Jamaican investors deserve better advice

THE EDITOR, Sir:

The Business Gleaner of November 16, 2011 carried an article above the fold titled 'FCIBJ to delist'. The essence of the article was that the Jamaica Stock Exchange was pressuring the board of CIBC FirstCaribbean International Bank (Jamaica) to delist given that the parent owns 96.3 per cent of the shares.

FCIBJ, as was stated in the article, has offered to purchase the minority shares at J$13.52 per share, pricing the offer at the stock's one-year high. Readers of your paper, and stockholders, may recall that in 2003, the parent of FCIBJ offered a share exchange of one share in the regional parent for every 7.5 shares in FCIBJ. The cash equivalent of this offer was J$9.80 for each FCIBJ share.

For those shareholders who followed the advice of financial commentators in 2003 to decline the offer, they are now offered a return of 3.8 per cent per annum, excluding dividends, over the period. In the same eight, almost nine years, the share price of the regional parent has increased from J$50 per share to J$116 per share or a return of 10.4 per cent per annum, excluding dividends.

While I am no fortune teller, this result was foreseen. A regionally diversified business with more shareholders and thus liquidity in the same business will likely outperform a local business from an investor's perspective.

Local investors deserve better advice from brokers and financial advisers, as the decisions they take do have an impact on long-term wealth generation.

Raymond Campbell

Former Director

CIBC FCIB Jamaica