By Errol Gregory, Contributor
Wray
GRACE Kennedy Financial Services Division announced a new product earlier this month that was nothing short of a masterstroke. In specific terms, the company launched the Grace Caribbean Fixed Income Fund - an offshore mutual fund.
The fund invests in sovereign debt, issued by governments in the region, that have been rated by an international rating agency. So far the Fund has invested in Sovereign debt issues by the Government of Jamaica, Barbados and Belize. The new fund is targeted at providing investors in the region with an attractive return on a "Zero risk" instrument.
The new fund - a first for the region- will go a far way in stimulating capital flows in the region. For one thing, the Fund borrows on the general penchant of investors for debt instruments with guaranteed returns and minimum risk. Additionally a mutual fund is a popular, simple instrument that should find resonance with regional investors.
Additionally, investors will now have a liquid instrument that they can trade in whenever they have cash needs. This will definitely increase the attractiveness of the offer. Also, the Fund by investing in sovereign debt of Caribbean governments will invariably improve the attractiveness of these instruments thus making it easier for Caribbean governments to market their instruments overseas. Further, the new Caribbean Fund will increase the overall attractiveness of the region as an investment option for overseas investors who are still lured to the mystique of emerging markets.
Essentially what Grace Kennedy has done is to reposition itself given the competitive global environment and has designed an instrument that will give its company a competitive edge. This is an obviously commendable response to the challenge of globalisation that we sometimes still view as an insurmountable hurdle rather than planning strategies to ensure our survival.
What is interesting about the latest move by Grace Kennedy is that when questioned as to the reasons for selecting Cayman as the home of its Fund, Wayne Wray, MD, George and Branday said the Cayman had the required infrastructure of professionals to make the issue successful. In this regard one can not but wonder that had the financial sector crisis not occurred, Jamaica might have been in a similar position like Cayman today.
It could very well be then that by strengthening its Financial Services Division and doing its homework, Grade Kennedy is showing the way that Jamaica can regain its position to become a leader in the financial world but in a sustainable manner.
In the meantime, with Grace Kennedy pointing the way, other local companies should join the fray in fashioning positive responses to the realities of the global marketplace.
