Jan 2006 Financial News

NYSE executive sees strong growth in '06 [Jamaica]

Jan 23, 2006

MONTEGO BAY, St James - Alex Ibrahim, a senior executive of the New York Stock Exchange, says that global growth momentum will help to propel Jamaica towards three per cent growth in its gross domestic product during the next fiscal year - which runs from April 1, 2006 to March 31, 2007.

"Here in Jamaica the growth is expected to be slightly below three per cent in 2006/2007," Ibrahim, who is managing director of the Global Corporate Client Group, told participants at last week's capital markets conference organised by the Jamaica Stock Exchange (JSE).

"Although small, this represents Jamaica's most rapid economic expansion since the late 1980s," said Ibrahim.

Jamaica's economy grew by 6.8 per cent in the calendar year 1989, the last year under Edward Seaga's administration of the 1980s, and by 5.6 per cent the following year - under Michael Manley's regime.

The growth rate fell dramatically to one per cent the following year, and has since ranged from negative to just over two per cent per year.
For the 2005/06 fiscal year, the government had programmed growth of 3.6 per cent. Between January 1 and September 30, 2005, the growth was 1.1 per cent.

Ibrahim believes that with the world now growing at the fastest clip in decades, Jamaica and other economies in the region were well poised to do well.

"The global economy today is growing at its fastest pace in 30 years: five per cent in 2004, four per cent in 2005 and will continue robust growth expected in 2006," said Ibrahim. "Indeed, there is a world of unprecedented opportunities for business industries and markets in every region of the world including Jamaica and the Caribbean nations."

The event at which the NYSE executive spoke was held at the Half Moon Hotel in Montego Bay, and was intended to explore the potential of regional capital markets within the context of the Caribbean Single Market and Economy - elements of which have already been introduced by some countries, including Jamaica.

Roy Johnson, executive chairman of the Jamaica Stock Exchange, which has been at the forefront of efforts to expand the region's markets, outlined his vision for the way forward for the markets.

"The Caribbean needs to develop its capital market by first moving to a level of regional integration that allows us to develop the critical mass to attract international capital," said Johnson. "External equity investors are more interested in investment across the region than companies operating in one location."

Johnson argued that the Caribbean should recognise that it was competing with markets with strong regional linkages, for example, Latin America and Asia and "not only with the sophisticated developed markets of New York, London and Tokyo".

The JSE boss recommended the following, as ways to induce astute investors to choose the regional markets rather than the other competitive venues:
. the lure of improved profits;
. a relatively stable political climate;
. control over one's investment;
. a well-developed regulatory oversight that promotes market integrity; and
. ethical business practices and liquidity that persuade investors to choose Caribbean markets.

HORACE HINES Observer staff reporter
Jamaica Observer
Sunday, January 22, 2006
http://www.jamaicaobserver.com/magazines/Business/html/20060121T230000-0500_97130_OBS_NYSE_EXECUTIVE_SEES_STRONG_GROWTH_IN_____.asp