Wednesday, November 3, 2010

BELIZE - Prime Minister Barrow clarifies reason for SSB investment in BTL shares.


I just got a sliver of the TV interview with BARROW. What I got was his rational for dictating to the Social Security Board, that they buy shares in BTL. He said and I quote - The SSB have millions of dollars sitting in Central Bank earning only 2.7% interest. So he thought it was a smarter move for them to buy BTL shares.

Now as a speculative investor all my life, small scale as befits the small nature of Belize, but the rules are the same. The $5 a share price for BTL shares will return a 2.4% dividend rate is my calculation. Now if the SSB would have bought BTL shares at $3 a share, I would have no objection. The dividend for BTL shares would have been proportionally larger. That is an dividend interest improvement. But going from 2.7% downward to 2.4% is hardly an improvement. Not counting the other problems with the company currently in the courts and coming up for the next general election. As a businessman and speculative investor, the rational left me flabbergasted. Mind you BARROW as PARTY LEADER has other political reasons for pushing the investment. What was disappointing to me, was learning that between PM BARROW the party leader, his ex-wife Louise Young and party hack Nestor Vasques, this trimuverate have adopted the same skills set and attitude formally held by MUSA, FONSECA and GODFREY of the PUP administration. The political interference and dictatorial attitude to Social Security Funds is the same game. Different political party, different names, but the same looting and plundering game. How very disappointed I feel, to have this confirmed.
As far as BTL shares are concerned, our own dividend interest rate return as a speculative investor are slightly different. Our maximum share price, all things being equal can only be .95 cents per share for BTL shares, to get our needed rate of return on capital invested. I can certainly see the justification for buying the shares for SSB at $3 a share though.

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