Michael Lee-Chin, president and chairman of capital management firm Portland Holdings Ltd, indicates that companies which want to list on the leading global indices are being held back by the poor economic and social state of the island in which they are domiciled.

The investor made the comments about National Commercial Bank (NCB) while giving the keynote address at the Institute of Chartered Accountants of Jamaica’s Business Conference 2016, held at the Jamaica Pegasus in New Kingston, on October 7.

NCB, which has been pursuing such a plan for listing since 2011, has so far failed to gain positive traction with investors in the United States and the United Kingdom.

At the same time, Lee-Chin noted the company is rated as the bank with the third-highest return on capital.

Indeed, in 2011, The Banker Magazine, a publication of the Financial Times of London, ranked NCB third in the world for return on capital in its survey of “Top 1,000 Banks”.

For the nine months ended June 30, 2016, the company reported return on average assets of 2.4 per cent, with total assets of $584.8 billion growing by 15 per cent, or $76.1 billion.

Listed on the main market of the Jamaica Stock Exchange (JSE), NCB had total stockholders’ equity of $96.5 billion for the period , increasing by 10.5 per cent, or $9.1 billion. Return on average stockholders’ equity was 14.3 per cent.

To list on the New York Stock Exchange, companies need to have adjusted pre-tax income of an aggregate of US$10 million ($12.25 billion) over the last three years, as outlined by Sterling Assets Management.

NCB passed this benchmark some time ago. Since becoming part of the Portland group, NCB’s after-tax profits have increased from US$6 million (2001) to US$106 million (2014).

In the third quarter to June, net profit was $9.9 billion (US$77.34 million), an increase of $1.4 billion or 16.2 per cent.

Year-end profits for NCB are expected to shadow generously last year’s result of $11.6 billion, which was 36 per cent up on 2014, with the possibility of profit from new affiliate company Guardian Holdings included in the final quarter.

NCB currently has market value of $103.95 billion on the JSE, by the value of shares outstanding as at October 13, where stocks ended the day at $42.40 each, reflecting improvement of five per cent year over year.

The 52-week range on stock value was $30 to $45, influenced during the year by the acquisition of a significant stake in regional commodities and insurance giant Guardian Holdings.

In investor consultations in the US and the UK, NCB was offered 0.7 per cent of book value as the opening price, a commentary on its bad geography, Lee Chin said.

Another such company with ambitions of listing is the GraceKennedy Group, with operations spanning three continents and a distribution network running through 40 countries globally.

GK, with market value of $41.76 billion, traded at $41.67 per stock unit on Thursday. It made profit of $2.7 billion for the six months ended June, with earnings per stock of $7.45. Total assets held are $119.34 billon, as at June 30.

GK’s plan to list has also been on the slow track under recessionary conditions.

Lee-Chin, making a point about the possibilities for growth in the island, which has averaged less than one per cent increase in gross domestic product over the last three decades, said that a turnaround would also mean great possibilities for local companies with their eye on a place on the boards of the top stock markets.

The entrepreneur cited the example of Harlem in New York City, United States, where gentrification has led to skyrocketing real estate prices — so much so that many local residents can no longer afford to live there, Lee Chin stated.

The investor expressed the belief that Jamaica too can be gentrified, leading to better outcomes for all concerned.