Wise guy

The market, he said, is expected to remain strong in 2006.

Describing himself as someone with "a passion for investment," Sheppard outlined WISE’s plans to encourage more companies to get listed on the local stock market and broaden the range of financial services which his company currently offers to its customers.

Having cut and sharpened his financial teeth at institutions such as McGill University, the University of Western Ontario and Nesbitt-Burns, the investment arm of the Bank of Montreal, from 1995 to 1999, Sheppard said he never saw Canada as home and was determined to return to TT to make a contribution for national development.

He said it was around August that word came that Peter Clarke was stepping down as WISE CEO and the opportunity to work there came up. Sheppard said while it was an environment he was unfamiliar with, he gladly welcomed the challenge and is determined to carry WISE to new heights. He also had a short stint at Republic Securities last year.

Sheppard said a superficial examination of the stock market’s performance in 2005 shows that there were similarities to its performance in 2004, ending flat and slightly down.

"What we saw in 2005 was institutional investors — pension plans, insurance companies, mutual funds — come out of the market for a number of reasons. Without the support of the institutional investors, the market began a correction in May and continued that correction until about September when it bottomed off and started to increase slightly."

"Then subsequent to that, it went back down last week," he said. However, Sheppard believed the market remains strong, citing the performance of the underlying companies that represent the market.

"You can see that these companies for the most part are doing well. They continue to grow. So fundamentally the market is strong. It’s a little bit pricy and the market ran ahead of itself in 2004 and we are just seeing a correction back down to more longer term averages," he stated. Asked why the energy companies and major corporate conglomerates such as Associated Brands and Clico are not currently listed on the stock market, Sheppard said this is something that WISE will be closely looking at in 2006. He identified the market’s disclosure requirements as a deterrent as well as the stage of development of the market itself on why some companies may decide against a public listing.

Noting that other regional stock markets and many local companies are now publishing quarterly accounts, Sheppard said the levels of transparency in and security of the market are very good and gave credit to the Securities and Exchange Commission (SEC) for this.

"There are a lot of benefits of public listings. We need to make sure as brokers that we keep talking to people, trying to get companies and principals comfortable with market," he said. Sheppard said he hoped that WISE would be able to convince private companies to list instead of taking the normal route of selling out because in the long run, "it makes for a better market, a broader market."

In terms of the major stock market performers for 2006, Sheppard said WISE was expecting solid performances from the Neal and Massy Group of Companies, Trinidad Cement Ltd, RBTT, Caribbean Communications Network and the National Commercial Bank of Jamaica. (NCBJ). He added that WISE will publish annually its top five best stocks for the upcoming year and 2006 was the first time that it was recommending a Jamaican stock in the form of NCBJ, Jamaica’s number two commercial bank.

On the subject of cross-listing, Sheppard said there are many Jamaican and Barbados companies that are currently listed on the TT stock market. He expressed his fervent hope that as Caricom governments moved to implement the Single Market and Economy (CSME) from January 1, 2006, the establishment of a regional stock exchange would happen in the near future "because it makes sense." Sheppard added that many local companies and conglomerates are currently leading their regional counterparts in implementing the CSME.

TRANSFORMING WISE

Back on the home front, Sheppard said WISE has been working hard over the past four months to transform itself from a stock brokerage company into a full service brokerage firm. Noting that WISE can already boast of an enormous platform on the stock brokerage side, Sheppard said WISE wants to become a company where investors can "come in and buy anything they want from a securities perspective."

"We have since begun executing the plan. WISE right now, beginning this year, is going to be offering on a limited basis a fixed income trading capability," he stated. Adding that he is "a bit of a perfectionist", Sheppard said he wanted to ensure that WISE is fully capable of delivering on any service when "we come to market ."

On a brokerage basis, Sheppard said WISE has the ability to access and trade on the New York Stock Exchange from its desks in Port-of-Spain.

Noting that there were local investors that utilise this service, Sheppard said there are significant benefits for having local representation.

"We understand our own people better than the Americans do. We have the ability and are right now in the process of building a demonstrable track record that we could then say to our investors, ‘We have been in the market, we understand the market and we can offer a service that the American dealers cannot and that’s local understanding."’

He added that while WISE does not expect any "immediate outstanding success" from this area of its operations, it will be essential for the company’s medium to long term success.

On the subject of Initial Public Offering (IPO) investments, Sheppard said WISE is currently working on one right now and hopes to get it out before the end of the third quarter of 2006. "We are all quite excited about it," he stated. Sheppard added that WISE was now in the process of going through a private financing round which will be followed later by a public offering.