WEEKLY CARICOM STOCK REPORT 26 November to 30 November 2012

UWIStockReport

Compiled by the Department of Management Studies, UWI, Cave Hill

The Float Ratio of a stock refers to the number of outstanding shares held by “public investors” as opposed to company officers, directors, controlling-interest investors or other strategic investors. In essence, the float ratio refers to the proportion of shares that are available for regular trading, as distinct from shareholdings that are only likely to be traded as part of a major re-organization of the firm.  The float ratio is a major determinant of the liquidity of a stock.  Stocks with relatively small float ratios tend be rather illiquid, with very little trading.  This makes it extremely difficult for investors to earn capital gains on such investments, and may leave minority investors at the mercy of the dividend policy set by dominant shareholders.  To help promote liquid markets, the Hong Kong Stock exchange, for example, requires a minimum float of 25% of the outstanding shares.  In a number of cases, stocks listed on Caricom exchanges have float ratios way below this minimum.

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  • With the chance Dr Robinson may comment why not take the opportunity to discuss the sale of NIS share holding in Republic Bank?

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  • Why don’t you let that man correct his exams in peace nuh…?

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  • @Bushie

    He is Chairman of the most important government agency in Barbados. Plus he has always done what the other academics have been loathed to do which is rub shoulders with ordinary fold on BU.

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  • Whatever the NIS did, Republic Bank would own at least 83% of BNB. The float ratio of BNB would have been so low (less than 10%) that there would be very little trading and hence little possibility for any capital gains for the NIS. In my opinion if NIS had remained as a shareholder, it would have been at the mercy of the dividend policy of republic bank, which as a very minor shareholder it would have no influence on. That to me would not have been a wise investment approach.

    I publicly expressed a preference for a share swap. Republic Bank indicated that it was unwilling/unable to do a swap.

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  • what do you think of the new format of the stock report?

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  • @Dr. Robinson

    Thanks for the response, so what happens with the proceeds of the sale given the bearish domestic market?

    On 5 December 2012 10:02, Barbados Underground

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  • Dr. Robinson

    The format is good and encourages ones to read. As you can see BU has been highlighting your investment tips. You need to get traditional media onboard. Especially now the country is embroiled in the RBL debate.

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  • The Investment Unit has undertaken an in depth analysis of alternative investment possibilities.

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  • @ David , Dr. Robinson

    The new format is great, although some of the figures on the graph got muddled on my PC. ( A key for the graphs would be nice ).
    As I stated before, I welcome the reintroduction of the investment school especially as it appears that the Department is trying to incorporate the explanation of timely issues like the float ratio. This is certainly help in the understanding of critical financial issues.

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  • Thanks fragile90!

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  • millertheanunnaki

    @ Justin Robinson | December 5, 2012 at 6:02 AM |

    During the course of last year we were promised the publication of the most recent financials before year end, December 2011.
    It is almost 1 year hence and still no financials to be seen. If these have been presented then tell us how to access them.
    If the financials promised last year are still outstanding how do you expect the public to have any confidence in or rely on your analyses or pronouncements when such an unprofessional state of affairs prevails?

    When can we expect to see reliable (audited) financials on the NIS funds which are really the workers of Barbados money and not the politicians’ piggy bank?
    Are there valid or justifiable reasons for the long delay in producing such vital financial information in a timely manner needed for effective decision making and investment strategy especially with such powerful technology available to the management of the NIS funds?
    How do you think the present situation reflects on you and the Board?
    Are we asking too much of you, Sir?

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  • @Miller

    To be fair you should have noted that the late preparation of NIS financials is a practice brought forward from the previous government. However BU like you look forward to the financials of the NIS Scheme made public as promised.

    How do you respond to the fact the numbers show that the BLP government borrowed as heavy or more from the NIS?

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  • millertheanunnaki

    @ David | December 5, 2012 at 3:26 PM |
    “How do you respond to the fact the numbers show that the BLP government borrowed as heavy or more from the NIS?”

    You speak with a forked tongue. How can you make such a factual claim in the absence of reliable financials?
    Where did you get this information from? We would like to know so we can see for ourselves. There are people on this blog who too can read, analyse and interpret financial information, even if not prepare it.

    When was the last financial year for which there are audited statements?
    We did not change the government in 2008 for “same old same old” inefficiencies and maladministration of our affairs.

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  • @The Miller

    Noticed you sidestepped the fact the AG reports have highlighted the tardy preparation of financials by government agencies dating to the last government.

    Will research the other piece of info, must have read it some where. Bear in mind although not audited the NIS must have internal financials to guide decision making at that level. Now an excuse mind you!

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  • It looks like BNB is now fully qualified to be a footnote. It will be interesting to see if the large bloc of government business remains with RBL, especially the credit unions.

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