The Caribbean remains a great place to invest, especially T&T, says Nick Chamie, chief investment officer for international wealth management at Scotiabank.
In an interview with the T&T Guardian at a session on Global Markets Outlook: A Road Map for Challenging Times Chamie said: "Because of the diversity of economies and markets and companies and issuers of stocks and bonds in the Caribbean, certainly there are a number of very important and impressive companies to invest in and we are constantly evaluating investment opportunities in the region for our broader global investors.
"I look at T&T and other markets around the world and obviously, regionally, from a financial market point of view in terms of the attractiveness of stock and bond markets alike. Generally we find T&T to be a relatively stable and attractive market, with good growth opportunities and in the end, it tends to rank highly within the Caribbean."
Asked to comment on the Europe Commission' publishing of a blacklist of 30 countries around the world described as the worst tax havens, 14 of which are Caribbean islands, Chamie said: "To be honest, I haven't looked at that report or haven't considered that so I have no comment."Turning his attention to geopolitical and financial events in Europe and Asia that could affect the region, he said the financial crisis in Greece and the slowdown in the Chinese economy were two events to be concerned about.
If there was a disorderly or difficult end to Greece's crisis that results in that country's exit from the Euro currency area, that is going to act as a head wind to consumer and business confidence in Europe, and eventually weigh negatively on business activity, he said. It will hurt trade and business investment flows into many regions, including the Caribbean and Latin America.
Chamie said indirectly the region will feel some reverberation if there was a disorderly unwind of Greece's problems. However, he does not believe the situation in Greece is similar to the global financial meltdown of 2008.Since 2010, he said, the rest of Europe has established a number of firewalls to help mitigate some of the spill-over risks. As a result, the potential for some kind of systemic event has been greatly reduced.
"To be honest I am not even to sure that back in 2010 when the Greek crisis really first erupted, if then it didn't represent proper systemic risk for the world–not in the way 2008 did," Che said."Of course, T&T and the rest of the Caribbean region relies on commodities. In terms of overall global economic growth, China is the second largest economy in the world and as a result, its continued slowdown will act to slow global economic momentum.
"Of course, in terms of investment, trade flows, specifically investment flows into the Latin American and Caribbean region, China has been very prominent as a source of investment in flows into the region. So, as China's growth slows, it represents a potential risk to some of those investment flows,"he said.
As equities continue to decline, considering that most of T&T's mutual funds were held in US equities and the government held US securities, the market will remain volatile.
"The world has to, on a regular basis, contend with a number of contentious issues, but in the end, equities represent an investment in productive capital. So in the long term, we still expect that equity returns will continue to be a reasonable option for global investors. In the end, what you have in the US economy is the most stable economy, one of the economies that has done the best coming out of the global recession in 2008-2009.
"So far, European equity markets have lost some gains recently in the context of the Greek crisis. We are still generally optimistic on European equity markets over the longer term, so it is important to stick to longer term investment principles and that has traditionally seen investors through difficult and uncertain times," Chamie said.
