www.barbadosadvocate.com Web Posted - Mon Mar 17 2003

WHEN CIBC and Barclays Bank PLC completed their merger last year, it virtually set in motion the start to changes in the local banking industry.

That process now seems to be picking up speed with talks of a strategic arrangement between the Barbados National Bank and Republic Bank of Trinidad and Tobago.

Financial sources told Business Monday that there are a couple of issues that would favour the BNB going for a strategic partner.

“The first is that the face of banking in Barbados is not only changing but that the competition is becoming tough,” one analyst indicated.

He recalled that the creation of FirstCaribbean International the entity out of the merger of CIBC and Barclays Bank PLC is a large bank.

“That bank has with assets of US$10 billion that effectively made it the largest bank on the island,” the source said. However, the other players like Royal Bank and Scotiabank with their foreign base, give them the depth to be significant players in this market, according to an economist.

“Secondly, the Caribbean Single Market and Economy (CSME) is going to provide new opportunities and challenges for banks, and the BNB has to be in a position to capitalise and benefit from those opportunities,” the economist said. Though it has been performing well over the past few years, the BNB might still be unable to match what these “giants” are able to do.

“By ... seeking a strategic partner the BNB’s is effectively becoming more dominant in the industry.”

“With several businesses in Barbados as well as Government seeking foreign financing the opportunity is there for capitalising on such activities,” it was pointed out to Business Monday.

“So there are synergies to be gained from the arrangement.” Republic Bank’s assets stand at well over TT$10.7 billion and in 1996, the bank showed after tax profits of TT$136 million. Republic employs over 2 000 people in Trinidad and Tobago.

With a well established branch network and the reputation as the premier bank in Trinidad and Tobago, Republic Bank Limited has expanded its operations beyond its home base, and positioned itself as the leading financial services institution in the Eastern Caribbean.

The bank’s major subsidiary in Trinidad and Tobago is Republic Finance & Merchant Bank Limited (FINCOR). For the purpose of large scale property development, the London Street Project Company Limited was developed in 1995 as a subsidiary to FINCOR.

Republic Bank was actively establishing subsidiaries in 1992. That year the bank and Grupo Acedo-Mendoza established Acedo-Mendoza Fincor C.A., a confirming house with offices in Venezuela and Colombia as well as Trinidad. Also in 1992, Republic established Republic Bank Trinidad and Tobago (Cayman) Limited, a wholly-owned offshore bank with registered offices in the Cayman Islands. Before the close of the year, Republic Bank Limited purchased a 51 per cent shareholding in the National Commercial Bank of Grenada Limited, a commercial banking operation with eight branches on the islands of Grenada, Carriacou and Petite Martinique.

www.vheadline.com Posted: Friday, March 14, 2003 By: Robert Rudnicki

According to former executives at the Central Bank of Venezuela (BCV), the government has taken control of the BCV and it is now "a monetary branch of the government."

In a document signed by 11 former senior BCV executives they claim that the BCV is breaking the Constitution by endorsing government policies. "Monetary policy is now subordinate to fiscal needs and this has led to non-compliance with the Constitution."

Proof of this, the group claim, can be seen on three specific occasions: August 2000 "when the Finance Minister decided to confiscate part of the bank's capital," secondly in October 2001 when the bank's ability to establish reserves were removed from the Central Bank Law and thirdly in November last year when the law was changed because the Treasury needed extra funds.

www.newratings.com 03/13/2003 Wachovia Securities

NEW YORK, March 13 (New Ratings) — Analyst Yves Siegel of Wachovia Securities upgrades Hanover Compressor Company (HC: NYSE) from "market perform" to "outperform." Shares of Hanover Compressor Company, an oilfield services and drilling company, are currently trading at $6.00. According to Wachovia Securities’ research note, Hanover Compressor Company has overcome the worst contract compression conditions in 4Q02. Wachovia Securities mentions that the company is likely to exhibit improved results in its global compression operations, despite the problems in Venezuela. The analyst believes that the stock is attractively valued at the current level. The analyst, however, expresses caution regarding the Venezuelan situation and the company’s failure to attain the projected cost savings and restructuring targets. The EPS estimates for 2003 and 2004 are $0.30 and $0.70, respectively. The P/E estimates for 2003 and 2004 are 20.0x and 8.6x, respectively. Wachovia Securities upgrades Hanover Compressor Company from "market perform" to "outperform."

sg.biz.yahoo.com Friday March 14, 4:52 AM By Jehan Senaratna Of DOW JONES NEWSWIRES

CARACAS (Dow Jones)--With the effects of a debilitating general strike just about behind him, Alberto Hassan, chief executive at Venezuela's Orinoco Iron, is working on August and September business.

Output hasn't been fully restored quite yet after gas shortages during the strike forced the facility into standby mode, but Orinoco Iron is among a growing number of companies that are slowly resuming production.

According to Hassan, Orinoco is sold out through July, and "normalizing" is definitely a near-term goal. "We plan to restart our second production line on Mar. 21, and we should have all the gas we need for that," he said.

Orinoco Iron, along with its sister company Venprecar, produces about 1.3 million tons a year of hot briquetted iron - about a third of Venezuela's total output.

The company needs about 60 million cubic feet per day of natural gas to run its equipment, and Venprecar, which should be restarted in the "first days of April," needs about another 35 million cfpd, Hassan said.

At the most conservative of estimates, Venezuela's state oil giant Petroleos de Venezuela SA (E.PVZ) is now pumping about 4.1 billion cfpd of gas, according to Alfredo Gomez who represents a group of dissident oil workers who brought the company to a virtual halt during the strike which began Dec. 2.

That's only about 43% of pre-strike levels, but "it's good enough" to get most heavy industries back to normal, Gomez said.

Since gas is pumped during crude oil extraction, the levels are rising as Venezuela's oil output increases.

Gomez's group estimates crude output at around 2.1 million barrels per day now, well on its way back from a low of around 150,000 b/d at the height of the strike. Daily production stood at about 3 million barrels before the strike.

Orinoco Iron isn't alone in slowly bringing production back to pre-strike levels as gas supplies improve.

Comsigua, a competitor, is also returning to its normal output of about 1.1 million tons a year, according to industry sources, although another hot briquetted iron producer, Opco, which is run by Japan's Kobe Steel Let. (J.KOB) and produces 900,000 tons per year, hasn't yet achieved that.

Steelmaker Siderurgica del Orinoco CA, or Sidor, another major player in Venezuela's heavy industry belt in eastern Bolivar state, is getting about 190 million cfpd out of the 200 million cfpd of gas it needs, according to industry sources.

In other parts of the country, too, operations are slowly returning to normal.

Ricardo Tinoco, spokesman of Ford Motor Co.'s (F) local unit in central Venezuela, said operations have returned to normal since about a month ago because suppliers, many of whom had shut down due to the lack of gas, have resumed production.

"Our suppliers are doing OK. I haven't recently heard of any problems with gas," Tinoco said.

Orinoco Iron's Hassan is celebrating another fortunate, if unrelated, turn of events.

International hot briquetted iron prices have risen by about 40% to $145 per ton F.O.B, due to supply problems and heavy demand in China and Southeast Asia, he said.

But there's no forgetting Venezuela's problems, he said.

The strike was aimed at forcing President Hugo Chavez to declare early elections but the left-leaning leader has refused and many fear he may block any form of a vote in a bid to stay in power despite overwhelming opposition.

The government is in the process of cutting this year's budget while hoping to raise money from various bond issues to plug estimated financing needs equal to about 10% of gross domestic product.

Unemployment is seen soaring to more than 25% from the current 17% as more businesses shut their doors after the government imposed currency controls to protect falling reserves given oil revenues, which account for about half of pubic income, were severely affected by the strike.

The controls include restrictions on imports - which accounted for about 60% of consumption last year, including raw materials for an array of manufacturing process - sparking fears that some industries may never resume normal output.

Annualized inflation is almost 40% and is seen likely to increase as the bolivar's value drops beyond the current VEB2500 per dollar levels in private markets despite the official VEB1598 per dollar rate.

-By Jehan Senaratna, Dow Jones Newswires;58 212-564-1339 jehan.senaratna@dowjones.com

www.forbes.com Reuters, 03.12.03, 10:52 AM ET CARACAS, Venezuela, March 12 (Reuters) - Venezuela's largest state-run aluminum smelter, Venalum, produced 33,321 tonnes in February, meaning it is on track to achieving annual output similar to the record 436,558 tonnes in 2002, a smelter spokeswoman told Reuters Wednesday. Venalum, operated by the state industrial holding Corporacion Venezolana de Guayana (CVG) in mineral-rich southeast Bolivar state, suffered no serious effect on its production from a two-month anti-government general strike that fizzled out early in February. The smelter's February output figure was below the 36,954 tonnes produced in January but roughly the same as the 33,256 tonnes registered in February, 2002. The fall in February compared with January was due to the smaller number of days in the month of February, the spokeswoman said. Venalum, which has a nominal capacity of 430,000 tonnes a year, has said it hopes to repeat this year the output level achieved in 2002, The opposition strike, called by foes of leftist President Hugo Chavez to try to force him to resign and call early elections, slashed oil output in the world's No. 5 petroleum exporter and reduced natural gas supplies to some strategic basic industries in Bolivar state. Venalum is 80 percent owned by a wholly owned subsidiary of CVG. The remaining 20 percent is held by six Japanese firms -- Showa Denko K.K. <4004.T> , Kobe Steel Ltd. <5406.T> , Sumitomo Chemical Co. Ltd. <4005.T>, Mitsubishi Materials Corp. <5711.T>, Mitsubishi Aluminum Co. Ltd. and Marubeni Corp. <8002.T> No data were availbale for CVG's smaller Alcasa smelter, which produced 14,206 tonnes in January.