Jul 2007 Financial News

Capital and Credit launches US brokerage

Jul 25, 2007

The Capital and Credit Financial Group (CCFG) has established an international brokerage firm in Florida, United States in which it has 100 per cent ownership held under a company created for the purpose, Capital and Credit Holdings Incorporated (CCH).

Investment in the new brokerage, called Capital and Credit International Incorporated (CCII), ran to US$750,000 (J$51.5 million) on the initial set up costs.

CCII began operations this month as a broker-dealer, with clearing services and custodianship executed by Pershing LLC, a subsidiary of the Bank of New York Company (BNY).

The Capital and Credit Group holds 80 per cent of CCH, whose principal directors include Ryland Campbell, chairman of CCFG and its Chief Financial Officer, Andrew Cocking, while Capital and Credit Merchant Bank, the main subsidiary of the group, owns the remaining 20 per cent of the US holding company.

Campbell told Wednesday Business in a brief interview that the group was projecting that the new firm to add to group profits, starting in 2008 or 2009.

"We expect in another 12 to 18 months to make an initial contribution of 10 to 15 per cent to our profit," said Campbell.

"Thereafter, the sky is the limit as we make momentum."

Vice-president of Securities Trading Benjamin Spiro said the company's focus will be on the emerging markets and institutional securities.

Spiro said industry activities show that real value added comes from institutional servicing.

CCII will also handle stocks, mutual funds, fixed income securities and retail accounts.

"Obviously there is a lot of capital with Jamaican and Caribbean institutions having an appetite for overseas investments and we are the first Jamaican affiliated broker dealer in the United States that will offer the full suite of financial services, whether its large institutional port folio management, or for the small retail investor," Spiro told Wednesday Business on Tuesday.

In the United States, broker activity must go through clearing houses in order to protect investors' funds, a function that Pershing will perform for CCII.

The arrangement is similar to the manner in which the Bank of Jamaica acts as a clearing house for local commercial banks.

CCII will have Pershing perform the execution and clearing support for it.

"Our initial focus would be Caribbean and I'd say Latin America." said Spiro.

"We are looking at a number of countries as potential investors. Right now India's economy is booming going forward even on the equity side of things look very promising so we are really going to have a global focus going forward."

Much of those markets are already controlled by big investment banks like Bear Stearns and Morgan Stanley. Still, Spiro said Capital and Credit had connections into the Jamaican and broader Caribbean communities overseas, from which to begin building its market.

Said the financial controller: "we never had the presence in those States to leverage those communities until now."

He was not prepared, however, to project the level of business that the new brokerage will be able to command.

"We are in our infancy, but we expect that definitely Jamaicans here will be interested in the sense that people like to spread out their assets and there are a lot of Jamaicans that have dual residency or have by affiliation through family."

Source:
Susan Gordon, Business Reporter
The Jamaica Gleaner
Wednesday July 25, 2007

http://www.jamaica-gleaner.com/gleaner/20070725/business/business2.html