est. 2007

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Cable & Wireless ‘Amalgamation’ and Lack of an Operational Barbados Stock Market

Submitted by Crusoe The Nation news reports that C&W is seeking to purchase all remaining shares in the company, from minority shareholders ”Under the proposed amalgamation, shareholders will surrender their shares in Cable & Wireless Barbados in exchange for a cash payment of BBD$2.86 for each common share.” For a company that has not paid…

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Submitted by Crusoe

The Nation news reports that C&W is seeking to purchase all remaining shares in the company, from minority shareholders ”Under the proposed amalgamation, shareholders will surrender their shares in Cable & Wireless Barbados in exchange for a cash payment of BBD$2.86 for each common share.”

For a company that has not paid a dividend for years, yet made substantial profits, how can such a low share price be substantiated?

Surely the FSC should examine the calculations supporting such a share price, including the expected future earnings potential of the shares, as a share price should be calculated.

That C&W Barbados has not paid a dividend in years would, while making profits, is shocking, would surely not be allowed by shareholders in North America (the directors would have been roasted, as NA shareholders in any company expect a dividend every quarter) and this ridiculously low share price merely adds insult to injury.

What exactly is the FSC in Barbados doing to protect minority shareholders?

This event adds credence to the assertion that there is no real stock market in Barbados, that any semblance of such is a veneer, with no real possibility of small shareholders earning via dividends or share appreciation. Add to this, that profitable companies locally are mostly privately owned and the whole thing becomes a joke.

If one believes that assertion and I do, then the conclusion is that Barbadian citizens should be allowed to invest in international stock markets, to have every opportunity that others have. Handcuffing Barbadians in using their earned income to invest is idiocy. Government policy on investments, limitations on overseas investment, is nonsense and needs to change.

There is not and will never be a viable stock market in Barbados.

62 responses to “Cable & Wireless ‘Amalgamation’ and Lack of an Operational Barbados Stock Market”

  1. Alvin Cummins Avatar
    Alvin Cummins

    David,
    Bajans in general do not pay attention to the stock market, and the purchase and sale of shares in companies. They do not consider shares in a company as a commodity to be bought and sole. the history of share holding here is that shares are bought, wait for dividends to be paid annually, and pass them on to the children. Imagine holding shares in a company for 56 years in the expectation od annual dividends. Foolishness. Maybe those shares could have been sold and shares in another company, more valuable and paying higher dividends bought, to realize higher returns on the investments. When Pine Hill Dairy shares were first being sold, they were sold at $i.00 per share. As the company profited, shares were split, and the value per share increased. When the value of the shares reached $8.00 per share I decided it was time to sell. I made a handsome profit on the number of shares I originally held. Hoe many people look at the shares listed on the local market? How many people have discussed shareholding with a local broker? How many people who have shares in companies listed on the local stock market, attend annual meetings, get advice on the annual reports, and ask questions at the meetings. The buying and selling of shares is private. government has no hand in the operation of stock exchanges except to ensure that adequate legislation is in place to protect shareholders from nefarious speculators. C&W (Barbados) is a subsidiary of the larger C&W international. Local shareholders are subject to the agreement under which they acquired their shares. It is up to the shareholder to acquaint himself/herself, with the terms. Government has nothing to do with those terms to which the shareholder would have agreed, so it the terms allow the company to demand, and require the shareholder to sell shares the shareholder has no alternative. Check BS&T, BL&P, etc.etc. Bajans should have never allowed BS&t to fall into for3iwgn hands. There is enough capital in Barbados that associations, Pension Fund managers, and individuals getting together, should have been able to obtain the funds necessary to buy the company. They should even have been ablate strike a deal with a foreign investment bank to obtain such funds. Cajans are too lazy to do the work necessary to save themselves.

  2. David Avatar
    David

    @Alvin

    Your comment is one sided. There is the other side i.e. the market being manipulated by a narrow interest.

  3. Alvin Cummins Avatar
    Alvin Cummins

    Dribbler,
    Every night on CBC there is a report; meagre and short on adequate information, on the performance of the Barbados, Trinidad, and Jamaican stock exchanges. How many people, including you, pay attention to it and demand more information?

  4. Hal Austin Avatar
    Hal Austin

    David,

    “Wouldn’t trustees of the pension Funds you mentioned want to push for a higher share price especially in a low yield market?”

    Plse explain!

  5. de pedantic Dribbler Avatar
    de pedantic Dribbler

    Really Alvin….you jest …badly so too.

    Does ANYONE interested in financial markets source their data principally from limited news reports on ANY TV or cable news program.

    Whether in BIM, T&T or the UK you source your input from myriad other places. A news report is just to inform on some most recent event.

    A CBC or VOB report as a report for local market investment decisions….what a laff!

  6. millertheanunnaki Avatar
    millertheanunnaki

    @ Alvin Cummins July 29, 2017 at 12:42 PM
    “Government has nothing to do with those terms to which the shareholder would have agreed, so it the terms allow the company to demand, and require the shareholder to sell shares the shareholder has no alternative. Check BS&T, BL&P, etc.etc. Bajans should have never allowed BS&t to fall into for3iwgn hands.”

    You lying hypocrite, you!

    Who sold their shareholding in BL&P (Emera) for a mess of forex pottage thereby forcing nationalistically enthused minority private/individual shareholders to give up their investment in one of the country’s major economic assets of strategic importance?

    Why did the current DLP administration sell off their minority holdings in the erstwhile National Bank facilitating the name change to Republic Bank now fully owned by Trinidadian investors?

    You might want to argue that OSA (after Sir Lloyd) made the avoidable mistake of facilitating the “de-barbadianization” of commercial entities strategic to the indigenous profile of the economy.

    But isn’t it your administration which is facilitating its death and soon-to-be funeral when the likes of the GAIA are sold to ‘foreigners’ for 30 pieces of forex?

  7. Alvin Cummins Avatar
    Alvin Cummins

    Miller,
    before the sale of the shares in the Natial bank fully to RBC in Trinidad, and ultimately Massey, I remember when the sale of the National Bank shares first went on the market. I advised a friend from Atlanta who was here on holiday, to buy some of those shares.He followed my advice. then when there was the second offer for the shares, he sold them and made a tidy profit. That iS how the stock market works. The belief from long ago; a legacy of the monied people in the private sector was to buy shares, if you could get them, and hold on to them. A stock market has to be vibrant with shares bought and sold every day. Bajans do not like to sell the shares they hold (own). They aRE NOT encouraged to buy and sell; even the money managers, who should be seeking to get the best return for the shares they hold; not necessarily through interest or dividends, but through judicious acquisition of assets that will bring better returns. When Warren Buffet started Berkshire Hathaway, he used the funds at his disposal to buy and sell companies, depending on their balance sheets, and forward planning. He didn’t buy and hold, except certain stocks that had long term potential earning power; not necessarily interest or dividing bearing stocks..
    And talking about selling for forex, is this not the reason given for the sale of the BNB, by your administration? Is this not the reason people like you have been pushing for privatization? Who is the hypocrite? You say”…forex pottage thereby forcing nationalistically enthused minority private/individual shareholders to give up their investment in one of the country’s major economic assets of strategic importance?’
    BL&P shares have been trading on the exchange for years. Nobody prevented the “enthused” individuals from buying them up. If it was advantageous to sell the shares, that is what you buy shares for; to sell at an advantageous time, or in time of need.
    Why did the “erstwhile” investors buy the BL&P shares? Because they saw it as a wise investment. Why was this lost on Barbadian investors, who have hundreds of millions sitting in the banks, getting little or no interest. Why do these same local investors scoff at buying Barbados Government savings bonds; which bear a higher interest rate than what they are presently getting, and which would support the same economy,that supports them and on which they depend. Simply because they/you want the economy to fail, and the government to fail?

  8. Alvin Cummins Avatar
    Alvin Cummins

    Dribbler,
    I never postulated that the nightly news, or even reports on the television, or radio (Sagicor early business) should be a “primary source of business information. Shareholders should keep track of their holdings and potential future holdings, bu requesting and consulting information from the company itself, annual reports and further enquiries. Educate yourself fully. It is your money.

  9. millertheanunnaki Avatar
    millertheanunnaki

    @ Alvin Cummins July 30, 2017 at 2:00 PM
    “BL&P shares have been trading on the exchange for years. Nobody prevented the “enthused” individuals from buying them up. If it was advantageous to sell the shares, that is what you buy shares for; to sell at an advantageous time, or in time of need.”

    “In time of need”, alright! Forex need, that is!

    Not on the part of many of the residual private minority shareholders but because your administration- by forcibly ‘divesting’ its share of the remaining holdings- put the other minority holders in a position where Emera could compulsorily acquire their less than 10% residual holdings. It was your inept administration which created the tipping point.

    Was that a move to create the environment where the former minority shareholders will be faced with the reinvestment options of idle cash sitting on the bank earning less than 1% or buy government junk bonds needed to pay public sector workers in order to stave off the inevitable cash flow crisis and to temporarily prop up your dying administration.

    You should find out if the same BL&P (now Emera) shares are traded on the local stock exchange and let us know so we can buy some with our tax refunds overdue since 2013.

  10. Alien Avatar
    Alien

    http://www.nis.gov.bb/investments/

  11. Alien Avatar
    Alien

    History repeats itself and shareholders wait on NIS (and Sagicor and CIBC) – again –
    https://barbadosunderground.wordpress.com/2011/01/10/emera-about-to-steel-barbados-light-power-co-ltd/. Have the reporters at the Nation and Advocate approached these entities about their likely response to the CWWI bid and what they believe to be an adequate valuation. By the way, Minister of Finance, soon these funds will be looking for a resting place if you plan to privatize anything.

  12. Gabriel Avatar
    Gabriel

    The diddering old fool Alvin dare to tell me how and where to invest and what decisions I should make with my assets.Jackass!Of course it’s the stuff of which the Dems are made.Failures and scam artists dare to advise.

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