Region must move to deepen capital markets, says Gooden

Chief executive officer of NCB Capital Markets Steven Gooden is challenging the region’s ­governments to implement reforms that will deepen its capital markets as a means of facilitating infrastructure development within the various island states.

“Having been involved in close to US$2 billion in financing and structured products transactions over the past two years, we are the Caribbean’s leading investment bank in terms of deal flow,” said Gooden. He was speaking to more than 250 officials, comprising regional ministers of government, policy makers, engineers and scientists in attendance at the 28th Annual Caribbean Water and Waste Water Conference in St Kitts and Nevis, recently.

Making his case for the deepening of regional capital markets, he noted that Caribbean governments are often fiscally challenged and, therefore, see public-private partnerships as a catalyst for growing industries.

“Traditional banks do not have the risk appetite for long–term financing and understandably so, as banks are simply not set up to lend money for 20 to 40 years.”

He also noted that overseas financers, due to lack of familiarity and perception of Caribbean risk, at times do not offer the best financing solutions.

“My recommendation is that Caribbean countries follow Jamaica’s lead in nurturing its local capital market,” said Gooden who is also the president of the Jamaica Securities Dealers Association.

He cited the Government of Jamaica’s recent mandate to tackle policy reform and divest state-owned infrastructure assets, such as Wigton Wind Farms and the imminent TransJamaican Highway via an initial public offering (IPO).

“The Jamaican Government has also stated its intention to divest, via an IPO, it’s 19.9 per cent stake in Jamaica Public Service Company,” Gooden said.

The Government’s reforms include the expansion of allowable assets for institutional investors such as pension funds, the enhancement of liquidity and price-discovery mechanisms for sovereign and corporate debt, initiatives to encourage more public debt equities listings, and a creation of a ratings culture.

With respect to his duties as CEO, Gooden maintains that NCB Capital Markets continues to demonstrate its ability to handle large and complex transactions through creative financing.

“We were most innovative and, dare I say, bold in creating a 40-year solution for the National Water Commission without sovereign guarantee,” he added, noting that this solution was supported by a capital markets ecosystem that has been developed over the years.

This, he said, was a historic transaction and underscores the need for entities to collaborate, learn from and pursue best practices across the region.

“The capital market stands ready and able to play its role. The evolution of Jamaica’s capital market over the years is testament to that … therefore, there is no reason this story cannot be one for the wider Caribbean.”