WEEKLY CARICOM STOCK REPORT 29 October to 2 November 2012

UWI, Cave Hill,Barbados

Investing School (Be Brave and Don’t Follow Fashion)

One of the most enduring realities in investing is the fact that most small investors seem to end up buying stocks at the top of the market and selling at the bottom.  One of the major reasons for this is the fact that investors seem to let their emotions dominate when making investment choices. Two emotions in particular seem to dominate when making investment decisions:: fear and following the crowd.

First, let’s talk about following the crowd, what West Indians call “follow fashion.” The adverse effect following fashion has on investment results is rather straightforward. When a person sees others do well in an asset class or stock, he or she decides to jump on the bandwagon and buy some too. What tends to happen is that by the time “follow fashion” people invest in the stock, the stock’s price has ran up so much that it has become overvalued. Of course, the bubble eventually breaks and people that bought at the top lose a lot of money.  “Follow Fashion” people end up buying at the top of a bubble.

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Crisis Of Confidence In Listed Companies – WEEKLY CARICOM STOCK REPORT 16 April to 20 April 2012

Compiled by the Department of Management Studies, UWI - Click image to read in PDF

The news that Barbados Dairy Industries Limited (BDIL) has delisted from the Barbados Stock Exchange (BSE) followed by confirmation from the Chairman of Banks Holdings Limited (BHL) Sir Allan Fields that BHL board will be discussing a similar option is not good news for the local investment climate. To state that the Barbados investment climate from inception of the BSE has never been bullish would be an understatement. The delistings will not help to improve the current state. The fact that there has not been any significant interest shown by Barbadians in the traditional and social media is confirmation that the profile of the Barbadian investor does not factor stocks in their investment portfolio.

How should the Barbados authorities who want to develop a financial market with rich options for Barbadians respond? It has become a head scratching exercise. How can we blame non Barbadians for buying out Bajan companies when the locals have demonstrated over time there is no appetite to invest in equities?

Proposed De-listing of Barbados Dairy Industries Limited

Submitted by Atrue Freeman

Sir Allan Fields

Sir Neville, thank you for your response of January 17, 2011, to my email of January 8, 2011.  Sir Allan C. Fields, Chairman of Barbados Dairy Industries Limited (BDIL), states in BDIL’s 2010 Annual Report that BDIL is expected to be de-listed during January 2011 (see below extract). I urge that a condition of the delisting be that the minority shareholders be offered a fair price, for their shares, of cash or shares in Banks Holdings Limited, which owns 83.74% of BDIL.

Extract from Chairman’s Report, 2010 Annual Report of Barbados Dairy Industries Limited:

During the year, our shareholders approved the Board’s recommendation to de-list our Company from trading on the Barbados Stock Exchange. This approval was obtained at an extra-ordinary shareholders meeting, held on the 27th May 2010. This was communicated to the Barbados Stock Exchange who approved our request in November 2010 and forwarded their approval to the Securities Commission for ratification. We expect that BDIL will be removed from the list of Companies trading, during January 2011. Our decision to de-list was taken because our Company has not benefited from being listed as borne out by the very low volume of shares traded. When the cost associated with staying listed was taken into consideration, financially it makes sense to de-list. I assure our shareholders that we will continue to manage our Company in keeping with established corporate controls and practices.

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Barbados Stock Exchange Approves Emera’s Offer To Light & Power Holdings Limited

Chief Marketing Manager Stephen Worme (l) General Manager Peter Williams (r) of BL&P

According to Light & Power Holdings Limited 2009 Financials, “sixty-two per cent of the shares in Light & Power Holdings Ltd (LPH) are held by approximately 2,800 Barbadian shareholders.” The recent offer by Emera Inc. (“Emera” – Toronto Stock Exchange listing: “EMA”) to make an offer to other shareholders in LPH has been approved by the Barbados Stock Exchange (BSE). LPH is the parent company of the Barbados Light & Power Company Limited (BL&P).

It is noteworthy that as at 20 December 2010 the closing price listed on the BSE is BDS12.00. The offer made by Emera Inc “to purchase all issued and outstanding common shares in Light & Power Holdings at a cash price per share of BB$25.70 will be hard to ignore by the 2800 Barbadian shareholders. Under normal circumstances it would be hard to ignore the significant capital gains to be made, the offer is made all the more attractive in a recessionary environment. It has been reported the offer (25.70BDS) by Emera Inc mirrors what it paid to Leucadia National Corporation in May 2010 to acquire its current 38% of common shareholding in LPH.

The prospect of the BL&P being managed by a Canadian 5.8 billion asset based company appears to be an attractive proposition, on the surface. No doubt the management of the company must be feel pleased that a highly successful company like Emera Inc would ‘cherrypick’ LPH to add to its portfolio. One cannot help but wonder however at the timing of the recent move by LPH to apply to the Fair Trading Commission (FTC) for a rate review.  In January the FTC responded favourably by granting a rate of return of 10% instead of the 10.48% requested by LPH.

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A Senior Barbadian Journalist Gives A Rare Insight Into The Challenges Of The Local Media Extracting Information From Government Regarding GEMS


I have called both Parliament and xxxxxx, to ask them for copies of the Gems’ financials which were laid in House some time ago, apparently.
You might not be surprised to learn that these are only up to 2001, and no information is available on when anymore might be coming down from the mountaintop.

Also, I am concerned about your implication of journalists n this non-transparent behaviour of the government. There are so many government reports and financial statements which are technically public documents but cannot be even read, far less commented on by reporters, until they are “laid in Parliament”. We would have to mount a 24/7/365 operation to learn when any of these are finally sneaked into Parliament. There are no trumpets sounding and no fanfare: somewhere, as quietly as possible. I don’t even know if “laid in Parliament” means that someone has to tell the Speaker while P is in session.

A basic rule of transparency, it seems to me, would be to routinely make those documents available to the media. The Parliamentary person told me they had only been given enough copies for MPs and their library, so I would have to ask the PS Cabinet Office. He then said he would have to cal Parliament to see if they had spies.

So you see, the media is purposely left out and kept in the dark as much as possible, yet we are supposed to somehow follow all these things up, YEARS after documents should have been laid.

Barbados is not easy, hear.


lsbusprf.gif The quote above should be very easy to contextualize. It is a response to a prominent Barbadian citizen from a leading journalist in Barbados. Those readers who think that BU, BFP and the many other citizens who are demonstrating concern about the threat to our democracy are partisan political poppets, please wake up and smell the coffee!

We can sit back and do nothing or we can all start to do what civic minded citizens are obligated to do. Take your pick.

Previous Stories

Barbadians Do You Want To Discuss The Financial Statements Of Hotel And Resorts Ltd, AKA GEMS?
Media Houses In Barbados Should Take Note Of What Their Counterparts In Dominica Are Doing
The Third Estate Has The Final Power~The Voices Of THE PEOPLE Must Be Heard
Media Houses In Barbados In Collusion With Government To Suppress News, Press Freedom Under Threat ~ The Voices Of The People Must Be Heard



Barbados Shipping & Trading (BS&T) Directors Advise Shareholders Not To Accept Ansa McAL's Offer Because They Are In Bed With Neal & Massy Of Course



See the document which has been circulated to BS&T shareholders advising them not to accept the Ansa McAL offer of $7.00. A number of recommendations have been stated by the Board of Directors of BS&T which seek to support their position. Thanks to that person who sent us the information; we do appreciate it.


Why is BU not surprise at the BS&T posture! This is a warning to Barbados that they are about to see a corporate dog fight which has never been seen in Barbados. A lot is riding on this deal because if Neal & Massy loses it would significantly diminish their presence in Barbados while their arc-rival Ansa McAL would have achieved the opposite.


Please note that you will need the Acrobat PDF reader. Click here if you need to download.


Previous BU Stories

Former Deputy Speaker Ezra Alleyne~Has He Passed the Point Of No Return?

Issues & Ideas – Of gates and mergers

by Ezra Alleyne

Although Barbados has gated communities within its boundaries, the island itself is not a gated community, nor is it surrounded by a paling or any kind of fence. It is a small open economy, which is affected by the twists and turns of regional and international economic turbulence…

But is this really relevant to Barbados, some may ask, and my answer is yes. I adopt the words and reasoning of the new British Minister of Finance, on mergers and take-overs as reported in the London Times. The minister argues that “the British economy has benefited greatly from inward investment”. That is also very true of Barbados. Where would we be without Sandy Lane and other major tourism developments?

Full Nation Newspaper Article

The BU household went into a tail spin when we read the article quoted above written by Ezra Alleyne in the today’s Nation. To be honest, it has created a bitter taste in our mouths after being doped by the euphoria of achieving one of yesterday’s top post at WordPress with the piece on Roy Morris.

An achievement if we can say so considering that WordPress hosts 1.2 million blogs!

This guy continues to miss the point deliberately or otherwise, when making his opinions known on the current BS&T merger and on M&A’s in general as it relates to Barbados. I would be a fool to deny that Barbados as a country with currently no natural resources MUST pursue a policy of attracting foreign investment. BU and others might debate how the government is approaching the task but would agree that Barbados must continue to engender a receptive climate to foreign investment. However, to zoom in on the article of Mr. Ezra Alleyne, he and other commentators who should know better continue to discuss the BS&T merger with Neal & Massy, or Ansa MCal as a single transaction, divorce from the other activities also taking place in the market. The overall impact of the aggressive aquisition of T&T companies and the effect of violating the independence and sovereignty of our once proud nation has been relegated to discussion by ordinary citizens and the blogs.

The millions spent on education in Barbados, has it gone to waste?

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Too Late For Sentiment With BS&T~Time To Dissolve The Old Boys Network

The issues that keep surfacing about Nationalism and loss of National icons, reiterates that too many times Bajans are reactionary. When the likes of BNB was being divested by Government, where were the consortiums? All we got was the usual rhetoric from our top “analysts”, that said nothing except that the company was a good company with great potential.




This is typical of our culture; we only see the potential after an outsider has offered to take over. There was no meaningful response from the Big businesses and again our analysts when the Government as they all “claimed” to know in their desperation divested of the likes of BNB to who would take it.


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Barbados Stock Exchange (BSE) Asleep On The Job In The Barbados Shipping &Trading Neal And Massy Merger

ConcernedCitizen~BU finds it very interesting that two years ago BS&T was trading at over $8.00 (2005), $5.31 (2006) and up to yesterday $5.51. Although the share prices from our research have taken a beating in the Caribbean, BU find it strange the precipitous drop in the BS&T share price compare to other companies. What is it that the market sniffed about BS&T?

BU smells something funny ?:

Posted on BU -3rd July 2007

A poster to BU made the quoted observation on the 3rd July 2007 and to our surprise in the Nation this morning we see the headline BS&T Shares Lockdown. What BU finds intriguing is the length of time it took for the industry regulator, Barbados Stock Exchange to suspend trading in a transaction where there was sure to be heightened interest given the nature of the deal. It is Barbados lone conglomerate and the market as we have seen will speculate and manipulate if allowed.


We visited the BSE website to view the trade summaries of the days being investigated, see attached. A novice scan of the reports clearly show that the share price has been allowed to move from $5.51 on the 2 July to $6.66 on the 6 July 2007. The is a clear manipulation of the share price which was done under the nose of the BSE. The significant movement in the share price has huge financial implications given what is at stake.


All members of the Board should resign immediately.

Related BU Stories

Sir Allan Fields The Man Behind The Orchestration To Dump Barbados Shipping And Trading To The Trinidadians
Senator Lynette Eastmond Shut Up!
Prime Minister Arthur Prefers A Neal And Massy Deal~Barbados Underground Say So
BS&T Going, Going, Soon To Be Gone~ The Advocate Newspaper Should Go Too