BCW gets JSE licence

New investment house acquires Capital & Credit’s member dealer pass

BY JULIAN RICHARDSON Assistant business co-ordinator richardsonj@jamaicaobserver.com

Tuesday, February 19, 2013

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BCW Capital has become the newest member dealer on the Jamaica Stock Exchange (JSE) after acquiring a trading licence from Jamaica Money Market Brokers Group (JMMB) for an undisclosed sum.

The company acquired the member dealer licence from JMMB's subsidiary, Capital and Credit Securities, and has been approved by the JSE. It was one of two licences held by JMMB after it bought Capital and Credit Financial Group last year — its original licence and that of Capital and Credit Securities.

"This acquisition was critical as it will enable BCW to make our contribution to the development of the Caribbean capital markets with new products and services for our high net worth and institutional clients," said Rohan Barnett, CEO of BCW Capital.

BCW refused to state how much money it paid in the deal, the first transaction of its kind in Jamaica, but industry insiders say a member dealer licence could cost anywhere from $50 to $60 million.

JMMB Chief Investment Strategist Julian Mair noted, "We are happy to have taken this significant step to fulfil the promises we made to our shareholders in the Capital and Credit acquisition, with the divestment of this asset and wish BCW success as a niche market player in the space."

The licence allows BCW to trade stocks and arrange listings on the JSE's main and junior exchanges. The firm said it is well advanced in the process of structuring at least three equity issues — two on the junior and one on the major market — expected in 2013.

BCW began operating in July 2012 after receiving securities dealers and pension fund investment manager licences from the Financial Services Commission. Since then, the company has developed a unique suite of products for the Jamaican and Caribbean markets, including a $850-million corporate bond offer on behalf of Jamaica Broilers Group and two innovative Principal Protected Notes (PPN), which offer preservation of capital while also allowing investors significant upside growth potential based on their respective indices.

In addition to the PPNs, BCW has also established BCW LIONS, a private equity vehicle charged with strategic investments in global assets in a tax-efficient manner. Depending on market conditions, the company said it may seek to list LIONS, an acronym for Listed International Offshore Negotiable Securities, on the exchange.

BCW is the 12th member dealer on the JSE the last to acquire a licence was Proven Wealth in October. The other dealers are: Barita Investments; First Global Financial Services; JMMB Securities; M/VL Stockbrokers; Mayberry Investments; NCB Capital Markets; Pan Caribbean Financial Services; Scotia Investments Jamaica; Stocks and Securities; and Victoria Mutual Wealth Management.

"The acquisition of the Member Dealer licence is a real win for the company as we seek to revolutionise the capital markets in Jamaica and the wider Caribbean by utilising the Exchange to provide investors with investment options that are not currently available," said Charles Chambers, BCW's managing director of investment banking.

"Working with our global partners on Wall Street and across the Caribbean, our goal is to help transform the Jamaican and Caribbean capital markets, to foster growth and development for the region with capital from across the world. We see financial products as an export product," he said

Led by Barnett, Chambers and Gerry Wight, managing director of operations, the company has recruited a top investment banking and sales team that includes Paul Simpson as vice-president for sales and marketing, and Joel Gordon as institutional sales manager.

"Our clients not only expect us to offer portfolio management solutions, which includes but is not limited to offshore mutual funds, bonds, exchange traded funds (ETFs) and equity hybrids, they also expect us to provide financing solutions such as raising capital," Simpson told the Business Observer.

Members of the team are no strangers to big local and international transactions. Chambers, while at National Commercial Bank (NCB), structured the JMMB preference share offer and listings of both Supreme Ventures and NCB Capital Markets. Barnett, as an attorney with Citigroup's Global Markets/Smith Barney Division, worked on that company's merger with Travelers Group.

"The investment banking business is quite different from traditional business that utilises plant, property and equipment to create and deliver products. The engine that pushes an investment bank forward is really the people that walk in and out of the building every day," said Barnett.




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