Home' Trinidad and Tobago Guardian : January 23rd 2014 Contents BG10 | FEEDBACK
BUSINESS GUARDIAN www.guardian.co.tt JANUARY 2014 • WEEK FOUR
Recently, a former Clico policyholder now
unitholder asked me: "When is the Clico
Investment Fund (CIF) likely to pay dividends
and why is this important?"
My response to the second part of his
question was that the payment of dividends
is important because it provides an investor
with the most efficient, effective and eco-
nomical way to take profits periodically with-
out having to liquidate his/her investment
in a particular stock or security, particularly
if existing market conditions do not warrant
With respect to the first part of his ques-
tion, according to the CIF prospectus, units
are expected to pay dividends twice annually
via what is referred to as "distributions." Dis-
tributions are paid on February 21 and August
21 of each year and must be paid only to
those unitholders who are on register as at
the "record date."
The record date is defined as 15 business
days prior to the "distribution date." On this
occasion, the next available distribution date
is February 21. Since there are no public hol-
idays between now and this particular date,
the record date will have to be next week
Friday, January 31, 2014.
In accordance with Rule 603 of the T&T
Stock Exchange (TTSE), the CIF, being a
publicly listed company, has to notify the
TTSE within the seven business days prior
to the record date of its decision to pay a
dividend. Therefore, the CIF board of direc-
tors, technically, has until the January 30 to
meet this regulatory requirement.
However, it should be noted that the rules
also state that the ex-dividend date (or the
date on which a stock trades minus its div-
idend) is two business days prior the record
date, which, in this case, works out to be
next week Wednesday, January 29, 2014.
What does all this mean?
This simply means that any unitholder
who sells their units on or before January 29
will ostensibly be giving away their dividends
as the buyer and not the seller would be enti-
tled to the dividend payment.
It is interesting to note that on the January
23 last year, CIF declared a dividend of $0.56
payable on February 21, 2013. This payment,
when added to the final dividend of $0.32
paid in August, brought the total dividends
paid for the year 2013 to $0.88, representing
a yield of 3.52 per cent to its conversion price
of $25.00 and a yield of 4.09 per cent to its
average market price of $21.53.
It is also noteworthy that at its current
market price of $22.50, the CIF is still trading
at a significant discount of $2.50 or ten per
cent to its conversion price and $2.92 or 16
per cent to its quoted net asset value (NAV)
of $26.82 on Tuesday.
It is no secret that I have always argued
that during the initial months of trading and,
to some extent even up to today, individual
unitholders, who some have referred to as
"unsophisticated", were literally "selling them-
selves short," with the main beneficiaries of
their loss being in the main institutional and
Several reasons, including the need by
some unitholders/former Clico policyholders
to obtain cash, have been advanced to explain
this phenomenon. However, I remain per-
suaded that this has more to do with the
dearth of timely and incisive technical and
financial analysis of this, particular security,
along with the appropriate guidance for these
investors by the stockbroking community.
I was therefore very intrigued to note a
recent publication (in another newspaper) in
which a well-known brokerage firm has
included the CIF units as one of its top five
stock picks for 2014.
It described the CIF as "(almost) a pure
dividend play for the short-term investor"
and indicated that "since its debut in January
2013, the CIF has been one of the most liquid
stocks on the exchange offering a dividend
yield of 3.96 per cent."
In fact, it demonstrated that the NAV of
the CIF was significantly above its trading
price and argued that "investors holding CIF
units are gaining indirect RBL exposure at a
discount relative to RBL s market price."
Moreover, the firm concluded that for div-
idend yield and (longer-term) capital appre-
ciation, it has recommended a BUY on the
Minority shareholders rights advocate
There has been interest, but no responses yet to the
Telecommunication Authority of T&T s (TATT) request
for proposals (RFPs) for Enhanced Mobile Data Services.
The front page of the Business Guardian last week,
"RFP for third mobile provider: TATT gets 6 responses"
and the associated article Page BG4 by the headline,
"TATT gets six responses to RFP for third telecom
player," may have misled readers to believe that TATT
had already received bid responses to the RFP for
enhanced data services.
To date, six prospective bidders have purchased bid
packages. The bid period has been extended to give
interested parties more time to complete their bid
responses with a closing date of March 31, 2014.
No bid responses have yet been received.
The primary objective of the RFP process is to make
spectrum (700 MHz) available both to existing providers
and any other party who may be interested in entering
the market (popularly called a third mobile operator),
in order to provide enhanced data services.
Consumers need for higher broadband speeds and
for it to be more widespread and affordable throughout
T&T guided TATT to take the decision to make spec-
trum in the 700 MHz band available to providers in
order to facilitate the provision of enhanced data serv-
ices, and included the opportunity to further open the
mobile market to increased competition.
Prime frequency bands, like the 700 MHz band,
will enable either new or incumbent mobile operators
to utilise state-of-the-art technologies in the deploy-
ment of new networks and services.
The authority envisages technologies, such as long
term evolution (LTE) in the 700 MHz spectrum, to
be utilised, thus opening the door for true mobile
broadband speeds and enhanced services to the public.
Sherry Mc Millan
Executive officer communications
Consumer and information services
Telecommunications Authority of T&T
It is very disappointing, surprising and actually bor-
dering on insulting that the management of the Unit
Trust Corporation has decided to pay the princely sum
of 0.01 (1 cent) dividend payment for the second half
of 2013, on the First Unit scheme.
This was paid on the January 15, 2014. The UTC s
performance is tied to the performance of the stock
market and overall, the performance of the stock market
for 2013 was good (case in point, the tremendous per-
formance of First Citizens, which I m quite sure that
UTC has invested in).
If one were to look at the previous years payments,
one could easily see how poorly this last dividend com-
pares to the others---values shown are in cents---for
example, in July 2009, 45 cents/share was the dividend
pay-out compared with one cent/share paid last week.
If the trend continues, the shareholders will have to
pay UTC a dividend rather than the other way around
As far as I know, no explanation has been given by
the UTC, further adding insult to injury!
Disappointed UTC shareholder
Allow me to make it clear at the outset
that I shall never support or condone any
act, in any quarter, which is in contravention
of the constitutionally-enacted laws of this
country or, indeed, of any country.
Now that the "fallout" consequent on the
recent denial of entry to a group of Jamaicans
to T&T seems to have subsided (at least tem-
porarily), I feel incumbent to comment there-
on. However, I must first declare my partiality
being an unadulterated "integrationist" as
well as one with Jamaican "connections"
which I treasure.
My considered view is that our authorities
did not handle this matter with the tact,
diplomacy and perhaps even the understand-
ing which the situation demanded. My views
are dictated by the following considerations:
Firstly, and on a personal note, I am influ-
enced by the fact that the eldest of my five
sisters was privileged to have taken her first
degree at the UWI Mona campus and, having
returned to this country with glowing tribute
at the hospitality meted out to her during
her three-year stay in Jamaica, it was not
surprising, therefore, that when her turn
arrived, the last of the girls chose to attend
the Mona campus as well.
As fate would have it, it was at Mona cam-
pus that she met and got married to a goodly
gentleman whose godmother was none other
than the late Lady Bustamante, a family
friend. Many of my relatives and acquain-
tances, like so many other T&T nationals,
have also attended the Mona campus and
have met with similar experiences.
Secondly, Jamaicans have traditionally
invariably been at the forefront in defence
of the rights of immigrant and other minority
groups, especially the rights of Caribbean
peoples, in countries such as the United
Kingdom, the United States and Canada, for
example. This no doubt has had its origin in
the ethos of the Jamaican freedom fighter,
Thirdly, the commitment of Jamaica to
the regional economic l (note: "economic")
movement cannot be called into question.
Indeed, this writer is aware that the JLP gov-
ernment through the then Minister of
Finance, Edward Seaga, was the first among
the proposed Caribbean member territories
to declare its unstinting support for the
Caribbean Development Bank.
Fourthly, and most unfortunately for
Jamaica, T&T must not be faulted for expe-
riencing a "hefty" positive trade balance in
its favour in trade with Jamaica.
Indeed, if anything, Jamaican manufac-
turers and importers must be castigated for
failing to so fashion their activities as to
enable them to penetrate the undoubted
opportunities for extra-Caricom import sub-
stitution into this highly import-oriented
country. They would be well advised "to get
up and get" and not to use the unfavourable
trade balance as a panacea for justifying an
assumed moral obligation on the part of T&T
to accept the uncontrolled entry of Jamaicans
into T&T at this time.
Errol OC Cupid
Be careful with your CIF dividends
Jamaica's trade imbalance with T&T no excuse for illegal entry
yet to TATT RFP
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