JMMB talks smart money with investors
Published by www.jamaicaobserver.com on May 16, 2007
May 16, 2007

The "smart money" was with Jamaica Money Market Brokers (JMMB) last Thursday at the Knutsford Court Hotel in Kingston as JMMB Chief Investment Officer Fayval Williams, senior JMMB staff, along with guests from United States-based investment broker Oppenheimer took the audience around the world in 80 minutes.

Under the theme 'smart money isn't domiciled in one location or one product', guests were told that smart money is spread across key investment products to generate required returns.
Senior equity analyst Keisa Ansine-Samuels, said that while the stock market is in a bear mode, things are really "not bad".

"Over the past 52 weeks, the three Indices have in fact performed positively. So we say the stock market at this time is not bad," she said, adding that there was value to be found in quality stocks. One such conglomerate, she said, was Lascelles deMercado, which "remains one of the companies with a distinctively high shareholders' equity and, by extension, the only locally owned company with the highest book value".

Ansine-Samuels also said that Lascelles' quarterly earnings trend could not be depended on to guide the firm's level of the earnings for the year. "So although the recently released second quarter ended March 2007 lagged the corresponding quarter last year, as well as the previous quarter, investors need to bear in mind that the second quarter's performance last year was an anomaly," she said. "Historically, the drivers for the year's performance are the first and final quarters, with the first quarter accounting for a third of the year's profit."

Leo Williams, JMMB's regional business development manager, continued the discussion on equity investments. In his presentation, he highlighted JMMB's new Trinidad & Tobago equity mutual fund.

"The Trinidad Select Index Fund offers investors a unique opportunity to invest in the 15 most actively traded local companies on the Trinidad and Tobago Stock Exchange through a single investment," he said. "The fund will move in value as the TTSE Select Index moves daily."

The advantages of investing in the fund, he said, were:

1 Easy & Convenient-access to all 15 stocks in each purchase;

2 Diversification across all top 15 T&T stocks to help minimise risk associated with individual stock volatility;

3 Transparency & Cost Efficiency - investments will mirror the performance of the TTSE Stock Index;

4 Performance - long-term capital growth;

5 Professional Management - experts who are able to take advantage of market opportunities; and

6 Flexibility - buy and sell and quantity of shares.

Michael Margolis, managing director of investments at Oppenheimer & Company, informed the audience that the investing climate today is similar to that in the 1970s.

"Similar to the 1970s, we are in a new investing cycle dominated by commodities (oil, gold and copper) and assets that benefit in inflationary times such as real estate," he said. "We see a sign of higher interest rates as the money supply has grown internationally."

Fadel Gheit, senior vice president of Oil & Gas Research at Oppenheimer, told the audience that the days of cheap oil were over. "Oil prices are rising, not because we are running out of oil, but because of other factors such as global tensions, terrorism, climate change and increased demand from China and India," Gheit said.

Gheit also told the audience that oil and energy will remain volatile, and suggested that investors who want to buy oil-related stocks should price them at what they expect to be the new lows, not the new highs.

"If we say that oil prices will be US$62 per barrel forever, then when we buy stocks in that industry, we should price them if oil were to drop to US$45 per barrel," Gheit said, adding "I am bullish on natural gas stocks."

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