Jun 2008 Financial News

NCB Capital Markets in search of big risk takers - Creates high return PPN, boosts team

Jun 13, 2008

Chris Williams, head of NCB Capital Markets, has launched a new marketing campaign to reach high net worth clients.

NCB Capital Markets Limited feels it has done a poor job of convincing enough investors that it can make them wealthy.

So now the brokerage, Jamaica's largest, is pumping about $15 million into a marketing campaign to develop a better message and to connect more directly with investors, starting with those of high net worth.

The brokerage rolled out the campaign two weeks ago to increase visibility and garner business from private investors.

Managing director, Christopher Williams, said he had infused 'young blood' or so-called 'wealth advisors', into the company to give impetus to the plans.

Their job is to get personal - that is, engage in direct sell of the company's products and customise investment packages to suit the client's risk profile.

Principal Protected Notes

The brokerage has already began the hunt for market among high rollers. Last year it created and offered under private placement principal protected notes to local investors.

A PPN is a financial product whose returns are based on the performance of its underlying security. If the product is created around stocks, the returns would track the performance of those equities on the market.

"The distinguishing feature is that the principal amount - your original investment - is 100 per cent protected," said the 2007 annual report of the brokerage's parent, NCB group.

The note that NCB Capital Market issued was tied to global stocks.

"These offerings demonstrate that we are providing solutions to meet the needs of clients who are seeking higher than average returns," said the report.

Williams said Jamaica's tryst with alternative investment schemes suggested that brokerages like NCB Capital Market needed to redefine their communication strategy to reach those clients.

Market risk

A local think tank, CaPRI, has estimated that the alternative investment schemes, up to last year, were valued at J$100 billion to J$200 billion, but that was before the collapse of one of the more popular entities, Cash Plus, which has been placed in receivership.

Investment houses to now have underestimated the market's risk appetite and investors' thirst for big returns.

Indeed Williams, as he rolled out the company's new 'I Am' campaign to be initially targeted at high net worth clients, said NCB Capital Market had done a poor job of selling itself as a wealth creator, and promoting the accessibility of its services, even as the forex trading schemes were snagging club members.

"It forced us as an organisation to look at ourselves," said Williams.

"Many customers didn't even know that in each branch there is a NCB Capital Markets representative."

Back to the drawing board

It also forced the brokerage "back to the drawing board," he said, to devise new packages for clients.

Williams' announcement followed the release of the company's first quarter results for the period ending December 31, 2007, which reflected flat net profit of $416.7 million compared to the $416.9 million it made at December 2006.

Growth in the period was hampered by a $73 million decline in trading income.

Williams said NCB Capital Markets' products are to be worked around three components - high returns, minimum taxes and protected principal.

"We have built products around those three; we have brought them into the global framework." he said.


Source:
richard.deane@gleanerjm.com
Jamaica Gleaner
Friday June 13, 2008

http://www.jamaica-gleaner.com/gleaner/20080613/business/business10.html