As part of NCB Capital Markets’ (NCBCM) focus to grow its client base and secure a greater foothold in the equity market investment space, NCBCM has maintained its no arranger fee policy for companies which decide to utilise the services of the enitity for their initial public offering (IPO) to list on the junior market of the Jamaica Stock Exchange (JSE).

The policy, which was first announced at the JSE’s 2019 regional conference, has been extended beyond the initial one-year period.

NCBCM was not spared the ravages of COVID-19 as highlighted by Chief Executive Officer Steven Gooden who noted the precipitous decline of asset prices in March at a recent Business Observer Forum.

“We have done fairly well, and you would have seen it from the results. The capital markets compared to banks is that the markets tend to respond quicker to a crisis.”

Although NCBCM’s separate financials aren’t published like its insurance and banking affiliates, the wealth, asset management & investment banking segment of the NCB Financial Group reported an 8 per cent drop in total external revenue, which totalled $14.4 billion for the overall financial year (FY) while revenue from other segments fell by 65 per cent to $4 billion.

The operating profit for the overall segment declined by 38 per cent to $6.1 billon as deal flow slowed for half of the FY and staff expenses rose over the period. Despite these lower results, Gooden pointed out that the results were in line with revised projections due to COVID-19.

“NCBCM took advantage during the crisis to secure positions in heavily undervalued assets which declined during the period with bond prices recovering faster than stock prices. NCBCM has also managed to execute several multi-billion-dollar deals in the latter half of their FY which included the $14.1-billion IPO of TransJamaica Highway Limited, the sale of National Road Operating Construction Company’s $3.6-billion TransJamaica preference shares and $13.4 billion unsecured bond offering of affiliate Guardian Holdings Limited,“ Gooden said at the Business Observer Forum.

Although Gooden sees challenging times ahead and an economic recovery which will be predicated on a successful vaccine, he believes that there is an opportunity for investors to gain higher rates of returns as interest rates remain optimally low and liquidity remains high in the system.

NCBCM has been engaging with several clients on refinancing and capital sourcing during the crisis with Gooden pointing out that NCBCM has and continues to be one of the largest arrangers of private securities in the marketplace.

“We are fortunate to have been under an IMF programme as that has put certain frameworks in place to manage our fiscal affairs. That has worked well for us [Jamaica] and we’re fortunate to have gone through that programme prior to COVID. I do believe that as a people, we have made significant strides in adjusting to the new normal. There is still going to be some amount of fallout, but we know what we’re dealing with and we’ll come out more resilient because of it,“ Gooden said.

— BY DAVID ROSE