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Financial News

Jan 2008 Financial News

Reported increase in share prices for BS&T and BFL

Jan 22, 2008

TWO of the companies which were targeted for acquisition have reported the highest movement in share prices in Barbados in 2007. However, with some companies to date showing robust financial performance in 2007, analysts are quietly predicting an overall rebound in these prices in 2008.

The share prices of the Barbados Shipping and Trading and Barbados Farms Limited increased significantly last year when compared to 2006.

The BFLs stock price jumped from 95 cents a share at the end of 2006, to $4.40 by the end of trading in 2007. The BS&T started 2007 at $5.25 and by the time the tentative takeover by Neal and Massy was announced nearing the end of last year, the share price was $8.50 a share.

BFL has been acquired by Sagicor Financial Corporation following a competitive bid for the farming company. CLSS Holdings Limited, a subsidiary of CLICO Holdings was also involved, but announced last week that it was withdrawing its bid.

While Neal and Massy has acquired the majority stake in the BS&T, its move to take up the shares and to pay for them has been held up by the Securities Commission, pending a decision on action the commission had instituted in relation to some of the procedures involved in the purchase of the shares.

Economist Anthony Johnson has told the Barbados Advocate that a number of factors tend to contribute to the movement in share prices.

Johnson who is President of the Barbados Economics Society, has pointed to such influences as company earnings, interest rates and a stable economic environment.

He said for instance that in instances where interest rates are high, these tend to add costs to a companys operations. This will most likely result in lower profitability, assuming the interest rates were lower, and lower dividend to shareholders, he added.

Other share prices increasing last year were BICO, Banks Holdings Limited, Grace Kennedy, West Indian Biscuit, One Caribbean Media, First Caribbean International, the Insurance Corporation of Barbados, Sagicor Financial Corporation, Goddard Enterprises Limited, Cable and Wireless (Barbados) Limited and Light and Power Holdings.

Stock market reports have suggested that the Barbados Stock Exchange (BSE) has produced the best performance of the three major exchanges in the Caribbean for the year 2007. The BSE Composite Index gained 9.09 per cent over its close for 2006. (JB)

The Barbados Advocate
Tuesday 22nd January, 2008