Yet again the markets inched forward as investor interest in the stock markets and economic data strengthened. Lower unemployment figures in the US last week offset weaker consumer confidence figures to leave trading early this week mixed as investors await the onslaught of earnings and economic data slated to be released. The US Dow Jones Industrial Index gained almost a 100 points over the week but in fact all this gain was realised on Friday. Trading for the first four days was slow and more down than up on average. The S&P 500 and NASDAQ indexes logged gains late in the week as well, with the NASDAQ leading the rise with a 22 point increase, or 1.3%. In other global markets, the Canadian TSX was the big winner for the week, gaining 2.5% to close at 7251. The UK FTSE also posted above average gains, logging an increase of 54 points for a 1.4% improvement over last week’s close. Big news for the week was the surprising initial jobless claims in the United States, which dropped to 386,000, its lowest level since February. The figure suggests that the improvements in the labour market are happening and of course, this will lead to more money in the hands of consumers, who account for 2/3’s of the country’s GDP. More jobs are seen as a cornerstone of sustainable economic recovery.

On the other hand, the big story earlier this week was the weak consumer confidence figures released for July. US Consumer Confidence fell to 76.6, down from June’s figure of 83.5 when most analysts’ were expecting an increase. The caution in spending by consumers may be temporary as it will take some time for the lower jobless figure to work and other government initiatives to work themselves into the economy. Alan Greenspan, in his recent positive statement to US Congress, had stated he expected the world’s powerhouse to grow at the equivalent of more than 3.5% for the rest of this year, accelerating to over 4% next year. With inflation staying below 2%, and some of the United States major trading partners still suffering from weak economies, there remains some uncertainty as to the strength and surety of the recovery. Demands have been soft, aggregate demand flagging and consumer caution visible and now clearly measured by the 76.6 July figure. We note that debt service costs for homes has declined and equity improved which should help bolster Consumer confidence as well. Not withstanding, the economy does seem to have some measure of resilience and as the politicians continue to say, is poised to move forward. Deflationary concerns now seem quite remote.

In the UK, retail sales rose 1.9% coming in ahead of economists’ predictions of 0.4%. The increase was significant but seems seasonal in that the government attributed the gains to warmer weather got shoppers out more purchasing outdoor related goods. The UK economy grew less than expected during the second quarter. GDP rose 0.3% in the quarter but analysts had projected 0.4%. In Japan, consumer confidence for the second quarter grew to 37.3 from 36.1 in June. As we have said before, a number below 50 means contraction, nevertheless, for Japan the increase was seen as a positive. In closing, there continues to be more good news from corporations on their balance sheets and earnings achievements. Improved confidence in the economy also seems to be the order of the day, which we expect will flow through to stock prices.

e-mail : darcy@investments-intl.com

Coosal’s Managing Director, Sieunarine Persad Coosal, is readying his company for the construction boom that he predicts is coming. The current producers of pre-mix cement and of concrete blocks do not presently have the plant and other production capacity to satisfy the current and future needs of our booming construction industry, he told guests at the launch of two concrete plants. Coosal’s foray into this area of production should not undermine the revenues of their competitors, he said, as there is sufficient promise in the market for all stakeholders at present and in the future. This bold move, an investment of roughly 60 million dollars, is a natural and inevitable progression for the company, said Persad Coosal as it will allow them to develop their top notch  limestone deposits into higher value added products. Indeed, Coosal’s operates the largest privately owned quarry in TT which produces over 3,000 tonnes of limestone per day. They own a quarries at Maracas, St Joseph and a gravel plant at Tapana Valencia.

Persad Coosal described his company as “the premier road paving contractor in TT” due to quality of mixes, expert application, quick execution and minimal disruption. He applauded the government’s endeavour to achieve equity in the award of road resurfacing contracts. However, he noted that “no distinction is made and no regard is paid to the resources available to a contractor to effectively complete the contracts awarded to him on a timely basis and to produce work to the specified standard and quality.” He proposed that annual surveys through site visits should determine whether a contractor has the capability and resources to complete the relevant jobs, a procedure which would prevent the public from being “short changed.” Persad Coosal recalled that the Uriah Butler Highway was paved in 1980 by Coosal’s and has weathered the wear and tear of heavy traffic well. Present circumstances, however, required diversification into pre-mix concrete and concrete blocks and related internal expansion into civil engineering operations and property development, he said. Through the latter initiatives a substantial amount of the former products would be utilised and the only outsourced product would be cement.

It is anticipated that tax incentives for new homeowners, Vision 2020, as well as the government’s accelerated housing programme and infrastructural development programme would all contribute to a veritable boom in the industry, he continued. Also, the $60 million capital outlay was “influenced by the generous tax write offs” for the manufacturing plants and machinery which, he said, will act as catalysts for recovery of the investments. A substantial portion of the plants were fabricated locally and a laboratory was created on site to facilitate continuous testing.The concrete batching plant is fully automated and capable of producing 1000 cubic metres of concrete in an eight hour shift and the block making machinery can produce up to 30,000 blocks in the same amount of time.

You are more likely to survive an encounter with a violent criminal, not by mindless Hollywood-style heroics, but by taking simple avoidance action. So advised US security expert, J Kelly McCann, when he addressed a Personal Security Awareness Seminar hosted by AmCham last week at the Hilton Trinidad. Unapologetically using graphic street language, McCann drove home the harsh realities of modern violent crime. McCann is a former US Marine major, security/military consultant to CNN, and senior vice president of Kroll’s Protective Security and Training Group (USA). He trained US special forces seeking Osama bin laden in Afghanistan last October, according to the CNN website. Despite his own colourful past as a special operations officer in anti- terrorism, he advised participants on a lower-profile approach to surviving violent confrontations. Saying television shows did not show the hard reality of violence, he warned:

“Get stabbed in the stomach with a screwdriver and you’ll have a colostomy the rest of your life. Get knocked down and hit your head on the curb and you could become a quadriplegic”. Saying he was trying to reduce participants’ chances of getting attacked, he explained: “The criminal is a predator. You will be attacked when conditions are least favourable to you and most favourable to the attacker. Criminals are not stupid, although they do seek the path of least resistance. “A bad person doesn’t care if you get hurt or he gets hurt. He’s got nothing to lose. Most people aren’t capable of (mentally) dealing with violent crime. Don’t try to out-think the criminals — they go to a ‘school of criminology’.” People’s best chance to survive violent crime, he said, was to try to anticipate it thereby being aware and alert, and so avoid it. He advised that if approached by someone acting suspiciously, don’t wait until you see his weapon. “Beep your horn. Take a left, take a right. Make your determination and act early…If the criminal gets in your face before it comes to the weapon, just bolt!”. He noted that many people, if awakened at night by an intruder in their home, denied to themselves what was actually happening to them. This freezing-up had even happened to highly-trained soldiers of the British SAS when attacked by an IRA mob who eventually killed them with their own pistol, he added. “When you are under crushing fear you are significantly dysfunctional,” he explained.

Personally he did not recommend participants to buy a gun, saying it required your mental commitment to actually shoot another person, which many people would find hard to do, and it was a huge liability that one’s children would play with it. He instead advocated the use of guard dogs to deter criminals. Pepper-gas also found favour with McCann; he lamented that it was illegal in Trinidad and Tobago. To not to be targetted by criminals when traveling through airports, McCann advised participants to keep a low profile, especially not to display their personal information on baggage labels. He explained: “Criminals are master observers. They know people.” He also gave detailed advice on how to select a hotel room where one felt safe, giving insight into the scams that criminals tried on hotel guests. Look for a vertical crack down the outside of a door frame, he said, warning that was proof the door had once been kicked in by assailants and could be so assaulted again. To secure one’s home, McCann thought door-chains to be ineffective, instead preferring good-quality locks, convex mirrors, CCTV, motion censors, and Mylar sheeting over sliding glass doors.

To cut your chances of being trailed by criminals, he advised that one should vary one’s daily schedule, changing the times one left home for work and the route taken. For women being attacked by a robber/potential rapist, he advised them that if it was too late to prempt the robbery by taking off, they should initially comply and hand over their handbag. But they should not merely hand it over and allow for a pregnant pause, but should then add some uncertainty to the attacker, say by running off. He warned women who gave up their valuables against going along with an assailant, who might tell them to go with them down into an alley. He said: “Historically with women you don’t want to go to a second attack-site. The odds are overwhelming that you will be killed or raped.” Women should instead try running away even if the assailant had a gun, he said, saying that with some distance she had a good chance of avoiding being shot. Criminals did not attack at random, he said, but chose their victims based on personality traits and on circumstances. Saying that criminals were “in tune with people” and that like a lion on the savannah they attacked the weakest prey, McCann disclosed that a psychological survey of criminals discovered that they perceived as vulnerable, persons with unusual foot strides. Further, he said, the criminal would attack in circumstances where the victim possessed value, was accessible, and wouldn’t offer resistance, and where the attacker could make his escape. To anticipate a criminal assault, McCann advised: “Be alert for things that make you say, ‘That’s strange’.”

With crime gripping the nation and people paranoid over the fear of being kidnapped, many are forking out and digging deep into their pockets to invest in security systems. This paranoia comes at a high price, said one security consultant, noting that people have decided to turn fear into action by investing in security. Even though the most basic security systems can cost roughly $4,500 to set up, security companies have suddenly appeared on everyone’s speed dial. Michael Blanc, a security consultant at Securicor, was able to give a clear perspective of the price protection goes for these days. There are numerous options available to a home owner and a businessman if he wishes to secure his home and business, it all depends on what you want and how deep your pockets are. According to Blanc, most security companies usually assess a home owner’s premises at no cost to the owner. “This is a complete survey which involves counting the number of entry points and examining the architecture of the building,” said Blanc. Once the company has seen the layout of the premises, they can advise the owner on the type of protection he needs.

Security systems can be electronic or physical, said Blanc. The physical systems, or guards, fall into three categories: the fully armed guard, the K9 or dog guard and the static or baton guard (unarmed). Guards need to be paid by the hour in accordance the with Minimum Wage Act of $7 per hour, said Blanc. So if a person decides to get a guard for 24 hours a day, seven days a week, it will cost him over $40,000 a year for physical security. But, if you want electronic security, it can cost you an even bigger chunk of change. Security experts say that electronic security takes many forms. You can have intrusion systems which are widely known as alarms, you can have automatic gates, close circuit television (CCTV) and intercom systems (video and audio). A standard alarm system for a three-bedroom house would cost about $4,500. But again, Blanc pointed out each case would differ depending on the layout of the home. Most alarm systems allow the owner to have multiple codes for arming and disarming the system. It is good to use this type of system if you have a lot of temporary visitors, experts say. The CCTV system which is basically a camera set up to monitor movement, is another option available to home owners. A basic system of two cameras, to the front and back of the premises can cost about $6,500. But the price goes up the more sophisticated the system gets, said Blanc. For example, if a person wanted a colour monitor instead of black and white or if they wanted more than two cameras on the premises, costs can take a gigantic leap. That can go for about $12,000. Another common form of security is the automatic gate system.

“This system allows the owner to control the gate entry and exit on the premises from another location, like his vehicle,” said Blanc. A basic set up can cost $15,000. Blanc said the amount varies depending on the dimensions of the garage and whether or not the owner wants a swinging gate or a sliding gate. The intercom is another control system people can place in their homes, said Blanc. It allows communication between someone inside the premises and someone outside. A basic system is about $3,000 for a one-storey house. Blanc said the number of stories affect the number of units that need to be set up for the intercom, in turn increasing the cost. A variation to this is the video intercom system. Immediately the price goes up to $7,000. The video intercom allows the same communication but with the added feature of a camera, so the owner can see who is outside while speaking to them. Blanc said it is up to the owner to decide whether the camera is hidden or visible. Blanc pointed out that most of these systems are ineffective unless the owner has some sort of recording device in place to record possible illegal activity on the premises. “You have a better case, if you can show evidence to the authorities,” said Blanc. He recommends having a VHS, digital or multiplex recorder be installed. “A person can be in south and be able to monitor what is going on in his home in north or even up the islands, depending on the level of technology he wants to install,” said Blanc. In other words, the more technology you pump into your security, the more leverage you have and unfortunately, the more it will cost, he said. Security options for businesses are even greater. Blanc said commercial property owners can also implement access control on their premises. “Companies like banks utilise electronic locks and card entry systems for security,” said Blanc.

Smack in the middle of a throng of bars, restaurants, casinos and pubs on Ariapita Avenue sits a tiny coffee shop. Perk’s Coffee Shop is an incongruity in an area where the pace of business is almost non-stop.    Opened last December, the shop has been causing quite a stir among local coffee lovers and is steadily drawing in those who are already coffee connoisseurs and those who are on the brink of being converted. Owner Kim Ament, a Trinidadian living in Canada with her family, is the brainchild behind  Perk’s. It is managed by Sonja Sahadeo, a close friend of Ament. Sahadeo says Ament wanted to open a cafe in TT, where those who loved the brew could come and enjoy not only a lime but also to get away from the hassles of  their day. Early last year Ament said they came up with the idea to have a coffee house but they also wanted something that was a little different from what was already being offered on the local market. They both wanted to give Perk’s the feel and  look of a foreign coffee house. “So we tried to make it a homey place where people wouldn’t mind liming and wouldn’t feel intimidated to come in,” said Sahadeo. As the idea began to take shape in her mind, Sahadeo said Ament even began dreaming of the shop.

So real was this dream, Sahadeo said this  was how they came up with the shop’s layout and theme. But deciding on everything else was serious business. All the equipment and furniture was brought in from Canada, along with the coffee and cheesecakes. Ament came to Trinidad in June last year to decide exactly what she wanted, and to start the Perk’s rolling. The next step was finding the right type of coffee to introduce on the local market. Ament decided on Seattle’s Best, a well known coffee franchise in Canada. But instead of entering into a franchise with the coffee makers, Ament bought the coffee wholesale and blended it down here. She decided on Seattle’s Best because “it was different from anything else on the local market.” It also gave coffee drinkers a diverse range to choose from, apart from Nescafe and Hong Wing which have been saturating the market for decades. According to Sahadeo, a lot of the expatriates come into their cafe because Perk’s offers them something other than Nescafe. “They want a little piece of home.” She added that passionate local coffee drinkers who have travelled and tasted coffees offered in other countries, find it hard to re-adjust to coffees on the local market.

“They crave something richer, stronger and more robust,” Sahadeo says. To complement the coffee, Perk’s offers a wide assortment of La Rocca gourmet, which are also brought in from Canada. Every month, Perks’ brings in about sixteen  cheesecakes, while the coffee is stocked up every four months. So far, they have invested approximately $60,000, with half of that money being spent on the Italian cappuccino machine that whips up the cafe’s famous blends. Along with this machine, Perk’s has a grinder, slushie machines and a percolator to total its equipment requirements. Sahadeo said Ariapita Avenue is a high rent area, so business people should think carefully before setting up there. Since the space within the shop is very limited, Sahadeo said planning the layout took a lot of time. “It needed to be appealing, while at the same time offer them privacy, the privacy they wanted,” Sahadeo said. One can either sit at the coffee bar, where the coffee is made, or sit at one of the tables.

There are also little tables set up along the front of the shop. Ament visits the shop about three times a year but is content to leave the management to Sahadeo. “She is down here enough to warrant wanting and having a business in Trinidad, she is from here and she wants to do something here,” Sahadeo said. Even though Sahadeo feels crime may be a deterrent to starting new business on Ariapita Avenue, she also feels it is also an area a small business can prosper in. She is optimistic though. “Very soon it will turn into a little local metropolitan area. It is on its way to becoming the liming avenue for tourists as well as locals,” said Sahadeo. Sahadeo says Perk’s is looking for ways to entice customers. Soon, the coffee shop will be offering other blends of coffees. In terms of infrastructure, the shop has limited options. City codes prohibit seating on the pavement in front of the store, so as an alternative, Perk’s will be expanding behind the shop. Perk’s will be putting up a deck area so their customers can enjoy the tranquility of a back yard setting while sipping coffee and dining on cheesecakes. With crime on the increase, the shop is never opened after 8 pm, except on a Friday. But Sahadeo says she is unfazed and will continue to offer their brews.

Caribbean Communications Network
Results for the Six Months Ended June 30, 2003
Recommendation : BUY  

Caribbean Communications Net-work released very impressive results for the six months ended June 30, 2003.  Sales increased by 13.85% moving from $66.080 million for 2002 to $75.230 million for 2003.  The increase in cost of sales was a smaller 10.62% moving from $52.002 million in 2002 to $57.523 million in 2003. As a result the increase in gross profit was a more substantial 25.78%.  Operating profit increased by 52.06% moving from $7.497 million in 2002 to $11.400 million in 2003.  Finance cost declined by 78.56% moving from $2.188 million in 2002 to $0.469 million in 2003.  The currency swap which was a loss of $3.975 million for the six months ended June 30, 2002 reversed in 2003 resulting in a credit of $1.465 million.
This is a positive turn of $5.440 million. Overall, the Company’s profit before tax increased by an impressive 339.85% moving from $3.365 million in 2002 to $14.801 million in 2003.  Profit attributable to shareholders increased from $0.809 million in 2002 to $10.545 million in 2003.

At an analyst meeting, the Chairman attributed the performance to a general all round improvement.  He was optimistic that the second half of the financial year would also bring further improvements.  We concur with his assessment.  There were also hints that the Company would be making further investments which could have a positive effect on the bottom line. The Company’s two main revenue streams the television station and newspaper continued to dominate their respective markets. We now revise our 2003 earnings forecast to 50 cents per share which at the current price of $4.20 is a PE ratio of 8.40. The Chairman has indicated that the interim dividend will be nine cents per share as compared to six cents per  share in 2002, an increase of 50%.

West Indian Tobacco Limited
Results for the Six Months ended June 30, 2003
Recommendation : HOLD

West Indian Tobacco (WITCO) posted a marginal decline in net turnover in the six months ended June 30, 2003 over the comparable period in 2002.  In 2003 net turnover amounted to $143.3 million, while in 2002, this figure was $143.9 million. Cost of sales was down 7.6 per cent in 2003 to $47.2 million, from the 2002 level of $51.1 million.  Gross profit was 3.5 higher in 2003 at $96.1 million, up from the $92.8 million recorded during the same period in 2002. Operating profit improved by 8.3 per cent to $61.5 million in 2003, from the 2002 amount of $56.8 million.  The effective tax rate declined from 34.9 per cent in 2002 to 28.4 per cent in 2003.  WITCO posted an after tax profit of $44.7 million for the first six months of 2003.  This represented an 18.6 per cent increase over the $37.7 million made in the similar period in 2002. There were two main factors behind WITCO’s improved first-half performance in 2003.  In the first instance, the benefit of the reduction in the corporate tax rate was felt during this period.  Secondly, WITCO continues to derive cost savings due to infrastructural investments made previously.  Cost of sales, as well as total operating expenses declined in 2003 from those incurred in the corresponding period in 2002. Per share earnings in the first half of 2003 reached 53.0 cents, compared to 44.7 cents made in 2002.  We are estimating a full-year EPS of $1.10, with a total dividend payment of $1.00.  At the current price of $19.80 this is a dividend yield of 5.1 per cent, thus we rate WITCO a HOLD.  A second interim dividend of 17 cents per share is to be paid on August 15, 2003 to registered shareholders as at August 6, 2003. Analysis by West Indies Stockbrokers Limited Member of the Trinidad and Tobago Stock Exchange Ltd.

After the success of their Bond Market workshop in April of this year, CMMB conducted a second workshop of its kind on the 3rd and 4th of July at the Trinidad Hilton. Over thirty participants comprising of attendees from the financial and investment sectors of Jamaica, Barbados and Trinidad were able to benefit from this in-depth practical training programme.

CMMB’s presentations covered fundamental Bond concepts, yield curve analysis, the valuation of Bonds and Bond Portfolios, the role of Credit Rating Agencies in the bond market, duration and convexity, and Bond portfolio management. The presenters included a panel of experienced and knowledgeable industry professionals such as recently retired lecturer from the Department of Management studies at the University of the West Indies St Augustine campus, J Martin Dalgleish, along with CMMB team members Ram Ramesh, Wayne Dass, Taan Maraj, and Dave Dookie. The success of this workshop has encouraged CMMB to plan similar seminars and educational programmes to be held in the near future, for not only the benefit of industry peers but the interested public as well.

Michelle Lashley graduated with a Bachelor of Science degree in Business Management from NOVA Southeastern University, Ft Lauderdale, Florida and is presently pursuing her Masters degree. She plans to pursue a doctorate degree in business. She is a past student of St Theresa’s Girls’ RC, Diego Martin Secondary, and Holy Name Convent, Port-of-Spain. Marcia Lashley has graduated cum laude with a Bachelor of Fine Arts Degree in Graphic Designs from the Florida Atlantic University, Boca Raton, Florida. She is a past student of St Theresa’s Girls’ RC, Diego Martin Secondary, and Queen’s Royal College, Port-of-Spain.

Michelle and Marcia are the daughters of proud parents Michael Lashley, retired staff Sgt of the Trinidad and Tobago Defence Force and Victoria Lashley, retired secretary, Port Authority of Trinidad and Tobago. Michelle is the proud mother of Mikhail S Rampersad who is an A Honour roll student and one of the top students of Broward County, Florida. Mikhail has received the President’s Award Gold Medal for outstanding achievement in the Florida Comprehension Assessment Test (FCAT). Both Michelle and Marcia are pursuing careers in the United States.