est. 2007

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Sagicor and Scotiabank Signal the Caribbean Market

The blogmaster received several messages yesterday from members of the BU family whicch highlighted two financial transactions choking local, regional and some internation newsfeeds. The decision by Scotiabank to shed operations in nine Caribbean islands should hardly be a surprise to those who make it a business to keep ears to the ground. The region…

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The blogmaster received several messages yesterday from members of the BU family whicch highlighted two financial transactions choking local, regional and some internation newsfeeds.

The decision by Scotiabank to shed operations in nine Caribbean islands should hardly be a surprise to those who make it a business to keep ears to the ground. The region has become a hot mess regarding the state of economies and with de-risking high on the agenda of financial institutions the risk appetite of international banks operating in the region has reached an intolerable level. At some point in the future they will completely withdraw from a region to focus on bigger markets.

The acquisition of Sagicor shares by Canadian company Alignvest for 536 million dollars- reportedly to create the opportunity to efficiently raise capital by listing in a more liquid market to drive growth is the other mega transaction closed this week. The following statement by Sagicor’s Chief Operating Officer Ravi Rambarran about how regional stock exchanges operate is instructive:-

At the same time, our stock markets in the Caribbean are very thin and very illiquid. We saw just last week Friday someone sold 700 Sagicor sales out of 306.3 million shares and drove the price down to about USD1.00 That means all the other shareholders who have their stock had to value their stock at this price. That is a reflection of our stock market being very thin and very illiquid.

We look forward to a debate led by our educated class to inform a general public who are in the main disinterested and ignorant about these kinds of transaction. A shame!

162 responses to “Sagicor and Scotiabank Signal the Caribbean Market”

  1. lawson Avatar
    lawson

    sign of the times ….will canadians still be able to launder money

  2. peterlawrencethompson Avatar
    peterlawrencethompson

    It is popular in Barbados to complain about foreign interests (Trinidadians, Canadians, etc.) buying up local assets; the same complainers also whine about needing more foreign direct investment (FDI) to kickstart the Barbados economy. They don’t see the contradiction: foreigners buying up Bajan assets IS FDI.

  3. John Avatar
    John

    Is Sagicor a Barbadian asset?

  4. peterlawrencethompson Avatar
    peterlawrencethompson

    Sagicor is not a Barbadian asset since it fled to Bermuda a few years ago to escape Barbados credit downgrades, but it still has a bunch of Barbadian shareholders.

  5. William Skinner Avatar
    William Skinner

    Barbados Shipping and Trading, now Sagicor, recently SOL/Simpson’s. There is none so blind as he who cannot or is it will not see.
    Whatever happened to enfranchisement of the workers ?
    Is this the Singapore model?
    Just asking.
    @ PLT
    Is your position an endorsement of the new wave of brutal financial recolonization?
    Just asking.

  6. David Avatar
    David

    @William

    To be competitive our large companies must have access to capital as well to effectively mitigate risk. It is why credit unions will struggle to establish a bank to serve Barbados only.

  7. A. Dullard Avatar
    A. Dullard

    @William

    To be competitive our large companies must have access to capital as well to effectively mitigate risk.

    What does this mean, in the current context? Sounds like garbage to me…

  8. David Avatar
    David

    @A.Dullard

    Is Sagicor able to mobilize capital by listing on regional stock exchanges?

    Criticize but appreciate the business landscape a large company like Sagicor has to navigate.

  9. William Skinner Avatar
    William Skinner

    @ Dullard
    You need to ask David that! It was his ststement not mine.

  10. Vincent Codrington Avatar
    Vincent Codrington

    @ PLT

    When economists speak of the need for FDI they expect financing of new ventures ( oil exploration) not purchases of existing ,flourishing locally owned businesses. It is the transfer of technology,capital, growth of new export industries and new jobs.

  11. Mariposa Avatar
    Mariposa

    The one saving grace that kept barbados out of the sale listing is that of the IMF restructing barbados economy
    How ever this grace period would come at another heavy price for barbadians who have savings or do finiancial dealings with Scotia as more fees are applied to their accounts

  12. William Skinner Avatar
    William Skinner

    @ David
    Are you seriously suggesting that: BST, SOL/ Simpson and Sagicor had no “access” to capital ?
    I await your answer.

  13. Georgie Porgie Avatar
    Georgie Porgie

    RE We look forward to a debate led by our educated class to inform a general public who are in the main disinterested and ignorant about these kinds of transaction.

    THIS IS A BULLSHIT STATEMENT!
    HOW CAN our educated class inform a general public who are in the main disinterested?
    IF YA AINT INTERESTED YA AINT INTERESTED

    Who are our educated class ? you mean the highly credentialed commenters on BU who know eva ting bout eva ting but can only talk wid out solving any problem?

  14. David Avatar
    David

    @William

    SOL, Goddards, Sagicor are companies that have outgrown what the region can support for them to be globally competitive.

  15. Georgie Porgie Avatar
    Georgie Porgie

    QUAE CUM ITA SUNT………..SINCE THIS IS THE CASE……..WUH ALL DE LONG TALK BOUT DEN, BESIDES LONG TALK

    WILL THE LONG TALK CHANGE ANYTHING?.

  16. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU

    The concern of Sagicor management is keeping the price per share high. In another blog I pointed out that in a very small market activity is minimal/ low. In our culture , we prefer to purchase shares to yield income through dividend. We do not like speculatory profits ,where the value of shares can be halved or doubled in a short period of time by one sale. The stock exchange is not suited to our culture. So the price alluded to fell sharply because the owner needed money urgently. It was a fire sale and had nothing to do with the performance of Sagicor itself.

    The recent sale of Sagicor is what Hal Austin would refer to as a financialisation decision. Short term gains for somebody. Not necessarily the policy holders. These decisions form the base on which persistent financial meltdowns thrive in the capitalist system.

  17. David Avatar
    David

    @Vincent

    Agree with you.

  18. Vincent Codrington Avatar
    Vincent Codrington

    @ David Bu

    I agree with William. The companies are supposed to service Barbados and CARICOM. What are the advantages of being globally competitive as defined by you? Listing on metropolitan Stock Exchanges is not an indication of global competitiveness. Was Sagicor not asked to leave the London Stock Exchange? Was BNB not asked to close its London office?
    As Dr. Simple Simon would say: “Cockroach has no business at Fowlcock party.”

  19. David Avatar
    David

    @William

    Sagicor, Goddards and SOL are international companies. To sustain success a large company has KPIs, KRIs and portfolio mixes to manage. Is this a function of the geography the company serves? Our leading companies should limit the vision?

  20. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU

    The political,business and Labour leaders need to have a serious public conversation on where we are at, and where we want to go. I think we need to leave the consultants out. We need to put the vision of the citizens at the centre of our deliberations.
    We have little input into the shaping of the geopolitics and international economic perturbations but we can strategize how we are going to respond to them.

    We must put the welfare of Barbadians first. We abhor people taking knee jerk decisions on our behalf on the notion that Barbadians have no choice. Baloney!!!

  21. William Skinner Avatar
    William Skinner

    @ Vincent
    When David posits that the people are disinterested and there is some “ educated” group who can enlighten us that is mere piffle.
    There is a bigger philosophical discussion that we need to have:Do these companies that acquire massive financial portfolios have any obligation to restructure by at least making the workers , who built them major players.
    How can we talk about economic enfranchisement when all the capital is being shifted to ensure the economic lifeline of a select few?
    What is the current economic /corporate model?
    You will note that mutual got into house building when the economy was buoyant but abandoned as soon as it weakened.
    Do these companies built on the backs of our workers have any obligation to the greater national good ?
    Even the governor of the central bank said that the sale is unfortunate. He went on to say that if we don’t do things differently we will be back where we are trying to escape from again.
    David and others have bought into sound bites, corporate PR ,?that when stripped of their sophistry means absolutely nothing.
    It is not that the average person in “disinterested “ it’s just that they have seen the movie before and are not impressed by those, who are trying to fool them that it will have a different ending this time around.

  22. Vincent Codrington Avatar
    Vincent Codrington

    @ William at 9 :54 AM

    I agree with everything you wrote in that submission. We asked for independence and even though we have it we are still loitering on the steps of the previous colonisers . To compound matters we are looking for new masters.

  23. David Avatar
    David

    @William and Vincent

    You are suggesting that government legislate the right for employeez to own shares in a company?

  24. WARU Avatar
    WARU

    “we are still loitering on the steps of the previous colonisers . To compound matters we are looking for new masters.”

    And ya leaders are simultaneously too DUMB and corrupt to see, too ineffective and incompetent to make the requisite changes…Gordon Browne told off Scotia for their insulting and disrespectful behaviour to his government and people…not a whimper from Mia…there are real LEADERS and then there are leaders. .

    “How can we talk about economic enfranchisement when all the capital is being shifted to ensure the economic lifeline of a select few?”

    A total insult to Caribbean people that as policyholders their monthly premium payments will enrich others outside the region.

  25. Georgie Porgie Avatar
    Georgie Porgie

    WARU
    NOW THAT YOU HAVE JOINED IN WE CAN NOW SEE debate led by our educated class to inform a general public who are in the main disinterested and ignorant about these kinds of transaction.MURDAH

  26. William Skinner Avatar
    William Skinner

    @ Legislation can be and has been used as tools of socio economic engineering. If we have to use legislation to ensure that the economic pie is properly shared, there should be no quarrel with that.

  27. David Avatar
    David

    @Willam

    How do you anticipate the large regional and international companies would react given the nature of today’s commercial climate?

  28. Mariposa Avatar
    Mariposa

    Browne is a paper tiger either he would have to go along with the flow or be left holding the bag
    Isnt this the same guy who blew his trumpet at Butch then had to retreat after Sandals threaten him to leave the country
    By the way what in God’s name would u expect her to say
    Most likely she read the tea leaves before giving those generous tax cuts

  29. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU at 10 :04 AM

    No. I do not believe in GoB legislating shares for employees in the companies for which they work. There is a potential conflict of interests. The same conflict that arises where management are given bonus shares in companies that they manage. There is enough local and international evidence as to who suffer and who benefit.

    For a market to be genuine it must be allowed to evolve. The constraints are cultural. Some owners like to hold onto companies long after the opportune time for disengagement. It is as if they want the company to die when they die.

  30. Hal Austin Avatar
    Hal Austin

    @A.Dullard
    Is Sagicor able to mobilize capital by listing on regional stock exchanges?
    Criticize but appreciate the business landscape a large company like Sagicor has to navigate.(Quote)

    This is why I think that David BU should post anonymously. He is performing two roles on BU, the host and a contributor. It is very difficult to respect the host and think that the contributor is silly.
    There are people who think that to condemn David the contributor I to attack David the Host. The above quote is a classic example of David BU’s ignorance about business. Yes, if a major company is domiciled in Timbuktu, whatever Mali’s credit ratings, it will still attract global finance.
    The key reason for a listing on a big stock exchange is for an improvement in the company’s valuation. But yes, a company can be listed on a regional stock exchange and still attract big money.

    @ Vincent,
    The only responsibility of the directors of a company is not just profitability. They have a responsibility to ALL the stakeholders. That is why we need a new Companies Act in Barbados. BERT does not address this.

  31. WARU Avatar
    WARU

    Again…it is all in the hands of the people to stop putting their hardearned money in these crooks hands, they should only be investing in CAR and HOME insurance…nothing else…no one can make anyone buy insurance outside of those two necessities,.

    GP…they already know all of this…their problem is implementation deficit.

  32. A. Dullard Avatar
    A. Dullard

    @A.Dullard

    Is Sagicor able to mobilize capital by listing on regional stock exchanges?

    Criticize but appreciate the business landscape a large company like Sagicor has to navigate.

    Dear David

    I do not get your argument at all. What are you trying to say? What does this have to do with the issue at hand?

    What is so special about “the business landscape a large company like Sagicor has to navigate”? They have been ‘navigating’ it for over 150 years, no? Sagicor does and must know that the regional exchanges are not true capital markets in the true sense. For example liquidity is non-existent, little to no price discovery exists, poor regulation, etc.

  33. Hal Austin Avatar
    Hal Austin

    @ Vincent,

    Good companies allocate shares to their employees. It does not have to be compulsory, but if necessary, then it should be. Workers and other stakeholders have as much interest in the success and performance of the company as the shareholders and executives. That should be recognised in law.

  34. A. Dullard Avatar
    A. Dullard

    @ Vincent Codrington November 29, 2018 10:01 AM

    “The recent sale of Sagicor is what Hal Austin would refer to as a financialisation decision. Short term gains for somebody. Not necessarily the policy holders. ”
    ++++++++++++++++++++++++++++

    This is about it. I would go a step further and replace ”not necessarily” with “not at all”.
    Something really needs to be done about the state of financial and other regulation in Barbados.

    Also, there seems to be no one able to speak in an unbiased, knowledgeable manner with any clarity or authority on any topic.

    Have all the competent people left or have become that disengaged?

  35. David Avatar
    David

    @A.Dullard

    How would legislation have prevented Sagicor from redomiciling from Barbados?

  36. Simple Simon Avatar
    Simple Simon

    @WARU November 29, 2018 11:04 AM “…they should only be investing in CAR and HOME insurance…nothing else.”

    Do I still need “invest” in car insurance if iIhaven’t had a car for decades, and intend NEVER AGAIN to own a car?

    And can I use that money for health insurance instead?

    And is insurance an “investment?”

  37. Vincent Codrington Avatar
    Vincent Codrington

    @David BU

    I think you are giving GoB too important a role in the evolution of the Barbadian society and economy. And they are taking you too seriously. Their role is facilitation and regulation not directors. Piece would use a more apt word.LOL!!.
    Every citizen has to play his/her part. Hence the idea of a public conversation without the optics. Talking about it is not doing it. We have to listen and respond to each others’ concerns. The conversation is going for the most part in one direction.That is propaganda the precursor of fascism/populism.

  38. William Skinner Avatar
    William Skinner

    @ Hal
    You say a failed state . I think we have reached stagnation.

    @ A Dullard
    You are more than correct: they have navigated the waters for 150 years but will like to convince us that they are broke.
    Not surprising the plantation/ sugar barons did the same thing and then we had to subsidize the sugar industry.
    @ Vincent
    Pray tell how we are going to implement change without radically changing from what we are doing now?
    @ David
    Therein lies the problem: We are anticipating how they will react rather than we acting in our self interest.

  39. Simple Simon Avatar
    Simple Simon

    Georgie Porgie November 29, 2018 9:12 AM “IF YA AINT INTERESTED YA AINT INTERESTED.”

    Surely Georgie Porgie who is famous for kissing the girls, knows moreso than anybody else that interest can be stimulated.

    Lolll!!!

  40. Hal Austin Avatar
    Hal Austin

    A. Dullard

    The recent sale of Sagicor is what Hal Austin would refer to as a financialisation decision. Short term gains for somebody. Not necessarily the policy holders. ”(Quote)

    This is Vincent trying again to read my mind. I have said no such thing. It is a cultural thing. Financialisation is the funding of the economy through a variety of methods, including non-banking streams. It is an accepted term in financial economics.
    If Vincent wants to talk about the sale of Sagicor, and who would benefit, I am prepared to give a view. My view is that the sale was in the interest of shareholders, not policyholders.
    Policyholder s in the Mutual and Sagicor missed the boat a long time ago when the de-mutualisation of the Mutual ignored, or appeared to have ignored, the business’s legacy investments. It is a high price to pay for ignorance.
    Our leaders politicised these businesses a long time ago. It is still not too late for a proper inquiry in to the insurance sector in Barbados. Not with the view of prosecuting anyone, but of learning lessons for the future.

  41. David Avatar
    David

    @Vincent

    You are aware the sale of Sagicor shares was to fund the purchase of Scotiabank insurance operations in Jamaica and Trinidad based on reports? His is how large companies have to move to sustain the business. Listing on the regional exchanges is a joke.

  42. Simple Simon Avatar
    Simple Simon

    @Hal Austin November 29, 2018 11:26 AM “Not with the view of prosecuting anyone, but of learning lessons for the future.”

    And why no prosecutions?

  43. Vincent Codrington Avatar
    Vincent Codrington

    @ Hal Austin at 11: 11 AM

    Employees stakeholder-ship is already recognised in practice and in law. Their employment provides an income/wage and a job. They are rewarded for producing good products , excellent consumer services and profits for the shareholders. Their rewards come out of total revenue ahead of other expenses.
    They are quite free to engage in share-ownership in other companies.

  44. Hal Austin Avatar
    Hal Austin

    @ Vincent,

    Ignorance again. If Sagicor wanted to buy the insurance business from Scotia Bank, there are a number of ways it could have done that. A rights issue is the obvious one; a straight debt swap with Scotia – Scotia shares for Sagicor shares – borrowing in the financial markets; any number of ways.
    If Sagicor wanted to buy the insurance business from Scotia, then it would mean going for market share. Why then would it sell off part of its insurance business to buy more insurance business – in the same market. Who advised Sagicor on this sale? All that should be listed in its post-sale press release. Where is the local financial press?

  45. Hal Austin Avatar
    Hal Austin

    @Vincent,

    Every publisher I have ever worked for issued shares as part of the benefits package, not just wages. @ Vincent, you are out of step with modern practice.

  46. Bush Tea Avatar
    Bush Tea

    @ David
    Why are you over-intellectualising this discussion? Are you trying to sound like a Cave Hill big shot?
    Sagicor’s problems have NOTHING to do with mobilising funds, attracting investment or credit ratings.

    It is a SIMPLE case of us facilitating a class of incompetent Jack Asses into positions of authority over critical national infrastructure and heritage resources.
    ANY TIME that you allow shiite to float to the top of a well and to linger there, you can expect that well to die slowly and surely ….like we are now seeing with our last swamp.

    What has this man done since taking control of Sagicor?
    What has he EVER accomplished – apart from snivelling behind the previous shiite ‘leaders’ to win their favour and endorsement?

    The ONLY ‘innovations’ coming from Sagicor has been by way of them pimping being international albino-centric johns – mostly losing their shirts in the process. Not even Barbados Farms could they make a go of….

    The Lloyds of London Caper comes to mind….

    These jokers just used the Sagicor resources to live big in Miami (just like the CLICO shiite hounds did) and they employ bribes and PR to cuffuffle Bajan Brass bowls into conformance.

    Look at Goddards as a contrast.
    When Simpson started his SOL odyssey with a few shrimp boats, Sagicor was ALREADY a powerhouse….

    Steupsss…
    Don’t flatter these jokers with complex analyses that assume that they are competent …and are making logical decisions…
    Picture Lexicunt running BU from the USA……
    ….same shiite.

  47. The Truth Shall Set You Free Avatar
    The Truth Shall Set You Free

    @ Hal Austin

    “This is why I think that David BU should post anonymously. He is performing two roles on BU, the host and a contributor. It is very difficult to respect the host and think that the contributor is silly.”

    XXXXXXXXXXXXXXXXXXXX

    Won’t it have easier for you to disagree with David BU’s contributions and offer reasons why you disagreed rather than to think of him as being silly in his role as a contributor? But when people show up your ignorance you get angry. You want bloggers to respect you and you have no respect for contributors.

    You are too disrespectful to all contributors but expect them to respect you, I say you need to grow up.

    If you believe most of BU contributors are beneath you in intellect, why not develop your own blog to attract people of your ilk?

    BETTER YET, STOP POSTING TO BU, I AM SURE YOU WOULD NOT BE MISSED!!!!!

    You are one miserable old man.

    #tiredofyouandyourchildishnonsense

  48. William Skinner Avatar
    William Skinner

    We note that Sir Hilary Beckles, who mobilized the whole Mutual Affair a few years ago and ended up on the Board is still on the Board in this new dispensation.
    We wonder what he can possibly say now and what his followers think of this move.

  49. Hants Avatar
    Hants

    It is good to do research.

    https://www.marketwatch.com/investing/stock/aqy.a?countrycode=ca

  50. Hal Austin Avatar
    Hal Austin

    @The truth,

    I did, as always. Re-read my post. Had it not been David BU I would have ignored it. As David BU he has a lot more influence than any ordinary contributor.

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