Hylton, group managing director of National Commercial Bank Jamaica
Ltd, speaks during an investors briefing at the Hyatt Regency
Trinidad, Wrightson Road, Port-of-Spain, yesterday. Photo: Shirley
High interest rates on investments have diminished the incentive
for Jamaican investors to move capital into the islands stock
market and is one of the factors contributing to the depressed performance
of the Jamaican Stock Exchange.
So said Patrick Hylton, managing director of the National Commercial
Bank Jamaica Group (NCBJ), which is listed on the Jamaican and T&T
some extent, Jamaica has had some challenges over the years, which
may have people a little bit shy about going to the market,
He said people are more inclined to invest in government instruments
without taking on the same level of risk theyd be exposed
to by investing in the stock market.
one looks at recent events in terms of the Central Bank having acted
to jack up interest rates in an attempt to control exchange rates,
devaluation and consequent inflation, it is clear that there exists
some challenges in the Jamaican context and the Jamaican environment,
Referring to oil prices peaking this week at US$105 per barrel,
Hylton said a continuation of that trend will significantly impact
Jamaicas budget and its ability to find US dollars to pay
Hylton was speaking at an investors briefing at the Hyatt
Regency Trinidad, 1 Wrightson Road, Port-of-Spain, yesterday.
Speaking of positives, Hylton said the bank has noted the Jamaica
governments concentrated effort to manage the fiscal situation.
He also said there has been an improvement in the tourism product,
one of Jamaicas major revenue earners.
NCBJs stock liquidity
Christopher Williams managing director of NCB Capital Markets Ltd,
said the banks stock has had tremendous volume in the
market, and that its availability will keep the price down.
is a combination of the investor sentiment as a result of macroeconomic
factors, which we obviously have no control over and then some supply
issues, which again, we dont have any control over.
stay focused on ensuring that good performance is there, and we
think that the macro and supply issues will eventually settle off
and that the price will therefore find its proper place. As a result,
we think it continues to be a good buy.
Williams said historically, Jamaicas volatile financial periods
have presented opportunities for investors to make good money.
High oil prices and PetroCaribe
Williams said todays high oil price is a double-edged sword.
One aspect of it is the balance of payments challenge.
Another is an opportunity to create a bit of a slush fund
with the PetroCaribe deal Jamaica signed with Venezuela.
fact that we do get, I believe, over $50 or $60 back from Venezuela
at a 25-year, pretty much, zero coupon terms.
has been able to build us and give us a fund to create development
projects and to move gross domestic product, Williams said.
He said if that development fund is put to good use, Jamaica may
be able to, at the very least, downplay the impact of oil prices.
dont give up on us yet, Williams said.
Commercial Bank Jamaica Ltds consolidated results for the
three months ended December 31, 2007:
n net profit, J$1,859 million
n net profit for the corresponding period of the previous year was
J$1.5 billion, an increase of J$357.4 million, or 24 per cent
n gross revenue for the quarter was J$9.1 billion, an increase of
J$1.0 billion, or 13 per cent, compared to J$8.1 billion for the
corresponding period in 2006
Major revenue highlights for the quarter:
n total interest income increased by J$695.2 million or 11 per cent
due mainly to the continued growth in the loan and investment portfolios
n net fee and commission increased by J$248.9 million or 28 per
cent, which was mainly attributable to fees generated from card
and other retail banking products
n premium income from the insurance segment increased by J$38.5
million or 58 per cent over the prior year due to increased sales
of both retail and group life insurance products