Ashford W. Meikle, Business Reporter

Pan Caribbean's Donovan Perkins addresses shareholders at the company's annual general meeting, Thursday, Terra Nova Hotel, St. Andrew.

With almost $7 billion in assets up to the end of December, PanCaribbean Financial Services (PCFS) is the country's largest unit trust manager, with a 41 per cent market share, PCFS President, Donovan Perkins, told shareholders at the company's annual general meeting yesterday.

"Last year, Sigma Optima, our equity fund beat the All Jamaica Index by over 656 basis points [while] Sigma Solution, in addition to beating the competition, beat both inflation and T-Bill yields," said Perkins.

Unit trust offered

Through its subsidiary Pan-Caribbean Asset Management (PCAM), PCFS offers three unit trusts under the Sigma marquee, which are specifically targeted to different investors - Sigma Optima, Sigma Solution and Sigma Liberty.

While the overall decline of the Jamaica Stock Exchange (JSE) was 3.7 per cent last year, the All Jamaica Index rose by just over two per cent, Sigma Optima - which invests primarily in a variety of listed equities consisting primarily of blue chip Jamaican companies - had a 8.7 per cent return.

Sigma Solution invests primarily in the fixed market and achieved a 12.6 per cent return last year compared to the 12.3 per cent offered on the 180-day Treasury Bill. Inflation for the calendar year rounded out at 5.8 per cent.

The company recently introduced Sigma Liberty, which comprises of JMD and USD debt instruments issued by the Government of Jamaica.

Perkins also announced that PCAM would be a sales agent for Canadian mutual-fund managers, CI funds, joining, Mayberry Investments, Dehring, Bunting and Golding, RBTT and First Global Financial Services.

"We will have the suite of 40 funds but we have chosen to participate in eight as opposed to throwing down a menu of 40 funds and say spin the wheel and chose one. We want to offer products that our customers are interested in [and] understand."

Cannibalisation

In response to a question posed by Sunday Business, vice-president and general manager of PCAM, Steven Gooden, said he did not expect a cannibalisation of PanCaribbean's products - particularly its Sigma Liberty unit trust - by the product offering of the Canadian mutual fund.

"The CI funds that we will be offering are primarily growth funds - they are equities based - while the Sigma Liberty is an income type fund, so I don't expect significant cannibalisation," remarked Gooden.

Perkins told shareholders that PanCaribbean was instrumental in lobbying the Financial Services Commission to allow additional unit trusts in the market.

"We are happy that PanCaribbean successfully led the lobby for the removal of the moratorium on unit trusts because we believe it is good for the market, great for investors, creates new choices and fundamentally supports the philosophy of a level playing field in our financial markets."

Overall performance

Reviewing the other operations of the company, Perkins noted that while there are areas for improvement, he was pleased with the overall performance of PCFS, especially judged against its peers.

For example, of the 13 primary dealers in Jamaica underwriting new government debt issues, Pan-Caribbean increased its share to 14 per cent, up one point, to retain the number-one spot with an underwriting volume of $15.4 billion.

Among the 11 brokers trading on the JSE, the company, with a traded volume of $2.8 billion, controls 14 per cent of the market, second behind NCB Capital Markets.

However, in its cambio operations, the company has lost some ground.

"There are 14 authorised foreign-exchange dealers and scores of cambios all across Jamaica. Last year, we had a nine per cent market share and ranked fourth in foreign exchange," said Perkins.

"We remain in fourth place, but our market share has slipped to seven per cent, so we have some work to do in 2007."

Comparing PCFS to its peers in the banking and non-banking financial sector, Perkins noted that PCFS was ahead in its capital-to-assets ratio (16 per cent) and efficiency ratio (34 per cent).

ashford.meikle@gleanerjm.com