Competing in the Capital Markets Arena

Ramcharan Kalicharan CFA

Date: 13th November 2007 – CAIB Conference

The Capital Markets

Market for long term funds where securities are traded

Primary market

Secondary market

Equity

Debt

Date: 13th November 2007 – CAIB Conference

Capital Market Services

• Underwriting

Equity

Debt

• Secondary trading/brokerage services

• Investment Management

Mutual funds

Portfolio management

Date: 13th November 2007 – CAIB Conference

Underwriter

Individual & Corporate Investors

Government & State Enterprises

Corporations

Marketing & Distribution

New Debt Issues Debt Refinancing Equity Issues

Underwriting & ArrangingStructuring

Investment Manager

Institutional Investor

Broker/Dealer

PrimaryMarket

SecondaryMarket

Overview of the Capital Markets

Mutual Funds

Date: 13th November 2007 – CAIB Conference

Caribbean Capital Markets

• Bond market dominated by government issues

• Few rated issues

• Few corporate issues

• Multinationals dominate large issue market

• Organized secondary equity markets but not bond market

• Growing mutual fund market

Trend: Growth in capital markets will be driven by demand for securities.

Date: 13th November 2007 – CAIB Conference

Benefits of Developed Capital Market

• Mobilize domestic savings

• Permit raising of long term capital at lower costs

• Efficient and competitive financial system

• Permit individual participation through issue of securities

Government and regulatory push to develop capital markets

Date: 13th November 2007 – CAIB Conference

Why Compete in the Capital Market?

• A growing market with large revenue potential

• Diversify income base

• Defensive strategy

• Synergies with other lines of business

• Balance sheet management

• Competitive advantage:

Existing relationships

Risk assessment and pricing

Strong balance sheet to support underwriting

Date: 13th November 2007 – CAIB Conference

Competing Effectively

• Board decision to enter

• Identify and recommend areas to focus on

• Assign separate resources to compete in this market

• Implement risk management framework

• Introduce lateral integrating mechanisms

• Partnering to share risks and acquire expertise

Date: 13th November 2007 – CAIB Conference

Thank You