Aug 2011 Financial News

Sagicor first on TTSE US$ equities market

Aug 27, 2011

Sagicor Financial Corporation (SFC) is the first company to trade a US dollar-denominated instrument on the T&T Stock Exchange’s (TTSE) new equity platform and its chief operating officer Richard Kellman says it is evidence of the company’s intent to increase its market presence locally. Yesterday, the market opened with the listing of 120 million convertible redeemable preference shares, issued by SFC with a subscription rate valued at US$1 each, to be redeemed five years from the date of purchase with a 6.8 per cent dividend on investment. He said: “During June and July of this year, Sagicor raised a total of US$140.5 million from existing shareholders who contributed US$42 million and the International Finance Corporation (IFC) which contributed US$98 million. Of the US$140 million total, US$120 million was in a US$ denominated issue of new preference shares.”

Kellman was speaking at the launch of the TTSE US dollar equities market at the company Nicholas Towers, Port-of-Spain, headquarters. He said the successful capital raising exercise sent a strong signal of confidence in the company’s future and it’s management, demonstrated by shareholders and an international institutional investor of the standing of the IFC. The brokerage firm, West Indies Stock Exchange (WISE) handled the share issue for Sagicor on the TTSE.

WISE chief executive Adrian Manmohan said he hoped Sagicor Financial was the first of many companies to use the trading platform created, citing that the T&T market had a small level of liquidity. He said: “One of the problems is that people are seeing more attractive US type investments. We hope that this would have some incentive for investors to come to the local market and for issuers to use the local market, especially the debt equity. Some bonds are already listed in the US which could become listed in T&T to add depth to our market. Coming into the volatility around the world now where so many companies are going under, it’s safer for Trinidadian to have a local place where they could deposit their bonds and know that its close to them and there is some level of safety.”

Investors, however, would need to have pre-funded accounts with their brokers to transact business in the TTSE US-dollar equity said Wain Iton, chief executive officer at the TTSE. He said: “We are settling on a T-plus-three cycle. We can’t allow you time to say you have to go to the bank to see if you can procure US dollars to settle. If that were the case, we would be setting up ourselves for settlement failures. We have to settle in three days. It’s a market designed essentially for people who already have US dollars and want to trade.”

Ranjit Jeewan, chairman of the TTSE, expressed delight that companies were using the market to raise capital, which happened to be the main reason for its existence and encouraged more T&T companies to follow Sagicor’s lead in bringing equity or debt IPO’s to market. He said: “I would implore both T&T companies and investors to partner with the TTSE in developing our capital market. The government may have a role to play in this development thrust and we anticipate that in fiscal 2011/2012 we would see some of the initiatives announced in last year’s budget, in particular, the divestment of suitable state enterprises, coming to market.”


Source:
Trinidad Guardian
Saturday August 27, 2011

http://www.guardian.co.tt/news/2011/08/27/sagicor-first-ttse-us-equities-market