Aug 2011 Financial News

JMMB to re-enter T&T securities market

Aug 24, 2011

Jamaica Money Market Brokers (JMMB) has revealed plans to make another play for securities business in Trinidad, a market it exited three years ago in the midst of the recession when it needed cash and sold out to partner CL Financial group.

The market is now ripe for expansion, said JMMB Group CEO Keith Duncan in a statement published inside the company's 2011 annual report just released to shareholders ahead of the annual general meeting on September 14. The money market firm also plans to explore other opportunities in Central America.

"Over the next three years, the JMMB Group also plans to re-enter the securities business in Trinidad and Tobago," Duncan said.

"Along with the various strategies to increase profitability and market share in the Dominican Republic through the identification of banking acquisition opportunities, JMMB is currently evaluating strategies to enter the Central American region. Over the next three years, we will also be evaluating various partnerships to enter the securities and real estate investment trust (REIT) business."

JMMB said Tuesday in response to Wednesday Business queries that it was still evaluating the strategy for entry.

In 1999, JMMB expanded into Trinidad through a 45 per cent shareholding in Caribbean Money Market Brokers (CMMB). It, however, sold its stake in 2008 to CL Financial, then the largest privately held conglomerate in the Anglophone Caribbean.

Essentially, JMMB wants to replicate the success of its investment in CMMB - a business that was taken over from CL Financial by the Trinidad Government and resold, and now operates as First Citizens Investment Services.

"This investment reaped significant returns for the JMMB Group as we realised a J$2.3 billion gain from the sale of our stake in the entity in 2008. Over the period 2011-14, our intention is to replicate this business model in Trinidad and Tobago as we believe the market conditions are now favourable for re-entry," said Duncan's management statement to shareholders.

JMMB is joint venture partner with the Mittal Group in Trinidad-based Intercommercial Bank (IBL). JMMB also operates in the Dominican Republic. Duncan said that those operations were performing well.

"The JMMB Group continues to maintain its presence in the region with the steady results from IBL ... and the encouraging performance from our operations in the DR. The operations in the DR continue to grow with a client portfolio now standing at US$76.15 million as at March 31, and comprising a strong base of retail and institutional clients, including banks, savings and loans associations, securities dealers and pension funds," he said. "We will continue to expand our strategy in both markets through targeted acquisitions, as well as taking advantage of business opportunities as they arise."

The company's push for growth is also playing out in its domestic market.

JMMB announced earlier this month plans to acquire Capital and Credit Financial Group (CCFG). The deal is worth J$4.2 billion.

JMMB will finance 70 per cent of the deal with J$2.95 billion in cash and the remainder via a share swap to CCFG share-holders. JMMB's cash and equivalents totalled J$3.1 billion at June, and the company was worth a net J$11 billion on its balance sheet.

The parties have set a yearend timetable to finalise the CCFG transaction, pending regulatory approval.


Source:
Steven Jackson, Business Reporter
steven.jackson@gleanerjm.com
Jamaica Gleaner
Wednesday August 24, 2011

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