Invest in Fiji Blog Readership : March 2009 vs February 2009

We provide you with statistics on our blog readership. Here are the readership statistics for our Promoting Suva blog for the months of February and March 2009. Data for February is given first followed by data for March.

February 2009

• total number of visits - 415;
• total number of page views - 612;
• top 15 countries of origin of readers and no of visits per country - Fiji, 185; Australia, 60; United States, 37; United Kingdom, 21; New Zealand, 17; India, 11; Canada, 9, Ivory Coast, 8; Thailand, 8; Nigeria, 6; Ghana, 4; Spain, 3; Papua New Guinea, 3; Switzerland, 3; Poland, 3;
• top 10 referring source - google / organic, 330; (direct) / (none), 35; yahoo / organic, 16; blogger.com / referral, 5; ftib.org.fj / referral, 4; promotingsuva.blogspot.com / referral, 4; rizwandean.blogspot.com / referral, 4; search / organic, 4; ask / organic, 2;
  monetynews.pl / referral, 2;
• top 20 keywords used in searches - invest in fiji, 10; bruno gillier, 5; business in fiji, 5; investinfiji, 4; email contact directors 2009 @yahoo.com.fj, 3; investment in fiji, 3; "joes farm" & fiji, 2; +679 email 0f business, 2; +679 email contact addresses of companies in fiji, 2; deposit interest rates, fiji, 2; email fiji islands trade and investment bureau, 2; fiji, 2; fijian holdings unit trust, 2; foana nemani, 2; info@gilbert.com.fj, 2; investing in fiji, 2; rate of interest fiji, 2; starting a business in fiji, 2; westpac fiji interest rates, 2; "@ .fj" + tel: +679 + ceo + 2009, 1;

March 2009

• total number of visits - 636;
• total number of page views - 1,010;
• top 15 countries of origin of readers and no of visits per country - Fiji, 342; United States, 76; Australia, 69; New Zealand, 22; India, 17; Canada, 15; United Kingdom, 14; France, 10; Malaysia, 6; South Africa, 5; United Arab Emirates, 5; Philippines, 5; Ivory Coast, 4; Burkina Faso, 4; Germany, 3;
• top 10 referring source - google / organic, 514; (direct) / (none), 37; blogger.com / referral, 22; yahoo / organic, 20; rizwandean.blogspot.com / referral, 6; msn / organic, 5; promotingsuva.blogspot.com / referral, 5; search / organic, 4; ask / organic, 3; google.com / referral, 3;
• top 20 keywords used in searches - invest in fiji, 13; investinfiji, 6; bruno gillier, 5; gilbert veisamasama, 5; global financial crisis in fiji, 5; invest in fiji blog, 5; business in fiji, 4; fiji islands invest, 4; gillier group, 4; buisnesses for sale in fiji, 3; colonial national bank fiji, 3; global financial crisis-fiji, 3; investment in fiji, 3; anz term deposits, 2; association of banks in fiji, 2; business for sale in fiji, 2; effect of global financial crisis on fiji, 2; effects of global financial crisis in fiji, 2; effects of recession on holiday inn suva, 2; fiji credit crisis, 2;
  

Observations

• Readership of the blog again grew in March 2009 compared to the month earlier;
• Readers from Fiji, USA, Australia, New Zealand, India and Canada form our largest readership group. Readers from these countries can best be targeted for marketing from this blog;
• Our top referring site continues to be google.com. This indicates our good visibility on google searches.
• Keyword searches indicate that readers are searching for a issues relating to investing in Fiji. Interestingly there is an increase in searches on the impact of the global financial crisis on Fiji.

Companies can utilise our wide readership base and high search rankings to market and advertise their products.

For advertising to our wide readership base, check our advertising rates here. If you wish to discuss how we you can advertise your products and services on our blog, e-mail us on info@gilbert.com.fj.

Our Portfolio Management Services

The impact of the global financial crisis for Fiji can be seen in the figures released by the Reserve Bank of Fiji with a reduction in inward remittances by 26.7% during 2008. The tourism industry has also indicated how tough their marketing has been to attract tourists to Fiji at this time.


How can the crisis affect companies and individuals in Fiji?

Primarily, the impact of the crisis will be on those companies and individuals who have some assets or liabilities denominated in foreign currency or have products and services that they market to non-Fiji residents.

Companies and individuals who have their assets or liabilities denominated in foreign currency may find that their assets may increase or reduce in value depending on movements of the foreign currencies in which those assets have been denominated, against the Fiji dollar. For liabilities, they may find that they owe more or less than what they had previously owed, due again to movements in exchange rates.

Similarly, if an individual or company offers its products and services to a target market that are non-residents of Fiji and sell those overseas, then what they expect to get for those sales may change due to changes in exchange rates. More importantly, the global crisis may bring about a reduction in consumption demand in most of the economies/markets overseas which may include the economy/market where the individual or company offers its products and services.


Investment Advice and Portfolio Management Services

If you have investments or are considering some, it might be the best time to consult a professional that can assist you.

To protect your investments, we can assist you with portfolio management services at a competitive fee. As part of this service, we can review your current investments and make suggestions on how they can be improved to better weather the crisis. We can also review and recommend for you new investments that will meet your investment objectives. We will also provide you with regular (at least quarterly) updates on how your investments are performing during the time we manage your portfolio for you.

Investments will be held in your own name rather than by us giving you all the rights and control over investments made.

Our principal, Gilbert Veisamasama Jr, is a licensed investment advisor and with his licence he can provide investment advice and portfolio management services to clients.

If you are interested to discuss this further, please contact us on telephones (679) 3342719 or (679) 3544897 or email info@gilbert.com.fj.

Free Investment Seminar

The South Pacific Stock Exchange (SPSE) is organising a free investment seminar on Friday, 27 March 2009, at the SPSE Boardroom, Level 2, Provident Plaza 1, FNPF Downtown Boulevard, Ellery Street, Suva, Fiji.

Participants will receive a free educational package. Light lunch will be served.

For information or to register you interest, pls call telephone (679) 3304130 or email info@spse.com.fj.

For advice on investment in Fiji or for portfolio management, pls email our company on info@gilbert.com.fj or call telephone (679) 3342719.

State Owned Enterprises (SOE) Workshop - Reform Opportunities in the Capital Market - 19 Feb 2009

The capital market can help Government in improving efficiency and performance of state owned entities (SOEs). Some of these opportunities include enforcing financial and corporate discipline, as well as having better access to relatively cheap capital both locally and abroad. The recent successful capital raising cases of Pleass Beverages and Yatu Lau are good examples.

However, before any of this is possible, Government needs to get its house in order by imposing a performance-based framework for SOEs. The dismal performance of SOEs (see below) is not a new thing in Fiji, and this is due largely to a lack of clear goals, political interference, lax financial discipline and the question of competency of those on SOE boards.

The following are areas the government needs to work on, before SOEs could seriously look at accessing the capital markets:

• The government of the day needs to seriously assess its policies and reconcile it with its portfolio of SOEs and see which ones are key components in its strategic plan. Any non-strategic SOEs will need to be divested from to save government from wasteful spending.


• Policies and regulatory frame-works need to be in place and current to address the issue of investment in/divestment from these SOEs.


• And reformation of SOEs will need political will to implement.

Contingent upon government’s strategic goals, SOEs can be commercialized, form partnerships with the private sector, have competitors injected into the industry if it is operating under a monopolistic framework, or have the SOE fully privatized (divestment). The idea behind SOE commercialization, minus government subsidies (usually SOEs operated like a business but were at the same time heavily subsidized by government which gave them an unfair advantage over the private sector. This promoted gross inefficiency and a resultant high percentage of non-performing SOEs) is to promote efficiency, profitability and a performance based culture.

Valuable lessons can be learned from New Zealand’s SOE reform success in 1987. Between 1987 and 1990, Telecom New Zealand reduced staffing levels by 47% while at the same time increasing productivity by 85% and profitability by 300%. New Zealand Post reduced its workforce by 30% while increasing the rate of next-day delivery within the country from 80%-98%. At home, Amalgamated Telecom Holdings Ltd, an ex-SOE (formerly known as Post & Telecom) is proof that restructuring and ultimately privatization does improve performance. In fact ATH commands 49% of market cap and has the second most traded stock on the South Pacific Stock Exchange. It is also the 1st listed company to adopt the Code of Corporate Governance and ATH recorded the highest total return of 60.67% in 2008.

The following are key areas that SOEs will need to prepare themselves before access into the capital markets is possible:

• Strengthening of corporate governance
  To avoid conflicts of interest, government as the owner of SOE should not allow its representatives to be sitting on the board. Ideally, the board should be made up of independent directors who have commercial skills and experience. Secondly, there should be performance-based contracts for management and lastly eliminating payments to directors on the board who are there by virtue of holding another office (ex officio).


• Clarifying mandates
  SOEs must operate with a consistent commercial mandate, free from political interference. Both government and the SOE must be clear on their respective roles and their obligations. This should also be supported by a statement of corporate intent (SCI) to support these arms-length relationships and provide performance monitoring and accountability tools.


• Implementing robust frameworks for community service obligations (CSO)
  CSO (this generally refers to the provision of essential services, like electricity, water, infrastructure development etc) should be delivered on a full cost-recovery basis. This means that CSOs will need to be rigorously identified, costed, contracted, and monitored for delivery. This is probably one of the most “touchy” areas in SOE reformation and will need all the political will the Government can muster to fully implement the necessary changes.


• Imposing financial discipline
  Commercialized SOEs should operate under the same hard budget constraints as private sector firms. This ensures prudent spending, better accountability & transparency and ultimately better efficiency for the SOEs core operations. This is where the SOEs business plan (statement of corporate intent and corporate plan) come in handy.
  

Types of SOEs that may be considered for privatization

Once SOEs have been reformed it is important that Government have a clear understanding of which SOEs are strategic components of its long-run policies and which are not. For non-strategic SOEs, these should be put through the final step of reformation, which is to become privatized (divestment).

A look at privatization of SOEs globally reveals that that these SOEs deal largely in:

• Basic utilities (e.g. electricity, water, gas etc).
• Information Technology & Communication.
• Major capital infrastructure (e.g. airports, ports, roads, rail-railroads).

This is also the growing trend locally, which started with the privatization of P&T to ATH. In fact, at a workshop on SOE reformation that was held at the Holiday Inn on the 19th of Feb 2009, the Ministry of Public Enterprises revealed their plan of having 5 SOEs taken to privatization by next year. Even though the Ministry of Public Enterprises did not reveal any specific names, it is instructive to note two SOEs that attended, Post Fiji Ltd and Airports Fiji Ltd.

Year end earnings of selected state owned entitities in Fiji ('99-'04)

State Owned Entities	2004 ($)	2003 ($)	2002 ($)	2001 ($)	2000 ($)	1999 ($)
Fiji Shipbuilding Corporation Ltd	(183,155)	(269,235)	(304,495)	(145,399)	N/A	N/A
Viti Corps Ltd	FS not submitted	FS not submitted	(249,539)	(643,545)	(581,273)	(645,641)
National Trading Corporation Ltd	N/A	N/A	(9,000)	(2,000)	(344,000)	(692,000)
Fiji Hardwood Corporation Ltd (FHCL)	(2,354,370)	(3,668,944)	(1,841,914)	(2,972,423)	(2,938,350)	(3,981,910)
Rewa Rice Ltd	FS not submitted	FS not submitted	(241,550)	121,399	(328,039)	2,412,967

Governor says that Fiji needs a sound financial system

The Governor of the Reserve Bank of Fiji, Savenaca Narube, has said that Fiji needs a sound financial system.

Having in place a sound financial system requires a set of preconditions, principal among which is the need for a stable political environment. Other requirements include having good regulatory and financial structures, good fiscal and monetary policy, transparency and good corporate governance among players in the financial sector.

Fiji has been fortunate to be able to attract foreign investment even with our past history. We have also been able to finance our development from domestic funds with institutions such as a Fiji National Provident Fund acting as a captive source of financing. However, we need to understand that we need to compete for the investment dollar. If we do not have in place the essential preconditions, we will not be able to continue to attract that foreign investment dollar.

Whether Fiji has these preconditions in place is subject to a good debate and I will not delve into that except to say that Fiji may lose out its prominence in the financial sector arena to other countries in the region such as Papua New Guinea and Samoa if we do not get up, review where we are, decide on where we want to go and move forward. I am talking here about financial sector development and planning.

In the meantime, I provide below a copy of an article in the Fiji Times on the comments made by the Governor of the Reserve Bank of Fiji.


"Governor: Fiji needs a sound financial system, Saturday, November 03, 2007

The Governor of the Reserve Bank of Fiji, Savenaca Narube says the country needs a sound and efficient financial system along with political stability to bridge the investment gap.

Mr Narube said with the 2008 Budget to be announced in two weeks, they were looking forward for better economic policies that would take the nation forward.

Mr Narube said a policy framework that would push the private sector as the "growth locomotion" had to be put in place.

He said if the private sector was to play its role, it needed certainty and predictability.

Speaking at the opening of the Rooster's Poultry Farm in Navau, Ba on Thursday evening, Mr Narube said the country's balance of payment was still an issue of concern.

Mr Narube said Fiji was losing a lot of money as the country's traditional exports had not performed well over the year.

"Collectively, exports of sugar, garment and gold are lower by $400million from their peak year and that is a lot of money to loose."

"This has been made worse by the rise in oil price which broke over $US90 per barrel recently.

"Our major policy challenge is clearly to address our widening trade deficit.

"Our policies of dampening import demand seem to be taking effect.

"However, the key is not so much to discourage imports but rather to grow our exports and we should continue to work hard at achieving this," he said.

He said an encouraging trend was the reduction in inflation.

He said they expected inflation to drop to at least 3.5 per cent by the end of the year. He said Government debt had increased to more than 54 per cent of the gross domestic product (GDP) and he would like to wish government well in their commitment to bring it below 50 per cent.

He also said while they were working very hard to improve investment as a catalyst of economic growth, they were expecting a drop by the end of the year.

Mr Narube said even though they had thrown in the figure of 25 per cent of GDP as a possible target, they were estimating it to fall back to about 15 per cent of GDP by the end of the year.

He said there was a lot of ground to cover and there were a host of factors such as political stability and economic fundamentals that had to be implemented in order to achieve it."

New Financial Services Commission to be set up

The Interim Cabinet has approved the establishment of a new Financial Services Commission.

The Commission will regulate the level of fees and charges imposed by financial institutions in Fiji.

The idea of a Financial Services Commission arose out of the 1998 Financial System Inquiry after considering complaints by customers on the 'exorbitant' fees, charges and interest rates levied by financial institutions in Fiji.

The Interim Minister for Finance has said that there is a lack of competition in the financial sector in Fiji which has resulted in high bank profits, high user charges, excessive margins and poor services standards.

The Commission is to work together with other financial services regulators in Fiji which include the Reserve Bank of Fiji, the Financial Intelligence Unit and the Capital Markets Development Authority.

Yesterday, bankers have said that there was no need for another regulator as they felt that the Reserve Bank of Fiji is adequately supervising the area of bank fees and charges.

Perhaps a comprehensive customer survey of banking and other financial services customers would best reveal the demand for a financial services commission.

Yatu Lau Initial Public Offering

The Yatu Lau Company Limited, a successful property development company, which was initially set up by the late President and Prime Minister, Ratu Sir Kamisese Mara, for the people of his province, has made its initial public offering.

Each share is being sold at F$1.50 - a large discount to what it is actually valued at.

The initial public offering closes on 30 November 2007.

To assist members of the public with their questions on the company and to issue copies of the company's Prospectus, the issue manager, Kontiki Capital, is organising the following public sessions during business hours on Wednesday, 7 November 2007 :

• at the Fiji Development Bank branch, Main Street, Nadi;
• at the Fiji Development Bank branch, 38 Vitogo Parade, Lautoka;
• at the Fiji Development Bank branch, Main Street, Ba;
• at the Kontiki Capital Office, Level 4, Plaza 1, FNPF Boulevard, Suva;
• at the Yatu Lau Office, Yatu Lau Arcade, Rodwell Road, Suva.

For more information, pls call a Kontiki licensed broker representative on telephone (679) 3307284 or (679) 9922923.

Another project : Preparing a new Prospectus for Unit Trust of Fiji

We are currently working on another project; preparing a new Prospectus for the Unit Trust of Fiji. The current prospectus expires on 7 November 2007 and a new prospectus is being prepared that will apply for 3 years from 8 November 2007.

The major part of this work is to ensure that the new Prospectus complies with all capital markets, unit trust, trustee laws, regulations and rules as well as the Unit Trust of Fiji's Trust Deed.

The prospectus is a primary document referred to by potential investors when considering investing in a particular instrument.

Entities that source investments in Fiji's capital markets are required to prepare prospectuses which are to be approved by the Capital Markets Development Authority.

For any assistance on a similar project or any other work involving banking, financial sector, capital markets and unit trusts, please contact us via e-mail to gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.

Corporate Governance in Fiji's Capital Markets Industry

We have just completed assisting some New Zealand consultants working on developing Corporate Governance Principles for the capital markets industry in Fiji.

In the first leg of the consultancy that has just been completed, we conducted interviews with players in the capital markets industry to get an appreciation of the state of corporate governance in the various entities.

A report on this leg of the consultancy has been prepared and submitted to the Capital Markets Development Authority which provided some recommendations on potential areas that can be covered in the Principles to be drawn up for the industry.

A follow up Conference at the end of September 2007 will be focused towards identifying and putting together appropriate Principles for the industry.

For this assignment, we provided the local expertise on technical capital markets issues to the lead New Zealand consultants who had more specific experience in corporate governance.

Please read my profile on the right hand side of this webpage for information on some of our other clients.

For potential consulting work, pls contact us on telephones (679) 3396427 or (679) 9921427 or e-mail gilbertv2@connect.com.fj.

Fiji stock exchange update

Read an article below from the Fiji Times on Saturday, 21 July 2007, on the status of trades on the South Pacific Stock Exchange based in Suva, Fiji.


"SPSE market 'bear':CEO, Saturday, July 21, 2007

Investors on the South Pacific Stock Exchange have witnessed a "very bear market", with sellers outnumbering buyers over the last 12 months, says chief executive officer, Jinita Prasad.

Ms Prasad said a number of stocks hit their 52-week low prices. Market capitalisation had declined 23.6 per cent in value over the same period because many stocks remained with only sellers and no buyers.

"This was reflected in the volume traded over the period as well which fell significantly as many investors braced for further downward movement in prices," she said.

"While some stock prices might continue to fall in the near future, some stocks had also started to reach levels which might be attractive for speculative buyers and institutional investors to start accumulating at."

Ms Prasad said a long term investment in shares should not only be seen in the economical or political light or its volatility in the short term.

She said volatility in the short term was bound to exist in any market.

"In other words, prices move up and down in the short run, however generally trend upwards over the long term."

Ms Prasad said this was evident in some of the listed company share prices when seen over a three-to-five year period rather than the performance over the last six months only.

Market capitalisation dipped slightly by 0.4 percent by the end of the week.

Ms Prasad said the fall was due to the decline in share price of Foster's Group Pacific Ltd by approximately 0.3 per cent. "

Fijian Holdings Unit Trust pays dividends

The Fijian Holdings Unit Trust (FHLUT) has paid out dividends which is an increase of 14.5% to what it paid out last year.

The two funds managed by FHLUT both recorded strong results over the last financial year. This included the property fund which recorded good results despite the impact of the removal earlier this year of dividend tax concessions enjoyed by investors in that fund.

The final dividend paid was 1.54 cents per unit for the financial year ended 30 June 2007. Total payout by the unit trust will be F$680,863.00.

In terms of returns, FHLUT recorded a dividend return of 4.96%, a capital growth return of 5.96%.

FHLUT's total funds under management is F$28 million. These are invested in a range of listed and unlisted companies, term deposits and Government guaranteed bonds.

Capital Markets Development Authority CEO emphasises Corporate Governance

The new Chief Executive Officer of the Capital Markets Development Authority, Mrs Mereia Volavola, has emphasised that good corporate governance is essential to improve accountability for companies operating in the capital markets.

Read more on her comments in an article from the Fiji Times below.


"Good governance key, Monday, July 16, 2007

Good corporate governance is essential to help companies and financial intermediaries improve accountability, says the new chief executive officer of the Capital Markets Development Authority, Mereia Volavola.

Speaking at her welcoming ceremony on Friday, she said financial intermediaries were essential in fostering financial stability and healthy economic growth.

Good corporate governance enabled more efficient use of capital and attracts quality and long-term investors at lower costs.

In the long run, the country's competitiveness and development will improve if good corporate governance is exercised.

Good governance is one area the CMDAwill focus on in the years ahead, Ms Volavola said.
She said many companies in Fiji were yet to fully appreciate how the stock and bond market works and how companies can benefit from it through enhanced company value and flexibility.

There are 16 companies listed on the Suva-based South Pacific Stock Exchange compared to six in 2000.

Market capitalisation, said Ms Volavola, rose from $243million in 2000 to $897million this year, representing a 269 per cent increase.

The CMDA she said, would continue its education program on the significance of the stock exchange.

"More companies need to be listed on the South Pacific Stock Exchange. Some large companies the insurance companies, the commercial banks and tourism companies remain unlisted," Ms Volavola said.

"Experience to date shows that most companies continue to satisfy their capital needs predominantly by using retained earning, bank-funded debt or through private equity deals with associates and friends."

With the review of the CMDA legislation, Ms Volavola said there was a need for a balance between a regulatory framework that guides peoples actions and economic freedom that allows them to innovate, experiment and take risk.

"One of the most important factors in determining how much material progress a society made was its ability to maintain a vigorous capital market," she said.

"Creating prosperity had largely been a matter of bringing together people who are prepared to invest capital with people who are able to use it to create wealth.""

RB Patel Group registers a profit

The RB Patel Group Limited, a company listed on the South Pacific Stock Exchange in Suva, Fiji, recorded a profit after tax of F$3.4 million over its financial year ended 31 March 2007 - an increase of a little over 16% compared to the previous year.

Group revenue rose to F$71.7 million, an increase of around 4% compared to its 2006 financial year.

Given that it operates in the supermarket industry, the company said that this somehow protected it after the Reserve Bank of Fiji tightened monetary policy.

The company will continue to look for growth opportunities and open new stores.

Yatu Lau Company raises F$2 million

Kontiki Capital has raised F$2 million for Lauan investment company, Yatu Lau Company Limited. The funds were raised through a private placement of 1.3 million Class B Yatu Lau shares at F$1.50 each with a syndicate of investors put together by Kontiki Capital.

The issue was managed by Kontiki Capital and underwritten by Kontiki Stockbroking.

The transaction followed a restructure of Yatu Lau's share capital to allow non-Lauan participation in the company.

A second phase of fund raising will involve a public offering to raise an between F$1 million F$1.5 million for the company.

Some of the company's directors are children of former President and Prime Minister of Fiji and Tui Nayau, Ratu Sir Kamisese Mara.