Tobagonians are being invited to invest in the National Investment Fund which has been created to monetise assets from the Clico/CL Financial (CLF) bailout, transferred to the Government.
On July 18, the Financial Literacy Secretariat of the Tobago House of Assembly (THA) Division of Finance hosted a session to provide information on NIF. Finance Secretary Joel Jack, speaking at the session at the Victor E Bruce Financial Complex, said that NIF was an opportunity for investors to participate directly with the TT stock market.
He said there there was now significant liquidity in the financial systems in TT with the interest rate on deposits in the banking system low and unattractive.
“Accordingly, this share offering provides opportunities for investors to obtain better return on our investments. You don’t have to be a big investor to participate as this bond offering is so structured that even individuals with a large sum or tiny sum can participate.”
Jack said the bonds were specifically designed to allow institutions such as credit unions and insurance companies to make long-term, tax free investments and the THA was particularly pleased to collaborate with First Citizen’s Bank (FCB) and the Unit Trust Corporation (UTC) on the initiative.
NIF comprises Clico’s liquidated assets – $4 billion shares from Republic Financial Holdings Ltd; $970 million Angostura Holdings Ltd shares; $405 million West Indian Tobacco Co Ltd shares; and $200 million One Caribbean Media Ltd shares. Government has added its 100 per cent shareholding of Trinidad Generation Unlimited (TGU), worth $2.025 billion, bringing the total value of the fund to $7.9 billion.
First Citizens Brokerage and Advisory Services, a subsidiary of First Citizens Investment Services is the lead broker handling purchase transactions for the bonds, but they can be purchased at any registered brokerage firm.
FCB Brokerage Manager Leslie St Louis, who also spoke at the session, said people could invest from as little at $1,000 on the various offers available and that tax-free interest would be paid every six months while the principal amount invested would be paid upon bond maturity.
“What is happening is that the Government has basically received shares from certain companies as part of the CLICO bailout. It has nothing to do with CLICO other than the fact that bonds were used by the CLICO group to pay back the Government in 2009, well part of it. They are issuing tax-free bonds and it comes with three periods – five years, 12 years or 20 years and it is available to whoever wants to invest.”
UTC financial advisor Desiree Hackett-Murray, also speaking at the event, addressed what she said was the “fear factor,” noting that investments in the stock market did involve risk.
“It is good to do your homework and don’t be afraid to ask questions and get help from experts and people who know. Before you invest, you need to know what you are investing in, be able to analyse the company and the returns,” she said.
The offer for sale of the fixed income bond opened July 12 and is expected to close on August 9.