Home' Trinidad and Tobago Guardian : July 30th 2015 Contents BG6 NEWS
BUSINESS GUARDIAN www.guardian.co.tt JULY 30 • 2015
Scotia Investments T&T (SITT)
has taken a strategic decision
to focus on its asset manage-
ment offering and is conse-
quently winding down its retail
In a reply to questions from the Business
Guardian on a newspaper advertisement it ran
three weeks ago, Scotiabank said that the clo-
sure of its local brokerage division was in line
with the group s efforts to continuously review
its operations to ensure that they are structured
in the right way to meet the needs of its cus-
They said clients have been individually
contacted and are being transitioned to appro-
priate alternate investment options and chan-
nels suited to their needs.
"We continue to offer a portfolio of eight
mutual funds for varying investor needs. Our
Global, Canadian, Caribbean and US funds
were joined in late 2013 by the introduction
of our TT-dollar denominated mutual funds,
rounding out our portfolio of mutual funds
offered in the local market. These funds are
some of the best offered in the region and we
see this area as having the greatest growth
potential," the statement to the Business
SITT also said the impact on staff has been
minimal and they are still in the process of
transition, through which the company is
focused on supporting employees and staying
true to its principles of treating employees,
fairly, equitably and with respect.
"As the leading bank in the Caribbean region,
Scotiabank is focused on continuing to grow
our presence in retail, corporate and commer-
cial, insurance and wealth management," they
said in the statement.
According to its newspaper ad, the SITT
clients were notified that the brokerage division
of SITT would cease operations effective July
"Our first priority has always been, and will
continue to be, seeking the best interest of
our clients," according to the advertisement.
Scotiabank in the ad also advised clients to
contact Scotiabank offices to ensure there was
no disruption in their ability to conduct trans-
actions in securities such as mutual funds,
stocks/equities or debt securities/bonds.
In a statement last November, Scotiabank
in Canada said it would close 35 of its 200
branches in the Caribbean to reduce structural
costs and duplication of services and that
1,500 jobs would be affected.
Of the Caribbean, Scotiabank said then:
"Due to the prolonged economic recovery and
continued uncertain outlook, these additional
amounts bring the net carrying value in line
with the expected net recoverable value."
The bank said it had started restructuring
initiatives "in order to improve the speed and
quality of service it provides its customers, to
reduce costs in a sustainable manner, and to
achieve greater operational efficiencies.
"The bank intends to record a restructuring
provision of approximately US$148 million in
the fourth quarter. The majority of the restruc-
turing provision relates to employee severance
charges in the bank s Canadian banking and
international banking divisions and will affect
people at all levels of the organisation."
Small capital market
Brent Salvary, director of fund management,
KSBM, told the Business Guardian on Monday
that he could not provide explanations for the
specific decisions of companies including Sco-
tiabank, but said that lower trading volume
on the T&T Stock Exchange has not been
encouraging for local brokerage houses.
"The amount of business has been dwindling
so companies may ask themselves if this is
worth the headache to continue. Year on year,
if you compare the first six months of last
year and compare it to the first six months
of this year, volumes are down 25 per cent.
And this is just one period that you are looking
at. There is a clear trend that volumes have
been going lower and lower in the market."
Salvary s explanation: "There is simply not
much interest in the local market.
"A great deal of T&T investors are actually
investing overseas where it is much more liquid
and opportunities are much wider. The oppor-
tunities are endless in bigger countries com-
pared to this country which is smaller. It is
just five or six companies that trade regularly
on this market.
"There are not that many more independent
brokers left and I doubt there are that much
more incentives to remain in the business.
But, then again, their business goes hand in
hand with some of the other business that
they have. If one more drops out, it is not
going to make much of a difference but I do
not really foresee many more brokers dropping
He spoke about institutional companies
versus independent brokers.
"You have RBC which owns WISE and its
risk management division so there is a synergy
between those companies and the brokerage
divisions they form but the independent bro-
kers more or less have their own clientele."
Salvary said the local capital market needs
more companies to be listed.
"Phoenix Park Gas Processors IPO is sup-
posed to come on stream but we need more
companies. The institutional investors are not
selling because it is already so low and you
get a pretty good dividend from some of these
companies so there is no incentive for them
to sell. And then you have buyers who are
looking outside of T&T for opportunities," he
closes brokerage operations
... local firms face share slowdown
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