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Industry leaders in favour of fund

Thursday, July 12, 2018

Even though the high interest tax-free bonds in the National Investment Fund Holding Company Ltd (NIFHCL) would be available from July 11, business leaders believe the investment climate is in place to facilitate the fund.

The leaders gave their views about the NIF bond which would be offered in three tranches: five years with an interest rate of 4.5 per cent, 12 years with an interest rate of 5.7 per cent and 20 years at 6.6 per cent.

The NIFHCL was formed as a vehicle to monetise assets transferred to the Government from CL Financial and its subsidiaries, so the Government can recover funds owed from the $23 billion bailout of Clico after the insurance giant’s 2009 collapse.

The leaders spoke at the Business Outlook conference hosted by the T&T Chamber of Industry and Commerce (TTCIC) last Wednesday.

Blue Waters Products Ltd

Managing director, Blue Waters Products Ltd Dominic Hadeed urged the investing public if they are not satisfied with the returns that they are getting from the banks, they should invest in the NIFHCL.

“We are putting a lot of investment in plant and equipment and that is what we are spending a lot of money on this year. If we have extra money then definitely we are going to look at the NIF. For people who have liquid money and they are not happy with the rates at banks it may be a good opportunity.”

Commenting on the state of the economy, Hadeed said it is looking stable and it’s not getting worse; it looks as though it can move forward toward further growth. He added if business people are not investing in the NIF it is because there are more viable projects in the country in which to invest.

“If we don’t participate (in the NIF), it is actually a good thing, but it does not mean NIF is a bad investment.”

Amera Caribbean Development Ltd

Managing director Joseph Hadeed said he preferred to wait until the prospectus for the fund was available, but expressed confidence in the economy that there would be further growth.

“There is a lot of pent up capital that is in T&T awaiting deployment, and I think the more investments that come to market the better it gives us the private sector, a proper amount of variety in order to make proper business decisions.

Investment is certainly positive the economy is on a rebound, that’s a positive outlook, the leading indicators are pointing in the right direction so we are confident that things would turnaround by the end of 2018/2019.”

Amera Caribbean’s investment projects have mainly been projects within the real estate sector. Explaining why he had confidence in the economy despite a slow in the construction sector, Hadeed said the gestation period of the sector is one which takes time to develop, adding that construction normally happens heavily during the period between January and June.

“It is not something you make a decision today and you see a new building or a new office building tomorrow. It requires a lot of planning, site planning, design, finance requirements and then the actual construction. The lack of new construction taking place in the market now should not be seen as a negative, because once the economy starts generating more positive movements, then you would see construction.”

He added that one of his concerns when the economy starts to turn around is that there would be a problem accessing “quality” labour and material on a timely basis and on a price competitive basis.

“Once things start turning around, is there the right infrastructure in place to assist in having the right labour environment and the right material environment so we can continue to develop at the right pace?”

He called on the Government to put the right infrastructure in place so when the economy starts turning around even further, the business community can continue with their investment.

National Gas Company

Gerry Brooks, chairman of the National Gas Company, described the NIF as a good opportunity and urged business leaders to look at it and then make some informed decisions. Referring to the TTNGL public offering he said it is an excellent example of people making an investment and getting a lucrative return.

Trade Ministry

Trade Minister Paula Gopee-Scoon also said it is an excellent opportunity with guaranteed returns and is available to every level of society, not only to businesses but to the man on the street.

Rationale for offering bonds

Finance Minister Colm Imbert who spoke in the Parliament last Tuesday had given the rationale for offering bonds to the public through the NIF.

“From market soundings, it was determined neither a fund issuing units nor a company issuing shares could generate the $4 billion through a public offering given restrictions governing the structuring of portfolios within the institutional sector including pension funds and life insurance companies. It was agreed an asset backed corporate bond with appropriate tenors and coupons would be adequate to meet the varying investor requirements of the individual, corporate and institutional sectors.”


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