Barita Investments has dismissed claims that connected parties of affiliated companies have been trading shares among themselves in order to inflate the price of their stock.

Several questions around the matter were posed to executives from Barita on Taking Stock with Kaliah Reynolds recently. The issue follows concerns raised by the Trinidad Express in its series of articles referencing Bartia, its parent company, Cornerstone Financial Holdings, it’s special purpose company Bartia Finance as well as another company affiliated to a Barita Director, 294 Inc.

Responding to the concerns, Vice President of Asset Management and Research at Barita Investments,  Ramon Small Ferguson, said incorrect information has been published in some reports on the matter. He said while share trading has been typically public in nature, the specifics about who does what hasn’t necessarily been disclosed.

At the same time, he said connected parties dealing with the shares of the companies they are involved in has long been a trend, as evidenced in reports disclosed by the Jamaica Stock Exchange (JSE) on other listed companies. 

Vice President of Asset Management and Research at Barita Investments, Ramon Small Ferguson

He said such activities have been permitted once conducted within the context of the JSE’s rules about disclosure and timing, pointing out that there are points in time when the parties cannot trade, for example.

“There is great focus on specific transactions by Barita Investments, Barita Finance, Cornerstone, 294 Inc, but thousands of shareholders have bought and sold Barita shares at various prices throughout the course of the 11 years the company has been listed so it isn’t unusual for related parties to be dealing with the stock at all,” said Small-Ferguson.

He said such activities have not had any significant impact on the performance of Barita’s stock.

“The stock isn’t trading astronomically outside of where the market is,” he said, adding, “It isn’t a situation where these trades have moved the needles. If you look at for example the days when those transactions would have been done, the stock price didn’t move significantly on the days, it just so happened that the shares were traded and that’s about it. The notion that these trades themselves are moving the share prices are unreasonable.” 

According to the Vice President, the fact that the company’s share price has increased five-fold since 2018 to $90.00 has been justified as the institution has evolved into a ‘growth company’.

“What we’ve demonstrated over the last three years is very solid growth in profits nominally but also in earnings per share so the fact that the share price has gone up in conjunction with that is not unreasonable, we see that in the market all the time,” he said.

Based on the prospectus of the company’s latest Additional Public Offer (APO) which opened September 6, the shares, priced at $80.00 each, are about 18.6 times its earnings over the previous 12 months (P/E).

Small-Ferguson said investors stand to reap more value based on that metric alone, as it compares to the $52.00 share price in the 2020 APO, when the company’s P/E was at 19.92.

Meanwhile, he has hinted that Portmore could be among the next locations to welcome a Barita office. Since this fiscal year, Barita has opened two branches in Montego Bay and Kingston with a few others in the pipeline for development.

“We would have spoken about our digital strategy in the last prospectus, but we’re complementing that with a few strategic locations across Jamaica to ensure that we make wealth management solutions, investing accessible to our clients,” he said.

“We’ve read statistics about Portmore being one of the most densely populated places in the Caribbean and we are planning to go where our customers are so you can make some inferences from that,” he added.

Small Ferguson said the company will also continue to seek out opportunities in other Caribbean countries as it also moves to increase its footprint in the region. He said the team would have already started funding companies in the region, and also started onboarding clients from outside of Jamaica.

Additionally, he said Barita has started to acquire assets through its freshly launched Alternative Investments platform; however, he said those details will be released at a later date. In 2020, the company raised some $6 billion for this strategy, with focus being placed on private credit, private equity, real estate and infrastructure. 

Manager of Investment Banking and Investor Relations at Barita Investments, Raul Pinnock

According to Manager of Investment Banking and Investor Relations at Barita Investments, Raul Pinnock, the company continues to pursue equity raises to spearhead the transformative change desired across the region. This, he said, falls in line with Cornerstone’s vision of adding shareholder value.

“One of the ways we think we can do that is to continue to act in the traditional  assets of stocks, bonds, fx trading, net interest income etc, as we have been doing but to also bulk up our investment banking platform in terms of our supply of capital to large and medium sized and small companies around the region, infrastructure investment and catalyzing growth in private companies,” he said.

New episodes of Taking Stock with Kalilah Reynolds premiere Tuesdays at 8pm on YouTube and Kalilahreynolds.com 

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