UTC Media Centre

June 17th, 2011: The Unit Trust Corporation, this week, donated $200,000.00 to six (6) Non- Governmental Organisations to support their steadfast work of caring for persons infected and affected by HIV/AIDS, in a cheque presentation ceremony held at the UTC Financial Centre, Port of Spain. On hand to receive cheques were representatives from Caritas, South Aids Support, ComTalk, Point Fortin Church of the Nazarene, Tobago AIDS Society and Tobago – Oasis.

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Decision Part of Corporation’s Strategic Decision to Focus on Trinidad and Tobago

Port of Spain, June 14th, 2011: The Belize Money Market Fund announced today that it will repay investors in full and close the Fund. The Company will cease its operations in Belize by the end of 2011 as part of the parent company’s strategic decision to focus on its core operations in Trinidad and Tobago. The Unit Trust Corporation’s core business in Trinidad and Tobago is unaffected by the exit from Belize.

“As a multi-billion dollar institution with the funds to meet our Belize investor’s’ needs, we have put the appropriate resources in place to ensure a smooth transition of our Belize operations,” said Eutrice Carrington, UTC Executive Director. “The decision to exit Belize was very difficult to make, but at this time we feel it is important to focus on Trinidad and Tobago and on the Corporation’s core operations. I am proud of our Belize employees’ efforts and thankful for their dedicated service and hard work.”

The Belize Corporation will be working closely with regulators in Belize to ensure the smooth and orderly exit from the country. Belize employees will receive their full salary through the end of the year as well as job placement assistance from the corporation.

For further information, kindly contact:
Amoy Van Lowe
Chief Marketing Officer
Marketing & International Business
Unit Trust Corporation
UTC Financial Centre
82 Independence Square
Port of Spain
624-8648 Ext 7021
AVanLowe@ttutc.com

                                                                                                         
Executive Director’s Address to
The 29th Annual General Meeting of
The Trinidad & Tobago Unit Trust Corporation
Held on 24th May, 2011
At Queen’s Hall

Madame Chairman, directors of the Corporation, representative of the Auditor General, Specially Invited Guests, Members of the Executive Team, Management and Staff of the Corporation, representatives of the Media, our valued Unitholders, ladies and gentlemen.

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Chairman’s Remarks at 29th Annual General Meeting

Address by Gayle Daniel-Worrell, Director MFATT and UTC VP Marketing and International Business at the launch of the Expanded Certificate for Financial Advisor Programme

‘Strengthening the Environment for Investor Confidence’

Salutations

Deputy Governor of the CBTT, Ms. Joan John,
Deputy Inspector of Financial Institutions, Ms Ho Sing;
Representative of Securities & Exchange Commission, Arlene Stephens
President of the Institute of Banking and Finance
President of the Securities Dealers Association,
Specially invited guests,
Members of the media
Ladies and gentlemen

The mutual fund industry and the securities industry have emerged as specialized disciplines within the financial sector, while some skill sets are common across the industry unique skills are required as each sub set of the industry evolves. Significant advances have taken place in the industry in terms of financial instruments, profile of investors and issuers, processes, regulatory framework and technology deployment. There was therefore, a recognized need for educational courses at various levels to meet the needs of the mutual fund and securities industry and a need to build and nurture new age securities markets professionals.
The industry also offers great opportunity for creating employment. With the aim to create a forum for interaction between the securities industry and academia on the subject of human resource development in the industry, The Mutual Fund association of Trinidad and Tobago (MFATT) and the Security Dealers Association of Trinidad and Tobago, together with the Institute for Banking and Finance, collaborated to expand the existing Certificate for Financial Advisors programme to include separate and distinct modules for specialization in Mutual Funds and Securities Dealing.

With this programme we are seeking to promote securities markets education, through:
* Close interface with policy makers and regulators
* Continuous knowledge creation and dissemination
* Enabling stakeholders to enhance knowledge, skill and awareness and
* Serving as a role model for other institutions to enhance the quality of interaction in the financial services sector between the service provider and the investor.

We professionals in the industry as well as investors everywhere, have been made sharply, and in some cases, painfully aware, that there is no longer a time to be less than professional in the approach to providing financial information to clients. Both service providers and investors have to be doubly sure about information given and that received. We also have to be certain that financial institutions and the environment for investing have the best professional capability possible.
The continued existence of major financial institutions and the general state of economies in the developing and industrial worlds demand that we bring new and higher standards to the business we are involved in.
The development of educational content to meet those demands is the reason we are here this morning to launch this expanded certification programme for Financial advisors. It is one of the basic objectives of MFATT to enhance the expertise of the professionals dispensing financial information to customers.
In addition to the training programme, MFATT also uses every opportunity to bring our members up to date with the developments in the industry through meetings, the sharing of information and participation international conferences and seminars. In so doing we also allow our professionals in the industry to interact with each other and on occasion with professionals from outside our financial environment.
This interaction is vital because if we were not previously aware of it we understand now that financial developments in Europe, North America, Asia and Latin America impact very directly on us right here in Trinidad and Tobago and the Caribbean.
I am sure that the during the certificate training, the young professionals will also be exposed to the structures and developments in international financial markets and their links to our own financial environment.
With regard to the details of the certification programme, it will give formal training and eventual certification to those who will be responsible for selling mutual funds and other investment and financial products. And it should be noted that increasingly, new investment products are being brought to the market. In some instances, these products are completely new to local investors. It is therefore an essential element of the training programme, that participants acquire the skills set to provide financial guidance to customers on new products and services and assist clients in achieving their financial goals. This programme is recognized by the local mutual fund and securities sector. It fully satisfies the requirements and standards which are necessary for unsupervised practice.

It follows that a more knowledgeable workforce within this industry will improve the quality of financial guidance and education of the public. In turn this will enhance the confidence of investors in the financial services sector.
And while the certification programme is not currently a mandatory requirement for those in the industry and those seeking to work in the industry, we have sought the sanction of the Security Exchange Commission. With the SEC anxious to raise standards in the industry and have investors gain the benefit of professionally trained personnel; it is almost certain that in the future certification in the programme will be required for all persons who provide financial information to customers.
That will mean that consumers of investment services will have professionally qualified agents to guide them. But we all know that technical knowledge is not all, participants in the programme will also be exposed to ethical standards of behavior and other considerations which will have to characterize their professional duties and responsibilities to their clients.
This certification programme is the first of its kind to be accredited by the TT accreditation council. This has the potential to give the investment community and the national population an assurance of quality and standards.
Initial credit for envisaging a programme to train professionals for the industry must go to a former commissioner of the SEC. He provoked the question to the industry. As a group of companies and individuals understanding of the need for professionalism and standards to attract investors, we in MFATT took on the challenge. But of course we could not achieve the goal by ourselves. We sought a partnership with the Institute of Banking and Finance and Security dealers association. All of this effort was geared towards bringing professional standards to the industry to generate greater investor confidence.
We see this as a critical step towards revitalizing consumer confidence for persons who may have become disillusioned by inaccurate and or misleading financial information from poorly trained practitioners.
Eventually with the spread of training through the certificate programme, we expect that standardized practices will develop in the industry. But let me assure you that while all of the companies in MFATT, IBAF and SDATT cooperate to develop and provide professional training and certification for our front line personell, individual companies will continue to offer customized services as we compete one against the other for investment funds and new customers. Competition as we all know benefits the investor.
MFATT, the Mutual Fund Association of Trinidad and Tobago. It is an association of companies which provide mutual funds products to the public. With total industry assets of over $35 billion, the companies in MFATT represent a significant capital base in the economy.

By any consideration the membership of MFATT, comprising
the Trinidad & Tobago Unit Trust Corporation,
RBTT Asset Management,
First Citizens Asset Management,
Republic Bank Limited,
Guardian Asset Management;
Bourse Securities,
Ansa Merchant Bank,
And AIC Financial Group,
constitute a grouping of the most formidable financial institutions in the market.

Recognizing a need for international connections, MFATT is a member of the International Investmet Funds Association in Canada and an affiliate of the Investment Company Institute in Washington DC. Together our institutions represent companies globally which together manage over US$10 trillion dollars in assets.

As a representative group of the mutual funds practitioners; one of our objectives is to develop the growth in mutual funds investment in Trinidad and Tobago and the Caribbean. Our intention therefore is to spread information and so develop capacity.

In achieving this objective, we are seeking to increase the profile of T&T as a mutual funds centre in the Caribbean. So that, as in the case of steelband and calypso, the international community must know that Trinidad and Tobago is host to the mutual funds industry in the region.

As a group MFATT has been working at providing the industry with, policy positions, performance presentation standards, industry statistics, research, representation and now education, training and certification.
One very vital function of MFATT is to serve as a point of contact for comment and feedback from the general public on the Industry.

All that is left for me to do is to wish the future participants in this first professional certification programme, all the very best. But before I do that I must acknowledge the efforts of Aklima Beekham Maharaj the manager of International Business at the Unit Trust corporation, whose drive, tenacity, supurb organization and patience helped to sheppard this project through to its successful conclusion. It took three years from April 2009 to April 2011, but without Mrs. Maharaj’s efforts we would not be standing here today ready to launch the expanded CERT FA programme.
To the future participants in this programme, you must also know that much will be expected of you. You have the responsibility not merely to give the best possible advice to clients, but also to expand the community of qualified professional financial service providers and strengthen the environment for investor confidence. By so doing you will be making a contribution to the personal wealth, development and financial well-being of our national community.

Thank you.

The Unit Trust Corporation has partnered with Citadel Limited the home of i95.5fm radio station to host a financial information segment. The Bi-weekly, fifteen minute segment will focus on topics that will further educate listeners about investment and investment opportunities that are available at UTC. Remember to join UTC on i95.5fm!

Chairman’s Remarks at Trinidad & Tobago Chamber of Industry & Commerce’s
Panel Discussion on the
Trinidad & Tobago Business & Economic Outlook 2011
Held on 14th January, 2011
At Chamber Building, Columbus Circle, Westmoorings

INTRODUCTION/SALUTATIONS

Madame President Angella Persad, Minister Cadiz, Governor Williams, Mr Monilal Mulchan, Vice President of the Chamber, other members of the Chamber, ladies and gentlemen. Thanks to the Chamber for hosting this Panel discussion on the business and economic outlook for Trinidad & Tobago which the Chamber should be roundly congratulated for hosting. We at the Unit Trust Corporation welcome this opportunity to share our views on the outlook for investment with the wider business community and indeed the investing public of Trinidad and Tobago.

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The Energy Chamber CEO, Mr. Thackwray Driver,  members of the Energy Chamber, specially invited guests, representatives of the media, ladies and gentlemen good afternoon. 

First, allow me to the opportunity to say what an honour it is for me to have been invited to deliver the feature address to this luncheon meeting on the topic “Connecting the Domestic, Financial and Energy Sectors”.  Indeed, this occasion affords me and by extension the Trinidad and Tobago Unit Trust Corporation, the organization which I have the privilege to lead at this time, to add its voice to the discussions on local content and local participation in the domestic energy sector, with particular emphasis on domestic capital involvement.

 At the outset the following points must be underscored:  The importance of the Energy Sector’s contribution to the Trinidad and Tobago economy is unchallenged, despite efforts to address inherent concentration risk and the sector’s recent failings, in terms of declining output.  The data show that in 2010, the energy sector accounted for 35.7% of GDP, 52.3% of government revenues and 81% of foreign exchange earnings.  In addition, over the last ten (10) years the petroleum sector on average accounted for  90% of total Foreign Direct Investment.

There is no doubt that Trinidad and Tobago has profited greatly from its energy sector.  In recognition of this fact and in an effort to promote economic diversity and sustainability, the government has endeavoured to utilize the energy sector as the facilitator of economic diversification through the development of the alternative and renewable energy sector, as well as downstream sector expansion.

 In support of this thrust, during this presentation today, I will seek to explore with you some ideas or suggestions on ways to achieving a greater level of connectivity between the local private capital and the domestic energy sector.  To create a context for the discussions, I will first examine the demand for energy and energy related assets by local private capital providers.  In this instance local private capital would include institutional investors such as pension funds, life insurance companies, the National Insurance Board and mutual funds.  While we acknowledge the role of state capital as the largest single local investor in the domestic energy sector it will not be the focus of my presentation today.

Following an examination of the demand-supply dynamic, I will then seek to demonstrate using empirical evidence the various ways in which local capital accessed, or attempted to access, investment opportunities in the energy sector.  The penultimate theme is one that will shed considerable light on the potential of local private capital supply relative to demand for capital in the domestic energy sector.  The address is concluded by focusing on the possibilities we can consider as we seek to   better connect local private capital to investment opportunities in the energy sector.

To examine the appetite of local private capital for energy and energy related investments, I will specifically draw on UTC’s experience to date as an institutional investor in the Energy Sector to establish the backdrop against which my proposals should be considered.

The Corporation’s earliest opportunity to invest in the energy and energy related domestic sector arose with the issuance of a T&TEC bond in the late 1980s.  This was followed by the failed management buyout bid which was piloted by a local investment Banker, in collaboration with a foreign Investment Bank, to acquire TRINGEN.  Since those initiatives a number of offerings have been presented to the Corporation.

Over the last thirteen (13) years, the Corporation has had the opportunity to participate in approximately forty-three (43) energy and energy related investments across the entire energy value chain.  These opportunities ranged from Exploration, Development & Production to Distribution.  Currently, UTC has committed Energy Sector investments in excess of TT$454.7 million or US$71.6 million.  These investments account for approximately 2.58% of the Corporation’s funds under management. 

If the UTC’s appetite for energy related investments were to be extrapolated across the entire financial system, that is, both the money and capital markets, local private capital would have funded the energy and energy related sector to the extent of TT$6.2 billion, or US$1 billion with TT$ 1.6 billion or a quarter billion US$ coming from the money market and TT$4.6 billion US dollars or three quarter billion US dollars being sourced from the capital market.

Moreover, when private local capital allocation to the energy sector as a percentage of Gross Domestic Product is examined, it amounts to approximately 3.5% of GDP, this situation speaks to the extent to which local capital in the domestic energy sector is denominated by local state capital and foreign direct investments.

Notwithstanding the need to diversify the economy away from its heavy dependence on the energy sector, the current low level of participation by local private capital in the most productive sector of the Trinidad and Tobago economy must be reversed.   In 2007, UTC’s efforts to address the issue resulted in the establishment of the Energy Fund.  To achieve its investment objective of capital growth, this Fund invests in a portfolio of energy and energy related assets locally, regionally and internationally.  The Fund’s assets include bonds and equities as well as non-traditional assets such as private equity.

In addition to UTC’s Energy Fund, both individual and institutional investors have the opportunity to invest indirectly in the local energy sector by purchasing securities on international exchanges.  Through brokers or exchange platforms, investors can acquire securities issued by international energy players such as BP, BG, Repsol, Schlumberger or Halliburton all of whom operate out of Trinidad. This avenue allows the investor to acquire a stake in a company whose income is generated principally from the energy sector.  The major setback to this approach is that such investments are geared towards the global performance of the company as opposed to being specific to its operations in Trinidad and Tobago.

Our experience as an institutional investor shows that it is possible to access domestic energy sector investments via primary or secondary market offerings.  These investments comprised the following asset classes: conventional bonds, stocks and shares.  On the one hand, primary market offerings have been relatively infrequent and have typically come by way of project sponsors and investment bankers.  On the other hand, secondary market offerings have been limited to MoraVen Holdings and National Enterprises Limited, with NEL not being a pure energy play given the inclusion of NFM and TSTT in its portfolio. By and large, the domestic energy sector opportunities have generally been in the form of project financing associated with processing plants and distribution.

The set back to investing at the project financing stage is that the securities issued by the company are not traded and as a consequence are illiquid by nature.  In addition, investors assume significant amounts of project risk ranging from sourcing a strategic partner to cost over-run and project completion. Based on the complexity of the project and the industry as a whole institutional investors are at great risk if their core competency does not lie in energy sector management as the due diligence required is significant and remains the lender’s responsibility. 

Regionally, primary market issues have also been the norm via private placements arranged by local merchant banks.  These assets are not tradable and could present liquidity management challenges. By contrast, more entry and exit opportunities are on offer in international secondary markets by way of listed equities and to a lesser extent bonds.  Even where illiquid energy investments have been presented by international energy players, risk diversification has been achieved through limited partnerships that give access to a portfolio of projects.

Having reviewed private local capital investor appetite for energy and energy related investments and the issues involved in accessing these opportunities in the domestic energy sector, I now turn my attention to the potential of local private capital to finance investment in the domestic energy sector.  Using cumulative energy sector FDI over the nine-year period ending December 2009 as a proxy for capital, we can estimate demand for capital by the domestic energy sector.  On the supply side, we can estimate the supply of local private capital to meet the need of the domestic energy sector by using the assets mobilized by institutional investors, namely pension funds, life insurance companies, the NIB and mutual funds.

As at September 2010, the supply of local private capital stood at TT$118.9 billion or US$18.72 billion whereas the cumulative demand for local energy sector capital over the nine years ending December 2009 amounted to TT$136.16 billion or US$21.44 billion. The data show that the demand for capital in the energy sector over the last nine years as measured by FDI exceeded the supply of private local capital by TT$17.27 billion or US$2.7 billion.  This means that the total supply of local private capital fell short of the domestic energy sector demand for capital by 15%.

This estimate of US$18.7 billion that I am using as a proxy for private local capital assumes no diversification,  as such, the other sectors of the economy, for example, manufacturing, construction and agriculture to name a few would be deprived of capital.   Further, if we were to extend the analysis to compute capital demand in the domestic energy sector since its establishment the inability of local private capital to meet industry demands would be significantly more pronounced.  This does not mean that local private capital cannot be deployed in the energy sector.  In fact, what this suggests is that the allocation of local capital to the energy sector in T&T must be driven by profitability, efficiency and productivity.

Given that the supply of local private capital is limited and resource utilization must be optimised, the following five (5) measures aimed at achieving greater linkages between the domestic energy and financial sectors are submitted for consideration.

One:   Access to the domestic energy sector by local private capital must form part of energy policy at the highest level and minimum domestic private capital participation rates in new energy and energy related projects must be stipulated.  

The allocation to local private capital should be based on total project cost, with the proportion allocated varying with the capital size of the project and the level of risk mitigators embedded in the project financing structure.

Two: Joint ventures should be encouraged as a preferred method for pursuing certain downstream energy and energy related projects.  This would encourage local enterprises to partner with international companies to undertake energy projects which they would not have otherwise undertaken.

Three:  Revitalize the near dormant Energy Holding Corporation Ltd, which was established in 1997 with the express purpose to promote and facilitate the deployment of local capital in energy and energy related projects.  The portfolio of energy assets spanning the energy value chain which this company will hold is expected to provide local private capital with the capacity to effectively manage the energy sector specific risk.  With this approach much could be accomplished toward the goal of  achieving  greater local involvement in the energy sector.

FOUR: Encourage the rating of energy companies and energy issues by regional credit rating agencies.  This will go   a long way in helping local private capital to understand and appreciate the risk and returns associated with the domestic energy sector which in turn is expected to encourage greater participation.

Five: Convert National Enterprises Limited (NEL), into a pure energy play investment by removing NFM which is already listed on the local exchange and by removing TSTT and listing it on the stock exchange while adding other state-owned energy assets to the portfolio.  This recommendation could be achieved in relatively short order.

SIX: Establish a medium to long term target at the national level to increase local private capital share of investment in the domestic energy sector to 20% its current share of from 6.2%.

To sum up, the possibilities for the forging of linkages between domestic capital and the local energy sector are not endless or obvious. 

The capital requirements of the domestic energy sector, the relatively small size of the local private capital market which is further complicated by ownership and international alignment issues and the allure of laissez faire rhetoric contribute to the challenge we must face.

In spite of the foregoing, the case for action is compelling and we must continue to strive for the establishment of meaningful and permanent linkages between local private capital and the domestic energy sector.  We at the UTC are open for business and stand ready to evaluate and invest in suitable projects which coincide with our risk profile.

I thank you.

February 11, 2011: The Chairman of the Unit Trust Corporation is extremely pleased to announce that Ms. Eutrice Carrington has been appointed as UTC’s Executive Director by the Board in consultation with the Central Bank and in accordance with section 7(1) of the Unit Trust Corporation of Trinidad and Tobago Act 1981.

Ms. Carrington has been with the UTC for nearly 20 years.  She has served the Corporation in a number of capacities, including Chief Executive Officer Financial Services, Vice President Asset Management, Manager Investment Management, Security Analyst and, Portfolio Manager. Ms. Carrington holds a Bachelors of Science honours degree in Economics and a Master’s of Science in Economics.

In congratulating Ms Carrington on her new appointment, Mr. Ewart Williams, Governor of the Central Bank noted that her sterling contribution to the UTC over the past several years made her uniquely suited to leading the Corporation over the next few years when market competition and new regulatory requirements would present new challenges.

During her professional career, Ms. Carrington has served as secretary of the Economics Association of Trinidad and Tobago.  She was also a member of the Technical Committee appointed by the Cabinet of Trinidad and Tobago to assist in the formulation of Mutual Fund Legislation. Ms. Carrington sits on the Board of two publicly traded companies.

In the coming weeks, Ms Carrington will meet with employees throughout the organisation, as well as with Unitholders and members of the corporate sector.

The Corporation hopes that all our Unitholders will join with us in congratulating Ms Carrington on this new appointment.