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Jamaica’s Massive Road Construction Affect Businesses




Major Road Construction underway

Jamaica’s National Works Agency (NWA) is in the middle of a massive road construction project across the Corporate Area and parts of St. Catherine. Major road works started in 2013 and will continue until December 2019.

This road improvement initiative, the Major Infrastructure Development Programme, costs  US$352.941 million or J$45.60 billion.  The China Ex-Im Bank and the Government of Jamaica (GoJ) jointly finance this mega project. The NWA aims to reduce the travel time by commuters and improve the road network connections to main commercial centres and markets. Economic activities are also expected to boom after the completion of road construction.

Billions Spent on Road Construction

Road works projects underway are the US$64-million Mandela Highway Realignment and Reconstruction project, the US$56-million Hagley Park Road Improvement project, and the US$19-million Constant Spring Road Improvement Project.

Among other things, the Mandela Highway reconstruction project added two lanes to the four that existed between Six Miles and the east\west off ramps of Highway 2000.  Plus, the works contractors raised sections of that roadway to avoid the corridor becoming inundated with flood waters. They also upgraded the Duhaney River box culvert and built a new bridge over the Fresh River.

Concerning the Constant Spring road construction project, work is being done to widen the road to four lanes. In addition, road construction is to improve the traffic management system, upgrade the storm-water drainage, and build two extra bus bays at the transport terminal in Manor Park, St. Andrew.

Meanwhile, the NWA widened the 3.6 kilometres roadway from Three Miles to Maxfield Avenue. The works agency is also constructing a double overpass. The contractors are also installing new drainage pipes, moving back the boundary walls and perimeter fences along the roadway, and installing additional street lights and traffic signals.

Road Improvement to Benefit Businesses

In the meantime, business leaders agree that the improvement of the island’s road network is good for business, Not only will the upgrades carried out across sections of Kingston, St. Andrew, St. Catherine and other parishes reduce the commuter’s daily travel time to work, but they will also improve workers’ on the job productivity.

Additionally, transport operators such as taxi drivers and haulage contractors will benefit from increased daily trips and reduced driving time. The reduction in vehicle wear and tear is an added benefit of these road improvement works.

While the business leaders lauded the Government of Jamaica for undertaking these road construction projects at this time, they lamented the inconvenience caused.

Admittedly, as Metry Seaga, President of the Jamaica Manufacturers and Exporters’ Association (JMEA) notes, the scale of these road works is unprecedented. Nevertheless, road improvements are badly needed.

Meanwhile, President of the Small Business Association of Jamaica (SBAJ), Hugh Johnson, also welcomed the extensive road improvement projects. He agreed that road improvement is a necessary move by the GoJ to enable convenient commuting and improved traffic flow.

Traffic and Business Disruptions

But as the road construction continues simultaneously along the Mandela Highway, Six and Three Miles, Hagley Park, and Constant Spring Roads, commuters find it tougher to get around. Traffic snarls, dust, and smoke are the order of the day. Apparently, the careful crawl among heavy equipment, craters, and work crew is a daily necessity while the road works continue.

Not only do commuters lose precious hours in traffic, but businesses lose customers who for some reason or other cannot reach the establishment by their usual route. Small businesses, in particular, have seen their sales dwindle and their profits dive.

To compound matters, the roadworks also disrupted telephone, electricity, and water supply to affected businesses. Without these services, companies curtailed their operating hours and closed their doors.

Other hazards suffered by business operators in the work zones include flooding. As the road construction progressed with disruption to the drainage system, wastewater sometimes flooded the business establishments that are in the way. Other businesses that were blocked from their customers experienced a significant drop in their daily sales and profits.

Admittedly, the mitigation system to reduce the inconvenience to the motoring public and business operators is not working well. Consequently, both parties must endure traffic disruptions and dislocations for a while longer.

Should Government Pay Compensation?

In frustration at the heavy financial losses, business operators along the affected roadways are calling for compensation from the state. According to the Minister of Finance, Dr. Nigel Clarke the government will not settle with businesses as they have benefitted from the road construction initiative.

Clearly, the GoJ’s hard stance on the question of compensation does not sit well with some business owners and operators along Hagley Park and Constant Spring Roads who have considered taking legal action against the state. According to the SBAJ President, these business operators have experienced an estimated 80 – 85 percent drop in business activity as a result of the road improvement works in that area. “…we believe that with this level of work – we should be compensated,” he noted.

Road Improvement Status

The good news is that commuters and business operators do not have long to wait for much-needed relief. That said, it may take businesses a little longer to regain their customers who were displaced.

Currently, the Mandela Highway improvement project is 90% complete. Commuters are already enjoying a significantly improved traffic flow in the mornings and evenings. The Hagley Park road project is, also progressing satisfactorily and is on target to meet its June 2019 deadline. The Constant Spring road project is also progressing with little or no hiccups.

Meanwhile, Rowena Lawson, the NWA’s Senior Communications and Customer Services Officer, said in a November 2018 with the Jamaica Information Service that the agency has communication mechanisms to address any negative impacts on businesses and the commuting public.  She, however, reminded the public to pay attention to and obey the restrictions, warnings, advisories, and signals.

Peter Parchment is a highly trained professional with twelve (12) years senior executive experience in Policy Formulation, Monitoring & Evaluation, Strategic Planning in the Public Sector, and Social Research. A strategic thinker with strong problem-solving skills, people and resource management skills and the ability to think outside the box. Equipped with sound technical report writing and consultation facilitation skills and knowledgeable in the workings of Government and the Public Service. Experienced in working with rural and urban communities in a variety of locally and externally funded projects. He is also trained in Media and Communications and writes for online clients and publications. [email protected]

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Bankers Urged to Remain Alert to Electronic Fraud




Bankers, you must remain aware of the different tools that mitigate attempts at electronic fraud. That is essentially the message from Jerome Smalling, Vice President of the Jamaica Bankers Association (JBA). He was speaking at the JBA’s seminar on anti-fraud held recently at the Terra Nova Hotel in Kingston. His warning comes against the background of the increased attempts by criminal elements at defrauding financial services institutions.

100 Seminar Participants Hear About e-Fraud Technologies

Over 100 persons participated in the anti-fraud seminar that was also held in association with the Jamaica Institute of Financial Services (JIFS). International and local experts covered topics including fraud trends, artificial intelligence, data protection, and the use of closed-circuit television images in preventing fraud. Participants got first-hand data and information on the capabilities of existing technology in perpetrating fraud.

Dirk Harrison, the Director of Prosecutions at the Integrity Commission, presented statistics reported by Transparency International that demonstrate the harmful effects of corruption on the progress of governance mechanisms.

Stay Ahead of Fraudsters – Dirk Harrison

Integrity Commission Jamaica

Harrison argued for a solution-oriented rather than a problem-oriented strategy to deal with fraud. “We must stay ahead of the fraudsters, who may ultimately be responsible for programming the same technology and machines on which we are to depend,” he said. Further, the Integrity Commission Director of Prosecutions emphasised how important it is to engage with the youth. He encouraged the seminar participants to reach out to the schools, youth clubs, and the cadet force to reinforce the message of “right and wrong,” and the consequences of choices.

Interestingly, Damian Small, the Director of Corporate Security at Scotiabank, argued that institutions must use a combination of strategies to effectively manage e-fraud. Such an approach, he explained, must be transparent and trustworthy for clients. Strategies must also create awareness on the different social engineering tactics that criminals use to collect data. Furthermore, fraud detection and prevention should also be objectives from an organisational perspective.

Law Enforcement Challenges and Weaknesses

But a report appearing in the media in 2018 highlighted major weaknesses in law-enforcement and the justice system in fighting fraud. Reportedly, in 2017, as electronic fraud spread, banks, and other financial institutions lost $750 million.

Also, the Jamaica Constabulary Force (JCF) data showed that between 2013 and 2018 the police Fraud Squad received reports on almost 3,400 alleged cases of fraud.

Unfortunately, the rate at which fraudsters are convicted in the island’s courts lags the arrest rate. Reportedly, the courts found only 115 persons guilty out of the 1,029 persons held for different rackets.  Even then, more than 50 percent of the convicted persons over the five years received their conviction only in 2017. Also, according to police data, between 2015 and 2016, the police Fraud Squad secured only three convictions for fraud.


Fraud Officers Sometimes Redeployed

Even arrests fall behind reports. During the five years to 2018, the police Fraud Squad received almost 2,000 fraud reports, but only arrested a little over 900 persons. Distressingly, the situation concerning arrests and convictions for electronic fraud is much worse.

The bottom line is that the Duke Street-based police Fraud Squad is woefully understaffed and under-resourced. Up to 2018, the police Fraud Squad had fewer than a dozen investigators assigned to tackle fraud islandwide. Even with this shortfall, the police high command sometimes redeploys these officers to other duties including Zones of Special Operations (ZOSOs) and the State of Emergency (SOE) in Western Jamaica.

Official Ambivalence Regarding e-Fraud

Interestingly, Lloyd Parchment, an anti-fraud expert at the Jamaica Bankers’ Association, suggested that official ambivalence regarding the crime of fraud contributed to the low conviction rate experienced in Jamaica. For one thing, many see fraud, particularly that against institutions like banks, as a victim-less, white-collar crime.

Parchment suggested that:

 “The justice system does not recognise fraud as a very important area of criminal activity; they do not treat it seriously.”

He further explained that the banking sector has urged the justice system to acknowledge fraud as a serious criminal offence. He also noted that the money gained from it is also fuelling more serious illegal activity. According to the JBA anti-fraud expert, banking sector leaders received only a lukewarm response from the justice ministry when they attempted dialogue on the matter of fraud.

Banks Choose Not to Report Fraud

Consequently, financial industry leaders are not so confident that investigations into the reported e-fraud cases will yield serious results. Furthermore, banks, in some cases, chose not to report fraud incidents to the police Fraud Squad as they do not see the point of doing so. Also, the substantial backlog of reported fraud cases investigated by the Fraud Squad is another disincentive for institutional victims of electronic fraud to report or follow up on fraud matters.

Parchment offered an example of what happened in a recent fraud incident:

“We had a guy recently who reaped millions of dollars in fraudulent funds from the banking industry through debit card frauds, and when we managed to engineer his arrest, and he was brought to court, he immediately pleaded guilty. He was slapped with a $200,000 fine. He then went and stole the money from a customer’s account to pay the fine. It didn’t even come out of his pocket, and he is back working the next day and continues to work right now. I have the evidence of that because we have the camera system.”

Optimistic Outlook

Participants in the recently held JBA/JIFS anti-fraud seminar got an earful on the scale of electronic fraud and the kinds of technology criminals use. Not only did presenters offer their experiences on the various ways financial institutions suffer at the hands of unscrupulous fraudsters, but they also got useful tips on how to address this growing problem.

The existing law enforcement weaknesses and challenges in the justice system, however, threaten any success in addressing the e-fraud monster.

But as an adage goes, “where there is life, there is hope”.

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BOJ Clinches Deal with Bloomberg To Allow Local FX Traders on Platform




The Bank of Jamaica (BOJ) has clinched a deal with Bloomberg (USA) to access its advertising and trading platform.  BOJ’s arrangement with the international financial and media services provider will enable FX dealers to place Foreign Exchange rates on the Bloomberg platform in local and US currencies. Other dealers will then see them in real time.

The Deal with Bloomberg for B-Match Platform

John Robinson, BOJ’s Senior Deputy Governor announced the deal. He further disclosed that the deal with Bloomberg is an interim strategy. Dealers will, however, be able to use the Bloomberg trading platform come July 1, 2019. While this arrangement with Bloomberg is temporary, the BOJ expects to launch its own comprehensive trading platform in early 2020.

Robinson, in a media interview, further stated that Bloomberg is currently testing its B-Match model. That model enables dealers to trade among themselves. Bloomberg’s B-Match model is a data-driven service that offers information on clients so advertisers may present targeted opportunities. Bloomberg offers the same service to financial entities, such as FX dealers. They will be able to use specified information to match the FX needs of other Foreign Exchange dealers and entities.

Dealers Signing Up

Reportedly, traders and large buyers have already signed on to the Bloomberg platform. They have the advantage of seeing the rates at which other banks and institutions are selling the US dollars. These traders and buyers can see this information through a special terminal linked to the central clearinghouse system operated by the Bank of Jamaica. The BOJ official noted that it is necessary for dealers to have access to the Bloomberg terminal. This access will effectively allow them to work with their large clients who need foreign exchange from time to time.

As described by BOJ’s Deputy Governor Robinson using an example, “say JPS, which want to buy US$1 million, you can come onto the system and see who is selling and for what price, and you can buy through your dealer who will process the transaction using the Bloomberg B-Match model”.

However, in accordance with the deal with Bloomberg, the BOJ must pay a fee of US$2,000 per month for accessing the platform.

BOJ’s Comprehensive FX Trading Platform in the Works

Responding to a question on whether the BOJ would have a supervisory role in the Bloomberg B-Match system, Robinson indicated that the BOJ will coordinate rather than supervise the use of that platform. Each dealer will have his or her own terminal. The BOJ will, however, “shepherd them into sharing all this information”, Robinson explained.

Also, the BOJ’s comprehensive FX platform is still a work in progress. However, it will, in addition to the Bloomberg B-Match system, allow foreign exchange buyers to register and see the FX rates offered by each bank. FX buyers will then get the best price.

Bloomberg, a major provider of round the clock financial information and news, offers a professional analysis of financial data and news, as well as the analytical tools that financial professionals can use. The Bloomberg Terminal is one of its key income streams that is an integrated platform for streaming price data, trading information, news, and financial analysis to more than 300,000 customers globally.

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Sagicor Investments Jamaica Limited to Raise $4 Billion Through IPO




Sagicor Financial

Another IPO is on the horizon. This time, it is the Sagicor Investments Jamaica Limited that is seeking to raise around $4 billion through an initial public offering. Sagicor Investments is offering shares in the Sagicor Select Funds Limited, which is a fund pool consisting of financial stocks that are listed on the Jamaica Stock Exchange. The public offer will open on July 3 and close on July 17, 2019.

Sagicor Investments Jamaica Limited Offers 2.5 billion Stocks

Investors can purchase a total of 2.5 billion stock units at a price of $1.00 per unit. Also, they have the choice to purchase from an additional pool of 1.5 billion stock units should Sagicor Investments Limited choose to upsize the IPO.

The Sagicor IPO consists of shares in two classes – Class A shares offered to Sagicor Investment Limited clients and Class B shares offered to members of the public who subscribe to this initial public offer. The prospectus from Sagicor Investments Limited stated that the company was structured as a passive equity fund with separate classes of shares listed as a Financial Select Fund.

JSE Financial Index Grows 18%

Presently, the Financial Select Fund has invested $1.1 billion in 11 of the 23 financial stocks that constitute the Jamaica Stock Exchange Financial Index. The funds raised from this IPO will go toward acquiring more financial stocks. Sagicor Investments Limited aims to match the financial securities that constitute the JSE Financial Index as closely as possible.

With the Financial Select Fund, investors can track the Index’s value, the net asset value (NAV) of the Fund, and its market value daily. Such information is published on the Jamaica Stock Exchange website and will be published by the Sagicor Investment Jamaica Limited.

On March 1, 2019, the Jamaica Stock Exchange (JSE) launched the JSE Financial Index. This Index consists of insurance companies, financial and microfinancing companies that are trading on the main and junior markets. On Thursday, June 20, 2019, the JSE Financial Index closed at 118 points, which represents an 18.25 percent growth since it was debuted.

While Sagicor leads the unit trust market with its Sigma branded unit trust packages, its Financial Select Fund focuses on a specific sector (financial). So, investors have the choice of specialising in a sector without suffering the accompanying concentration risk.

Why Buy into an IPO?

Investing in shares offered through an initial public offering is like entering an opportunity on the ground floor. Through this strategy, the investor benefits from significant gains once the shares hit the stock exchange. Once the IPO shares are listed on the stock exchange, it’s all systems go as the normal trading takes effect.

A quick look at the performance of some of the investment opportunities offered through IPOs from 2018 to date shows strong gains in price since they were offered to investors.

Look at this table below:

Table 1: Performance of Companies Offered through IPOs from 2018 to Date

Company Symbol Date of IPO IPO Price Closing Price June 20, 2019 % Change
Elite Diagnostic ELITE Feb. 2018 2.00 3.95 98%
Everything Fresh Limited EFRESH May 2018 2.50 1.49 -40%
Fontana Limited FTNA Dec. 2018 1.88 4.43 136%
iCreate Limited Ordinary Shares iCreate Jan / Feb, 2019 1.01 0.8 -21%
Indies Pharma Ordinary Shares INDIES July 2018 1.50 3.21 114%
Mayberry Jamaica Equities MJE July 2018 7.56 11.31 50%
Sygnus Credit Investments Limited JMD Ordinary Shares SCIJMD May 2018 13.72 13.39 -2%
Wigton Windfarm WIG April 2019 0.50 0.84 68%


So, as you consider whether to buy into this latest IPO, read the prospectus and talk with your broker or financial advisor.


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