11172016 business

THURSDAY, NOVEMBER 17, 2016

business@tribunemedia.net

$4.10

Govt targets extra $40-$80m revenue from enforcement

By NATARIO McKENZIE

Creates 32-person joint Revenue/ Customs team

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Government is targeting an extra $40-$80 million in additional revenue over the next six to 12 months as it pursues an enhanced enforcement/compliance strategy, a Cabinet minister said yesterday.

Michael Halkitis, minister of state for finance, told the Bahamas Institute of Chartered Accountants (BICA) Accountant’s Week conference that the Christie administration has launched a multi-year tax compliance initiative to reduce leakages.

15,000 properties not properly assigned for tax Large importer audits, container exams on tap “After a careful diagnostic review of the existing revenue compliance efforts See pg b3

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

Between 40,00050,000 Bahamians may own stake Matthew ‘threw monkey wrench’ into timing

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None of 3,000 minority shareholders bought in

Bank of the Bahamas’ 3,000 minority shareholders have demonstrated their “complete lack of confidence” in the bank after forcing the Government to pick up its “entire” $40 million rights offering.

The troubled BISX-listed institution, unveiling its results for the three months to endSeptember 2016 yesterday, confirmed what most observers had long suspected - that not a single minority investor subscribed for their See pg b4

Investor: ‘Total lack of confidence’ in institution Troubled bank’s Q1 losses increase 10-fold Deposit base contracts by $119m in three months

Mortgage Relief: 16% of targeted borrowers qualify

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

‘Formalising’ HoldingCo details with key investors

Between 40,00050,000 Bahamians could own a stake in the second mobile operator’s majority shareholder, with efforts to buy out the Government now glimpsing “light at the end of the tunnel”.

Gowon Bowe, adviser to the Christie administration and its Cellular See pg b5

$4.14

‘Farcical’: Govt picks up ‘entire’ $40m BOB issue

‘Light at end of tunnel’ on Govt mobile buyout

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

$4.14

Michael Halkitis

Some 16 per cent of troubled borrowers targeted by the Government’s revised Mortgage Relief Plan have been enrolled in the scheme, a Cabinet Minister yesterday saying it had already been “more successful” than the first version.

Michael Halkitis, minister of state for See pg b5

Minister: Scheme ‘more successful’ than original Around 190 borrowers enrolled to-date Some 64%, or 1,160 or 1,826 eligibles, contacted

$4.14 Consumer chief set to investigate BPL bill spike Utility moves to correct October ‘under-billing’ Bahamians see ‘doubling’, ‘tripling’ of bills Sums owed for October added to November bills

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Consumer Protection Commission’s chairman last night promised to investigate the “double” and “triple” energy bill increases many consumers are now experiencing as a result of Bahamas Power & Light’s (BPL) post-Matthew billing practices.

Jerome Gomez told Tribune Business that while “no complaint has been lodged with us”, he would contact the utility monopoly over its efforts to cure “under-billing” for the See pg b4

PAGE 2, Thursday, November 17, 2016

THE TRIBUNE

The colour code for viewing print Have you always been happy with the colour of your print material? Have clients ever asked why their marketing material does not contain the colour they requested?

If they did, their first reaction is normally to point the finger at the designer. This is understandable, but they have not been told that different paper stocks produce different tones from the same colour of ink. In some respects, graphic designers usually take on the role of teachers to give clients an understanding of important points like this.

Colour control is important, even when colour ink is not used, due to the fact that black ink can seem to contain colour when printed on colour paper or card.

The grade, grain and colour of the paper used affect the colour of the ink.

The light source can also dramatically affect the colour tone. This reminds me of how supermarkets distort the colour of their meat displays with different lighting, giving it a fresher appearance.

If you choose a colour from a swatch book and ask 100 printers to print it, you may well receive 100 different tones. If you do not have a swatch book, and are thinking of picking one up, here are some useful pointers before you purchase pantone colour guides.

Always ask your printer for a proof before signingoff on a print job. Make it a hard copy (or digital proof), too, which should usually be included in the price of the project. A PDF proof will not show how colours print.

Paper plays a vital role in colour reproduction because its optical and surface properties impact how light is reflected and, therefore, how colour and tonal values appear when printed. It it is therefore necessary to know these factors and understand how paper can play a role in how colours are perceived by the human eye.

Paper Coating: The type of paper on which colour is reproduced has a huge impact on the way it appears. The same colour, when printed on smooth, coated paper, is more reflective because light is not as diffused as it

would be by the texture of a coarser uncoated paper.

Moreover, gloss coatings enable more light to be reflected, which is attributed to making colours ‘pop’.

This is especially helpful in making photos appear more colourful and saturated. Even different grades of coating (Cast Coated, Gloss, Silk, Dull, Matte) will affect how the same colour is perceived.

Paper Brightness and Whiteness: ‘White’ paper comes in various shades of whitefrom very bright cool white to softer, warmer pale ivory white. The brightness of a piece of paper is typically expressed on a scale of 1 to 100, with 100 being the brightest.

Brightness is the volume of light reflected off the sheet of paper. General multi-purpose bond paper has paper brightness in the 80s. Photo papers are normally in the mid to high 90s.

Paper whiteness refers to the shade of the sheet of paper. Therefore, the three major shades of paper are balanced white, warm white and blue white. Most coated papers, and many uncoated papers, are currently manufactured to a blue white shade because to the human eye, the blue white shade appears to be brighter.

If you use three sheets with different whiteness, the sheet with the blue white shade will appear to be the brightest, even though all three sheets have the same brightness rating.

The brighter and whiter the paper, the more it reflects light, enabling the printed piece to achieve higher contrast as well as a wider gamut of colour.

The less bright and less white a paper is, the lower its ability to reflect light and, therefore, the narrower the amount of contrast and colour that is possible in the printed product.

This is sometimes a desirable effect, as documents with more text and fewer photos would be better served by a paper that is more subdued, allowing the readers’ eyes to focus on blocks of type without being distracted by paper glare.

Printing on coloured paper, or paper that is not white, will adversely affect

The Art of Graphix by deidre m bastian

the colours. For example, a black ink can appear to contain colour (colour cast) when printed on a colour substrate.

Viewing Light Although not technically a paper issue, the viewing condition will also greatly affect how colours are perceived. Although the human eye makes certain colour compensation, viewing the same printed piece under bright daylight, shaded daylight, fluorescent lamps or incandescent ‘white’ lamps will yield different results (also known as ‘metameric failure’).

Bear in mind that if you are looking at a proof or comparing the proof to a printed piece, you have to view it under the intended viewing conditions. Until we meet again, fill your life with memories as opposed to regrets. Enjoy life and stay on top of your game.

• NB: The columnist welcomes feedback at deedee21bastian@gmail.com ABOUT THE COLUMNIST: Deidre Marie Bastian is a professionally trained graphic designer/marketing co-ordinator with qualifications of M.Sc., B.Sc., A.Sc. She has trained at institutions such as: Miami Lakes Technical Centre, Success Training College, College of the Bahamas, Nova South Eastern University, Learning Tree International, Langevine International and Synergy Bahamas.

CARDI’s team visited BAMSI’s North Andros campus. From left are Mechele Singh, livestock specialist, Caribbean Agricultural Research & Development Institute (CARDI); executive director of CARDI, Barton Clarke; executive director of BAMSI, Dr Raveenia Roberts-Hanna; director of academic affairs, Dr Joseph Lindsay, BAMSI; and senior agriculturalist, Ayrett Lightbourne, BAMSI.

BAMSI teams with Caribbean institute The Bahamas Agriculture and Marine Science Institute (BAMSI) will serve as the home-base for two agriculture specialists on loan from the Caribbean Agricultural Research & Development Institute (CARDI), after this nation joined that agency.

The initiative, driven by BAMSI president Godfrey Eneas, who also serves as the Bahamas’ ambassador to the United Nation’s Food and Agriculture Organisation (FAO), and CARDI’s executive director Barton Clarke, will see the two scientists resident in the Bahamas and attached to BAMSI, with one based in North Andros and the other in Nassau.

Mr Eneas said the CAR-

DI representatives will assist the Bahamas in research and development of the agricultural sector, and help to further develop the economy by capacity building. The researchers are expected to be in the Bahamas by the first of December.

Mr Clarke, along with a team of technical experts, visited the country last week. They met minister of agriculture, V Alfred Gray; Ministry of Agriculture permanent secretary, Rena Glinton, and BAMSI general manager, Alassis Braynen.

The group also visited BAMSI’s North Andros facilities, where they met executive director, Dr Raveenia Roberts-Hanna,

toured the tutorial and commercial farms and green house, and conducted a training session at the school.

Mr Clarke highlighted the expertise, research capabilities and technical support CARDI is able to share with BAMSI and the Bahamas. He pointed out that when the country’s industry came under attack from diseases such as black sigatoka, which impacts bananas, and citrus greening, CARDI sent scientists to examine the problem and recommend management plans.

“These are examples of services CARDI can and will offer to BAMSI,” he said.

THE TRIBUNE

Thursday, November 17, 2016, PAGE 3

NHI manager blasts sector’s ‘false division’

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The National Health Insurance (NHI) project manager yesterday asserted that the primary care phase’s rollout by early 2017 remains “reasonable”, while dismissing the “false division” between public and private health care providers in the Bahamas.

Dr Delon Brennen said both private and public health facilities had failed inspections to determine whether they were offering an acceptable standard of care.

Dr Brennen, who was part of an NHI panel discussion at the Bahamas Institute of Chartered Accountants (BICA) Accountants Week conference, said the standard of healthcare needed to be raised across the entire industry, as both public and private healthcare facilities have been found “wanting” in their NHI readiness.

Some private health facilities ‘found wanting’ Insurers concerned on regulations absence Warnings also raised on IT system “I think that we often have this connotation in the Bahamas that because the public sector is not ready, that the private sector is,” Dr Brennen said.

“We have gone into facilities, private health facilities, that are not ready to deliver a primary care service, even at the basic level that we have in place now.

“We need to raise the standard of care across the entire health sector. We need to dismiss what is a false divi-

Just 30% of workers covered by pensions

By NATARIO MCKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Just 30 per cent of the Bahamian workforce is covered by employer-sponsored pension plans, the Central Bank’s governor said yesterday, acknowledging that the relative lack of diversified investment opportunities in the Bahamas presented challenges.

John Rolle, speaking as a panelist at the Bahamas Institute of Chartered Accountants (BICA) Accountants’ Week conference, said: “Close to about 50,000 persons, by our estimates, participate in plans, so it works out to about 30 per cent of the workforce.”

He added: “There are challenges in terms of how portfolios are invested because basically government registered stocks (BGRS) are the largest investment opportunity.

“Then there are bank deposits and a small amount of equity, so the diversification of plans and the opportunities around diversification are very important. I think that there are more diversification options that are cur-

Low participation rate a ‘ticking timebomb’ rently not being exploited.”

Mr Rolle said the Central Bank estimates that Bahamian pension assets are worth roughly $1.2 billion, equivalent to 15 per cent of gross domestic product (GDP).

Larry Gibson, vice-president of Colonial Pension Services and a long-time advocate of legislation to protect the private pension fund industry, referred to the issue as a “ticking timebomb”.

He added that pension plan participation rates in the Bahamas are too low, and mandatory pension legislation is needed.

“Even legislation in and of itself is not the answer.

Not only do we have to have legislation that is mandatory to create the savings, we need to do a lot of education in terms of additional voluntary contributions,” Mr Gibson added.

Fidelity unveils 12% net income growth Fidelity Bank (Bahamas) yesterday unveiled a 12 per cent year-overyear net income increase to $15.75 million for the first nine months of 2016.

TheBISX-listed institution, in a statement, said that on a trailing 12-month (TTM) basis net income was $23.359 million or up 8 per cent compared to fiscal 2015.

Anwer J. Sunderji, its chief executive, said the bank’s loan book had grown by about $20 million in the first nine months to $380.241 million.

The loan book growth was funded by an expansion in deposits, fuelling a 7 per cent increase in interest expense.

Loan book expands $20m in first nine months Loan loss provisions also rose from $4.832 million to $5.42 million.

Mr. Sunderji said that Hurricane Matthew had not impacted the bank’s number, but a significant percentage of its staff had suffered damage to their homes.

Fidelity Bank (Bahamas) provided subsidised loans to its affected employees to assist in the repairs of homes, and the replacement of household goods and vehicles.

Govt targets extra $40-$80m revenue from enforcement From pg B1 and framework, the Government has launched a targeted multi-year tax and compliance initiative with the ultimate objective of reducing leakages,” he said.

“A few weeks ago, a joint 32-man revenue task force, consisting of the Department of Inland Revenue and Customs, was established to focus on four streams using data and other methodologies that will bring our revenue administration processes, tools and techniques more in line with international best practices.”

Mr Halkitis added enforcement efforts will initially focus on real property tax.

“There are some 15,000 properties which have been identified as having not been valued, as being grossly undervalued or having the incorrect usage; that is, com-

mercial properties that are classified as residential,” he explained.

“Within the next two weeks, new invoices will be hand delivered to those concerns with a proper followup and monitoring systems devised to address compliance gaps.”

Mr Halkitis said the Government will also focus on tax non-compliance in the areas of Business Licenses and Value-Added Tax (VAT).

“The third stream involves the post-clearance audits of large importers, which number some 250, and the fourth initiative focuses on the examination of shipping containers,” he added.

“After a careful assessment, these initiatives are targeted to yield $40 million to $80 million in additional revenue in the coming six to 12 months.”

sion of public versus private, and say that all of our healthcare facilities need to deliver the standard needed for the Bahamian population.

“We have gone out and started doing inspections of facilities, and there are public and private facilities left wanting.”

The first NHI phase – primary care benefits – is expected to roll out at the beginning of 2017. The first phase has been pegged at a cost of $100 million by KPMG, the Government’s hired consultants. Primary care services under NHI were originally set to begin in April 2016, but days before the start, Dr Perry Gomez, minister of health, said it would be delayed by six months.

Emmanuel Komolafe, the Bahamas Insurance Association (BIA) chairman, who was also a panelist, said the introduction of NHI will im-

pact the private health insurance sector.

He added that the industry still has a number of concerns over NHI regulation, supervision and enforcement.

“We need details,” Mr Komolafe said. “We need to have the regulations and the necessary information ahead of time so that we can plan accordingly.”

Actuary Derek Oborne, chairman of the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) NHI Committee, expressed concern over whether the right systems and processes would be in place to make NHI work effectively.

“It’s just the way we do things. For NHI, the IT system that we are getting, the permanent one hasn’t even gone to RFP yet,” Mr Osborne said.

“You are going to have

a temporary IT system first and permanent one second.

For a project of this size it’s a little strange to me that we are going to start with something that can probably do the basics and wait for a permanent solution.

“We all know what happens in the public sector, and what happens when you start something with the expectation of getting the funding and getting it done later.”

Emmanuel Komolafe

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PAGE 4, Thursday, November 17, 2016

‘Farcical’: Govt picks up ‘entire’ $40m BOB issue From pg B1 rights two months ago.

Yet Renee Davis, Bank of the Bahamas’ acting managing director, touted “a successful rights offering” in her report to shareholders, saying the $40 million equity injection had brought the institution back into compliance with key Central Bank capital ratios.

The unaudited financial statements accompanying Mrs Davis’s statement, though, told a much different story about the outcome of the September 6-12, 2016, rights issue.

“At the end of the offer period, the major shareholder subscribed for the entire offering, and the bank issued a total of $39.517 million in voting shares to its major shareholder at a price of $2.70 per share,” Bank of the Bahamas’ financials said.

The “major shareholder” is the Government, which holds its equity interest in Bank of the Bahamas through a combination of the Treasury and National Insurance Board (NIB).

It is unclear which contributed the rights offering financing, or whether it was a ‘joint effort’, but the Treasury’s cash-strapped position means it is likely to have come from NIB. The end result, as Bank

of the Bahamas’ financials show, is that the minority ownership interest in the institution has been diluted further, with the Government having increased its equity stake from 65 per cent to 79 per cent.

Few observers will have been surprised at the rights offering outcome, with Tribune Business having previously been informed that not one single investor subscribed for their rights via the two major broker/ dealers, RoyalFidelity and CFAL. Darron Cash, the former FNM senator and chairman, and a Bank of the Bahamas shareholder, told Tribune Business that the situation at the bank was “farcical”.

“The shareholder reaction to the rights offering reflects a complete lack of confidence in the Board and lack of trust in the Government,” Mr Cash said.

“It says they have no confidence about the future of the bank, and that ought to be very disconcerting to the Government. Bank of the Bahamas continues to be, by all indications, a bank in decline notwithstanding the efforts by the acting managing director to spin a good story.

“The only thing that will make a significant difference in the bank from a

Consumer chief set to investigate BPL bill spike From pg B1 September-October 2016 period.

Tribune Business can reveal that BPL estimated customer bills for the September-October month due to Hurricane Matthew’s passage and subsequent restoration efforts, which occurred around the time meter readings are normally taken.

With meter readings back on schedule, BPL is now discovering that it underbilled or under-estimated

customers’ energy usage for that month - in some cases by hundreds of dollars.

As a result, it is now seeking to reclaim or recover these sums by adding them to the monthly bill for the October-November period, which is due to be paid in December.

This has resulted in many consumers experiencing a “doubling”, or even “tripling”, of their bills above normal and/or expected levels, causing potential cash flow and financial

THE TRIBUNE

shareholder perspective is a significant policy decision by the Government of the Bahamas that they intend to divest themselves of majority and ownership and control of Bank of the Bahamas.”

The $39.517 million rights issue proceeds effectively represent another Government, taxpayer-funded ‘bail out’ of Bank of the Bahamas, following the $100 million ‘bonds for bad loans’ swap in October 2014.

The $482,667 ‘balance’ was used to pay offering costs, most of which would have gone to the placement agent, Leno Corporate Services.

Meanwhile, Bank of the Bahamas, which has sustained a collective $120 million loss over the past three years, incurred another $3.513 million in ‘red ink’ during the three months to end-September.

This represents a more than 10-fold increase upon the losses suffered during the same period in the prior year, largely due to a 71.7 per cent increase in loan loss provisions.

These rose year-overyear from $2.555 million to $4.387 million, raising questions as to whether the quality of Bank of the Bahamas’ loan book is improving.

“In the short term, the bank’s performance is largely dependent on the performance of our loan portfolio, which we continue to manage closely,” Ms

Davis acknowledged.

“Though we have made significant strides to mitigate losses, the bank recognised net loan loss provisions of approximately $4.4 million during the quarter, which is up by $1.8 million from the same quarter last year.”

Mr Cash, meanwhile, said there was room in the commercial banking industry for an institution with the necessary focus and policies that would enable it to compete.

“It does not appear that Bank of the Bahamas has that focus,” he added.

“There’s nothing in the acting managing director’s report that inspires confidence.

“The times she talks about focusing attention, it continues to be on internal challenges that they ought to have had a good handle on for the last several years.

“She says they’re managing and monitoring the portfolio, and managing expenses. These are all fine, but it does not give investors confidence that when it comes to the strategic development of the bank that they are doing anything exciting, creative and innovative as to its future.”

Mrs Davis touted Bank of the Bahamas’ “strengthened balance sheet” as at September 30, 2016, and its net equity of $100.229 million.

However, she did not mention that if the $100 mil-

lion worth of government bonds injected as part of the first ‘bailout’ were removed, the bank would be barely solvent.

And Bank of the Bahamas’ deposits had fallen by more than $119 million during the three months since June 30, 2016, dropping by 15.6 per cent from $764.353 million to $645.234 million.

Its $97.517 million accumulated deficit is now almost twice the ‘special retained earnings’ of $54.622 million that were gained from the October 2014 ‘bailout’, and transfer of $45.2 million in ‘bad loans’ to Bahamas Resolve.

Mr Cash said that although the loan book remained relatively flat, at $507.446 million, Bank of the Bahamas’ interest income and net interest income were down yearover-year - something he described as “not a good sign”.

He added that shareholder confidence was further undermined by the release of the financial 2017 first quarter figures, when the audited statements for the 2016 full year had yet to be produced.

Bank of the Bahamas was supposed to release the year-end figures by October 31, but subsequently obtained an extension to the end of the 2016 calendar year.

“This inability to deliver year-end audited results while delivering unaudited

first quarter results underscores the fact something very systemic is wrong,” Mr Cash told Tribune Business.

“There’s no sense trying to spin a positive story about the direction you’re moving in when the foundation, your year-end audited results, are not available to be inspected by the ordinary shareholders.

“One can legitimately say there continues to be a concern about Bank of the Bahamas’ ability to function as a going concern, and there’s a continual diminishing in confidence.”

Mrs Davis, describing the first quarter results, said: “Total operating income decreased from prior year by $1.8 million or 17.3 per cent for the quarter, primarily owing to a decrease in other operating income by $1.4 million for an extraordinary income recorded in prior year.

“The net interest income decreased with a minimal $0.8 million, due to a $0.9 million reduction in interest income for the quarter primarily related to the overall decrease in the loan portfolio, partially offset by a $0.2 million decrease in interest expense.

“The bank continued to manage its resources effectively and efficiently by successfully reducing operating expenses by 5.48 per cent overall.”

problems for some Bahamians in the run-up to the Christmas period.

The issue was exposed when one Tribune employee contacted BPL after receiving the highestever light bill for a property where they have been resident for 10 years - higher even that bills for summer 2008, when oil prices were over $140 per barrel.

A BPL customer service staffer confirmed to the Tribune employee that the record bill had resulted from under-billing for the September-October period, and the utility had merely added the sum outstanding from that month to the

October-November bill.

Other Tribune employees complained of a “doubling” or “tripling” of their energy bills for October-November, and social media has been alive with complaints from angry Bahamians about the situation.

“Wow. I’ve got to put out some feelers,” Mr Gomez responded, when informed of the issue by Tribune Business. “That is strange, and did they make an announcement that they have that issue?

“I will give the chief executive [Pam Hill] a call. I will definitely look into that. I’m going to get my bill as well. I will look into it.”

BPL’s bills show it also appears to be applying October-November’s higher fuel surcharge to the outstanding amounts for September-October, rather than the lower amount charged then.

Many Bahamians are thus likely to question whether BPL is seeking to recover some of its multimillion dollar Matthew restoration costs by hiking their bills, and doing this without explicitly saying so.

It is also unclear whether BPL can seek to recover in future bills sums that it has

failed to charge customers for in the past.

Dionisio D’Aguilar, the FNM candidate for Montagu and a former director of BPL’s parent, the Bahamas Electricity Corporation (BEC), said the situation was “a tough one” and presented a dilemma for both consumers and the utility.

However, he said BPL had “failed” to warn Bahamians that they might experience a substantial hike in their bills once meter reading resumed.

“What they would probably argue is that all hands were on deck to effect restoration and repairs from the hurricane, and they didn’t have sufficient meter readers to go around and give meter readings,” Mr D’Aguilar told Tribune Business.

“Now, having completed all the energy restoration and repairs, they’ve got all the meter readers back in the car and are getting a true reading. And, in some cases, it’s coming in as a whopping big bill.”

Given BPL’s dire financial position, due to consistent annual losses of $20-$30 million, and the poorly-maintained state of its key infrastructure assets, the utility desperately needs every cent due to it - hence its desire to correct the September-October ‘under billing’.

Mr D’Aguilar, though,

questioned how BPL’s September-October bills could have been so heavily underestimated “unless they did it for a reason”. He argued that the estimates should have been off by 10 per cent, not 50-100 per cent.

“How did they estimate these bills, and how could they be so wrong and under bill so significantly, unless they made a decision to forego and help people recover from the storm? How could they be so completely off-base?” he told Tribune Business.

“Now that period is over.

We’ve given you a break in terms of your bill; the honeymoon is over. It is a billing catch up.”

He added: “The way they’ve failed is they first of all didn’t alert the consumer that they were giving them a break. If they did, bear in wind you’re getting walloped now, and if the intent was just to estimate the bill, how could they be so wrong as to be off by 100 per cent, 50 per cent.

“You’ve just thrown your customers into a dither, especially those that want to remain current.”

Mr D’Aguilar said the situation again highlighted the need for BPL to move rapidly on the introduction of pre-paid meters, so that lower income Bahamians were not “trapped in the disconnection cycle”.

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THE TRIBUNE

Thursday, November 17, 2016, PAGE 5

‘Light at end of tunnel’ on Govt mobile buyout From pg B1 Liberalisation Task Force, yesterday said they were now “formalising” the private placement of shares in HoldingCo with targeted institutional investors.

He explained that the Task Force and its advisers were providing potential investors with the necessary information to enable them to make an informed investment decision on HoldingCo, which will own a 51.75 per cent majority interest in NewCo 2015 and its ‘Aliv’ mobile business.

In return, Mr Bowe said they were seeking formal commitments on the sums each investor planned to invest in HoldingCo, in a bid to finalise the private placement offering document (PPM).

Mr Bowe, who is now Fidelity Bank (Bahamas) chief financial officer, gave no timeline for when the HoldingCo placement, which is understood to be seeking a sum between $62.5 million to $67.275 million, will be completed.

Revealing that Hurricane Matthew had “thrown a bit of a monkey wrench” into the HoldingCo plans,

Mr Bowe said the resulting delay may have aided the placement efforts.

With Aliv’s formal product/service launch now less than a week away, he suggested that potential HoldingCo investors would gain greater confidence from seeing the new mobile provider becoming an operational reality.

“It’s now at the formalisation stage with all of the investor groups we have spoken to; the same institutional investors,” Mr Bowe told Tribune Business of the HoldingCo placement.

“What is happening now is that we’ve been going back to them in the last few weeks to get the amount of their [investment] commitment, and providing the formal documentation and necessary information each of their Boards requires to give approval.”

To gain the “hard commitments and formal approvals”, the Task Force and its advisers are providing investors with ‘term sheets’ showing the main financial details of the proposed offering.

“They can then say ‘we can live with this’, or ‘this

Mortgage Relief: 16% of targeted borrowers qualify From pg B1

finance, said 190 borrowers had been placed into the scheme to-date, with 64 per cent of those deemed eligible had been contacted by the various commercial banks.

Mr Halkitis, who was addressing the Bahamas Institute of Chartered Accountants (BICA) Accountants Week conference, said the Government was also discussing other legislative initiatives with the banks.

These, he said, were designed to give borrowers additional safeguards, while amending the rules governing non-bank lend-

ers to ensure Bahamians have more protection from abusive credit practices.

“Compared to the initial initiative, which had a success rate of less than five enrolments, the revamped Mortgage Relief Plan is more successful thus far,” Mr Halkitis said.

“To date, some 1,160 or 64 per cent of the total potentially eligible, 1,826 borrowers, have been contacted by the banks, and some 190 or 16 per cent enrolled to-date.”

The Government’s critics will likely argue that the 190 figure is still a long way short of the 1,826 targeted by the revised plan, and

needs to be tweaked to accommodate us’,” Mr Bowe explained. “It’s taking in a core document, and matching the auxiliary pieces to all the investor needs.”

He added that this would result in the PPM document becoming “a consensus driven mechanism”, where all investors had agreed to its terms - and the size of their investment - prior to its launch.

The offering itself will then become an “administrative” exercise that closes the buyout of the Government by private investors, who simply have to “write the cheques” to purchase their shares.

“We can see the light at the end of the tunnel,” Mr Bowe told Tribune Business of the HoldingCo process. “We know we’re on the right track. We can see that light in the distance, as we know we’re getting closer.

“We could have upwards of 40,00-50,000 Bahamians having a stake in HoldingCo through these pension plans and credit unions.”

HoldingCo is effectively the joint venture partner of BISX-listed Cable Bahamas in the NewCo/Aliv business, the latter enjoying Board and management control despite owning a minority 48.25 per cent equity stake.

Mr Bowe said the HoldingCo divestment was “one the Government stays excited about” and is committed to, adding that the upcoming general election would not derail the process.

However, he acknowledged that one factor delaying the private placement was Hurricane Matthew’s arrival in the Bahamas in early October. Besides taking over the Government’s priorities, the Category Four storm also distracted the Task Force’s target investors, who were busy providing relief to distressed members and plan participants.

“We were thrown a bit of a monkey wrench by the timing of Hurricane Matthew.

Some of the storm’s effects shuffled things around a little bit,” Mr Bowe told Tribune Business.

“What we’re also trying to do is avoid competing with other capital fund raisings that were previously behind us on the schedule, but are now flooding into the marketplace.”

Mr Bowe said the Government’s plans to raise $150 million to finance Hurricane Matthew restoration had also temporarily “spooked” investors, due to initial uncertainty over whether the funds were coming from.

He added that the Task

Force was “fortunate” that $120 million was taken

by Bahamian commercial banks via a syndicated loan, and not the investors it was targeting for HoldingCo, as this would have reduced the available investment funding pool.

Pension funds, credit unions, cooperatives and mutual funds were targeted as HoldingCo’s first private shareholders because they were viewed as providing the broadest possible Bahamian ownership.

Mr Bowe said HoldingCo had “unique potential”, suggesting that individual Bahamians would eventually have the opportunity to become shareholders via an initial public offering (IPO) in future years.

He reiterated that HoldingCo’s ultimate objective lay beyond mobile communications, given the vision for it to act as a vehicle that will pool Bahamian capital, and ensure local ownership and investment in the nation’s key infrastructure assets.

Mr Bowe said the Government had used Cable Bahamas’ $62.5 million spectrum license fee to fund its, and HoldingCo’s, share of the initial capital contribution to NewCo and its infrastructure build-out.

“It worked well for the Government’s coffers,”

he explained. “It was able to make its cash contribution without drawing on the public purse. When the HoldingCo shares are sold in the market, the Government will realise its spectrum fees.”

With NewCo/Aliv’s ‘soft launch’ now completed, Mr Bowe said its Board and management could now start to focus on assisting HoldingCo with the private placement.

He added that Aliv’s product/services launch on November 23 would further bolster investor confidence that the second mobile operator, and first competitor to the Bahamas Telecommunications Company (BTC), is for real.

“The fact we now have an operator, with the testing of phones and a soft launch taking place in the last few weeks, shows that NewCo is coming alive,” Mr Bowe told Tribune Business.

“You have the start of operations, and although you will see a period of expenses exceeding revenues as the business ramps up, investors know there are assets in the ground and a functional mobile network that operates.

“They will have greater security that this is a mobile venture that’s a go.”

the 1,000 that the original scheme sought to help.

The Christie administration, though, can counter that the plan is successful if it secures just one Bahamian family in their home, let alone 190.

The Government committed $10 million to its initial Mortgage Relief Plan in 2012, which was supposed to benefit around 1,000 out of an estimated 4,000 delinquent homeowners.

Back in May, Prime Minister Perry Christie announced plans to revive the scheme, modelled after the US mortgage assistance plan, in collaboration with the Clearing Banks.

He confirmed that the new scheme would cost taxpayers $20 million over four years, and it was designed to assist borrowers

more than 90 days past due as of May 2016. Eligible borrowers who have an ability to pay could qualify for a 20-25 per cent reduction in monthly payments, and are required to attend a financial counselling programme.

Mr Halkitis yesterday said that while there has been a sustained improvement in loan delinquencies since 2015, total arrears in the commercial banking sector, standing at $1.19 billion ,remain at an elevated 19.1 per cent of total loans. Mortgages account for the bulk at nearly 55 per cent of this sum.

“This has always been a concern for the Government as persons, through no fault of their own, were often faced with the prospect of losing their homes,”

Mr Halkitis said.

“While getting persons back to work will provide much needed relief to many, the Government has always recognised the need for some assistance mechanism that would close the gap in their ability to service their debt and reduce the risk of loss.

“This remains the driving rationale behind the Government’s recent launch of the revamped Mortgage Relief Plan, which was modelled after the US mortgage assistance plan and designed in co-operation with the banks.”

FOR SALE

Authentic Irish Linen Guayaberas P h o ne : (242) 535-5744 email: fridayshirtcompany@gmail.com

On behalf of the management and staff of CHILLY WILLY ICE, we wish to take this opportunity to thank all our valued customers and all those that endured the challenges of purchasing ice after the passing of Hurricane Matthew – especially our loyal customers who were unable to get any deliveries to their businesses due to the overflow of customers at our ice plant.

We also thank the Royal Bahamas Police Force for their help in maintaining order and to BEC for supplying us with electricity as soon as they could so that we could continue to supply our ice daily at such a high demand.

We sincerely appreciate you and look forward to continue to be of service to you all.

MANAGEMENT AND STAFF of CHILLY WILLY ICE

PAGE 8, Thursday, November 17, 2016

THE TRIBUNE

Congress urged to bar US acquisitions by China state firms WASHINGTON (AP) — As Chinese investment in the United States keeps setting records, congressional advisers suggest changing U.S. law so Chinese stateowned companies can be barred from buying or gaining control of American businesses.

The concern is that such enterprises could use technology, intelligence and market power “in the service of the Chinese state,” the U.S.-China Economic

and Security Review Commission said Wednesday in its annual report. The commission noted, for example, a growth in Chinese attempts to buy U.S. assets in the semi-conductor industry.

The recommendation, stemming from the security implications about foreign investment by the world’s No. 2 economy, was one of several proposals in the report, which examines a range of issues in the rela-

tionship between the powers.

Chinese investment in the U.S. reached a record $15 billion in 2015 and could climb to $30 billion in 2016.

About one-quarter of that investment is from stateowned companies.

“We don’t want the U.S. government owning large chunks of the U.S. economy, so why do we want the Chinese Communist Party owning large chunks of the U.S. economy?” said Den-

nis Shea, the Republicanappointed chairman of the bipartisan commission.

“These state-owned enterprises are arms of the Chinese state and Communist Party. Often they do not act purely on commercial or market basis, they have strategic considerations,” he said.

The commission members are selected by leaders of both parties in the House and Senate. They include former U.S. lawmakers, and

former U.S. government, military and intelligence officials. The commission is mandated by to provide recommendations to Congress for legislative and administrative action.

The report urges Congress to amend the statute authorizing the Committee on Foreign Investment in the United States, known as CFIUS, to prohibit Chinese state-owned enterprises “from acquiring or otherwise gaining effective control of U.S. companies.”

That committee reviews foreign acquisitions for threats to U.S. national security.

A February report by the Rhodium Group, a research organization that tracks Chinese investment in the U.S., said that for the past three years, China was the country with the most transactions scrutinized by

the committee. Rhodium said that was not due to increased scrutiny of China, but rather reflected an increase in the volume of foreign investment from China and a shift in its interest toward technology acquisitions.

“The vast majority of Chinese overtures continue to pass CFIUS reviews without any problems,” researchers said. According to Rhodium, annual investment flows from China to the U.S. have exceeded American investment flows into China since 2015.

China has long complained that Washington’s security review process for investments in the U.S. unfairly targets Chinese investors. The Chinese Embassy in Washington did not immediately respond to a request for comment Wednesday.

Puerto Rico warns of cash crunch when debt moratorium ends SAN JUAN, Puerto Rico (AP) — Puerto Rico’s government warned in a liquidity report made public on Wednesday that it will run out of money in less than three months as the U.S. territory pushes for permission to restructure nearly $70 billion in public debt.

The report notes that the island faces a $1.3 billion debt payment in February, when a temporary debt moratorium imposed this year by the U.S. government expires. Another $934 million in bond payments is due from March through June.

Puerto Rico has already defaulted on nearly $1.4 billion worth of bond payments since August 2015, angering creditors who have filed multiple lawsuits and accuse the government of exaggerating its situation.

Government officials warned on Wednesday that if the moratorium is not extended, the island will run out of cash to provide essential services. The report also warned that the island’s pension system, which is underfunded by more than $40 billion, will run out of cash in 2018 unless the government takes steps such as increasing contributions.

“Puerto Rico’s economic crisis and insolvency is not a secret,” said Victor Suarez, the island’s secretary of state.

The government released the report two days before a federal control board

charged with overseeing the island’s finances meets in Puerto Rico for the first time. Additional details released later Wednesday state that the local government is creating a registry of all those who own Puerto Rico bonds, identifying so far 350,000 owners that hold 68 percent of the island’s debt. At least $6 billion of that debt is held by Puerto Rico residents.

Gov. Alejandro Garcia Padilla has been urging the board to authorize a debt restructuring so Puerto Rico can re-enter the markets and pull itself out from a decade-long economic crisis that is only deepening. His administration has declared a state of emergency at several government agencies and implemented austerity measures including deferring payments to the island’s police and agriculture departments, among others.

The report was released on the same day that Ricardo Rossello, Puerto Rico’s governor-elect, met with bondholders and credit rating agencies in New York.

Rossello has pledged to improve Puerto Rico’s credit rating and re-enter the markets after agencies downgraded the island’s debt to junk status.

Puerto Rico bonds rallied after voters last week chose Rossello as their new governor. He has said his main priority is to make Puerto Rico the 51st state.

Employment Opportunity

MAINTENANCE WORKERS A leading Fast Food franchise is looking for mature, clean-cut individuals to join its Maintenance (Janitorial) Team.

Job Summary To be responsible for the general cleanliness and upkeep of the entire Store and its surroundings, so as to facilitate the smooth, efficient operation of the Store.

Requirements • Must be a high school graduate.

• Must have excellent inter-personal skills.

• Must have excellent oral and written communication skills.

• Professionalism required.

• Must be able to work flexible hours including early mornings, late nights, weekends and holidays.

• A basic knowledge of kitchen equipment and electrical and air conditioning repair skills would be a plus.

• Must have a clean police record.

McDonald’s offers excellent benefits!

Please submit Resume to: Human Resources Department McDonald’s Head Office 111 Market Street North P. O. Box SS-5925 Telephone: 325-4444 Nassau, N.P., The Bahamas

THE TRIBUNE

Thursday, November 17, 2016, PAGE 9

Bank rally fades and stocks fall; dollar hits 13-year high NEW YORK (AP) — U.S. stocks finished barely lower Wednesday as banks return some of the huge gains they've made since the presidential election last week, but technology and consumer stocks climbed.

The dollar continued to appreciate against other currencies and reached its highest mark in 13 years.

Banks took the biggest losses as a seven-day rally in that sector petered out. Industrial companies, also big gainers since the election, traded lower as well. The price of oil gave back some of its enormous gain from the day before. Graphics processor maker Nvidia and household names like Apple and Microsoft led technology companies higher.

Rising stocks outnumbered decliners.

The dollar has been very strong in recent years, just not this strong, and it's been pretty stable compared to other currencies. But in the wake of the election, investors think the U.S. economy might grow a bit faster and inflation might pick up.

“What's pushed the dollar higher here in the short term is with the Trump win, particularly combined with (Republicans) holding on to the Senate,” said Scott Wren, a senior global equity strategist at the Wells Fargo Investment Institute. Still, Wren doesn't think the dollar will rise much further.

The Dow Jones industrial average slid 54.92 points, or 0.3 percent, to 18,868.14.

The Standard & Poor's 500 index lost 3.45 points, or 0.2 percent, to 2,176.94. The Nasdaq composite picked up 18.96 points, or 0.4 percent, to 5,294.58.

After a long losing streak before the election, the Dow had risen for seven days in a row through Tuesday and set several all-time highs.

The S&P 500 and Nasdaq have also made large gains and are near the records they set this fall.

JPMorgan Chase led banks lower as it fell $1.96,

or 2.5 percent, to $77.40 and Morgan Stanley lost 81 cents, or 2 percent, to $39.19. Banks are coming off their best single week since the financial crisis as investors hope for higher interest rates and more profits from lending, as well as cutbacks in regulations that could boost bank profits.

The ICE U.S. Dollar Index, which measures the dollar against six other currencies, rose to its highest level since April of 2003.

The dollar is rising in part because investors think the Federal Reserve will raise interest rates at a faster pace in response to inflation stemming from the increased spending that President-elect Donald Trump has proposed.

A stronger dollar hurts U.S. companies that do a lot of business overseas because it makes their products more expensive, and it affects their earnings when they are translated from other currencies back into U.S. dollars. However it makes imported goods cheaper for consumers in the U.S. The dollar slipped 109.15 Japanese yen from 109.32 yen late Tuesday. The euro slid to $1.0681 from $1.0718.

Technology companies moved upward as they continued a rally from a day earlier. Graphics processor maker Nvidia rose $5.44, or 6.3 percent, to $91.63 after it announced a collaboration with Microsoft, and Apple picked up $2.93, or 2.7 percent, to $110.04.

Tech stocks had weak-

ened since the election.

Trump's policies might affect their sales in China and other key markets, and a big surge this summer had brought some technology stocks to all-time highs.

Retailer Target raised its profit forecast and its sales projections for the third quarter with the holiday season approaching. That came as the retailer gave a strong third-quarter report, as it put more emphasis on low prices after it stumbled in the second quarter. The stock gained $4.59, or 6.4 percent, to $76.03.

TJX, the parent of TJ Maxx and Marshalls, reported a bigger profit and better sales than investors expected and its stock gained $2.90, or 3.9 percent, to $76.39. That helped lead consumer stocks higher.

Home improvement retailer Lowe's fell after it said traffic in stores was low during the third quarter, and Lowe's reported a smaller third-quarter profit because of several big charges.

Lowe's lost $2.03, or 2.9 percent, to $67.02.

Oil prices slipped. Benchmark U.S. crude lost 24 cents to $45.57 a barrel in New York. Brent crude, which is used to price international oils, fell 32 cents to $46.63 a barrel in London.

The price of U.S. crude oil soared Tuesday as investors hoped the oil-producing OPEC countries will agree to a production cut that would boost prices.

Energy companies fell.

They had rallied on Tues-

day along with the price of crude oil.

Bond prices rose. The yield on the 10-year Treasury note slipped to 2.21 percent from 2.22 percent.

Bond yields, which are used to set interest rates on

Fidelity Bank (Bahamas) Limited

(Incorporated under the laws of the Commonwealth of The Bahamas) Consolidated Balance Sheet (Unaudited) As of 30 September 2016 (Amounts expressed in Bahamian dollars) 30 September 2016 $

31 December 2015 $

ASSETS Cash on hand and at banks Investment securities Loans and advances to customers Other assets Investment in joint venture Property, plant and equipment

70,701,650 76,869,881 380,241,437 3,165,323 10,547,181 11,753,572

71,192,677 62,041,584 360,513,733 1,588,576 14,554,506 11,797,378

TOTAL ASSETS

553,279,044

521,688,454

LIABILITIES Deposits from customer Accrued expenses and other liabilities Debt securities

418,686,227 628,028 49,580,682

397,113,443 1,016,171 48,796,144

TOTAL LIABILITIES

468,894,937

446,925,758

EQUITY Capital Revaluation reserve Reserve for credit losses Retained earnings

35,409,068 850,014 3,647,593 44,477,432

35,241,119 875,780 3,647,593 34,998,204

TOTAL EQUITY

84,384,107

74,762,696

553,279,044

521,688,454

TOTAL LIABILITIES AND EQUITY

Fidelity Bank (Bahamas) Limited Consolidated Statement of Comprehensive Income (Unaudited) For the Nine Months Ended 30 September 2016 (Expressed in Bahamian dollars) 9 Months Ended 30 September 30 September 2016 2015 $ $ INCOME Interest income Interest expense

42,988,282 10,870,725

38,377,595 9,926,506

Net interest income

32,117,557

28,451,089

Non-interest income

2,674,006

3,097,735

34,791,563

31,548,824

7,153,407 6,960,136 5,419,749 1,194,102

6,960,596 6,179,838 4,832,107 950,339

Total expenses

20,727,394

18,922,880

Operating profit

14,064,169

12,625,944

1,686,189

1,624,504

-

-

15,750,358

14,250,448

787,500

696,199

14,962,858

13,554,249

15,750,358

14,250,448

28,766,599

28,735,849

$0.52

$0.472

Total income

EMPLOYMENT OPPORTUNITY

Restaurant Managers

A food service industry leader is seeking to employ Experienced Managers for its restaurants. The successful candidates must possess effective leadership skills and will be expected to work closely with the Restaurant Manager in managing the overall restaurant operations.

The individuals should have a solid understanding of the food and beverage industry and possess a minimum of 3 to 5 years experience in the related field with a proven track record of exceptional customer service.

Primary Duties and Responsibilities: • Ensures the company’s customer service excellence standards are exemplified consistently and that all team members are held accountable to same • Facilitate a high level of customer satisfaction by obtaining regular customer feedback • Identifies and resolves “bottlenecks” in food preparation and delivery to increase speed of service without sacrificing accuracy of orders • Ability to maintain a safe, clean and high quality restaurant operation at all times • Supervises and trains team members on all restaurant systems • Ability to effectively communicate, both orally and in writing, on a consistent basis with Restaurant Management team, superiors and support staff • Practical knowledge of inventory control management • Ability to coach, train and develop team members as well as delegate work in a way that encourages teamwork during shift to ensure smooth restaurant operations • Proven ability in handling of customer complaints, ensuring speedy and satisfactory resolution • Ensures the awareness and knowledge of all of the company’s systems, policies, procedures and operations through training and development • Provides productive direction to team members in a clear and concise way, and sets an example for team members by working hard to ensure swift and smooth food production and quality service • Sets challenging goals for self and team, provides timely performance feedback and ensures accountability

payments that bonds pay.

In other energy trading, wholesale gasoline fell 2 cents to $1.32 a gallon.

Heating oil fell 1 cent to $1.44 a gallon. Natural gas rose 6 cents, or 2 percent, to $2.76 per 1,000 cubic feet.

many kinds of loans including mortgages, have risen to their highest levels since the beginning of the year as investors expect inflation to rise. Bond investors hate inflation because it erodes the value of the fixed interest

EXPENSES Salaries and employee benefits General and administrative Provision for loan losses Depreciation and amortisation

Share of profit of joint ventures OTHER COMPREHENSIVE INCOME Total comprehensive income/(loss) Net income attributable to preference shareholders Net income attributable to ordinary shareholders

Weighted average number of ordinary shares outstanding Earnings/(loss) per share

Fidelity Bank (Bahamas) Limited Consolidated Statement of Changes in Equity (Unaudited) For the Nine Months Ended 30 September 2016 (Amounts expressed in Bahamian dollars) Capital $ As of 1 January 2015

Revaluation Surplus $

Reserve for Credit Losses $

Retained Earnings $

Total $

31,653,119

910,149

3,353,581

23,448,671

59,365,520

-

-

-

20,700,354

20,700,354

34,369

-

(294,012 )

-

Comprehensive income Net income Other comprehensive income Depreciation transfer

-

Appropriation for credit losses

-

Total comprehensive income

-

(34,369 ) (34,369 )

294,012 294,012

20,440,711

20,700,354

Transactions with owners Issuance of ordinary shares

99,000

-

-

86,400

185,400

3,489,000

-

-

-

3,489,000

Cost of preference shares

-

-

-

Dividends – preference shares

-

-

-

(963,014 )

(963,014 )

Dividends – ordinary shares

-

-

-

(7,938,334 )

(7,938,334 )

3,588,000

-

-

(8,891,178 )

(5,303,178 )

Issuance of preference shares

Total transactions with owners

(76,230 )

(76,230 )

Qualifications and Experience • Minimum of three to five years experience in the food and beverage and hospitality industries in a managerial or supervisory role • Working knowledge of computerized information systems used in restaurant operations, e.g. Point of Sales (POS) systems • Proficiency in various software applications, e.g. Microsoft Word, Excel, PowerPoint

As of 31 December 2015

35,241,119

875,780

3,647,593

34,998,204

74,762,696

As of 1 January 2016

35,241,119

875,780

3,647,593

34,998,204

74,762,696

-

-

-

15,750,358

15,750,358

Salary will be commensurate with qualifications and experience.

Transactions with owners

Interested candidates should submit their resumes in confidence to the following email address:

submityourform@gmail.com

Comprehensive income Net income Other comprehensive income Depreciation transfer

-

(25,766 )

-

25,766

-

Total comprehensive income

-

(25,766 )

-

15,776,124

15,750,358

-

167,949

Issuance of ordinary shares

167,949

-

-

Dividends – preference shares

-

-

-

(523,562 )

(523,562 )

Dividends – ordinary shares

-

-

-

(5,773,334 )

(5,773,334 )

Total transactions with owners As of 30 September 2016

167,949

-

-

35,409,068

850,014

3,647,593

(6,296,896 )

(6,128,947 )

44,477,432

84,384,107

PAGE 10, Thursday, November 17, 2016

THE TRIBUNE

Drug prices don’t budge even after pressure from Congress

former Turing Pharmaceuticals CEO Martin Shkreli attends the House Committee on Oversight and Reform Committee hearing on Capitol Hill in Washington. In 2015, Shkreli reneged on a pledge to lower the price of the life-saving anti-infection drug Daraprim after raising it 5,000 percent. Instead, his company offered hospitals a sliding discount and the option to buy a 30-pill bottle for $22,500 instead of the original 100-pill bottle, which cost $75,000. The $750 price per pill didn’t budge. (AP Photo)

WASHINGTON (AP) — Congress’s routine of publicly shaming drug company executives over high prices works no better than a placebo: It may make some people feel better, but it doesn’t treat the problem.

In the last two years, House and Senate committees issued more than a dozen subpoenas to pricehiking drugmakers, collecting hundreds of thousands of documents and berating executives for more than 16 hours of public hearings.

But a review by The Associated Press of the list prices of nearly 30 brandname medications and generic versions targeted by congressional investigators shows most haven’t budged since coming under federal scrutiny, according to figures from Truven Health Analytics.

“These companies have made clear that they are not going to change course on their own — they will keep bilking the American people for all they can unless Congress acts,” said Rep. Elijah Cummings, D-Maryland, the ranking member on the House Committee on Oversight and Government Reform.

Unlike most countries, the U.S. doesn’t regulate drug prices. That means drugmakers, like other businesses, are largely free to set prices as high as the market will bear.

Congress has avoided passing laws that would change how drugs are priced, in keeping with the wishes of the powerful pharmaceutical lobby. That leaves lawmakers with few options beyond hauling executives before their committees.

Cummings helped kick off Capitol Hill’s latest round of pharmaceutical bashing in the fall of 2014 with a flurry of letters to makers of prescription drugs that had seen dramatic price spikes.

Since then, the AP counted 29 drugs that were specifically mentioned either in letters from lawmakers or during congressional hearings. The list prices of 22 of those drugs did not change

MARKET REPORT WEDNESDAY, 16 NOVEMBER 2016

t. 242.323.2330 | f. 242.323.2320 | www.bisxbahamas.com

BISX ALL SHARE INDEX: CLOSE 1,915.70 | CHG 0.08 | %CHG 0.00 | YTD 91.75 | YTD% 5.03 BISX LISTED & TRADED SECURITIES 52WK HI 4.25 17.43 9.09 3.50 4.70 0.18 8.28 8.50 6.10 10.60 15.50 2.72 1.60 5.82 9.00 11.00 8.50 6.90 12.25 11.00

52WK LOW 2.50 17.43 8.19 3.50 1.77 0.12 5.50 8.05 5.50 7.66 13.05 2.18 1.31 5.60 6.60 8.56 6.12 6.23 11.81 10.00

PREFERENCE SHARES 1000.00 1000.00 1000.00 1000.00

900.00 1000.00 1000.00 1000.00

1.00 106.00 100.00 106.00 105.00 105.00 100.00 10.00 1.01

1.00 105.50 100.00 100.00 105.00 100.00 100.00 10.00 1.01

SECURITY AML Foods Limited APD Limited Bahamas Property Fund Bahamas Waste Bank of Bahamas Benchmark Cable Bahamas CIBC FirstCaribbean Bank Colina Holdings Commonwealth Bank Commonwealth Brewery Consolidated Water BDRs Doctor's Hospital Famguard Fidelity Bank Finco Focol ICD Utilities J. S. Johnson Premier Real Estate

SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS FAM FBB FIN FCL ICD JSJ PRE

LAST CLOSE 4.06 15.85 9.09 3.50 1.96 0.12 5.60 8.50 5.83 10.50 13.98 2.18 1.55 5.82 8.78 9.00 8.50 6.61 11.93 10.00

CLOSE 4.06 15.85 9.09 3.50 1.96 0.12 5.60 8.50 5.83 10.50 13.98 2.18 1.55 5.82 8.78 9.00 8.50 6.61 11.93 10.00

CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Fidelity Bank Class A Focol Class B

CAB6 CAB8 CAB9 CAB10 CHLA CBLE CBLJ CBLK CBLL CBLM CBLN FBBA FCLB

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.00 100.00 100.00 100.00 10.00 1.01

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.11 100.00 100.00 100.00 10.00 1.01

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

SECURITY Fidelity Bank Note 17 (Series A) + Fidelity Bank Note 18 (Series E) + Fidelity Bank Note 22 (Series B) +

SYMBOL FBB17 FBB18 FBB22

LAST SALE 100.00 100.00 100.00

CLOSE 100.00 100.00 100.00

CHANGE 0.00 0.00 0.00

Bahamas Note 6.95 (2029) BGS: 2014-12-3Y BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-3Y BGS: 2015-10-5Y BGS: 2015-10-7Y

BAH29 BG0103 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330 BG0403 BG0405 BG0407

111.01 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

110.74 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

-0.27 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

E J K L M N

CORPORATE DEBT - (percentage pricing) 52WK HI 100.00 100.00 100.00

52WK LOW 100.00 100.00 100.00

BAHAMAS GOVERNMENT STOCK - (percentage pricing) 115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

113.70 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

VOLUME 510

VOLUME

EPS$ 0.304 1.351 1.086 0.220 -1.134 0.000 0.185 0.551 0.508 0.541 0.528 0.094 0.166 0.510 0.612 0.960 0.650 0.703 0.756 0.000

DIV$ 0.090 1.000 0.000 0.160 0.000 0.000 0.187 0.260 0.200 0.360 0.610 0.060 0.040 0.240 0.275 0.000 0.280 0.120 0.640 0.000

P/E 13.4 11.7 8.4 15.9 N/M N/M 30.3 15.4 11.5 19.4 26.5 23.2 9.3 11.4 14.3 9.4 13.1 9.4 15.8 0.0

YIELD 2.22% 6.31% 0.00% 4.57% 0.00% 0.00% 3.34% 3.06% 3.43% 3.43% 4.36% 2.75% 2.58% 4.12% 3.13% 0.00% 3.29% 1.82% 5.36% 0.00%

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.00% 0.00% 0.00% 0.00% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 7.00% 6.50%

INTEREST 7.00% 6.00% Prime + 1.75%

MATURITY 19-Oct-2017 31-May-2018 19-Oct-2022

6.95% 4.00% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25% 3.50% 3.88% 4.25%

20-Nov-2029 15-Dec-2017 30-Jul-2018 16-Dec-2019 30-Jul-2020 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2018 26-Jun-2020 26-Jun-2022 26-Jun-2045 15-Oct-2018 15-Oct-2020 15-Oct-2022

MUTUAL FUNDS 52WK HI 2.01 3.91 1.93 169.70 140.34 1.45 1.67 1.56 1.09 6.94 8.65 5.92 9.94 11.15 10.46

52WK LOW 1.67 3.04 1.68 164.74 116.70 1.40 1.61 1.50 1.03 6.41 7.62 5.66 8.65 10.54 9.57

FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund FG Financial Preferred Income Fund FG Financial Growth Fund FG Financial Diversified Fund FG Financial Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Sub Fund Royal Fidelity Int'l Fund - High Yield Fund Royal Fidelity Int'l Fund - Alternative Strategies Fund

NAV 2.01 3.90 1.93 169.70 140.34 1.45 1.67 1.56 1.09 6.94 8.65 5.92 9.59 11.15 9.57

YTD% 12 MTH% 3.11% 4.17% 3.28% 4.34% 2.07% 2.93% 4.73% 5.64% 5.70% 7.66% 2.86% 3.86% 2.64% 3.93% 2.51% 3.63% 5.44% 4.48% 4.05% 8.28% 5.93% 13.53% 2.73% 4.73% 3.97% -3.53% 2.96% 4.33% -4.26% -6.22%

NAV Date 30-Sep-2016 30-Sep-2016 30-Sep-2016 30-Sep-2016 30-Sep-2016 30-Sep-2016 30-Sep-2016 30-Sep-2016 30-Sep-2016 31-Jul-2016 31-Jul-2016 31-Jul-2016 31-Jul-2016 31-Jul-2016 31-Jul-2016

at all. Five fell, and two went up. Those that fell were generic drugs that received little public attention.

Drugmakers say list prices overstate drug costs, since insurers who pay for them negotiate discounts and rebates. But companies don’t disclose those reductions, leaving the actual prices paid unclear.

Meanwhile, executives have found ways to defuse some of the public outrage without cutting prices. Under questioning from Cummings and other lawmakers in September, Mylan CEO Heather Bresch pointed to company coupons that can lower the price for EpiPens by up to $300 for some insured patients. While such coupons lower patients’ out-of-pocket expenses, insurers foot the bill for the drug, which still carries of list price of $608 for a twopack, up more than 500 percent since 2007.

Last year, former Turing Pharmaceuticals CEO Martin Shkreli reneged on a pledge to lower the price of the life-saving anti-infection drug Daraprim after raising it 5,000 percent. Instead, his company offered hospitals a sliding discount and the option to buy a 30pill bottle for $22,500 instead of the original 100-pill

when you raise prices more than 500 percent a 40 percent discount is still egregious,” said Scott Knoer, chief pharmacy officer at the Cleveland Clinic.

Valeant said in a statement the rebates were recommended by its internal drug pricing committee, created in the wake of public outrage over its prices. A spokesman for Ackman declined to comment.

Experts who study the pharmaceutical pricing say rebates and discounts allow drugmakers to retain greater control — and revenue — than blanket price cuts.

“You can have different prices for different customers depending on who has more market share,” said analyst Richard Evans of Sector and Sovereign Research. “So you can tailor your pricing somewhat stealthily.”

Evans says congressional scrutiny of companies like Valeant has discouraged the most extreme price hikes, generally those above 100 percent. But most of the price inflation squeezing patients and hospitals comes from industry-wide price increases that often total more than 10 percent a year, rather than the drastic hikes targeted by Congress.

“They can give the illusion of various discounts and rebates that sound on their face like price reductions but without really impacting their bottom line.” bottle, which cost $75,000.

The $750 list price per pill didn’t budge.

“The industry has cultivated an outrageously complicated and obscure pricing system,” said Robert Weissman, president of consumer advocate Public Citizen.

“They can give the illusion of various discounts and rebates that sound on their face like price reductions but without really impacting their bottom line.”

Even when corporate leaders seem to promise price cuts while under oath, the decreases don’t materialize.

Last April, billionaire investor Bill Ackman testified before a Senate committee about Valeant Pharmaceutical’s much-maligned strategy of buying niche drugs and raising their prices by as much as 3,000 percent. With the Canadian drugmaker’s then-CEO Michael Pearson stepping down, Ackman promised to use his influence on the company’s board to try and revamp its pricing strategy.

“A lot is going to change,” said Ackman, whose Pershing Square Capital fund is Valeant’s largest investor.

On two heart drugs that Valeant had acquired and hiked, Nitropress and Isuprel, Ackman suggested price cuts were imminent.

“You can expect from us within weeks, and hopefully sooner, a response to where we’re going to price these drugs and it will be meaningfully lower than where they are priced now,” Ackman said.

Instead, Valeant kept the list prices the same and expanded existing rebates for hospitals to up to 40 percent.

“That sounds good, but

Rep. Cummings and his investigative partner, Senator Bernie Sanders of Vermont, unveiled a new strategy earlier this month that could have more teeth than shaming, at least if companies are doing something illegal. Rather than launching another congressional probe, the lawmakers called on the Department of Justice to investigate possible price collusion among manufacturers of insulin, which they say has seen industrywide price increases of more than 300 percent between 2002 and 2013.

There are also some new and long-standing proposals that could stem increases, but they are unlikely to pass Congress, in part because of the pharmaceutical industry’s pervasive influence on Capitol Hill. Drugmakers and related health businesses spent more than $235 million on lobbying last year, more than any other industry, according to the nonprofit Center for Responsive Politics.

Investors seem to think the victories of Donald Trump and congressional Republicans have dimmed the prospects for drug price reform even further. Pharmaceutical company shares, which had lagged the broader stock market this year until the election, have dramatically outperformed the market since then.

In the meantime, lawmakers are likely to continue publicly lashing drugmakers, if only to appease constituents. A majority of Americans say lowering drug prices is the most important health care issue that the incoming president and Congress should be working on, according to a recent survey by the Kaiser Family Foundation.

Legal Notice

NOTICE INTERNATIONAL BUSINESS COMPANIES ACT (No. 45 of 2000)

PERIVAL HOLDING LTD. In Voluntary liquidation

“Notice is hereby given that in accordance with Section 138 (4) of the International Business Companies Act (No. 45 of 2000), PERIVAL HOLDING LTD. is in Dissolution.”

MARKET TERMS BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings

YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful

TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | FG CAPITAL MARKETS 242-396-4000 | COLONIAL 242-502-7525 | LENO 242-396-3225

The date of commencement of dissolution is the 15th day of November, 2016.

ROCKWELL LTD., 25 Mason Complex Stoney Ground, The Valley, British Anguilla Liquidator