Oct 2006 Financial News

JMMB eyeing Bahrain

Oct 06, 2006

Jamaica Money Market Brokers (JMMB), having already expanded to Trinidad & Tobago and the Dominican Republic, has set its sights on the Middle Eastern nation Bahrain, Keith Duncan, group chief executive officer, announced yesterday.

"We are currently working on the due diligence in Bahrain. We are looking at opportunities there," Duncan told shareholders attending JMMB's annual general meeting at the Knutsford Court Hotel in Kingston.

JMMB set up offices in the Dominican Republic in March this year, operating under the name JMMB Dominicana. The firm is awaiting approval of its application for a licence to begin operations.

In 2000, JMMB branched out to the wider Caribbean through its Caribbean Money Market Brokers (CMMB) and in 2004 with Intercommercial Bank Group, a move that has helped to provide balance to its Jamaican operations. "We intend to be a regional powerhouse," Duncan said.

According to the firm's 2006 annual report, its associated companies made a significant contribution to the group's profit. "The share of profits from associated companies increased by 45.3 per cent in 2006, adding J$573.8 million in pre-tax profits. CMMB was the major contributor to the performance," the report said.
Overall, the JMMB Group recorded a profit, attributable to stockholders, of J$1.67 billion at the year ending March 31, 2006. As at March 31, JMMB had a presence in Trinidad & Tobago, Barbados, St Lucia, the Dominican Republic and Jamaica.
Yesterday, JMMB executives spoke candidly at the meeting about the challenges facing their Jamaican operations. "For the Jamaican market, yields have been falling across the full range of tenors," they said. "The gap between the long end and the short end of the curves is also narrowing."

The management team also told the audience, "the spreads on our portfolio have been narrowing, as well as funding rates have been sticky relative to the market". This lowering of interest rates has led clients of JMMB, as well as the other financial services entities, to pull funds and place them in alternative investments.
"Jamaicans have become accustomed to high returns and in some cases unreasonably high returns, but we won't call any names," said Duncan.

He assured the shareholders that the firm was working on plans to give its customers what they want. "Interest rates right now are barely beating inflation, and after you pay taxes you are behind the eight ball," he said. "So JMMB has to come up with products for clients who want more return and who are willing to accept more risk. We will be offering these products with high risk to our more sophisticated clients."

Duncan said that JMMB will be pursuing new products in the 2007 financial year. These include additional mutual funds through JMMB Securities Limited, additional loan products and new general insurance products through JMMB Insurance Brokers Limited.

JMMB, now 14 years old, has 100,000 clients and nine branches.

Source:

Dennise Williams,
The Jamaica Observer
October 06, 2006

http://www.jamaicaobserver.com/magazines/Business/html/20061005T220000-0500_113698_OBS_JMMB_EYEING_BAHRAIN.asp