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This blog is brought to you by Gilbert & Samuels Company Limited, a financial advisory services and consulting company based in Suva, Fiji.
To contact the authors of this blog, please call telephones (679) 3342719, (679) 3544897 or e-mail info@gilbert.com.fj.


Wednesday, March 28, 2007

Recent investment trends in Fiji's capital markets

Investment with companies listed on the South Pacific Stock Exchange (SPSE) in Suva, Fiji, has gone down over the past month. Market capitalisation on the SPSE fell from the F$1 billion mark at mid February 2007 as investors sought investment in other instruments that were paying well or better than what they held.

Over recent months, investment in short term deposits (up to 2 year terms) were paying well while others may have opted for longer term Government securities that were also paying high returns.

As expectations of a reduction in interest rates arise, particularly in light of the announcements in the revised Budget 2007 a result of which may see more liquidity pumped into the financial system and thus create downward pressure on interest rates, educated investors would have sought instruments with the longest terms at which they could secure the best possible high interest rates at the time.

Given that interest rates will fall (some already have fallen e.g. ANZ's term deposit rates which was posted earlier on this blog), investors will now be looking for other investment instruments apart from term deposits. This could mean another redirection of interest to companies listed on the stock exchange, to unit trusts, etc. Bonds which have already been sold in the primary market at a higher interest rate, may become an attractive alternative investment, on the secondary markets.

Perhaps, buying some of these bonds on the secondary market is a vehicle for the Reserve Bank of Fiji to add liquidity into the financial system.

If you are an individual or represent a group that needs investment advice, you can contact our company, Gilbert & Samuels Company Limited, for assistance. Our principal, Gilbert Veisamasama Jr, is an investment advisor licensed by the Capital Markets Development Authority (of Fiji). To contact us, you can e-mail gilbert@connect.com.fj or call telephone (679) 3396427.

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