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To contact the authors of this blog, please call telephones (679) 3342719, (679) 3544897 or e-mail info@gilbert.com.fj.


Monday, April 30, 2007

Bank Deposit Interest Rates fall further

ANZ Fiji's interest rates published this today, Monday, 30 April 2007, shows that its deposit interest rates have fallen further compared to that the bank advertised last Tuesday, 24 April 2007.

Some of the changes noted were :
  • Retail Term Deposits : 9 months to 1 year - fell from 5.00% to 4.35%;
  • Retail Term Deposits : 1 to 2 Years - dropped from 6.00% to 4.35%.
No changes were recorded in the bank's lending interest rates.

I would expect lending interest rates to fall soon as banks' liquidity positions rise from 1 May 2007 when their required cash holdings held with the Reserve Bank of Fiji reduces by 1%.

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ANZ Interest Rates (Updated 30.4.07)

Schedule of interest rates released by ANZ Fiji are as follows :
  • Business Index Rate - 12.75%;
  • Residential Property Loan : Standard Variable Rate - 12.25%, 1 Year Fixed Rate - 10.25%;
  • Investment Loan : Standard Variable Rate - 12.25%, 1 Year Fixed Rate - 10.25%;
  • Personal Loans : Secured - 12.95%, Unsecured - 14.95%;
  • Small Loans : Unsecured - 19.00%;
  • Retail Term Deposits : 9 months to 1 year - 4.35%, 1 to 2 Years - 4.35%, 2 Years to 3 Years - 4.50%.
Interest rates are on a per annum basis and may be varied by ANZ without prior notice.

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Saturday, April 28, 2007

Capital Markets Development Authority - Chief Executive Officer Vacancy

The Capital Markets Development Authority, in Fiji, is seeking applications for the position of Chief Executive Officer.

The Chief Executive Officer will be responsible to the Authority for exercising a clear vision and leadership in driving both the developmental and regulatory aspects of Fiji's capital markets.

Some of the issues the authority is working on include : compliance listings, IPO's, rights issues, takeovers, capital raising and other corporate actions.

The ideal person should have :
  • an advanced degree in finance, commerce, law or related disciplines;
  • a high level of proven managerial and business development experience;
  • a sound knowledge of the workings of capital markets;
  • proven skills in strategy formulation and implementation;
  • a minimum of ten years (or near) experience.
The term of the appointment is 3 years with scope for renewal depending on performance.

Applications enclosing a curriculum vitae setting out details of qualifications, experience and referees are to sent to the following address no later than 5pm, Friday, 25 May 2007 :

Address : Chairman, Capital Markets Development Authority, PO Box 2441, Government Buildings, Suva or e-mailed to ceo@cmda.com.fj. Envelopes should be labelled "Chief Executive Officer Vacancy - Confidential".

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Selected Westpac Fiji branches open on Saturdays

Westpac Fiji's Laucala Bay and Cumming Street branches are to open for business on Saturdays starting from today, Saturday, 28 April 2007. Opening hours are from 9am to 1pm. For more information on Westpac Fiji's products and services, pls call the bank on telephone (679) 132032 between 8am and 6pm, Fiji Time.

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Friday, April 27, 2007

New Fiji tax website

The Fiji Islands Revenue & Customs Authority has launched its revamped website on Thursday, 26 April 2007. The website aims to provide all necessary information to taxpayers, customs agents and the general public with the intention of providing extensive awareness on tax and customs issues in Fiji. Visit the website on www.frca.org.fj.

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Board Membership at Home Finance Company Limited

This is to announce that I had been offered and have accepted an appointment by the Fiji National Provident Fund (FNPF) as one of its Independent Directors to the Board of Home Finance Company Limited (HFC Finance).

FNPF, the Fiji pension funds provider, owns 75% shares in HFC Finance (while the remaining 25% is owned by the Unit Trust of Fiji). HFC Finance is a deposit taking institution and is licensed and supervised by the Reserve Bank of Fiji.

I have accepted the appointment as Independent Board Director at Home Finance Company Limited in the interests of seeing how our member funds at FNPF are being invested, and to contribute to HFC Finance and FNPF, as its major shareholder, my banking and financial industry experience and skills.

Being a vocal critique of the responsibilities of Board Directors in local institutions, I undertake to carry out my Board Directorship role to the best of my abilities and in an impartial manner.

To our past clients in the finance industry and to those that may wish to use our services through Gilbert & Samuels Company Limited, I vouch that we will continue to maintain very high standards of professionalism and confidentiality with regard to individual client matters and will not, at any time, compromise our ethics and standards, by providing or sharing information about one client to its competitors in the industry.

To contact us about this appointment or any future consultancy, you can e-mail gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.

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Thursday, April 26, 2007

Unit Trust of Fiji Performance

Unit Trust of Fiji's (UTOF) returns fell drastically over its financial year ended 30 September 2006. For that period, UTOF recorded :
  • dividend yield of 4.70%;
  • capital growth return of 1.61%; and
  • a total return of 6.31%.

This was a substantial reduction from its performance recorded over the 2005 financial year when it registered :

  • dividend yield of 4.67%;
  • capital growth return of 9.01%; and
  • a total return of 13.68%.

UTOF has said attributed the dismal 2006 results to the increase in official interest rates by the Reserve Bank of Fiji which it said resulted in a decline in value of its government bond portfolio. That reduction, according to UTOF, led further to reduction in UTOF's unit prices.

The decline in share price/market value of various shares listed on the South Pacific Stock Exchange which contributed a negative effect on UTOF's investment portfolio.

Being professional fund managers, one would have expected a bit more diligence from UTOF. Investors in UTOF would be best placed to now question what steps the fund will take if interest rates will continue to rise to avoid a similar result occurring in future. On the other hand, UTOF may be best advised to look at reducing such risks by diversifying its investments and invest overseas.

Read a press release issued by UTOF in the Fiji Times today, Thursday, 26 April 2007, and check the CMDA Annual Reports at www.cmda.com.fj for UTOF's returns over the past years.

Note : Anyone that wants investment advice can contact our company, Gilbert & Samuels Company Limited, for assistance. To contact us, e-mail gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.

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Wednesday, April 25, 2007

Credit Corporation (Fiji) Limited makes a profit of F$4.2 million

After raising the issue on this blog earlier that some of the deposit taking institutions are not publishing their Key Disclosure Statements (which outlines pertinent indicators of financial performance, Balance Sheet and Income Statement), the Fiji Times today, Wednesday, 25 April 2007, shows the statement published by Credit Corporation (Fiji) Limited (CCFL).

Continuing with the trend recorded by banks, CCFL has recorded a net profit after tax of F$4.2 million for the financial year ended 31 December 2006. This compares with a net profit after tax of F$3.6 million recorded for the 2005 financial year.

Further, the institution's return on average total assets rose to 6.71% in 2006 compared to 6.00% in 2005.

Of note in the accounts is that while CCFL's loan portfolio grew by 2.8%, its deposits portfolio fell by 1.4%. The company had to pay more in interest expenses to attract deposits (depicted by interest expenses increasing by 20.9% compared to the previous year). This reduction in deposits may be attributed to depositors taking out their funds and reinvesting them in other instruments which were paying better (which may include long term government securities and term deposits with banks).

Interest income grew by 14.8% in 2006 compared to 2005.

For more details on the Key Disclosure Statement of CCFL, pls click here.

Note : If you need investment advice, you can use our company, Gilbert & Samuels Company Limited. Our principal, Gilbert Veisamasama Jr, is an Investment Advisor licensed by the Capital Markets Development Authority (of Fiji). To contact us, e-mail gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.

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F$300 million development at Nausori Town

A F$300 million property development project is planned for Nausori, the town next to Suva here the airport is located.

"The Haven" project will see the development of international class residential homes, terrace houses and apartments, a premium hotel, 12-storey office complexes for professional and corporate organisations and a contemporary 4-storey retail shopping complex.

Other facilities to be incorporated include an amusement water park, an entertainment centre, restaurants and state-of-the-art communication services.

The project is to be managed by international residential developer, Executive Development Properties.

Note : Investors that require assistance for obtaining loan financing for their investment and development projects in Fiji can use our company, Gilbert & Samuels Company Limited. Pls contact us on e-mail gilbert@connect.com.fj or telephone numbers (679) 3396427 or (679) 9921427 for further information.

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Tuesday, April 24, 2007

House prices to fall?

A report in the Fiji Times last Saturday, 21 April 2007, talks about demand for home loans having fallen over recent months as a result of monetary policy decisions taken by the Reserve Bank of Fiji. Read more on the Fiji times story here.

What are some of the things one should expect in this market in the near future?

These are some :
  1. demand for home loans continuing to slow as lending interest rates currently remain high and as the Reserve Bank of Fiji continues with its policy - one of which does not encourage ownership of second homes by members of the public;
  2. prices of residential property falling as a result of reduced demand;
  3. buyers or intending buyers of residential property having a good opportunity to bargain for prices that they want, i.e. there being a buyers market for residential property;
  4. more properties coming to market on mortgagee sale as members of the public have problems with paying their loans given the high interest rates and coupled with reduced working hours/salaries and redundancies in the current economy.

For those that will be buying residential property soon, please scope out deals and bargain, bargain and bargain (with sellers). Given that interest rates may come down in a few months, do not enter into a long-term fixed rate housing loan. Get a variable rate home loan for which the interest rate will be reviewed and reduced when interest rates fall.

Note : For those of you who require investment advice or assistance with getting a home loan or business loan, our company, Gilbert & Samuels Company Limited, can do this for you for a small fee. To contact us, you can e-mail gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.

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Another promising timber export

Teak may become a billion dollar industry in Fiji, according to Future Forests (Fiji) Limited chief executive, Paul Evers. Mr Evers says that the industry was capable of generating about F$150,000.00 a year.

The company has set up its first teak plantation in the Ra Province on Viti Levu.

Teak is said to be in short supply in England and other parts of the world. It is also said grow very well in the Pacific, particularly, Fiji, Solomon Islands, Papua New Guinea and Samoa.

Read more on this promising export product in the Fiji Times article here.

Note : Investors that require assistance and advice on setting up business in Fiji can contact our company, Gilbert & Samuels Company Limited, on e-mail gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.

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Bank of Baroda Interest Rates (Updated 24.4.07)

Schedule of interest rates released by Bank of Baroda Fiji are as follows :
  • Home Loan : 1 Year Fixed Rate - 9.00%; Thereafter - 11.00%;
  • Retail Term Deposits : 9 months to 1 year - 1.50%, 1 Year to 1 Year 3 months - 4.25%, 1 Year 3 months to 3 Years - 4.00%.
Interest rates are on a per annum basis and may be varied by Bank of Baroda without prior notice.

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ANZ Interest Rates (Updated 24.4.07)

Schedule of interest rates released by ANZ Fiji are as follows :
  • Business Index Rate - 12.75%;
  • Residential Property Loan : Standard Variable Rate - 12.25%, 1 Year Fixed Rate - 10.25%;
  • Investment Loan : Standard Variable Rate - 12.25%, 1 Year Fixed Rate - 10.25%;
  • Personal Loans : Secured - 12.95%, Unsecured - 14.95%;
  • Small Loans : Unsecured - 19.00%;
  • Retail Term Deposits : 9 months to 1 year - 5.00%, 1 to 1.5 Years - 6.00%, 1.5 to 2 Years - 6.00%, 2 Years to 3 Years - 4.50%.
Interest rates are on a per annum basis and may be varied by ANZ without prior notice.

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Sunday, April 22, 2007

Interim Prime Minister intervenes in Momi Bay hotel development

The Interim Prime Minister has intervened into the tax dispute between the Fiji Islands Revenue and Customs Authority (FIRCA) and developers of a 5-star resort at Momi Bay, near Sigatoka, Fiji.

He has asked the tax authority to stand aside and not hinder development of the resort.

Read more in the Sunday Times article here.

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Friday, April 20, 2007

Fiji National Provident Fund Chief Executive and Deputy fired

The Chief Executive Officer of the Fiji National Provident Fund (FNPF), Olota Rokovunisei, and his deputy, Foana Nemani, were fired by the FNPF Board yesterday, Thursday, 19 April 2007. Board Chairman, Peceli Vocea, said that the decision was arrived at after the Board considered all options that were available to it.

More on the story here.

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Thursday, April 19, 2007

Westpac Deposit Rates fall further

Westpac reduces its deposit rates with effect from today, 19 April 2007. Term deposits from 9 months up to 3 years now accrue a flat interest rate of 4.25%. The bank's rates which were last posted on this blog on 3 April 2007 fell as follows :
  • 6 to less than 9 months - fell to 4.25% from 4.60%;
  • 9 months to less than 1 year - remains at 4.25%;
  • 1 year to less than 1.5 Years - fell to 4.25% from 5.45%;
  • 1.5 years to less than 2 Years - fell to 4.25% from 6.00%; and
  • 2 years to less than 3 Years - fell to 4.25% from 4.50%.

This can be attributed to there being more liquid funds available in the banking system. More liquidity in the banking system is expected as the statutory reserve deposits that banks are required to hold with the Reserve Bank of Fiji, falls from 7% (of a bank's deposit and borrowing liabilities) to 6% from 1 May 2007.

We should expect lending rates to reduce over the next few months.

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Westpac Interest Rates (Updated 19.4.07)

Schedule of interest rates released by Westpac Fiji are as follows :

  • Business Lending Rate - 12.49%;
  • Residential Property Loan : Variable Rate - 12.25%;
  • Investment Loan : Variable Rate - 12.25%;
  • Retail Term Deposits : 6 to less than 9 months - 4.25%, 9 months to less than 1 year - 4.25%, 1 year to less than 1.5 Years - 4.25%, 1.5 years to less than 2 Years - 4.25%, 2 years to less than 3 Years - 4.25%.

Interest rates are on a per annum basis and may be varied by the bank without prior notice.

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Monday, April 16, 2007

Communications Fiji Limited records a large reduction in profit

Communications Fiji Limited (CFL), a company listed on the South Pacific Stock Exchange, has recorded a large reduction in operating profit. CFL's profit after tax fell to F$12,904 for the year ended December 2006 compared to F$217,102 recorded in the same period in 2005 .

The company has given reasons for the downturn as including difficulties arising from the recent political events in Fiji and an overall focus on consolidation.

Following expansion in 2005, CFL has concentrated on strengthening management systems and maintaining clear goals.

The company is expected to see an increase in profits over 2007 with increased revenues and significantly reduced expenditure.

CFL holds 45% shares in a local Internet Service Provider, Unwired Fiji, and owns radio stations FM96 and Legend FM.

Note : If you require investment advice, you can use our company, Gilbert & Samuels Company Limited. Our principal, Gilbert Veisamasama Jr, is an Investment Advisor licensed by the Capital Markets Development Authority (of Fiji). To contact us, e-mail gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.

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ANZ will not reduce interest rates

ANZ has said that it will not reduce its lending rates just yet.

The bank was responding to the move by Westpac Banking Corporation to reduce all its lending rates by 0.5% from 1 May 2007 in light of improvements in banking system liquidity.

Financial system liquidity is to improve further with the reduction of 1%, from 7% to 6%, in the Reserve Bank of Fiji's Statutory Reserve Deposits requirement from 1 May 2007.

Statutory Reserve Deposits are funds that banks have "locked in" as deposits with the Reserve Bank of Fiji. During a stipulated period, a bank may not withdraw these deposits from the Reserve Bank of Fiji for other use. Hence it is used as an instrument to control lending (or credit) in an economy.

Given the supposed failure of the Reserve Bank of Fiji's interest rate' monetary policy framework, it has resorted over recent years to directly controlling bank lending (or credit) through playing around with the proportion of funds that banks are to hold on deposit with the Reserve Bank.

Here is the related report in the Fiji Times, Monday, 16 April 2007.

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Bank South Pacific Clarification

The figures published by Bank South Pacific in the Fiji Times last Saturday, 14 April 2007, was apparently for the entire Bank South Pacific Group (which includes its global operations as well as Fiji).

Therefore, the figures reported are correct i.e. that net profit before tax for 2006 for the whole Bank South Pacific Group was F$62.0 million and F$55.1 million for 2005.

This is a new practice that banks in Fiji now publish their global financial results instead of that of their Fiji operations only.

After the controversy of the high profits recorded by banks in Fiji (refer to ANZ and Westpac performance reported on this blog earlier and in the local newspapers), I have found that those institutions' whose performance was to be published last April for their December 2006 results, have not published them. These include some of the non-bank deposit taking institutions.

The whole intention of the Reserve Bank's policy to require publication of their Fiji results was that it was more appropriate for educating and informing the Fiji public about how their banks and other deposit taking institutions have performed over the most recent financial year with comparative data provided for the year earlier.

Previously banks used to publish their global results. That publication meant very little for Fiji users and readers of financial information. This was changed after passage of the current Banking Act in 1995 and the implementation of a disclosure policy for banks and other deposit-taking institutions which require publication of the financial results for their Fiji operations.

Is the publication of global results going to be a new practice for Fiji? Or is someone trying to hide something particularly after the controversy of banks benefiting from Reserve Bank's high interest rates policy?

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Saturday, April 14, 2007

What profits did Bank South Pacific Limited record?

The Key Disclosure Statement published by Bank South Pacific Limited in the Fiji Times, Saturday, 14 March 2007, noted that it recorded a net income after tax of F$62.0 million for its financial year ended 31 December 2006 compared to F$55.1 million recorded the year earlier.

Sounds right? NO! The figures must have been misreported as the top of the Key Disclosure Statement state that they are in FJD'000 with the net income reported for 2006 as 62,009 or F$62,009,000 and 55,124 or F$55,124,000 for 2005.

Being the smallest bank in Fiji, this definitely does not seem right as ANZ being the largest bank only recorded net profit after tax of a little over F$40 million for 2006.

So, I would read it that the bank recorded only F$62,009.00 for 2006 and F$55,124.00 for 2005.

Let's hope that these banks and the regulator, Reserve Bank of Fiji as financial system regulator, check these things properly before authorising their issue as they tend to "over excite" people who read them.

Anyway, of note is that Bank South Pacific, which bought the Fiji operations of Habib Bank Limited, has placed most of its asset portfolio in securities and investments rather than in lending. This would mean that it has continued an overly cautious approach which was adopted by its predecessor owner, Habib Bank of Pakistan.

The bank's major source of funding has been non-interest bearing deposits, rather than interest bearing deposits. In the high interest rate environment that existed and which continues, one wonders whether depositors in that bank understand what they are losing out on by parking their funds for "free use" by the bank.

These are things that Fiji consumers would hopefully understand if they use advice from appropriately qualified professionals.

No data is given on the bank's proportion of bad loans to total loans, however, it is interesting to note that they are highly capitalised and meet the minimum capital adequacy ratio requirement of 8%. This is understandable, though, considering that the bank placed the majority of its assets in a lower risk weighted assets such as securities (which would mainly be government securities) and investments. That action has the resulting effect of reducing the bank's risk weighted assets base and increasing its capital adequacy ratio.

This is one bank whose performance over the next year would be interesting to follow as the strategic direction taken by its new owners come to bear. We, therefore, look forward to its performance over 2007.

Note : Those that need investment advice can use our company, Gilbert & Samuels Company Limited. Our principal, Gilbert Veisamasama Jr, is an Investment Advisor licensed by the Capital Markets Development Authority (of Fiji). To contact us, e-mail gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.

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Mahogany Industry Company seeks CEO

The Fiji Hardwood Corporation Limited (FHCL), which was mired in controversy recently and has not been profitable since its establishment, is seeking a new Chief Executive Officer. The Fiji Times today, Saturday, 14 April 2007, contains the advertisement.

Advertised by the Corporation's Board Chairman, the person sought is expected to :
  • develop and executive a strategic plan which will lead FHCL towards becoming a fully-fledged commercial business;
  • transform the organisation into one which is client focused and commercially oriented;
  • build current relationships and establish new business relationships with potential business customers;
  • develop a good rapport with mahogany landowners within the parameters of a commercial working environment;
  • ensure the financial health of the business;
  • risk management and ensuring that the operations of FHCL are compliant with the relevant legislation, regulations and professional standards;
  • accurate and timely reporting to the board and relevant Government Ministries;
  • staff management and development;
  • have a relevant degree and previous management experience in the forestry or timber industry.

The mahogany industry has the potential of being a high foreign exchange earner for Fiji given the demand now for mahogany products and furniture from overseas.

Given the impressive requirements listed above, I am sure that the industry and the FHCL will have an interesting future to look forward to.

If you feel that you have the appropriate credentials, send an application to FHCL's Chairman of the Board of Directors, Mr Winston Thomson, by e-mail on winston@connect.com.fj or telephone him on (679) 3322679. Applications close on Friday, 20 April 2007.

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Thursday, April 12, 2007

Another film to be shot in Fiji

Another film is to be shot in Fiji, according to the Fiji Audio Visual Commission. The thriller, ''Chicane'', has started local preproduction and is to begin filming around Mamanuca Group, Nadi, Serua and Namosi from 23 April 2007. Shooting will take a period of 5 weeks.

The producers are said to be attracted by Fiji's beautiful location and tax rebate incentive which is offered for the industry.

They intend to shoot more films in Fiji in future.

Note : Foreign investors that need assistance with regard to investing or setting up business in Fiji can use our company, Gilbert & Samuels Company Limited. Please check new financing rules for foreign investors which we have posted earlier on this blog. To contact us, pls e-mail gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.

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New Internet Service Provider set up

Kidanet, a new Internet Service Provider, has opened for business in Suva, Fiji. The company which is a subsidiary of Fiji International Telecommunications Limited (FINTEL) is now advertising its Internet access rates for homes, businesses and schools.

An interesting feature of Kidanet is that it does not place limits on data downloads per month as is done by the other Internet provider, Connect Fiji. Kidanet also offers cheaper rates compared to Connect.

Home connections range from F$35.00 per month for a speed capacity of 128Kbps, F$97.00 per month for speeds of 256Kbps up to F$376.00 per month for speed capacity of 1,024 Kbps.

The office connection charges range from F$255.00 per month for speed capacity of 256 Kbps up to F$1,074.00 per month for speed capacity of 2,048 Kbps.

School connection rates are the same as those for home connections.

Kidanet will definitely provide a good alternative to Connect Fiji. Interesting to note, though, that both companies belong to the Amalgamated Telecom Holdings' group of companies.

For more details, pls visit www.kidanet.com.fj or call toll free telephone number (679) 0800 3315749.

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Wednesday, April 11, 2007

Financial Transactions Reporting Regulations

The Financial Intelligence Unit, located at the Reserve Bank of Fiji, has announced that it has issued the Financial Transactions Reporting Regulations under the Financial Transactions Reporting Act of 2004.

Investors and those that are interested in doing business in Fiji are advised to be mindful of the requirements of the Act and Regulations. The Regulations are to come into effect from 1 May 2007 upon receiving Cabinet approval.

Other pertinent requirements which come into effect from 1 January 2008 include :
  • the reporting of all cash transactions of F$10,000.00 and above;
  • the reporting of all electronic fund transactions; and
  • border currency reporting.

Stringent penalties including imprisonment can be faced if the requirements are not met.

Soft copies of the Regulations will be available from the Financial Intelligence Unit later.

For more details or clarifications, pls call the Financial Intelligence Unit on telephone (679) 3223333.

Note : If you require assistance in getting your business systems up to par with the requirements, you can use our company, Gilbert & Samuels Company Limited. We have done compliance work for large financial institutions in Fiji and helped them bring up their procedures to meet legal and regulatory requirements. To contact us, you can e-mail gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.

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Saturday, April 07, 2007

A short term measure : Can we look at containing imports

Much has been said about the need to increase exports to help improve Fiji's trade balance position. However, we all know that getting into exports takes a while to set up with time spent on establishing a business, meeting all FTIB and Government-set requirements, setting up your product and getting it ready for exports, looking for markets and contacts, checking out the shipping and airline routes, availability and costs and then having your first consignment ready for exports.

Why don't we look at the import side and try to improve/reduce that side of the trade account? There are a lot of things that can be done to reduce imports.

My suggestions here relate to trying to reduce the import of fuel oils which formed 51% of the total imports in 2006. (Refer to Bureau of Statistics data here.) Some actions that can be done include :
  • looking for and encouraging the use of alternative energy in place of fuel and diesel oils and petrol;
  • residential property owners should be encouraged to complement their energy needs with solar energy derived from solar panels. The purchase of these solar panels should have a tax rebate or be tax free to encourage their use;
  • large vehicles (usually called gas guzzlers) such as four-wheel drives should have a prohibitive gas guzzler tax to discourage their purchase and ownership. They should also attract an environment tax given that they emit a higher proportion of gases and carbon which damage the atmosphere and ozone layer;
  • all properties (business or residential) should have an energy audit with a view to encouraging efficiency in use of energy;
  • energy saver fixtures and light fittings should be sold tax free to encourage their use widely in business and residential properties;
  • tax concessions should be given to businesses that will engage in the research of alternative fuels and energy;
  • controlling the number of vehicles on the roads with a limit on vehicles licensed each year;
  • stopping the import of second hand vehicles from overseas which have more fuel consumption for the same mileage as other new vehicles;
  • the set up of alternative energy structures (e.g. windmills) by the Fiji Electricity Authority be speeded up.

I suggest also that Government and the authorities have a good review of all imports and weed out or impose a higher tax on those that are considered unnecessary e.g. fruits and vegetables that can be sourced locally.

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Thursday, April 05, 2007

Pacific Green records a loss

Pacific Green Limited, manufacturer and exporter of palmwood furniture, has recorded a loss of F$200,000.00 over the past year. The company said that its performance was still good given that it had to overcome many difficulties during the period. It has attributed the loss to restructuring costs and closure of its warehousing operations in Australia. The company is listed on the South Pacific Stock Exchange in Suva.

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Fiji Television Limited to pay dividends

Fiji TV, a company listed on the South Pacific Stock Exchange (SPSE), said that it will pay an interim dividend of 9% per share despite a fall in its profits over its most recent half year. The company's payout is expected to total F$927,000.00. Fiji TV also added that it will pay out a final dividend at the end of its financial year after the usual annual audit of its accounts.

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Wednesday, April 04, 2007

Banking System keeps on profiting from RBF's monetary policy

The Fiji Times today reported the financial results released by Credit Corporation (PNG) Limited. In that report, there is a mention of its Fiji subsidiary, Credit Corporation (Fiji) Limited making a "record profit before tax of over F$6,066,642 for the year".

As I have reported earlier on this blog, the interest rates settings by the Reserve Bank of Fiji, aside from contributing to the hardships faced by individuals, small businesses and investors who need to finance part of their projects locally, is only contributing to the banks and other deposit taking institutions (of which Credit Corporation (Fiji) Limited is one) reporting these huge profits that they have not recorded over a large number of years.

I was expecting more Key Disclosure Statements (financial information that are published by banks and deposit taking institutions) to be published recently but have not seen those come out. Whether the Reserve Bank of Fiji has a hand in in those statements not coming out, I am not sure.

When they are published, I will have a look and post something on this blog.

In the meantime, here is the report in today's Fiji Times on the results recorded by Credit Corporation.



"Credit Corporation makes profit, Wednesday, April 04, 2007


CREDIT Corporation (PNG) Limited has announced a K56.93million net profit ($F32.89million) for the year, which represents almost 15 per cent increase for the same period last in 2005.

The company's earning per share was K1.13 ($F0.65) and the net tangible asset backing per ordinary share had increased to K5.79 ($F3.35), said Chairman of Credit Corporation (PNG) Limited, Sir Henry To Robert. Sir Henry was announcing the Corporation's results for the year ended 31st December 2006.


And while Credit Corporation (Fiji) Limited continued to perform well with a record profit before tax of F$6,066,642 for the year, Sir Henry said the economy in Fiji was under extreme pressure as a result of the military coup of December 5, 2006 and economic growth was forecasted to slow for the foreseeable future.

For Credit Corporation (PNG), Sir Henry announced that total assets now exceeded K486 million ($F280.78 million), an increase of nearly K80.0 million ($F46.22million) for the year.
Sir Henry said due to the national elections in Papua New Guinea and the coup in Fiji the results for the New Year, may be difficult to maintain at the 2006 level.


However, he said that the results for the first two months of 2007 had exceeded expectations. All segments of the group had reportedly continued to perform strongly and the company's investment in Bank South Pacific had continued well from 2005 with Bank South Pacific announcing an after tax profit of K111.62million ($F64.49million) for the year.

The increase in the share price of Bank South Pacific contributed K35.65million ($F20.60m) to the Corporation's total profit. "

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Reaction to Reserve Bank of Fiji's Policy Announcement

I will be posting some comments on the most recent policy announcements by the Reserve Bank of Fiji later, but here are some from Westpac and a Think Tank that is working for the Interim Government, taken from the Fiji Times today.


"Bank cuts lending rates, Wednesday, April 04, 2007

THE Westpac Banking Corporation has announced it will reduce lending rates by 0.5 per cent, effective from May 1.

The reduction reflects the improved liquidity situation that has followed since the introduction of the credit ceiling by the Reserve Bank of Fiji on November 30 last year, the bank said.

Bank general manager John Cashmore said Westpac welcomed the Reserve Bank of Fiji's announcement on Friday of a reduction in the Statutory Reserve Deposit requirement from 7 per cent of deposits to 6 per cent.

"As a result of the reduction, Westpac is pleased to announce that we will decrease our base business and consumer lending rates by 0.5 per cent effective May 1, 2007," he said.

Mr Cashmore said the credit ceiling by RBF had been effective in reducing the demand for wholesale funds.

"With this reduction, we feel that we are now able to pass these savings on to our valued customers," he said.

Mr Cashmore said the bank would continue to monitor the impact on the cost of funds and any further easing of market rates, "will allow Westpac to pass on these savings to their customers in due course".


"Westpac is committed to the continual review of our products and services to ensure that our customers can access the best deals possible," he said.

Westpac had decided to decrease interest rates after the announcement by RBF that it had increased the official interest rate from 3.25 per cent per annum to 4.25 per cent per annum.


The RBF announced it had left official interest rates unchanged but had introduced policies that "will provide some leeway to commercial banks to re-look at their interest rates offered to customers"."



"RBF faces criticism, Wednesday, April 04, 2007


THE decision by the Reserve Bank of Fiji to implement policies to safeguard the country's balance of payment has been criticised by a group of interim Government supporters.

The group, known as the Think Tank for pro-interim Government Supporters, accused the bank of "incompetence".


"Now that we have a falling economy, depleted foreign reserves and a currency under pressure, the RBF has woken up to the fact that foreign-owned companies that borrow locally have been partly a cause of the economic problems we now face," group spokesman Fred Caine said.

"Under its enabling Act RBF is chartered with ensuring financial stability for the wellbeing of the citizens of Fiji. I'm afraid they have not done this job well enough."


A statement from the bank last week said the decision to implement the policies to safeguard the balance of payment was made against a backdrop of a contracting economy, failing investment, inflation edging upward, under performance of exports, a widening trade deficit and declining foreign reserves."

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Tuesday, April 03, 2007

Reserve Bank of Fiji Announces Policy Changes

Here is a copy of a press release issued by the Reserve Bank of Fiji on 30 March 2007 which will impact on foreign investors wishing to set up business or to invest in Fiji, and domestic investors as well.


"RESERVE BANK OF FIJI BOARD ANNOUNCES POLICY CHANGES
Press Release No. 4/7, 30 March 2007

The Reserve Bank Board held its monthly meeting on 29 March 2007 and decided to leave interest rates unchanged.

The Board has, however, announced a number of policy measures to help safeguard Fiji’s balance of payment. The decision was made against the backdrop of a contracting economy, falling investment, inflation edging upwards, underperformance of exports, widening trade deficit and declining foreign reserves. Under such an economic climate, the Board felt it necessary to put in place a combination of measures to protect Fiji’s financial position but at the same time ease upward pressures on interest to help growth and investment.

The policy measures announced are:

  • Continuation of the credit ceiling on commercial banks where loans and advances to the private sector will be held at or below levels prevailing at 30 November 2006. Special consideration, however, will be given for investment projects, exports, and to the small business sectors. Lending to these areas will be treated as outside the credit ceiling.
  • Non-resident companies and Individuals:
    o Foreign owned companies will be encouraged to borrow offshore. Existing 100 percent foreign owned companies borrowings from domestic sources will be gradually reduced.
    o New foreign owned companies will be required to fund their capital expenditure from offshore while working capital requirements will be allowed to be borrowed from domestic sources. Companies having joint venture with locals will be able to borrow in the domestic market in proportion to local equity.
    o Local borrowing by non-resident individuals to purchase properties will be withdrawn from 1 January 2008 except to already approved tourism related projects.
    o Details of these Exchange Control measures will be announced later.
  • A reduction in the Statutory Reserve Deposits ratio (SRD) from 7 percent to 6 percent, effective 1 May 2007.

The Bank will continue to closely monitor the current economic developments.

Reserve Bank of Fiji"

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Movement in Interest Rates for Westpac and Colonial

The updates on interest rates released by Westpac and Colonial and posted on the blog today, Tuesday, 3 April 2007, indicate that lending rates for the two banks have remained at the same levels as their last release in early March 2007. Westpac's deposit rates have remained at the same levels while Colonial recorded a change in deposit rates for terms of 9 months which fell from 6% to 5%, while deposits for terms of 1 year fell from 7% to 6%.

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Colonial National Bank Interest Rates (Updated 3.4.07)

Schedule of interest rates released by Colonial National Bank are as follows :
  • Business Banking Base Rate - 11.95%;
  • Residential Property Loan : Variable Rate - 12.25%, 1 Year Fixed Rate - 10.40%, 1.5 Years Fixed Interest Rate - 11.00%;
  • Investment Loan : Variable Rate - 12.25%, 1 Year Fixed Rate - 10.40%, 1.5 Years Fixed Interest Rate - 11.00%;
  • Retail Term Deposits : 9 months - 5.00%, 1 year - 6.00%, 1.5 Years - 6.00%, 2 Years - 4.50%, 3 Years - 4.50%.
Interest rates are on a per annum basis and may be varied by the bank without prior notice.

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Westpac Interest Rates (Updated 3.4.07)

Schedule of interest rates released by Westpac Fiji are as follows :
  • Business Lending Rate - 12.49%;
  • Residential Property Loan : Variable Rate - 12.25%;
  • Investment Loan : Variable Rate - 12.25%;
  • Retail Term Deposits : 6 to less than 9 months - 4.60%, 9 months to less than 1 year - 4.25%, 1 year to less than 1.5 Years - 5.45%, 1.5 years to less than 2 Years - 6.00%, 2 years to less than 3 Years - 4.50%.
Interest rates are on a per annum basis and may be varied by the bank without prior notice.

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FTIB Exporting to the USA Workshop

The Fiji Trade Commission Los Angeles, Fiji Embassy Washington, the Fiji Mission to the UN and the Fiji Islands Trade and Investment Bureau (FTIB) together with senior executives of the Montalvan Sales Inc will be conducting two workshops on exporting to the USA.

Topics covered will include :
  • Understanding the US Market - Trends, Challenges and Opportunities;
  • Things to Know Before you Export to the USA;
  • Preparing Your Goods for Export - quality, packaging, labelling and shipping;
  • US Market Entry Requirements.

The sessions planned are :

  • Suva, Tuesday, 17 April 2007, 9am to 5pm, JJ's on the Park;
  • Lautoka, Thursday, 19 April 2007, 9am to 5pm, Tanoa Waterfront Hotel.

The presenters are :

  • Mrs Carmen Montalvan - Vice President and owner of Montalvan Sales Inc, one of the biggest US wholesaler and importer of food products from Fiji, NZ, Australia, Costa Rica and Chile;
  • Ms Doreen Francis - Fiji Product Sales;
  • Ms Marilyn Montalvan - Office Manager.

Bonus : Participants will receive a list of US companies (and contact details) who wish to buy kava, dalo, cassava, rourou, fish, fruits, vegetables, canned foods, chillies, beach-de-mer, etc, and participants may contact these US buyers directly.

Registration fees is F$35.00 per person. The fee will cover full day workshop, workshop materials, hand outs, morning and afternoon tea, list of products that Montalvans Sale Inc wish to buy.

For registration, pls contact Ms Katarina Lala on telephone (679) 3315988 or e-mail katarina@ftib.org.fj in Suva or Ms Yvonne Ravaga on telephone (679) 6667133 or e-mail yvonne@ftib.org.fj at Lautoka.

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