IT IS comforting to hear that regional plans for hosting the Cricket World Cup (CWC) 2007 are on target. When the West Indies Cricket Board won the bid to host the CWC five years ago, it had assigned to WI states the task of organising the biggest joint event, sporting or otherwise outside the political arena, in their history. The World Cup finals are without doubt the most popular tournament in the cricketing world also attracting the interest, indeed the participation, of many countries outside the Test arena. It may surprise many cricket fans to learn, for example, that in last year’s World Cup qualifying series, teams from Canada, China, Russia, Ireland, Scotland, Holland, Namibia, Argentina, Brazil, Italy, Spain and the United Arab Emerates, among others, took part in an effort to get into the finals, with Canada actually qualifying. So interest in the World Cup is really world-wide as compared to Test cricket in which ten nations compete for honours. The West Indies, then, are preparing to host an event which will attract a huge gathering of spectators to the region and will also be seen through television hook-ups by millions, perhaps billions, across the globe.

It is obvious then that the benefits our region stands to gain from the successful staging of Cricket World Cup 2007 will be tremendous. For over several weeks, the West Indies, including tourism-oriented islands such as Grenada, Antigua, St Lucia and St Vincent will be the focus of world-wide attention and, apart from the direct revenues of accommodating visiting spectators, these small states are certain to benefit from the international exposure. It has already been reported that Chris Dehring, Managing Director of Windies World Cup 2007, has estimated the economic windfall which Jamaica could derive from the sale of tickets, sponsorship, broadcast rights and a boost in tourism could amount to US $500 million. The financial benefits for Trinidad and Tobago, where an “excited” Prime Minister Patrick Manning has pledged his government’s full support for the country’s World Cup effort, may well hover around that figure. Apart from the economic advantages of this venture, we could hardly think of a better means of underscoring the rising interest in West Indies integration than the cooperation which hosting the CWC will require from Caricom member states. As far as we can see, three major hurdles need to be overcome if our efforts are to succeed: First we must be careful not to allow the process of selecting match venues from becoming a contentious affair, reflecting the insularity that now and then raises its ugly head in the selection of our Test players.

According to Dehring, a “thorough tender process” will begin in October-November this year by which each interested territory will bid to become an official CWC venue. According to Don Lockerbie, venue development director for CWC 2007, the “venue” will be determined not simply by the playing field but will be the entire country, including airports, seaports and hotels. A total of 12 teams are expected to contest the CWC finals in an equal number of venues so some tough decisions may have to be made. Secondly, there is the necessary infrastructure, requiring facilities beyond those of Test matches, to be provided which would need the heavy financial backing of governments. And, thirdly, there is perhaps the most difficult problem of the entire enterprise, that is arranging for the timely transport of teams and their large retinue of supporters to the different island venues. We hope that by then the proposed merger between BWIA and LIAT would have been completed and that the airline would be strong enough to handle this special challenge. We are pleased to hear that the region is on target with its preparations for hosting CWC 2007 and we expect that member countries will proceed on the understanding that the event, like the game of cricket, is bigger than its participants.

Increasingly there is tension between companies and communities, interest groups and officials, employees and employers, church and state.  Gone are the days when communication was a one-way process in which a dictum was decreed and compliance was expected.  Today’s world of stakeholder interest and analysis requires that you get “buy-in” before you make a move.  This is opening up new areas of communication for organisations and individuals.

Corporate Social Respon-sibility
The re-hashed language is “Corporate Social Responsibi-lity” (CSR) and while some may regard it as the latest  fad, it is clear to me that organisations which do not take a proactive approach to their Corporate Social Responsibility (CSR) may find themselves at best on the receiving end of “negative flack.” The main driver of this CSR band-wagon is the expanded world of communication which we live in.  Just one click and you know that Hewlett Packard has set up wireless networks for American Indians or that Nike has been on the receiving end of negative global pressure for its unfortunate labour practices.  On the other hand, Avon is enjoying  phenomenal publicity because of its support for breast cancer activities throughout the world. Why CSR? It is simply good business sense to have the community on your side but they won’t support you unless there is a genuine feeling that as a company you are doing what’s in their best interest. There are many communities to consider. Whether right or wrong the progress of the government’s VSEP plan for Caroni has received a setback at least for one group of workers. This occurred because in the eyes of one judge they had not consulted the bargaining unit. Again whether right or wrong the Point Fortin residents seem bent on halting any expansion of the LNG plant because they feel that they are being abused by the company. Again right or wrong, the Toco harbour plans were halted because the host community did not see the potential benefits. Organisations caught in the middle of such controversies have a delicate road to walk.  They must balance the common good with shareholder interest and satisfy the various communities of interest which can influence their future and therefore impact on their return on investment.

Negotiating Minefield
The business of business is not simply business, it has shifted to include satisfying host communities.  Maybe the most important action is to engage in formal and informal conversations with target audiences in order to identify what would make them comfortable with your business.  This means employing a suitable research methodology to get the right answers. The information derived from your research should then inform the development of effective policy which will guarantee a win/win solution. The third step is ensuring that key stakeholders understand and accept this policy. The reputation you develop is acted out by the leadership of your organisation and if they don’t understand it, they can’t sell it on an ongoing basis. The final step, mass communication. This would then be based on mutual understanding and sound knowledge of community expectations.

No Option
In this global village, the man in the street can learn about applicable standards of operations at the click of a mouse.  He/she can tell you what similar organisations or governments are doing to satisfy community interests in various parts of the world.  One can assume that the Trinidadian will continue to operate as he did 20 years ago and ask for a little sponsorship here or a little sponsorship there.  Or one can   dialogue with communities to ensure that action is based on what is in the best communal interest. In the latter case, the enlightened self interest of dialoguing with communities will result in third-party endorsements which are invaluable. Action based on some assumption  that a few persons know what is in the best interest of all is doomed to fail.  The only model likely to succeed is one based on the full involvement and participation of host communities. This can only be achieved by communication and dialogue. Corporate Social Responsibility provides an opportunity for organisations to be proactive and participate in formulating the agenda for action. Those who grasp the opportunity will occupy centre stage and enjoy a level of business success which will be envied.  In addressing the recently concluded World Summit, chairman of Royal Dutch Shell said: “Shell now sees that environmental and social responsibility are essential allies to business success.  Business should embrace sustainable development and corporate social responsibility not just as a force for good, but because it is our clear competitive advantage.”

The views expressed in this column are not necessarily those of Guardian Life. You are invited to send your comments to guardianlife@ghl.co.tt

Reducing portfolio fluctuation 

Many asset allocation studies illustrate that you would be wise to include real estate and various bonds in your portfolio. This will aid in reducing severe fluctuations and help keep your portfolio in more positive territories over time. It’s important to note that asset allocation seldom gives you the best returns in a given year, yet may contribute to an overall above average return over the long term. Some of the reason for this is that a well-diversified portfolio has more staying power. Having started the positive points about asset allocation, it is important to note that many asset allocation advocates equate risk as being the same as volatility. The point is that most investors don’t agree. Investors only dislike volatility when the market is going down. They are quite pleased with volatility when the markets are heading upward. In summary, asset allocation models are not perfect. They tend to try to reduce volatility and practitioners operate on the assumption that historic market information will allow them to select the appropriate allocation on investment assets for the future. Because the future is unpredictable, the allocations may not work as planned. These asset allocation programmes tend to have a cost associated with them as well, because someone has to determine the proper asset allocation mix and implement the programme. When considering a portfolio that will be managed by an asset allocation model, you may want to consider an asset management account or an individually tailored portfolio.

Keep investment fees low
Many investors focus on performance from their investments while ignoring the fees they are paying. While this may be acceptable while their investments are performing well, they should still be aware of what actual fees they are paying. Don’t expect all expenses to be explained to you in simple English. You must ask the right questions to ascertain whether you are being taken advantage of. While paying higher fund expenses or higher brokerage fees may not seem serious in the short term, the effects can be very meaningful over the long term. Simply saving one to two  percent per year in fees could translate to a much higher overall portfolio return in the long term.

The difference two percent can make over time:
$100,000 at 10 percent over 20 years = $673,000
$100,000 at 12 percent over 20 years = $965,000
2 percent over 20 years can make a difference of 43.5 percent in your rate of return!

Keep taxes low
Investors who ignore taxes may be investors who are living with a false sense of security. They may feel that they are achieving better rates of returns than they actually are. Always look at your overall return from your portfolio before tax and after tax. To keep taxes low, you should focus on individual bonds, individual stocks, unit investment trusts, and tax-efficient mutual funds. Many investors find the tax-sheltering ability of qualified plans such as profit sharing plans and retirement plans like individual retirement accounts a real benefit. If you have taken advantage of these plans and still want to defer more investment dollars, then you should check out tax-deferred annuities.

Key questions to keep in mind when reviewing your portfolio:
* Are your investment gains taxed each year or at the end of a certain time period?
* Are your gains taxed as ordinary income?
* Do you determine when you pay tax on an investment’s gain or does someone else make that determination?
* Is there a more tax-favoured way of handling your investments?

Select Investments That Offer a Margin of Safety
When creating a portfolio, investors should constantly be on the lookout for investments that offer a margin of safety. This advice is often ignored and can cause great damage to your portfolio’s returns. In addition to various risk factors, every investor should look for the right investment for themselves. Knowing your time frame for holding an investment as well as how much market volatility you can handle is crucial to your decision-making process. Assuming you have taken all the proper steps and are ready to make an investment decision, you should look to the investment choice that offers the best margin of safety. For instance, when selecting a bond investment you would look for a bond with the highest credit rating possible or with the most likelihood of returning your money for the risk taken. It simply is not necessary to risk your principal when making an investment. The adage “The greater the risk, the greater your return” is a false one. Far too many investors are taking on risk needlessly. When looking at a stock investment, you should opt for the stock that offers the most in secure growth potential. In addition, you should look for the stock of a company that has a good management team in place and is following a sound business plan. Make sure that the company you decide to invest in is in the right business and is not up against far better companies that could either take market share away from it or destroy its profit streams.

Never Panic
This is much easier said than done. Assuming you have ascertained what type of investor you are and have done your homework, you should know the following about yourself:
* What your true investment time frame is
* How the class of investments you are investing in have performed over similar market conditions or past time periods
* What your worst-case scenario is
* What your expected returns both positive and negative are
An investor should always perform a fire drill in regard to his or her portfolio. Use a historical perspective to see what the worst years in the stock market would have done to your portfolio.
Key questions that should come to mind include:
* During protracted negative markets, how long would your stocks have stayed down?
* How would a diversified portfolio of stocks invested among various size categories and investment strategies have fared?
* Is there anything you could have done to decrease these losses or to mitigate the length of any downturns in the market?
* Are you comfortable with the answers you have come up with?
* Can you create a portfolio you can live with under the most trying of circumstances?
With bonds, you should be asking yourself the following questions:
* Have you selected the highest quality bond?
* Is there something substantial backing the issuer of your bonds?
* Have you selected the proper maturity of bonds to meet your needs?

When looking at risk factors, you would be wise to seek ways of reducing or transferring as much risk as you can to others. For instance, stock investors can reduce financial risk by placing stop loss orders on various individual stocks within a brokerage account. These stop loss instructions will help ensure that your stock positions are sold out during the start of a major market downturn. Typically, investors place stop losses on an individual stock to be executed if the stock issue were to decrease by more than 10 percent. This can help to prevent even larger losses that can affect individual issues at times, regardless of what the broader stock market is doing in general. If you are holding stocks that continue to increase in value, perhaps you will want to move your stop loss instructions up with the rising stock price.
Failure to have stop loss instructions on major stock holdings is a common mistake among novice investors. Make sure you cancel your stop loss instructions on stocks that you have sold

Otherwise you could be placed in a position of having to deliver stocks you no longer own. A competent stockbroker can explain these techniques and others such as hedging. In addition to using package products such as mutual funds, you may wish to consider using vehicles such as index annuities. They allow you to participate in the appreciations of various stock indexes without taking on the downside risks. These investment vehicles are backed by the financial condition of the insurance company issuing them. Consider variable annuities if tax benefits or death benefits are a factor. Many variable annuities offer a death benefit, which basically states that your beneficiaries will receive your original investment back, plus a set amount of growth such as 3 percent or 5 percent per year as well, regardless of your account’s actual performance. Of course, if your actual account value has grown by more than the guaranteed death benefit amount, then your beneficiaries would get this higher amount. This may be another way to further reduce financial and market risk. Fixed annuities are excellent substitutes for individual bonds or bond funds. You obtain high yields in most cases without taking on financial risk. This, or course, assumes that you have selected a financially strong company with a competitive product. All of these various strategies can give you tremendous staying power. Another product worth considering is that of a managed account which provides ease of entry and exit from markets; and it is tailored to you individual needs and your tolerance for risk.

Angostura is making a gallant effort to put Correia’s on the list of local wine connoisseurs. With an aggressive marketing campaign, the local brew is  now being pitched to the local market as a viable alternative to high-end imports. “Let people know it’s still alive,” said  Giselle Laronde-West, Manager of Corporate Communications at Angostura. Angostura became sole distributors of  the home brew  in July 2002, and obtained ownership the following November. Full scale production of the wines started in April 2003. Whereas it has always carried imported wines, for the first time Angostura  is making available a wine that has been completely blended locally. To boost the wine’s profile, Angostura hired comedian Sprangalang to reintroduce the entire Correia’s line. While women are the target market,  the bestseller, White Lightning, is preferred by males due to its high alcohol content. It  accounts for over 40% of Correia’s sales. The profile of White Lightning’s target drinker is Afro-Trinidadian males over 30 from east Trinidad, says Keenon Roper, brand representative.

Roper indicates that, in addition to advertisements, Angostura intends to engage in various “below the line” activities in marketing Correia’s wines. Sampling, bar and supermarket promotions are just three activities geared to attract the customer. There are also new labels but this does not necessarily translate into a new image. Roper notes that there is a great deal of trust in the Correia name, given that they have been winemakers since 1916.  This goodwill shall only be maintained and built upon by Angostura’s high standards, he added. “The idea is not rebranding but to recreate awareness, because the name has a lot of equity on the market,” asserts Roper. Angostura will also employ seasonal marketing in re-introducing the line. “We look at any opportunity — Mother’s Day, Father’s Day, Valentine’s Day.” says Roper. “We have promotional point-of-purchase strategies.” Sales are surpassing expectations. From April to the present, the wines have more than met their budget and it is expected that the rest of the year will be equally profitable.

These projections are a pertinent inducement to retailers to carry the product, although they already have a high mark-up as incentive. Whereas many beers, for example, have an average mark-up of 3%, Correia’s wines bear a retail price of 20% above cost. Regarding the coming implementation of the FTAA treaty, Laronde-West is not perturbed. “The market is open and it will get more open.” she says. “We are trying to establish this wine as the number one brand in its category and we are willing to meet the challenge.” She adds that she feels after FTAA implementation many Trinidadians will opt to be more patriotic, support local products and thereby contribute to TT’s development. “Our people should feel proud,” she says, “that Angostura is producing such high quality goods from scratch.” In fact, Laronde-West believes that there is strong potential for Correia’s wines to be exported regionally in the future.

Prestige Holdings recorded a 5.77% increase in profit attributable to shareholders for the six months ended May 31, 2003.  This is a reversal of the 6% decline for the three months ended February 28, 2003 over the comparable period in 2002. The actual profit attributable to shareholders for the six months ended May 31, 2003 was $7.402 million as compared to $6.998 million in 2002. The Chairman attributed the reversal of fortunes to the improvement in same store sales from all three brands operating in Trinidad and Tobago in the second quarter.  However the Dominican Republic continues to be a challenge for the KFC brand.  Total sales for the six months ended May 31, 2003 was $197.300 million, an increase of 6.81% over the corresponding period in 2002 of $184.723 million. The increase in cost of sales was 7.90% which was higher than the increase in sales.  Hence the increase in gross profit was only 4.51% moving from $59.605 million in 2002 to $62.296 million in 2003.  The increase in operating expenses was also higher than sales.  As a result operating profit actually declined by 6.42% for the six month period.  Finance cost declined by 3.94% moving from $10.835 million in 2002 to $9.979 million in 2003.  The effective tax rate declined from 48.82% in 2002 to 38.66% in 2003. 

This was the major contributor to the 5.77% increase in profit attributable to shareholders.  The earnings per share for the six months ended May 31, 2003 was 12 cents which is 5.77% better than the 11.7 cents for the comparable period in 2002. The three brands in Trinidad and Tobago continue to deliver improved sales which are expected to be maintained in the second half.  However the DR’s KFC restaurants continue to be a drag on the consolidated profit with a loss of $1.5 million for the six-month period.  The Company has stated that it is committed to the DR in the long term and intends to work through the very difficult economic situation at present.  We have revised our forecast for 2003 to 28 cents per share which at the current price of $4.00 translates to a PE of 14.29.  Thus we recommend a hold on this share.

BWIA West Indies Airways
Results for the Year Ended December 31, 2002.

BWIA experienced a delay in releasing financial results for the fiscal year ended December 31, 2002.  There was no surprise that the results were down when compared with fiscal 2001. 
The airline’s operating loss increased to $116.2 million in 2002, as opposed to a loss of $16.4 million incurred in 2001.  Significantly, extraordinary items, which provided a $62.1 million income cushion in 2001 in the form of a US$9.9 million government grant did not recur in 2002.  Rather, BWIA was faced with having to provide for restructuring, costing of $51.7 million.  This relates to the retrenchment of employees. The Group loss after taxation totalled $216.7 million in 2002.  The comparable loss in 2001 was $4.3 million.  The loss per share for fiscal 2002 was $4.65.  The auditors have qualified their report and pointed to the airline’s accumulated losses of $420.9 million, together with a working capital deficit of $313.8 million as at December 31, 2002. The airline has recently entered into an agreement with LIAT, another regional carrier.  The Government of Trinidad and Tobago also has stepped in and averted the threat of seizure of aircraft by a creditor. We maintain that any recovery in the airline is contingent upon obtaining of additional financing, worldwide improvement in the industry, and most importantly, better performance from BWIA itself.  This would include greater cost controls, and greater efficiency in operations. 

Sagicor Financial Corporation
Results for the quarter ended March 31, 2003
(all amts in Bds$) 

Sagicor Financial Corporation (SFC) reported financial results for the three-month period ended March 31, 2003.  These results are not directly comparable with fiscal 2002, as the company has undergone a radical transformation from a mutual company and has also added significant new investments. 
Revenue reached Bds$176.6 million, 23.7 per cent of the total projected volume for 2003.  Total disposition of revenue was Bds$160.9 million or 23.5 per cent of the total forecast for fiscal 2003.   Net profit for the first quarter amounted to Bds$8.6 million.  We believe the net profit forecast of Bds$49.3 million is attainable.  However the forecast EPS of Bds 21 cents would provide a challenge. 

Analysis by:
West Indies Stockbrokers Limited, a
member of the Trinidad and Tobago Stock Exchange Ltd.

The Central Bank Governor, Mr Ewart Williams addressed the insurance industry and the wider financial services sector last week on the plans for “integrated supervision” whereby insurance companies and pension funds would fall under the supervisory authority of the Central Bank. The man in the street and the public at large might well ask the question, what all of this means to them and would they in the final analysis feel more comfortable and reassured that insurance companies would respond and honour legitimate claims. In fact, the issue of integrated supervision has caught the attention of other elements of the media and this was the subject of breakfast television a few days later so there is some interest in the eventual outcome of the ongoing project work. Let me hasten to add that there is no quick fix to any situation. There are stages in the process but ultimately the objective is to finally have a regime that will ensure that insurance companies and pension funds are managed in accordance with best practices internationally and therefore minimise the risk of failures with the general public having a higher degree of confidence in our institutions. The first step is to bring the insurance industry under the regulatory ambit if the Central Bank and it is expected that the legislation to give effect to that move could be before Parliament within the next couple of months.

The second step is the bringing to Parliament of insurance legislation that will comprehensively update the existing Insurance Act, 1980 which is clearly outdated and unable to respond to the new realities of the insurance business.The third strategy is the longer-term issue of the Super Regulatory Agency that will have the responsibility for the supervision of all financial services including the credit unions and security business. The present system of insurance supervision places the regulator — the Supervisor of Insurance under the Ministry of Finance. Immediately, that places the office within the public service structure with all the implications for manpower resources and the ability to attract suitably qualified professional staff to monitor and supervise an increasingly complex industry. In addition, inspite  the power conferred in the law the supervisor is perceived as being powerless since he could be influenced by politicians and therefore the office itself is diminished. In Trinidad and Tobago, position and stature count and the regulator is not seen at the same level or in the same league as the captains of industry or for that matter the executives of companies that he monitors. The approach to an integrated supervisory agency is widespread in both developed and developing countries so Trinidad and Tobago is merely attempting to find a model that suits our culture and takes into account our limited human resources. The Central Bank has been recruiting and training staff. It is preparing for its increased responsibilities and proposes to use technical assistance from the Canadians who have been recognised as having a high level of expertise in insurance supervision.  However, the biggest challenge ahead for the Central Bank is to find agreement with the insurance industry on the issue of new insurance legislation.

The first insurance legislation was introduced in 1966 and this was subsequently repealed and replaced by the current Insurance Act, 1980. This Act is now 23 years old and applicable to an era that is long gone. However, not withstanding the deficiencies of the legislation especially in the area of capital requirements, non-compliance and exit there are many notable features especially in respect of trust funds to protect policyholders and these provisions should be maintained in any new legislation. There have been many drafts of amendments to the existing legislation as far back as 1988 — 15 years ago — but they were not introduced in Parliament because the government felt that it was unable to obtain the required parliamentary majority. The issue was always how to give the supervisor power more akin to the Inspector of Banks to deal with delinquent companies. Whereas in the past some insurance companies might have had objections against the level of capital required, the sense today is that capital may not be an issue as there is the reality that only adequately capitalised companies will have a future in a more liberalised trading environment resulting from FTAA and GATS. In addition, the draft prepared by the consultants does give a timeframe within which companies that do not now have the capital will be allowed time to meet the new requirements. The industry’s main bone of contention is the consultative process employed by the consultants in arriving at their recommendations. There are different schools of thought — those who would like to see all embracing legislation that takes the country to modern day practices in one fell swoop as the way to go and that assumes that we are a people that normally uphold law and order and follow the letter of the law even in spirit when in fact we are the complete opposite. On the other hand there are those who would like to see incremental strengthening of the regulatory framework.

There is a strong view that good corporate governance is some distance away in Trinidad and Tobago and the best way to safeguard policyholders’ interest is to ensure that insurance companies comply with the existing requirements in terms of trust funds that leave little discretion in the hands of companies and therefore little room for abuse. Simply put, we have not yet reached a stage that we can trust ourselves to good corporate governance and while working towards these noble objectives we must not lose sight that the primary objective of improved legislation is to provide greater safety to the public and therefore we should do nothing that will provide less security for policyholders during the period of transition. While the focus is on insurance companies there is also an urgent need to address the competencies of the providers of ancillary services in the insurance industry to ensure that the advice that the public receives is correct and that they are not misled through inaccurate marketing and sales techniques. There must be a holistic approach that will increase consumer confidence in the insurance industry — better supervision of insurance companies is only one element — safeguarding consumer rights through consumer protection legislation and a responsive competition policy must go hand in hand.
E-mail : dacquing@cablenett.net

Most of the major markets were off in the middle of last week but ended the week up, moving indices forward once again. This past Monday turned into a very strong trading day for equities, even though there was a lot of profit-taking late in the day, ending with the S&P, NASDAQ and Russell 2000 indices all hitting 52 week highs. Activity and interest were high with advances out pacing declines by 3 to 1 on the NASDAQ as the index marched forward 20.91 points to gain 1.21% on the day, closing at 1754.84. Banks, techs and cyclicals were the leaders. More important in terms of analysing the market was to review the volume on advancing shares against volume of declining shares. The US Dow index traded 1.4 billion shares on Monday, a good day but not really outside the 10 day moving average trading range of late. But the volume on the advancing shares outpaced decliners by two to one. Clearly the bulls are running away with the market and as long as earnings come in to support investor confidence, we may well be moving forward with economic recovery. Please be reminded that an efficient market will anticipate economic conditions two to six months in advance. We also note that the US treasuries pulled back, taking note of the bullish equity markets.

Centre stage this week is Allan Greenspan, who will provide two days of testimony on the US economy to the House of Congress on Tuesday and Wednesday. In his semi annual report to the US Congress, analysts are expecting Greenspan to revise some critical numbers including GDP, which in February was forecast at 3.25% to 3.5%, but are now expected to be 2.5% to 3.0%. Unemployment is also a key figure which was set at 5.7% to 6.0% but which is expected to be 6.4%. Important to watch would be when Greenspan forecasts employment start to fall. This would be a signal that interest rates will start to rise, accompanying economic growth that he is forecasting. We are also interested to hear what Greenspan has to say about the output gap, the difference in production vs consumption which has become quite pronounced over the past several years of slow economic activity. It may take some time to work this out of the system, resulting in many quarters or even years of sideways movement in interest rates. Whatever he says, Greenspan will try not to spook the bond market, and focus towards keeping a lid on higher bond yields. As we are entering the height of the earnings season for typically the slowest quarter of the year, you can bet a lot of interest will be placed on what Greenspan has to say.

In economic news for the week, US trade deficit expanded in May to 41.8 Billion, up from 41.65 Billion in April. Both imports and exports increased, but with weak numbers, indicate a measure of uncertainty in global demand. We had discussed in earlier articles that the deficit should be reduced in part by a weaker dollar but recent trading has seen the USD gain on other major currencies working against the poor deficit situation. Pressure was high in the Euro Zone last week with public comments from Germany’s Gerhard Schroeder suggesting the European Central Bank should do more to help stimulate the European economies. ECB Chief Economist Issing responded stating the Bank had done enough in lowering rates to 2.0% and that it was up to individual Eurozone governments to introduce economic reforms and prudent fiscal strategies. This view was more or less supported by a survey of analysts and economists which showed they believed the German economy was improving. Meanwhile, the Bank of England surprised markets by lowering rates 25 basis points. The overnight bank rate is now at 3.5%, the lowest rate it has been at since 1955. Although the rate change should have bolstered equities, the accompanying announcement from new BoE Governor, Mervyn King, was somewhat down beat about the economy over the near term. The UK’s trade deficit also widened in May along with the US, rising to 4.1 billion GBP from 3.4 billion GBP in April. Imports from countries outside of Europe increased and value of exports to other European countries fell to its lowest level in four years. In closing, there has been a measure of good news economically and in corporate earnings. Confidence from Greenspan and solid corporate earnings reports this quarter should stabilise investors confidence in the economic growth we are all looking for. e-mail:     darcy@investments-intl.com

Samsung Electronics, the Korean manufacturer of cell pho-nes, is aggressively moving to further increase its market share in the Caribbean and Latin America. The company has been creating strategic partnerships with tele-communications service providers, such as Cable & Wireless, seeking to improve the distribution of its handsets. According to Marcio Fonseca, Samsung’s marketing excutive for the Caribbean and Latin America, the company’s market share for cell phones grew by 45 per cent over the past two years and had revenues in excess of US$100 million last year. Fonseca said the growth was mainly attributed to more aggressive marketing strategies and the ability to penetrate lower level markets in recent times. “We mainly cater to high-tier and mid-tier customers with our phones and in these segments we are the leaders of market share in the Caribbean,” he told the Barbados-based Business Authority. Last week, in association with Cable & Wireless, Samsung formally launched its new high-end cellular phone – the A255 — in Barbados.

A versatile fold-phone which can fit into the palm of the hand, the A255 boasts phone-book capacity for 250 numbers and blue illumination of the keypad. It also offers continuous usage for a minimum of 60 minutes and stand-by power for 130 to 160 hours. President of Cable & Wireless Barbados, Donald Austin said the new phone enhanced the product lines offered by his company. “We are delighted to join in this venture with one of our partners, Samsung, as we continue to define ourselves as a provider who caters to all tastes and budgets,” said Austin.

Graphix Advantage CEO Ronald Aqui doesn’t want to re-invent the advertising wheel but he’d be happy if he could just steer it his way. Eight months ago, he took over the 12-year-old company and has put the signage industry on notice. His mandate it is to win new clients and arguably has put Graphix on the top of the signage heap. These billboards have become the rave of the advertising world. You pass them, these tall, eye- catching gigantic signs with the messages of companies splashed across them. Political parties have used them to sway voters, alcohol manufacturers, newspapers, automobile companies entice customers, and even condom manufacturers use them to get their messages across. The flashier and more colourful it is, goes the argument, the more likely the chance it will get  motorists’ attention. Graphix left its imprint after it completed its first big job for SM Jaleel in 1996. That billboard introduced the soft drink manufacturer’s breakthrough product, Chubby. Apart from being the largest size of billboard around at that time, it was a multi-panel job which involved printing separate panels and getting the colours on each, to match up to form the billboard. “Graphix revolutionized this industry,” said Aqui.

Businesses have since realised that signage is a crucial advertising medium. This is evident from the multitude of billboards sprouting up over the TT. “With television and radio being what it is today, compared to ten years ago when there was only a handful of stations and channels, a cluster was created within those mediums. As a result this has forced companies to revert to direct point of purchase (POP) advertising, hence the revolution of signage,” said Aqui. Founded in 1991 as a Screen — Printing and Computer Vinyl Signage Company, Graphix started as a small printing operation and has since outgrown three locations and now operates froma massive building on the Caroni Savannah Road, Chaguanas. Now, the company has one of the largest facilities in Trinidad with 8,000 square ft of floor space, state of the art high-tech machinery, the highest resolution in digital printing with a Dot per Inch (DPI) of 600.  This translates into a company extremely equipped to handle any type of printing a client may need. With continuous invesment in high-tech equipment and an aggressive marketing thrust, Graphix has since taken a foothold in the market. It has since grown into one of the largest, most prestigious companies within the signage industry and setting trends for smaller companies to follow.

Acqui is no newcomer. He got his start working in the clerical department at the Central Bank, after which he decided to open a contracting firm. He has handled the distribution for Bermudez in Tobago and contracting for Associated Brands, specifically Devon. His last position was in sales and marketing at Lever Brothers WI Ltd. This Fatima student, who was once captain of the San Juan Jahbloteh football team in the early 1990’s, has an MBA from Lincoln University, which was done  through the School of Accounting and Management.
Now as the man at Graphix helm, he is busy plotting a course to take the company forward. The company currently specializes in identification signage, department signage, safety signs, banners and stage backdrops, self adhesive logos, printed cover-all, point-of-sale and window displays and billboards. A feather in Graphix’s cap is its membership in Screen Printing International Association in the US, where it forms part of a committee that sets world standards. “To judge screen printing jobs from all over the world, tells us we have achieved something big. We have reached a standard that makes the association feel we are world class,” said Aqui, in an interview at company’s offices in Chaguanas.

Aqui also said that being part of this international body allows Gaphix to critique its own work. Currently, Graphix has a client base that probably makes their competitors cringe : Shell Trinidad Ltd, Texaco Trinidad, National Petroleum Marketing Company, SM Jaleel, Kiss Baking Company and KFC, among others. The company’s most recent coup was bpTT’s account. “I cannot give out all my business secrets,” Aqui  said,” when asked how the company was able to lure such a prestigious bunch. “My long term goal for the company is to acquire clients within every major industry in Trinidad. I think we are already on that track with our current clients.” “I want to put our house in order, especially with staffing and technology. We are on a drive to grow but we are going carefully,” said Aqui. Some of the company’s most recognisable work  includes the menu boards and static cling stickers for KFC (since 1991) and the new bpTT building with indoor and outdoor murals as well as banners in Albion Plaza, Queen’s Park Savannah and Rexona billboards for Lever Bros on the East West Corridor and Uriah Butler Highway. Graphix currently employs 20 people with different printing backgrounds. As part of his short term strategy for Graphix, Aqui wants to ensure that the company’s relationships with the advertising agencies remain strong. Reputable local advertising agencies include McCann Erickson, Lonsdale Saatchi and Saatchi, Ross Advertising, CMB Advertising, Publicis and Go Graphics. He said Graphix cannot hope to break new ground with new jobs and grow as a company if it cannot maintain close ties with these agencies.

To keep the edge, Aqui said the company recently introduced display racks, an offshoot of in store advertising many companies rely on to boost sales, especially in groceries and pharmacies. Already Sedal and Rexona have sighed on. “We see this as a new opportunity for Graphix,” said Aqui. While digital printing offers strong competition and may have changed the signage landscape, Aqui is unperturbed. With three modes of printing in its arsenal – digital and computer vinyl cutting, the company, he said, can compete on any level in the market. Competitors in the printing industry include DigiSigns Ltd in Trincity, Dk Print Shop in Cocoyea and Island in the Sun, in Diego Martin. “What people need to realize”, said Aqui, “is that when it comes to this industry there is enough business to go around,” noting that companies in TT will have their own preferences. What he is not prepared to do is sacrifice quality for price. “If we charge $2 more than our competitors, we know our clients realise that the extra $2 allows for better quality.” On the illegal billboards that some companies have put along the highways, Aqui agrees that there should be tighter regulation. “It must be pleasing to the eye, not an eye sore, so I am very much in favor of regulation within the industry,” said Aqui. The end result, he said, is a company’s advertising message may be lost in the clutter of billboards.

BpTT has launched a new scholarship and awards programme for residents of Mayaro. Brighter Prospects, the bpTT Scholarship Award programme, which was launched on June 17, seeks to offer scholarships to students who possess the skills and knowledge to pursue academic and technical/vocational training, but whose parents may lack the necessary means for them to do so. bpTT has invested more than $500,000 in the programme, which will initially run for three years. The programme of the incentives has been created for students from pre-school to Primary, through to Secondary and on to Tertiary and technical/vocational training. BpTT has partnered with several educational institutions including the University of the West Indies and the Trinidad and Tobago Institute of Technology under this programme. At an official ceremony at the Mayaro Resource Centre Mayaro, bpTT’s Chairman and Chief Executive Officer, Robert Riley said Brighter Prospects was well in line with the company’s commitment to sustainable social development in the communities in which bpTT operates.

“Specifically it is in keeping with our aspiration to encourage and support the residents of Mayaro in the pursuit and attainment of tertiary level academic and technical vocational training-resulting in increased opportunities for income generation’” he said. The programme also provides a catalyst for those new entrepreneurs in the community, once they qualify, to access the facilities offered in the Mayaro Initiative and Private Enterprise Development. Riley called on other members of the corporate sector to come together to work toward the further development of the Mayaro community. Also addressing the ceremony were Minister of Science, Technology and Tertiary Education, Senator Danny Montano and Minister of Works and Transport and MP for Ortoire/Mayaro, Franklyn Khan. Minister Montano, who lauded the project, described it as an example of the kind of programme that was needed in other communities and, like Riley, recognised the important role the private sector had to play in building communities and encouraging community empowerment.