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Caribbean Management Talk

Looking For Growth in Trinidad

Author: 123jump.com Staff
Ticker.com
Last Update: Nov 18, 2:16 PM ET

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Wain Iton
One of the significant markets in the Caribbean region, the Trinidad and Tobago Stock Exchange, still has a lot of room to grow. Dealing with illiquidity and a limited offering, the manager Wain Iton primarily focuses on attracting new listings and new types of securities traded.
Trinidad & Tobago Stock Exchange
 
Q: How important are the tax considerations for the new listings? I believe that in Jamaica that has been an issue because 80% of the nationís income taxes come from the listed companies.

A:
Thatís correct. There must be some mechanism to get people and companies to pay their taxes, regardless whether they are listed or not. The U.S. ensures that people respect April 15, and we have to do the same in the Caribbean.

Q: In which industry do you see the greatest potential for new listings? Is it the oil and gas industry or is it too much dominated by foreign giants?

A:
We are establishing a depository receipts, trading platform, subsequent to the purchase of royal bank of Trinidad and Tobago by the royal bank of Canada (RBC). We expect that we would be trading TTDRís in early 2009. We also aim to attract several of the big oil and gas companies. Thatís still a possibility although it doesnít look as though itís going to bear too much fruit.

We have to go hunting. We plan to go to other jurisdictions in latin America and the southern Caribbean to see if we can find some new listings. Also, there are a fair number of state enterprises which we will seek to attract. Thatís a difficult task, and it definitely doesnít happen overnight.

Q: How has the Trinidad economy changed over the last three or four years? What are your expectations for the economic growth?

A:
It has been growing robustly over the last 15 years. In the period 2000 - 2006, the gdp doubled, mainly due to the rise in international oil prices. In 2006, the annual growth rate of the gdp was 12%, and in 2007 it moderated to about 5.5%. growth is expected to stay at about 6% to 7%. So, the economy is robust at the moment. The big problem is the inflation, which currently runs at about 12% per year.

We export a lot of energy, but we import a lot of food and consumer goods. The currency has strengthened only marginally. because we maintain a managed float, you can often hear a suggestion for currency appreciation, but it hasnít been material so far.

Q: Could you explain the idea and the context of the Caribbean CNX initiative?

A:
We have been involved with this initiative for quite a while. The CNX is about connectivity between the Caribbean financial markets and, eventually, would allow seeing all the trading in the region on one real time computer screen. I believe that would allow us to gain critical mass and better price discovery.

There are a couple of other initiatives that we are currently assess to see if they are plausible and realistic. But we are committed to the CNX. It is difficult to say when exactly it will be launched, because there are a number of regulatory issues. Trade settlement is a challenge. So, there are moving parts yet, but I hope that it will be launched soon.

Q: What is the time for settlement and the working hours of the exchange?

A:
We apply the international standard of tradeday plus three (T+3). A trade settles on the third day. We are open five days a week and trading begins at 9:30 and ends at 12:00. We used to be open for three days a week only, but since April 1st this year, we started a five-day trading week. Also, there is a pre-opening period from 8:30 to 9:30, but the actual trade starts at 9:30.

Q: Does the general public get the trading prices on a delayed or on a real-time basis? How do investors find the earnings releases and the annual reports of the listed companies?

A:
It is not real time at the moment. It goes up on the website at the end of the day; then it goes to the print media. With our new web site coming, weíll have only a 10 to 15 minute delay, and weíll publish intraday prices as well. It will be almost on a real-time basis.

Right now you can get a fair deal of the earnings history on Bloomberg, but the reports will be also available on the new site. We plan to encourage all of the companies to file directly to the web site. I expect to have the site up in parallel mode fairly soon, before the end of September.

Q: What coverage does the exchange get in the press? How many financial analysts are there in the country?

A:
There are probably about a dozen financial analysts at best, but we have a fairly welldeveloped financial press. The big media, the three major papers, do carry weekly business supplements that cover the different aspects of the market. Those three newspapers are Express, The Trinidad Guardian, and the Newsday. Thatís a healthy coverage.

Q: How many people, originally from Trinidad and Tobago, live outside the country? Do you consider that population as a potential investor group?

A:
In Jamaica, they like to say that itís maybe double the domestic population, so I would imagine that it is a fairly substantial number for Trinidad and Tobago as well. My estimate is 500,000 to 750,000 people.

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