Tuesday 23 July, 2019

Year in review: The biggest business headlines of 2018

From the two-way movement of the Jamaican dollar, acquisitions and mega profits - let’s take a look at the top 12 business stories for the year.

NCB records $28.6 billion profit

At a staggering $28.6 billion, financial conglomerate, NCB Financial Group in November recorded the highest profit in its history. The group’s performance for the financial year ended September 30, 2018, represented a 50 per cent increase in year over year net profit.

The performance placed NCBFG among the top five financial institutions in the English and Spanish speaking-Caribbean — an accomplishment the company was hoping to achieve at year end 2016.

President and Group Chief Executive Officer at NCB, Patrick Hylton is targeting top three financial institutions in the English and Spanish speaking-Caribbean come 2019.

NCB President and CEO Patrick Hylton

Scotiabank announces intent to exit nine eastern Caribbean territories

Late last month Trinidad and Tobago based- Republic Financial Holdings Limited (RFHL) announced that it had entered into an agreement to acquire Scotiabank’s banking operations in Guyana, St. Maarten and the Eastern Caribbean territories, including Anguilla, Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines.

Republic said the purchase price is US$123 million, which represents US$25 million consideration for the total shareholding of Scotiabank Anguilla Limited; and a premium of US$98 million over net asset value for operations in the remaining eight countries.

Scotiabank

Scotia Group Jamaica selling life insurance business to Sagicor

The Canadian banking giant said it will refocus its business in the Caribbean region by selling its insurance operations in Jamaica and Trinidad & Tobago to Sagicor Financial Corporation. After the sale, Scotiabank will partner with Sagicor to sell insurance in those countries. The agreement is subject to regulatory approval and closing conditions.

It is also subject to the closing of the announced transaction whereby Sagicor will be acquired by Alignvest Acquisition Corporation.

Scotia Group Jamaica President David Noel, and Sagicor Group Jamaica CEO Christopher Zacca (right).

Alignvest to acquire Sagicor Financial Corporation

Canadian private equity firm, Alignvest Acquisition II Corporation announced plans to acquire 100 per cent share ownership in Sagicor Financial Corporation valued at US$536 million or $1.75 per share.

Alignvest Acquisition II is a special-purpose company that was listed on the Toronto Stock Exchange in May 2017 to be used solely as the vehicle for the acquisition of Sagicor Financial.

However, the acquisition is not expected to affect shareholders of the Jamaican subsidiary, Sagicor Group Jamaica, since Sagicor Financial Corporation owns less than 50 per cent of Sagicor Group Jamaica.

Jamaica’s world-beating stock market rally

Three years after being recognised by Bloomberg as having a better year on the stock market than any other across the globe, Jamaica again caught the world’s attention when it was highlighted for its spectacular stock market rally - the world’s biggest over the last five years, with no sign of losing steam.

In October, Bloomberg reported that Jamaica’s benchmark index gained 19 per cent in dollar terms for 2018, the most among more than 90 primary equity gauges tracked by Bloomberg. The top performer was Barita Investments, whose shares have rallied 129 per cent in dollar terms this year, according to Bloomberg.

Jamaica Stock Exchange

Cornerstone acquires Barita Investments

Cornerstone Investments Holdings completed the purchase of the majority shareholding of Barita Investments Limited for over $3 billion.

Cornerstone Investments, which was incorporated in St Lucia, includes the same shareholders as Cornerstone United Holdings Jamaica, a special-purpose vehicle that acquired a majority stake in the merchant banking outfit MF&G Trust and Finance Limited in 2016.

Paul Simpson, serves as President and CEO of Cornerstone United Holdings Jamaica Limited (CUHJL), which was incorporated in Jamaica in 2015. Restaurant of Jamaica boss, Mark Myers is CUHL’s chairman.

Founded by Rita Humphries-Lewin, Barita Investments in 1977, Barita is a primary dealer and a cambio dealer operating with a staff of more than 80 from offices in New Kingston, Mandeville and Montego Bay.  

Cornerstone Investments Holdings shareholders from left to right: James Godfrey, Mark Myers, Duncan Stewart and Paul Simpson.

Gas prices at nine-month low

At the start of December, gas prices were at a nine-month low. The news was welcomed by motorists after gas prices hit a record high in August.

As the prices went up, the state-owned oil refinery Petrojam sought to reassure Jamaicans that the increase was unrelated to matters in Jamaica but was based on the prices for which the commodity is purchased on the international market, which are adjusted weekly.

As at December 5, a litre of 87 gasoline sold for an average of $123.46 while 90 gasoline was sold for $126.29. Both products were down $2.22. Automotive diesel was down by $2.96 while ultra-low sulphur diesel had its price slashed by $2.78. Kerosene sold for $2.28 less, but propane saw a slight increase of $0.10 while butane went up $0.05 more.

Loop stock photo

Sliding dollar

The Jamaican dollar hit a new low in August, closing at $137.96 to US$1. So bad was the sliding dollar that the Bank of Jamaica pumped US$40 million into the foreign exchange market in a flash auction, in addition to US$60 million the bank was selling over a five-week period.

The flash auction was in an attempt to slow the continued slide of the Jamaican dollar. But it had minimum impact on Jamaica’s business community which voiced that the sliding local currency was the primary deterrent to investment and expansion plans, according to findings from the Jamaica Chamber of Commerce Business and Consumer Confidence Survey.

This year’s period of depreciation was the longest and fastest slide of the Jamaican dollar since it started moving both positive and negative direction about a year and a half ago.

Jamaican thousand dollar notes

Bank of Jamaica Foreign Exchange Trading Tool (BFXTT)

Having completed the rollout of the sell side of the Bank of Jamaica (BOJ) Foreign Exchange Intervention & Trading Tool (B‐FXITT) in July last year, the central bank, for the first time, bought funds from the market in April.

The first auction saw the BOJ offering to buy US$5 million, US$412 million the following week and US$15 million a week later. BOJ uses the auction system to buy and sell based on an announcement of amounts to be auctioned over a four week period.

According to the central bank, the introduction of BFXITT makes more funds available in the foreign exchange market and is expected to deepen the forex market, providing more choices and greater liquidity.

Jamaica ranks 6th for ease of starting a business

Jamaica moved up 0.57 per cent in its rating for starting a business to secure its place as the sixth best country in the world to open a business, according to the latest Global Banking and Finance Review.

The report, which was inspired by online marketers Reboot Digital Agency, highlighted New Zealand as the number one economy to start a business in 2018 while Canada, Hong Kong, Georgia and Jamaica were categorized at 2018 start-up hotspots. Jamaica was rated at 97.3.

Starbucks staff at the store opening in Liguanea.

Starbucks opens two outlets in Kingston

Some seven months after opening the resort town of Montego Bay, Caribbean Coffee Baristas took the Starbucks to Kingston, with its first outlet in Liguanea in June and a second on Knutsford Boulevard in New Kingston this month.

Caribbean Coffee Baristas is a joint venture between Ian Dear, who is also the CEO of leading restaurant management and franchise operator Margaritaville Caribbean Group and Adam Stewart, the Deputy Chairman and Chief Executive Officer of Sandals Resorts International.

Local cannabis industry on a ‘high’

The Cannabis Licensing Authority (CLA), this year issued 11 licences after receiving over 40 applications for growing the medicinal cannabis plant. CLA has five categories of licenses are issued covering: cultivation, processing, transportation, retail, and research and development.

A patron examines EPICAN procuct on display at the store opening

The first two licenses were issued to Everything Oily Labs Limited for the processing of medical marijuana and to Environmentally Processing Inter-national Cannabis (EPICAN) for the cultivation, extraction, manufacturing and retail distribution of the plant.

EPICAN opened Jamaica’s first seed-to-sale cannabis retail store at Marketplace in Kingston, allowing for more than 300 cannabis enthusiasts to engage brothers, Dwayne and Karibe McKenzie.

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