“RBTT, known for innovation in product development and for pioneering excellent packages of services for special markets, leverages its regional and international reach to stimulate and enable trade expansion” said Patrick Kelly, Assistant General Manager, Corporate Banking, RBTT Bank, in his presentation to a fully subscribed seminar on Trade, Export and Business Financing. The seminar was a part of the programme at the recently concluded Trade and Investment Convention 2003. Speaking to a packed audience which included business men and women from Trinidad and Tobago, the Dominican Republic, Belize, Costa Rica, Jamaica and the rest of the Caribbean, Kelly outlined key financing solutions and services through which the RBTT Group helps build intra- and extra-regional trade. International Trade Financing was of keen interest to participants at the seminar, and the discussion spanned topics from Letters of Credit to Trade Advisory and Promotion Services, Export Development Financing and Structured GSM 102 Financing.

About ten years ago, Mayaro was one of the most under developed, hard to reach places in the country. But over the past few years the county has been given a drastic facelift, making it an attractive hide-away and one of the highest priced real estate areas in the country. Hotels, guest houses and restaurants have been springing up on the beach front attracting a bandwagon of locals to Mayaro. Ten years ago, the quality of the hotels was poor. The toilets were un-tiled and out doors, the bathrooms were un-tiled and unkempt. Many were run down houses without the proper amenities that were rented out to large families. There was also a high level of petty theft and vandalism. Yet Mayaro has always been one of the most beautiful and well-kept beaches in the country. The shore line stretches for about 22 miles, making it a potential source for development. A fact that did not go unnoticed by local entrepreneurs. The area has now turned into a lucrative “local tourist” getaway, with more hotels on the way. According to Sabrina Rahamut, owner of Rahamut Real Estate Services, the price of real estate in Mayaro has increased to $100 a square foot from about $20 ten years ago, especially in areas like Sand Sucker Road and Frontin Road.

She added that a new five star hotel was set to come on stream in the upcoming year and this will push property value up even higher. “Initially, the property value increased because of the number of expatriates flocking into the area. Large houses were built to accommodate them, all of a higher quality than the area was used too,” said Rahamut. This is evident from the large number of modern houses hugging beach front areas like Church Road. These bright, busy homes create a stark contrast to the older, abandoned houses woven in between them. Apart from putting up large houses on the beach front, energy companies like bpTT have made commendable efforts to improve the standard of living of the residents in Mayaro. The companies established a $7.2 million fund to stimulate sustainable and economic development. Rahamut added that Mayaro has become very niche marketed. The locals visiting the area are usually from the adjoining southern towns like Princes Town, Tableland, Rio Claro, Siparia and San Fernando. She said rarely will you get people from North vacationing in Mayaro. But, Vishnu Jaimungal, owner of Harry’s Guest House, also known as the Seagull, said Mayaro has turned itself into a blossoming “local tourist” spot. Local tourists, he explained, mean locals from other parts of the island coming to Mayaro to vacation and sight see. While he felt that two years ago the area was more alive, he agreed that businessmen are waging battles for beach front property to develop. The Seagull has been in operation for the last 20 years and Jaimungal said he has seen Mayaro come full circle.

He said the only chink in the armour, is the fact that Mayaro residents loseout on the area’s progress since most of the labor needed, is brought in from other parts of the country, to service both the tourist and the energy sector. He said some residents feel they are not getting their right share in the developments in terms of employment and benefits. “Mayaro does not have an exceptionally skilled labor force and companies and hoteliers look outside for their labour supply. Obviously this has caused some tension among residents,” said Jaimungal. Also, families vacationing tend to bring all their food items and necessities from home and rarely patronise the market or the small groceries, unless it is an emergency. “It is easier to make food and bring it. It is not like we are going to Miami,” said a mother of two. However, Jaimungal still feels the beach has seen better times over past two years.He said that while you can see a great leap in development in the area, he feels that recently there has been a dip in the number of people coming to Mayaro. “People have been afraid to leave their homes because of crime, which is understandable,” said Jaimungal. But he added this has not hindered hoteliers, restaurant owners and other businessmen from setting up shop on the beach front. Even party planners capitalise on the crowds in the area, awakening the night life on the beach.

Within the last year alone, said Jaimungal, there has been tremendous infra-structural development. “Huge groceries have opened stifling the smaller shops, there have been improvements to the hospital and new restaurants have opened also. Imagine KFC opened here only three months ago,” said Jaimungal. All this has gone up around the hustle and bustle of the famous Mayaro market. But again, he noted the area is not a haven for those looking for a place of luxury and pampering. He said people should not come expecting to find top class, five star hotels and restaurants. The area has not reached this stage yet. Right now, the beach front is peppered with guest houses that cater to families and couples. They have access to every amenity but in a quiet, homey setting. “The attraction is the natural, clean beauty of the beach front and businessmen can see this clearly, this is why so many people want to take a piece of the pie,” said Jaimungal.

Rasheed Hosein, owner of Rash Beach Resort, who has been in the hotel business for the past seven years notes that there has been an unmistakable rise in the price of real estate. “Seven years ago, you could get 2 lots of land for $120,000, but now beach front property like mine goes for $300,000,” said Hosein. Hosein has one of the most colourful beach front properties. Because of the limited space, all his expansion efforts have been upward. He said it is extremely difficult to get people to sell their property and this hinders many hoteliers from expanding their businesses. He added that this has not stopped businessmen from grabbing what is available and the land is becoming very scarce on the beach front. He said Mayaro has suddenly appeared on the list of places to visit when tourists come to Trinidad, especially with the recent popularity the area gained with the filming of the local movie Secrets of the Shell. “The movie was filmed in our hotel and this has drawn a lot of curious people to the area,” said Hosein, proudly. But with all the progress that is being made in the area, Hosein said development is still hindered by the reluctance of the government and TIDCO to assist the hoteliers to market Mayaro as a tourist destination. “If we could get the government to market Mayaro, they way they market Tobago, we would be able to turn the area into a lucrative tourist attraction. We have everything in place, we just need a little help,” said Hosein. But the improvements made by the hotel owners have made a huge impact on families who have been vacationing in Mayaro for more than ten years.

“We have been coming to spend July and August vacations in Mayaro, since my kids were babies, that’s over 20 years. And it has been a great pleasure to see the changes made to the area,” said one vacationer, staying at Rash Resort. “They expected to find dirty bathrooms and rundown houses, no hot water and no air conditioning. But now that things have improved, we can come again as a family,” the vacationer added. Hosein added that hotel owners, like him, felt they were given the short end of the stick by the government and TIDCO. He said they approached TIDCO to include the resorts on their web-site to increase awareness, but the tourist organisation was not as accommodating as they expected. However, he added that through the local county council office, the area hasbeen given great consideration, especially with improving drainage and having extra security on the beach front.

You might conclude that investment success follows those who diversify by asset class, while failure will befall those who diversify by time. Actually, neither premise is correct. The real message is that you must now follow both criteria if you are to achieve investment success: You must create a highly diversified portfolio, and you must maintain that portfolio for long periods. This is why market timing — the concept of moving in and out of investments as they rise and fall — fails. Market timing is the exact opposite of diversification. Where diversification tells you to invest in a variety of asset classes, market timers put all their money into stocks. Where diversification tells you to hold on to those assets for long periods, market timing tells you to frequently buy and sell your stocks in an effort to capitalise on the momentary fluctuations of the stock market.

Market timing is enticing. One book published in 1996  promises that you can double your money every two to four months. Imagine! Double your money every 60 to 120 days! This is the allure of market timers: They offer the promise of such fabulous, quick, and easy wealth that you figure it’s worth risking twenty bucks to buy the book and see. Or the US $22 to attend the introductory seminar. Or the US$295 for the annual newsletter. Or the US$2,500 for the complete workshop. It might be hard for you to believe, but I have never met anyone who has achieved wealth through market timing. But I know of lots of people who have gotten rich selling books, tapes, and seminars about it. Think about it: Let’s say you were able to double your money every four months. If you started with $10,000, guess how much money you’d have in 10 years? You’d have $5.3 trillion — enough to pay off the national debt of the US! In just 10 years! Assuming you could do this, why on earth would you be wasting your time telling everyone about it? So you could earn the three-dollar royalty from selling a book? As an investment advisor, I often have much more difficulty convincing someone to invest in a portfolio that will produce — if we’re lucky — annual returns that average 10%, or 12% over long periods, while there are others who claim to be able to double your money in an instant have no problem getting people to throw money at them.

STOP TAKING THIS DIVERSIFICATION STUFF TOO LITERALLY
You need to focus more and more of your attention on asset allocation, and less and less on individual stock-picking. It’s the forest vs the trees concept. The entire notion of diversification and asset allocation refers not to annual returns, but to volatility. In other words, I am not claiming that, by carefully allocating your money over a wide variety of asset classes, you are going to end up with more money than if you had merely plunked it all down on Lara. I merely am suggesting that, by properly diversifying your investments, you will earn almost as much as if you had plunked everything on Lara, while protecting yourself from the extreme possibility that Lara might prove disastrous. But what I am not denying – and this is important – is that, in the end, Lara just might have been the more profitable thing to have done.

You should note that picking a great allocation model  does not compensates for picking lousy investments. Nothing could be further from the truth. In fact, you must carefully allocate your assets, and then you must select the proper investments for each allocation. Missing on either point could prove as expensive as, well, as picking Lara. So, to make it all perfectly clear, you  need to devote substantial attention to both asset allocation and investment selection, not merely one or the other. And you thought life was going to get simpler. Instead, it says interest rates are irrelevant, that you ought to be looking at stocks, not bonds, anyway. Now you’ve been exposed to three attitudes, each of them intelligently offering their opinion. Then you start to understand: They are, indeed, merely opinions, not facts. So you reread the first two articles, this time focusing not on what they are saying about where interest rates are headed, but on why they are saying it. You discover something you weren’t expecting: Both publications agree on what causes interest rates to move, and on the financial implications if rates indeed move. They differ on only one point. Whether the rates are going up or down. Then you realize that they haven’t got a clue, any more than you do.

That’s when it hits you: It’s not that they aren’t any better at this than you are. It’s that you are just as good at it as they are! So, for the very first time in your life, feelings of intimidation about personal finance start to fade away. You’re beginning to feel ready to make the call: Do I really want to be in a money market fund right now? You don’t turn to the magazines for the answer. You rely on your own judgment. But you know you don’t have enough facts. Or enough knowledge. So you continue reading. While you keep subscribing to the magazines that got you started, you need more as you begin to feel they’re a little too basic, so you turn to the business press. You are surprised at how easy they are to read, and how good they make you feel. Then you start to listen to radio talk shows about money, and you start buying books like this one. You even start sharing what you’ve learned, buying copies for your family and friends to help them discover what you’ve learned. What you’ve learned is that the field of personal finance is an art, not a science, and there is no “one” answer to any situation.

With earnings season mostly behind us, the corporate news mostly over, the summer doldrums are here with most people focused on what is left of their vacation period and not the markets. We are now truly at the half year mark, an excellent time to review your current investment portfolio (available online at our web site www.investments-intl.com) with a view to adjusting your asset allocation mix before getting into the third quarter earnings acceleration of September.  As presented in last weeks article, the US’s ISM report was extremely positive, more so than expected, with the non-manufacturing index for July coming in at its highest ever, 65.1. Notwithstanding the positive economic data, the markets slumped on concern over what could be termed “the neutral bias of the US Federal Reserve” of late.

All but two of the major global indexes were off on the week with only the DOW and the FTSE 100 gaining positive ground. When the US Fed took a lead from in front approach, investor confidence seemed higher and certainly willing to follow, but now that the US Fed has stepped back to take a wait and observe attitude (because they believe enough has been done to stimulate the necessary foundation for economic growth) investors have stepped back too. At the time of writing, the Fed has yet to announce its decision (due on Tuesday) as to any change in short term rates, but we expect no change. The neutral bias is what is right, but the market may not like it. We are in the rocky seasonal period for stocks. From now until Halloween, the stock market history supports caution. The US Federal Reserve has probably cut interest rates for the last time. They are simply observing data which suggests they believe that a recovery is starting or likely to start. The US Government agencies have applied massive stimulus and are doing so coincident with a weakening dollar and a rising federal deficit. They see the tax cuts hitting the economy this quarter. We think their work is done and that the US will lead a global recovery. Perhaps now is a good time to review investment strategies that count. Portfolio planning accounts for 80% of an investment portfolio’s success with only 17% of growth attributed to timing and security selection. That is to say, buying a house in Westmoorings 10 years ago was a good decision, which year and what house really had little effect on the overall investment performance at this point in time. The same can be said for many other districts in TT. Thus, making the simple decision to invest in real estate, or equities or bonds, account for most of the end result.

That said, fundamental asset allocation theory now favours equity (ownership) positions over debt and cash (rental) positions. Thus the average investor needs to find a home for about 65% of his current net worth in ownership positions. The emotional trauma of the last three years has left many investors overly cautious and thus an opportunity has arisen for those who have the courage to review and make a rational forward thinking decision. We still favour a bias towards the value investment selection process over growth prospects but continue to place emphasis on small to medium capitalisation issues where we believe the greater opportunity exists for earnings and market share improvements. Thus our recommendations focus toward the Franklin Templeton Mutual funds which are stalwart performers in this regard and clearly demonstrated their conservative posture over the past 36 month down turn. Looking forward, we find it hard not to see the Health Care, Financial Services, Consumer Discretionary and Technology Sectors playing a significant role in our future life styles and thus remain over weighted in these sectors.

E-mail : darcy@investments-intl.com

Local wireless technology has been given a boost with the introduction of a new broadband system. West Indian Telecommunications Inc (WINTEL), an independent Internet provider, has partnered with Navini Networks of Brazil to bring a wireless broadband network to the local market. The four inches wide, two inches long device called the Nomad Ripwave and fondly labelled the Rabbit by its developers, is capable of transmitting a high speed Internet signal to over twenty computers at the same time. According to Peter Fung Kee Fung, head of Consumer Strategic Development for WINTEL, this network will be the first widespread broadband service offered locally. The Nomad Ripwave is a non-line-of-sight system that uses a patented beam to provide optimum signal, making it a revolutionary system on the local market. The beam is a variation from traditional wireless systems that use direct line of sight technology.  The beam transmits to WINTEL’s base station on Fort George. The station has a 3-mile range but Fung Kee Fung said they have been able to pick up signals on a longer range. “Through our relationship with Allplus Computer Systems we were able to see what Navini could do. And we realised this technology was what Trinidad needed,” said Fung Kee Fung.

He said while many people feel the local market is not ready for this type of advanced technology, all their research has shown otherwise. Currently no other independent provider or TSTT offers this service locally. This wireless system takes Internet access and video conferencing to a higher level. According to Fung Kee Fung the Nomad Ripwave is a third generation system that local businessmen are dying to get their hands on. The company has been going around giving demonstrations to anyone who is interested and according to Fung Kee Fung, the response has been tremendous. The company’s current service area is Diego Martin, Petit Valley, Westmoorings, Port-of-Spain, Maraval, Cascade and St Ann’s. While the company is currently targetting businesses with the Nomad Ripwave, it plans to focus on residential markets throughout Trinidad and Tobago within the upcoming year. Even though the system is extremely sensitive to the signal from the base station, certain factors can affect the strength of the transmission. Paper and vinyl walls, solid and pre-cast concrete limit signal penetration to a 2 wall coverage. Wood and drywall allow signal for 5 to 6 walls. However, Fung Kee Fung said weak signals can be strengthen by connecting a small antenna to the Nomad Ripwave. He also said interference from devices operating on the same frequency will not affect the Ripwave’s performance. Usually items like microwaves and cordless phones cause interference but the system has a built-in digital processing algorithm that allows you to operate in the presence of interference.

The days of Barbadians spending long hours on the telephone and Internet may soon come to an end. In addition to applying for a telephone rate increase, Cable & Wireless (C&W) Barbados has asked the Fair Trading Commission (FTC) to approve a metered rate system for Barbadians. This was revealed by Donald Austin, C&W’s president, during a media briefing at the telecommunication company’s Wildey, St Michael offices. The disclosure came 24 hours after Government issued licences to AT&T Wireless, Digicel and Sunbeach to operate cellular services, ending C&W’s monopoly of the local mobile phone market. “We have asked for an adjustment of the domestic rate for both residential and business and we have also asked for a usage-based price for fixed-to-fixed lines; what is ordinarily called metered rating,” said Glenda Medford, vice-president of C&W’s legal, regulatory and public policy. Austin said that C&W wanted approval of a plan that would see it offer three-line rental packages. The current basic rate of $28 will remain for people who use 2000 minutes or less per month, or just over an hour each day, while C&W would charge $38 for a package of 4000 minutes per month.

For subscribers who want to continue having unlimited use of their telephones the company wants to increase the basic rate by $20 to $48 per month. The C&W top executives, however, said that if subscribers use more than the minutes assigned to their package, then they would have to pay an additional 1.7 cents per minute. Austin indicated too that while special phone features like call waiting and caller identification will incur “slight” increases, international calls will be cut in some cases by as much as 30 or 40 percent, but this depends on the FTC’s response to its application which forms part of the rebalancing exercise. And to get Barbadians accustomed to what some argue will be a culture shock, from next month telephone bills will indicate how many hours were spent on the phone during the billing period. The full effect of the rate adjustments on businesses will be revealed completely when the rate application document becomes available to the public from the FTC.

What has been disclosed, however, is that C&W has requested that the popular PABX key system for which it charges at $101.25 per month be increased to $150 per month, while businesses will also be offered the 2000 and 4000-minute “bundles” from which to choose. The C&W executives insist the rate increase will not bring additional revenue to the company and was intended only to be a revenue neutral exercise. Consultant Olson Robertson said C&W was “playing the public for fools” adding that he will formally object to this application whenever it comes up for hearing before the FTC. On  Austin’s statement that this rating system will not bring additional revenue to the company and was intended only to be a revenue neutral exercise, Robertson  called on Barbadians to object to this request by the telecommunications giant. “They should come out in their numbers, bearing placards.”

It seems anyone with the urge, the money and the bravado, can decide to go into the sanitary napkins business. New brands like La Femme, Padz and Lebresse have recently claimed a place on pharmacy and grocery shelves, adding to the existing brands like Stayfree, Kotex, Always and Confidence. Misons Industries Ltd, makers of Teddies diapers, recently introduced La Femme feminine napkins on the local market. This is the third brand to enter the market within the last year. Ashmeer Ali, general manager of Misons said the company decided to get into the market because of the quality of the napkins currently sold. Ali feels the market has been moving away from the traditional thick napkins (maxi pads) into leaner thinner napkins (ultra thin napkins). Based on this trend, Misons decided to introduce La Femme as an ultra thin napkin to compete with industry leaders like Stayfree and Kotex. The difference, said Ali, is that Mison’s napkins are made locally, while all the big players import their napkins. According to Ali, Stayfree is their biggest competition with a strong hold of almost 85 per cent of the sanitary napkins market, locally and regionally. By the end of the year Ali expects La Femme to grab at least 25 per cent of this market share.

He said no manufacturer within the region is currently producing this type of napkin and Misons decided to capitalise on this emerging trend. But this may be wishful thinking. Christian Lopez, plant manager at Hakim Juman and Sons, the makers of Padz, said they followed the same path Misons is following right now, when they launched their brand last September. Padz currently holds a market share of about 5 per cent. Lopez said believing the market is sophisticated enough for the ultra thin napkin, is not an accurate assumption and manufacturers cannot disregard the maxi pad users. Padz launched an ultra thin, winged napkin as its first product, said Lopez. “What we should have done was launch a maxi pad also. This was the dominant product on the market and was monopolised by Stayfree,” said Lopez. He added that while research showed them that the TT woman was sophisticated and that all trends were moving toward ultra thin napkins, this was not an accurate description of the market.

“About 60 per cent of local women still prefer the traditional maxi pad which is a non-wing thicker product and because of this we lost footing on the market,” said Lopez. Padz is currently working on its new line of maxi pads to reach this market share. Lopez said the competition and brand loyalty on the market is so tight that even with a quality product, manufacturers may find themselves in a slump. “Even when some women tried our product and liked it, they still purchased the more dominant brands they grew up with instead. This is something you have to be aware of when you enter the market,” said Lopez. According to Lopez, there are approximately 300,000 menstruating women in Trinidad and Tobago. Each woman would use about 12 napkins per cycle, bringing the tally up to 3 million napkins needed on a monthly basis. This translates into a company having to produce 8,000 cases of napkins per month to service the entire market. Lopez said, a big player like Stayfree could produce this amount, but for smaller players like Padz, a target of 1,000 cases per month is enough to remain stable on the market. But in most cases production capacity greatly outweighs this number and manufacturers then look towards exporting the excess.

There is nothing stopping new brands of sanitary napkins from saturating the market. According to the Food and Drug Division, the Standard of Bureau and the importers and manufacturers themselves, the industry has neither standards nor regulations to control it. But, Stanley Teemul, director of the Food and Drug Division said this needs to change. He said the industry needs to be regulated and restrictions put on the importers and manufacturers, particularly in the area of quality. Sanitary napkins fall under the textiles and garments division of the Bureau of Standards and falls into the same category as disposable diapers. Violet Davis-Maurice, head of the textiles and garments division, said they have had complaints about certain sanitary napkins on the market. She said most of them were concerning the use of super-absorbant powder in the napkins. This powder is used by almost every napkin on the market to increase the level of protection. It is a feature that manufacturers boast of having.

The board has been looking into this same issue regarding disposable diapers. Davis-Maurice said the same consideration will be applied to sanitary napkins as a result. She added that the Board will also have to look at the number of manufacturers and importers entering the industry, since the sudden increase is reason enough to standardise the industry. “When you have a whole number of players entering an unregulated industry like this, the board may think about setting up a specification committee to examine it in detial,” said Davis-Maurice. She added that the committee will comprise of governmental officials, the manufacturers, consumer groups and members of the standardisation board. The end result will be a set of minimum requirements for manufacturers to abide by. “We are not as yet sure if it will come to this,” said Davis-Maurice. But Teemul feels this will eventually be the case for the industry. “When there are too many manufacturers entering the market, like they are doing now, there needs to be some form of standardisation to ensure they are all consistent with quality. It cannot be a free for all,” said Teemul.

The HCL Group of Companies recently purchased seven John Deere backhoes as part of their equipment upgrade. The vehicles which will be used for the development of the Trincity Millennium Vision Project were supplied to the company by John Deere through TRINTRAC LTD, the authorised distributor. John Deere is known internationally for reliability and dependability along with excellent after sales support.

RBTT Financial continued to produce impressive results in the quarter ended June 30, 2003.  Profit attributable to shareholders for the three months ended June 30, 2003 was $146.811 million, an increase of 43.95% over the corresponding figure in 2002 of $101.991 million. Net interest income increased by 24.02% moving from $282.037 million in 2002 to $349.794 million in 2003.  Other income increased by a more impressive 31.77% moving from $151.589 million in 2002 to $199.752 million in 2003. Overall total income for the three months ended June 30, 2003 was $549.546 million, an increase of 26.73% over the corresponding 2002 figure of $433.626 million.  The percentage increase in non-interest expenses was marginally lower at 23.06% moving from $311.933 million in 2002 to $383.864 million in 2003.  This led to an even more impressive increase in operating profit of 36.15% which moved from $121.693 million in 2002 to $165.682 million in 2003.  Share in associated companies nearly trippled to $9.801 million in 2003 from $2.800 million in 2002.

Profit before taxes increased by 40.96% moving from $124.493 million in 2002 to $175.483 million in 2003.  The effective tax rate declined from 16.37% in 2002 to 15.30% in 2003.  The earnings per share for the three months ended June 30, 2003 was 43 cents as compared to 30 cents for the same period in 2002, an increase of 43.33%. The Chairman has stated that the improved performance was as a result of improvements in banking operations outside of Trinidad and Tobago.  In fact while revenue in Trinidad and Tobago remained flat moving from $341.790 million in 2002 to $342.414 million in 2003, revenue in the Other Caribbean Territories increased from $381.022 million in 2002 to $459.772 million in 2003, an increase of 20.67%.  In terms of operating profit there was an 11.57% decrease in Trinidad and Tobago from $78.303 million in 2002 to $69.243 million in 2003.  However in the other Caribbean territories operating profit increased by an impressive 122.26% moving from $43.390 million to $96.439 million.

The Chairman has also stated that they are optimistic that the Group will continue to achieve strong earnings growth in the remaining quarters of the financial year.  We concur with this assessment and now forecast a full year earnings per share of $2.10 which at the current price of $23.75 gives a PE of 11.31 which leaves considerable room for capital appreciation.
Trinidad Cement Limited. Results for the Six Months Ended June 30, 2003 Trinidad Cement Limited (TCL) posted a strong second quarter performance to bring the first half of 2003 in line with that of 2002.  Earnings per share was just 8 cents at the end of the first quarter in 2003, however the second quarter produced 17 cents per share, for a total of 25 cents per share, equal to that of 2002. Revenue for the first half of 2003 totalled $583.3 million compared to $554.5 million in 2002.  Operating profit increased marginally by 1.9% to $135.9 million in 2003 from the 2002 amount of $133.4 million.  Finance costs increased 8.6% to $48.8 million from $44.9 million incurred in 2002.   This was a direct result of the depreciation of the Jamaican dollar and its effect on Carib Cement.  Finance costs for Caribbean Cement Company rose more than 100% for the six months ended June 30, 2003. Pre-tax profit reached $87.1 million in 2003, 1.5% below the 2002 figure of $88.4 million.  The net profit of $60.0 million for the first half of 2003 was 0.5% less than the $60.3 million posted in the corresponding period in 2002.  However, 67.3% of this net profit was made in the quarter. The Chairman has described the sales environment as buoyant in Trinidad and Tobago.  Plant output was high in Barbados and Jamaica as well. 
The mitigating factors in the first half were:
* higher fuel costs in Barbados due to an interruption of supplies from Venezuela,* downtime due to planned Kiln upgrades and,
* losses due the depreciation of the Jamaican dollar. 

Going forward, the Group expects continued buoyancy in the local and regional markets.  Benefits are also expected from efficient plant operations due to upgrades completed in the first quarter in Jamaica and Barbados.  Stability in the exchange rate of the Jamaican dollar coupled with increased economic and construction activity is also forecast to impact positively on performance. We expect the third quarter to match or even better the second quarter performance.  Given that the last quarter has traditionally been TCL’s slowest quarter, we estimate a full-year EPS of 55 cents per share, together with a total dividend payout of 20 cents per share.  At the current price level of $5.71, the PE ratio of 10.4 would suggest some room for capital appreciation.  The corollary here is continued exchange rate stability in Jamaica, and a resolution to the efforts for implementation of fair trading measures. 

Guardian Holdings Limited
Results for the Six Months Ended June 30, 2003

Guardian Holdings results for the six months ended June 30, 2003 gives a fuller picture of the effect of the ING Fatum acquisition.  Revenue increased by 59.70% moving from $715.683 million in 2002 to $1.143 billion in 2003.  However operating profit increased by a much smaller figure of 10.80% moving from $119.468 million in 2002 to $132.372 million in 2003.
This reflects the higher cost associated with the new acquisitions, namely ING Fatum.  Share in profits from associates increased by 29.71% moving from $59.814 million in 2002 to $77.586 million in 2003.  Finance charges increased by 56.22% moving from $37.883 million in 2002 to $59.179 million in 2003.  The amortisation of goodwill is a credit of $30.235 million which resulted from the negative goodwill of $45.651 million from the ING Fatum acquisition and the debiting of normal amortisation of goodwill of $15.416 million.
Overall profit before taxes increased by 43.68% moving from $125.981 million in 2002 to $181.014 million in 2003.  The effective tax rate increased from 10.85% in 2002 to 20.95% in 2003 which occurred mainly on account of the new acquisition.  As such income available to shareholders increased by a much smaller figure of 25.63% moving from $95.814 million in 2002 to $120.368 million in 2002.
 
The fully diluted earnings per share for six months ended June 30, 2003 was $0.74, an increase of 23.33% over the corresponding figure in 2002 of $0.60. The Chairman has stated that despite the uncertainty in the global economy and weakness in some Caribbean territories the Group looks forward to a very good performance in the second half.  At this time we maintain our earnings forecast of $1.65 per share which at the current price of $20.80 gives a PE of 12.61. The Directors have decided to pay an interim dividend of 12 cents per share, and have fixed August 21, 2003 as the record date.  Dividend cheques will be mailed out on August 28, 2003.

ANSA Finance and Merchant Bank Limited.
Results for the Six Months
Ended June 30, 2003
ANSA Finance and Merchant Bank (AFMB) managed to increase profit by literally “cutting expenses.”  In the six months ended June 30, 2003, income declined 1.6 per cent to $46.9 million from the corresponding figure of $47.7 million in 2002.  Expenditure was curtailed by 8.9 per cent in 2003 to $32.6 million, down from the $35.7 million incurred in 2002.  This was due in the main to “careful management of interest cost exposure.” Profit before tax rose 20.2 per cent to $14.4 million in 2003 from the 2002 amount of $11.9 million.  Net income was 21.5 per cent higher at $12.2 million in 2003 when compared with the 2002 amount of $10.1 million. As a result of increasing its portfolio of investments regionally, loans, receivables and investments grew 10.9 per cent.   In 2003 the value was $714.6 million from the $644.0 million on the balance sheet at the end of the same period in 2002.  Deposits and fund raising instruments were just 4.8 per cent higher at $719.3 million in 2003, while the corresponding figure in 2002 was $686.2 million. Earnings per share reached 39 cents per share in the first half of 2003 compared with the 32 cents earned in the similar period in 2002.  An interim dividend of 10 cents per share is to be paid to shareholders on August 29, 2003 to registered members as at August 22, 2003. 

Based on these results, we forecast total EPS for 2003 to reach 80 cents per share, with a total dividend payout of 40 cents per share.  At the closing price this week of $8.60, the PE ratio of 10.7 suggests an increase in price in the short-term.
National Flour Mills Limited
Results for the six months
ended June 30, 2003
National Flour Mills continued to show sequential growth in both its top and bottom line.  Turnover for the six months ended June 30, 2003 was $277.736 million as compared to the corresponding period in 2002 of $237.176 million, an increase of 17.10%. The Company was also able to curtail expenses as net income before tax grew by an even more impressive 30.46% moving from $15.816 million in 2002 to $20.634 million in 2003.  Taxation increased by 14.08% moving from $5.425 million in 2002 to $6.189 million in 2003.  As a consequence of the lower increase in taxation net income after tax increased by a much higher figure of 39.01% moving from $10.391 million in 2002 to $14.445 million in 2003.  The earnings per share for the six months ended June 30, 2003 was 12 cents as compared to 9 cents per share in 2002, an increase of 33.33%.

The Chairman stated that he expects the performance in the second half of the year to be better than the first.  We concur with this assessment and now revised our earnings estimate to 28 cents per share.  At the current price of $3.21 this gives a PE ratio of 11.46 which leaves some room for capital appreciation. The Directors have declared an interim dividend of 7 cents per share which is 1 cent per share more than the 6 cents paid in 2002.  The dividend would be paid on September 19, 2003 to shareholders on the Register as at September 2, 2003.
Analysis by West Indies Stockbrokers Limited, 23a Chacon Street, Port of Spain, Trinidad (868) 623-4861.Member of the Trinidad and Tobago Stock Exchange Ltd.