_8389442#ixzz1ELCMtiJh

A decade ago, it was said that online banking would never prove viable because customers would never entrust modern computer technology with their financial affairs. How wrong those people were! According to Jim Bruene, author of The Case for Mobile Banking: “Starting from essentially zero just three years ago, more than half of the US online banking population will be using mobile banking by 2015. That’s zero-to-40 million households in just eight years. There is little doubt that mobile is the next online, not just in banking, but with many information rich, time-sensitive services. Even in the online-centric US, we expect mobile banking to eclipse online by the end of the decade.”

Read more: http://www.jamaicaobserver.com/business/Drumbeat-grows-for-mobile-financial-services-in-the-Caribbean_8389442#ixzz1ELF5uGAp

One term is not long enough to fix the economy — Shaw

“The Jamaican economy was characterised by many many years of no economic growth. The country was averaging growth of less than one per cent for over 15 years, about .7 per cent. In the entire 14-year tenure of the former minister (Dr.Omar Davies) he averaged .8 per cent per annum, that is while the world economy was growing at a rate of five per cent. But we in Jamaica could not muster a single one per cent,” Shaw told G2K supporters attending the forum held at the multi-functional room, near the main library on the Mona Campus of the University of the West Indies.

“The only thing that grew discernibly apart from poverty was debt. Because instead of financing the budget, financing the country’s affairs from the increments that you produce, and from the consequent taxation that you are able to garner when you are creating wealth,” Shaw explained.

Read more: http://www.jamaicaobserver.com/business/One-term-is-not-long-enough-to-fix-the-economy-Shaw_8389828#ixzz1ELcH4ybM

Bowen blasts Caribbean tribalism

Scotia boss knocks JA vs TT infighting at JSE conference

“I am absolutely amazed that in 2010 you have some people in Jamaica who would prefer to have a hedge fund out of New York with no concern in the region, take equity stake in Air Jamaica rather than our brothers and sisters in fellow Caricom countries,” he said in his address at the Jamaica Stock Exchange’s Investments and Capital Markets Conference on Thursday.

“Fortunately sane minds prevailed and realised its better to have someone who knows you than doesn’t,” he said in relation to the resulting partnership between the airline and the Trinidad based Caribbean Airlines.

Read more: http://www.jamaicaobserver.com/business/Bowen-blasts-Caribbean-tribalism_8323140#ixzz1CiEdeOu1eZines founder wins PM award for entrepreneurship

Managing director of electronic magazine company eZines, Tyrone Wilson, Read more: http://www.jamaicaobserver.com/business/eZines-founder-wins-PM-award-for-entrepreneurship_8323190#ixzz1CiE4StVZ

I’m confident in this economical environment. We’re operating in a current business environment where exchange rate is stable and interest rates are at an all time low. This is good for the productive sector for it will push financial institutions to stop buying government paper and invest money in the productive sector. Also, what it means for businesses that borrows from financial institutions is that they have cheaper access to money.

A stable exchange rate and low interest rate will enable companies to better compete on the local and international market for goods and services will be cheaper and this will be easy on the pockets of consumers.

In a post-recessionary period, I think Jamaica is on the right track for a turn around and I think businesses should position themselves to grab the opportunities when they come.

Read more: http://www.jamaicaobserver.com/business/eZines-founder-wins-PM-award-for-entrepreneurship_8323190#ixzz1CiDPcmRq

Christie blasts Observer

Contractor General Greg Christie

“The question becomes even more critical and ominous when the very entity that is itself insisting that the cloak of secrecy be maintained over the matter is a daily newspaper that has already dedicated, and continues to dedicate, each week, some of its pages and editorial cartoons to what appears to be a sustained effort to steer the public’s opinion towards what it, the newspaper, considers to be the facts of the matter, albeit that some of these so-called facts have already been found to be unadulterated falsehoods by a Special Statutory Report of Investigation of the OCG (Office of the Contractor General) which was formally tabled in both Houses of Parliament almost five years ago,” Christie said.

Read more: http://www.jamaicaobserver.com/news/Christie-blasts-Observer_8325797#ixzz1Ci9f6r00

Freedom of expression is not synonymous with a free press

“Freedom of expression is not synonymous with a free press, as the press in the modern world is not free but very much part of the business elite,” Chang said.

He added: “The press today is not the young, bright and sometimes attractive professionals gracing the media box. It is as much the grey-suited, often little-known directors and owners that can be found in any boardroom.”

minister Dr Horace Chang, the member of parliament for North West St James

Businesses upbeat; consumers pessimistic

Firms convinced of growth amidst policy uncertainty, consumers don’t blame the Gov’t

Business optimism rose to the highest level since the third quarter of 2007, when the ruling political party took over the administration of the Government, while consumers held a bleaker view of economic circumstances in the last quarter of 2010 than the one before.

Even while consumer confidence remained in the doldrums in which it has been since the Government changed, very few Jamaicans — less than one in 20 — cited poor leadership of the Government as a reason for the current state of the economy, while many businesses had uncertainty about ongoing changes in government policies as well as the global recovery.

Read more: http://www.jamaicaobserver.com/business/Businesses-upbeat–consumers-pessimistic_8285821#ixzz1AxjylaSt

Jamaica National eyed for commercial bank licence

“If Jamaica National Building Society, the country’s largest building society, entered the commercial banking sector, its entry is likely to enhance competition in the sector,” The FTC report stated.

After disclosing the results which indicated that the commercial banking sector is ‘highly concentrated’ and that the two largest banks, NCB and BNS together operate 85 of the 130 branches islandwide, account for approximately 74 per cent of the sector’s deposits and approximately 73 per cent of the sector’s gross revenue, Minister Samuda stressed the need for increased competition in the sector.

Read more: http://www.jamaicaobserver.com/business/Jamaica-National-eyed-for-commercial-bank-licence_8274572#ixzz1AMLokEtX

Jack visits Coosal’s

Minister checks highway candidates

By Joel Julien joel.julien@trinidadexpress.com

ON TOUR: Sieunarine Coosal, second from left, executive chairman of Coosal's, and his son Avinash, left, marketing manager, lead a tour of their company's facilities at Madras Road, Cunupia, yesterday with Works Minister Jack Warner, second from right, and Minister in the Ministry of Works, Rudranath Indarsingh. —Photo: ANISTO ALVES

IN AN effort to ensure local contractors do not bite off more than they can chew, Works and Transport Minister Jack Warner said his Ministry will be conducting site visits at the facilities of potential candidates.

“We at the Ministry of Works and Transport felt that we should not merely sit in the Ministry and take projects and profiles from companies that say how good they are or how great they are and so on, but we must come and see for ourselves,” Warner said yesterday.

Warner made the statement following an hour-long tour of Coosal’s Industrial Complex at Madras Road in Cunupia.

LIME Builds Upgraded Telephone System For NCB

“The fact that LIME continues to be the telecoms partner of choice for a major corporation like NCB underscores our position as the premier provider for corporate and government entities when it comes to mission-critical connectivity,”

LIME was also the provider of Scotiabank Jamaica’s telephone system, a deal sealed under a previous country manager, Phil Green, in June 2008. Avaya also provided the hardware for that five-year contract that was worth J$400 million.

A month later, Green landed a J$500-million job to build a data-transport and mobile-services network for Sandals Resorts International, connecting 17 properties in the hotel group’s Caribbean operations. Sandals is billed monthly under the three-year arrangement.

LIME managing director for Jamaica and Cayman, Garry Sinclair.

A source of intolerable frustration

“Much to my chagrin, it took more than five months to have the requisite ministerial order drafted to give effect to a Cabinet decision re the cess dating back to May 25, 2010,” said Jennings.

“This has been a source of intolerable frustration and perhaps the single most important factor in my decision not to seek a renewal of my contract which ends on January 7, 2011.”

Dr Paul Jennings, CEO of the Jamaica Dairy Development Board, says he will leave the job

Not true’ – Carib Airlines denies it wants out of Air J deal

“The board made no such suggestion, and it could not be further from the truth,” the airline said in a news release. “To the contrary, the board — in keeping with the decision of the Government of Trinidad and Tobago — has indicated its commitment to the completion of the acquisition of the Air Jamaica routes.”

Read more: http://www.jamaicaobserver.com/news/Not-true-Carib-Airlines-denies-it-wants-out-of-Air-J-deal#ixzz1AAXNUiD2

collecting the bill for JPS is not a business by itself

“Bill Express is not new for JPS. They have been collecting JPS bills for over 10 years so its not a new partnership. I think collecting the bill for JPS is not a business by itself. It only becomes a good business if you add other services and Bill Express has that willingness to expand into offering more services to JPS customers,”

Jamaica Public Service company (JPS) president and CEO, Damian Obiglio

Read more: http://www.jamaicaobserver.com/business/Bill-Express-makes-third-to-take-on-JPS-offices_8268659#ixzz1AAWE773m

“Our vision is to make Bill Express the leading bill payment solution entity in Jamaica and across the Caribbean. The consummation of this agreement represents an important step towards achieving that goal,” said Campbell. He said there is also the option for persons in North America to pay their bills in Jamaica through any Western Union location overseas.

Read more: http://www.jamaicaobserver.com/business/Bill-Express-makes-third-to-take-on-JPS-offices_8268659#ixzz1AAWdc2hL

“The half-way mark, or just over $1 billion, was reached on the official opening day”.

“Given declining interest rates, I’m happy that clients and the wider investing public see this is a good investment opportunity to invest for a better 2011 and onwards”, said Duncan in a press statement issued on Monday. “Even more importantly, the return which will be earned on this Preference Share is income that clients can plan on each month for the next five years.”

JMMB hoped to raise $1.2 billion from the issue of 400 million preference shares to existing clients and preference shareholders at $3 a share, carrying an interest rate of 8.75 per cent, and another $875 million from the open market through the issue of 250 million shares at $3.50 a share and interest rate of 8.5 per cent a year.

JMMB group CEO, Keith Duncan

Read more: http://www.jamaicaobserver.com/business/Investors-grab-JMMB-shares_8270326#ixzz1AAVHSjzC

Jamaica is open for business — Marks“The city faces a complex set of interconnected challenges. An important component of urban renewal is providing economic opportunity, whereby promoting private sector-led growth is an integral part of the solution,” she said. “Urban renewal can be facilitated through business investment, job creation, and infrastructural upgrades. Therefore, I am working to attract investments into key sectors that will anchor this effort, including tourism, transportation infrastructure including shipping and small and medium sized enterprises.”

Marks pointed to a number of investment projects that are either underway or in the finals stages of planning, including the construction of the Falmouth cruise ship terminal at US$220 million, the Harmony Cove Casino and Hotel development amounting to US$1.5 billion, conversion to Liquefied Natural Gas which ultimately will reduce costs to the consumer by 30 per cent, the rehabilitation of the Palisadoes shoreline at a cost of US$56 million and the Kingston re-development project, at a project cost of US$2.5 billion.

Read more: http://www.jamaicaobserver.com/business/Jamaica-is-open-for-business—Marks_8189867#ixzz16z429C9F

C&W making US$210m Bahamas investment

Acquiring state-owned Bahamas Telecommunications Company

“We believe there is a solid strategic fit between LIME and BTC with many possibilities to build the customer experience and the Bahamas community. If successful, this transaction can deliver a new era of innovative services like mobile TV and high-speed broadband in The Bahamas. This MOU is a positive first step. The due diligence will now provide a fuller understanding of BTC operations and the concerns of its stakeholders – which is the right way to start and a big part of getting to know the flavour of The Bahamas,” said LIME Chief Executive David Shaw.Read more: http://www.jamaicaobserver.com/business/C-W-making-US-210m-Bahamas-investment#ixzz16z2u2it0

Howell sued, assets frozen

Delroy Howell

Lawyers for Jamaican businessmen Delroy Howell and Kenarthur Mitchell, as well as four companies controlled by Howell, are fighting a freeze on their assets in a complex financial case being played out before judges in Jamaica and the Turks and Caicos Islands.

In Kingston, First Financial Caribbean Trust Company, a company that used to be controlled by Howell, and of which Mitchell was a director, is claiming that both men either misappropriated or have failed to account for US$13.9 million in assets that was under their management.

In a claim filed in the courts here, First Financial Caribbean Trust said that Howell and Mitchell breached their fiduciary responsibilities and caused trust funds “or some of them to be transferred to accounts held by the defendants, or some of them in circumstances contrary to the interest of the claimant”.

But in a related case in Providenciales, the Turks and Caicos capital, Howell – whose Jamaican interests include the Wyndham Kingston hotel – is arguing that First Financial Caribbean Trust was stolen from him by Judith Wilchcombe, the company’s former vice-president for operations and business development.

She was involved in a conspiracy, he argues, with a former shareholder and director, Dr Joseph Marzouca.

http://jamaica-gleaner.com/gleaner/20101015/business/business1.html

Lasco spurs interest in junior market

Street Forrest said the Junior Market has piqued the interest of Jamaicans, who would not normally consider investing in equities. “This is significant, as one of the desired outcome of the Junior Market is that there would be an expansion of ordinary Jamaicans taking real advantage of the equities market,” she said at the listing ceremony. Another historic move by Lasco was to reserve a pool of shares for teachers, nurses and police officers, unheard of in the 43 year history of the JSE. A document showing the shareholders in the Lasco listings indicate that Olympic Champion and world record holder Usain Bolt, bought 50,000 shares in the IPO.

http://www.jamaicaobserver.com/business/Lasco-spurs-interest-in-junior-market_8058009

Ha, ha, ha… who’s laughing now!

Audley Shaw: Man on a mission

“I don’t want to be bragging about it because things are cyclical, as you know. What is important is that we must preserve the gains and build upon them. So far what have those gains been? We now have sustainability. The government now has breathing room and the necessary fiscal space to deal with our obligations on a timely basis. It also sends a signal that we are able to cope with our challenges. The fiscal implication has been significant because the savings for this fiscal year when netted out comes to in excess of US$350 million. Then we see the exchange rate continues to be not only stable but is revaluing. It is now at J$86 to US$1 and in fact last Friday came down to J$85 to US$1. At the last auction,the Treasury Bill rate came to 7.75 per cent on the three-month instrument. Equally the Bank of Jamaica’s open-market operations are recording levels of sub 8 per cent which is telling the story that this is a 33-year low in government and central bank rates. We now have to look to the commercial banks dropping their rates on a more progressive basis in terms of bringing down the spreads between government and central bank rates and the rates that are being offered by the commercial banking institutions. Then there is inflation coming from double digits to a figure in the 6 to 7 per cent range though Tropical Storm Nicole may well impact that, but we shall see. Our Net International Reserves (NIR) are now close to a healthy US$2 billion,” said the Minister of Finance. He was speaking exclusively with Caribbean Business Report from the St Gregory Hotel in Washington DC.

Minister of Finance Audley Shaw

http://www.jamaicaobserver.com/business/Ha-ha-ha-whos-laughing-now_8057743

Scotia DBG Merchant Bank Ltd assets and liabilities vested in BNSJ

The Bank of Nova Scotia Jamaica Ltd (BNSJ) has announced that the assets and liabilities of Scotia DBG Merchant Bank Ltd were vested in BNSJ pursuant to a Vesting Order dated October 01, 2010 issued by the Minister of Finance and the Public Service. As a result, effective October 01, 2010, all loans and other assets and all deposits and other liabilities of Scotia DBG Merchant Bank Ltd were transferred to and became vested in BNSJ. This reorganization is aimed at offering customers added convenience while improving efficiencies across Scotiabank Group Jamaica (SGJ). The transaction was undertaken by way of a scheme of transfer under the Financial Institutions Act, which was approved as provided for under the statute.

“If you don’t have healthy customers you won’t have healthy institutions,

“I think there needs to be a change in mindset. You must pursue profits but clearly there must be more innovative ways to do it,” said Wright. “In this environment, they should get involved with a spot of venture capital financing. This is one way of earning good returns when they score,” said Wright. “When they score it could contribute to the buoyancy in the system,” Wright said.

“If you don’t have healthy customers you won’t have healthy institutions,” he said. “Not when your customers are floundering.” He argued that lower fees and interest rates are important for the economy to develop as it facilitates entrepreneurial investment. “It is important for the country where you want to encourage the smaller people. These people with relatively small things become people with big things,” said Wright. “The phenomenon of fees can really slam people.”

Karl Wright, a retired executive from the financial services sector and investor

Lower changes would actually result in increased profitability, not losses.

“As far as I am aware, the private banks for example the HDFC Bank and ICICI Bank in India operate very profitably without charging high fees and high interest rates,” Jain said. “Their business models and practices, charges, interest spreads, etc. should be studied to learn lessons for actions with appropriate adaptation as per local conditions,” he added.

Jain said as a shareholder, he is quite willing to accept a lower return if fees and interest rates are lowered, but believes that the changes would actually result in increased profitability, not losses.

“In my view, the commercial banks should significantly reduce the interest rates further. This is feasible for them because this will increase their level of business, bad debts will go down and there will be growth in the economy which will be positive for them,” Jain said. “As an investor and shareholder in the shares of banks, I am happy to accept a lower return if they reduce the interest rates and the fees. But this may not reduce the profits because the increased level of business, lower level of bad debts, and higher economic growth may in fact result in higher profits. Also, this may result in emphasis on greater cost reduction and higher efficiencies,” said Jain. “These will have very positive effects on the aggregate demand and economic growth.”

Sushil Jain, noted financial analyst and investor

I am not going to take a lower return

“The whole financial sector needs to go through an adjustment period where the traditional commercial banks have been accustomed to providing a certain level of returns to shareholders,” said Duncan. “Now with their net interest income being lower because of the debt swap, they have to find ways of still being able to grow their profitability. Now, should shareholders accept a lower return or lower profits because of the adjustments to the market because of the JDX (Jamaica Debt Exchange)? There are some shareholders who say ‘no, charge it, charge the fees. I am not going to take a lower return’.”

Keith Duncan, Group CEO of Jamaica Money Market Brokers (JMMB)

LASCO IPO – $940 million spread over 2,500 shareholders

INFORMED sources have revealed that on a combined basis, the dollar value of subscriptions for the three Lasco affiliated companies: Lasco Distributors, Lasco Manufacturing and Lasco Financial Services, listed on the Junior Venture Exchange has risen to $940 million spread over 2,500 shareholders. This is more than double Lasco’s original target to raise approximately $415 million. It is also nearly 50 per cent higher in dollar terms (and 25 per cent higher in terms of number of applications) than lead broker Mayberry’s original rough estimate that they had received “in excess” of 2,000 applications totalling over $650 million. As at midday Friday, they were still counting, so even this figure is still an estimate.

It is also of note that a number of the larger institutional investors, who had planned to invest in the offering, put their applications in mid-morning after the 9:03 am closing time, and were therefore not able to participate in the offering. With their participation, subscription levels would have definitely exceeded the $1billion benchmark, with the overall offering likely to have been close to three times oversubscribed.

http://www.jamaicaobserver.com/business/Lasco-offerings-more-than-2X-oversubscribed_7841862

It’s been a very, very tough time for our company

“It’s been a very, very tough time for our company… Just as I have felt a bit of sadness of a company that came to the Caribbean 140 years ago and has been such an integral part of Caribbean and Jamaican life, that it has declined to the point where several of you as shareholders probably have been very disappointed with the results, it is time to start afresh,” said Dehring. “If we battle each other in the market more and more on prices it takes out all the value and it can be very, very difficult to make a profit. We have some new services that we are launching that is unprecedented in this part of the world,” Dehring said, adding “We need to improve our customer service again to differentiate and we are going to have to have some high-profile marketing as well.”

http://www.jamaicaobserver.com/business/LIME-TV-on-the-horizon_7971147

EXIM Bank has dropped its lending rates to 10 to 11.5 per cent for Jamaican dollar loans and 7.5 to nine per cent for US dollars loans. This represents up to a two percentage point drop in loan rates. US dollar loans range from 7.5 to nine per cent, while Jamaican dollar loans range from 10 to 11.5 per cent

Lisa Bell, chief executive officer of the EXIM Bank. - Photos by Ian Allen/Photographer

Interest rates on loans accessed through the Bank’s Approved Financial Intermediaries have also dropped by one percentage point to 11 per cent per annum.  EXIM’s approved financial intermediaries include major commercial banks, merchant banks and money market brokers across the island.

These new rates become effective October 1, 2010.

There is a special window now in place for SME energy loans involving renewable energy projects at 9.75 per cent for Jamaica dollar loans, and which start at 5.63 per cent for US dollar loans for Jamaica dollar loans.

EXIM in realizing the challenges to grow and develop businesses in the productive sector sees it necessary to adjust its rates based on the needs of the stakeholders in order to help them compete in the global marketplace.

Manager, Trade Financing and Risk Management, Valerie Crawford says “the reduction of the rates is in keeping with the Bank’s mandate to enhance its clients’ capacity by creating easier access to loan facilities. We are keen on working directly with established and potential clients to ultimately help them to grow and develop their businesses. ” She added that with competition not just in Jamaica and the Caribbean, companies needed a competitive advantage and to have access to new and emerging markets.

For the last 12 years EXIM Bank has kept the rate consistently at 12 per cent in keeping with the customers’ needs. In comparison to the average 30 per cent lending at that time, EXIM Bank has consistently responded positively to the demands of the productive sector.

Crawford also stated “this rate reduction is in line with the government’s objective of reducing interest rates to the Productive Sector.”  The rate reduction is timely as recently commercial banks have reduced some of their rates, an indication of the competitive nature of the market.

EXIM Bank and other financial institutions have had to adjust to the new operating environment Following the Jamaica Debt Exchange (JDX) which effectively reduced the interest earned on Government of Jamaica securities, and signaled a gradual reduction in lending rates.

Diverse pool of funds

The Bank is also reporting a pool of 1.1 billion Jamaican dollars of new money, with an ambitious loan utilization target of 6.6 billion dollars up to year end March 2011; approximately 27 per cent increase over the 5.2 billion dollars achieved at year end March 2009.