Investors lose penchant for global market
Investors in Barbados and the Caribbean have apparently lost their appetite for international investments.
But a senior official of a regional firm with operations in Barbados says they are missing out on opportunities to make good money following the rebound of some external financial markets.
Michael Anderson, the man in charge of Royal Fidelity’s operations here and in the Bahamas, said investors had given a “bit disappointing” response to a series of funds introduced in 2010 and last year.
He and other Royal Fidelity officials including its Barbados Managing Director, Archie Cuke, are hoping for a better outcome now that an additional two investment funds in the TIGRS series (Total Index Linked Global Return Securities) have been listed for public trading on the Barbados Stock Exchange.
The two officials spoke this afternoon at a Press conference where details on the new listings were given.
Asked what type of appetite investors here were showing for the previously marketed investment funds in the TIGRS series, Anderson said: “To be honest it’s been a bit disappointing. People look at equity markets and even international equity markets and if you were back at the end of 2007 and you said ‘well what’s going to happen in 2008?’ most people would have said to you ‘well we anticipate that because the market has gone up over the last seven years we can anticipate it going up in 2008’.
“What happened in 2008 and 2009 is that the markets crashed so if people look at this and go ‘I am uncertain about putting money into international equities’, and you see your own equity market go and you wonder ‘what’s going to happen in our own market’ and you kind of take this uncertainty from your own market and apply it to other markets and assume it’s not something you are comfortable investing in.
“So I think generally speaking in the Caribbean markets there is a reluctance to put too much of your money into equities that you don’t have any certainty. So people much prefer debt instruments, putting money into the banks where they get a fixed rate of interest, they know what they are going to get back at the end. This uncertainty about equities is what put people off,” he added.
Cuke said the primary aim for introducing the new investment options “is to provide one way for local investors to use Barbados dollars to gain US dollar international investment exposure, to diversify their portfolio, to increase their potential for returns, and to simultaneously protect their initial investment”. (SC)