Although the rest of the world's consumer confidence may be in the toilet, Panama's is still riding high. As this particle points out, it is due partially to a 13th month year end mandatory bonus and Panamanian's belief in a brighter future.
Excerpt From La Estralla:
Jacques de Raucourt of GFK Marketing Group, the company that carries out the consumer’s confident surveys for the Panamanian Chamber of Commerce said the increment of the index in Panama was directly related to the high level of commercial activity in December, mainly because during that month the Panamanians receive more income, like the 13th month payment and other incentives.
Consumers expectations about the financial situation of their homes went up to 118, five points higher that in November, which indicates optimism for the future.
Tuesday, January 27, 2009
Monday, January 12, 2009
With U.S. economy stuck, economists look abroad
By Jack Chang, McClatchy Newspapers WASHINGTON — As U.S. consumers stop spending and investors keep their money to themselves, government and business leaders hoping to get the country's ailing economy moving again are playing one of their few remaining cards. They're trying to sell more U.S. goods overseas despite the decline of both global demand and U.S. competitiveness. Exports currently make up about 13 percent of the country's total economic activity, far less than the 70 percent taken up by production for domestic consumption. But that's where economic growth can still happen, analysts say, especially as the domestic housing and credit crises promise to freeze spending at home for at least another year. Economists and business leaders suggest the incoming Obama administration implement export-friendly measures such as streamlining U.S. customs operations, negotiating more free trade agreements and developing industries such as alternative energy that can become the next generation of U.S. economic powerhouses. (more)
Sunday, January 04, 2009
Fitch Affirms HSBC Bank Panama & Sub's Ratings; Outlook Positive
NEW YORK--(BUSINESS WIRE)--Today Fitch Ratings has affirmed HSBC Bank Panama (HBPA) and its subsidiary Primer Banco del Istmo's (PBI) ratings as follows: HSBC Bank Panama: --Foreign Currency Long-term Issuer Default Rating (IDR) at 'BBB+'; --Foreign Currency Short-term IDR at 'F2'; --Individual Rating at 'C/D'; --Support Rating at '2'. The Rating Outlook is Positive. Primer Banco del Istmo: --Foreign Currency Long-term IDR at 'BBB+'; --Foreign Currency Short-term IDR at 'F2'; --Individual Rating at 'C/D'; --Support Rating at '2'. The Rating Outlook is Positive. HBPA and PBI's IDRs reflect the support from its parent (HSBC, rated 'AA' by Fitch Ratings) and are constrained by Panama's country ceiling rating. The individual ratings reflect HBPA and PBI's strong franchise, market share and improving revenue diversification; they also factor in the challenges of their merger and the weakening economic scenario. (more)
In Fitch's opinion, considering HBPA's (and PBI's) size, importance and key role in HSBC's strategy in the region, support from its parent should be forthcoming, if needed. An upgrade in Panama's country ceiling rating (reflecting a strong economy) would allow HBPA's and its subsidiary's IDRs to be upgraded. A disruptive integration of PBI, declining asset quality or weaker capitalization could pressure individual ratings.
HBPA's performance in 2008 is driven by stable margins and increasing non-interest revenues that offset modest loan portfolio growth (+2.2% for the year to date at August 2008). Margins are somewhat underpinned by decreasing funding cost while growing fees and commissions supply about 25% of operating revenues. Operating costs have increased, reflecting the on-going integration effort that involves significant investments in premises, training and an IT overhaul. Provisions have gradually returned to normal levels hence resulting in higher efficiency and improved profitability.
The loan portfolio is widely diversified and little concentrated while asset quality and reserve coverage improved within HSBC's stricter credit policies. The investment portfolio is smaller, less risky and a substantial liquidity cushion is in place. Deposits, which are broad-based and little concentrated, increased in line with assets and funding costs eased as institutional funding declined. Capital was strengthened by fresh capital injections (about $156 million) and retained earnings (over $160 million), hence BIS capital ratios attain 10.9% at August 2008 (11.4% in 2007, 9.4% a year earlier).
Going forward, moderate loan growth should be driven by corporate lending and later on by retail lending; margins should remain under pressure, but funding costs are likely to stabilize/decline. Operating costs should start declining in 2Q09, after the integration is completed while credit cost should stabilize in line with asset quality. Efficiency and profitability should improve only by 2Q09 while capital ratios should remain fairly stable. The merger has been delayed by the IT overhaul; however, these glitches do not change Fitch's belief that the completed merger will result in a very sound, efficient and competitive regional player as originally planned.
HBPA is 100% owned by HSBC; its operations are highly integrated within HSBC's regional franchise where it is considered a key subsidiary. A universal bank active in consumer, commercial and corporate lending, HBPA holds 21% of the system's assets at September 2008; it merged with Grupo Banistmo (PBI's parent) in July 2007 creating Panama's largest bank and a major regional player operating in Central America and Colombia.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
In Fitch's opinion, considering HBPA's (and PBI's) size, importance and key role in HSBC's strategy in the region, support from its parent should be forthcoming, if needed. An upgrade in Panama's country ceiling rating (reflecting a strong economy) would allow HBPA's and its subsidiary's IDRs to be upgraded. A disruptive integration of PBI, declining asset quality or weaker capitalization could pressure individual ratings.
HBPA's performance in 2008 is driven by stable margins and increasing non-interest revenues that offset modest loan portfolio growth (+2.2% for the year to date at August 2008). Margins are somewhat underpinned by decreasing funding cost while growing fees and commissions supply about 25% of operating revenues. Operating costs have increased, reflecting the on-going integration effort that involves significant investments in premises, training and an IT overhaul. Provisions have gradually returned to normal levels hence resulting in higher efficiency and improved profitability.
The loan portfolio is widely diversified and little concentrated while asset quality and reserve coverage improved within HSBC's stricter credit policies. The investment portfolio is smaller, less risky and a substantial liquidity cushion is in place. Deposits, which are broad-based and little concentrated, increased in line with assets and funding costs eased as institutional funding declined. Capital was strengthened by fresh capital injections (about $156 million) and retained earnings (over $160 million), hence BIS capital ratios attain 10.9% at August 2008 (11.4% in 2007, 9.4% a year earlier).
Going forward, moderate loan growth should be driven by corporate lending and later on by retail lending; margins should remain under pressure, but funding costs are likely to stabilize/decline. Operating costs should start declining in 2Q09, after the integration is completed while credit cost should stabilize in line with asset quality. Efficiency and profitability should improve only by 2Q09 while capital ratios should remain fairly stable. The merger has been delayed by the IT overhaul; however, these glitches do not change Fitch's belief that the completed merger will result in a very sound, efficient and competitive regional player as originally planned.
HBPA is 100% owned by HSBC; its operations are highly integrated within HSBC's regional franchise where it is considered a key subsidiary. A universal bank active in consumer, commercial and corporate lending, HBPA holds 21% of the system's assets at September 2008; it merged with Grupo Banistmo (PBI's parent) in July 2007 creating Panama's largest bank and a major regional player operating in Central America and Colombia.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Saturday, January 03, 2009
A Tree Grows in Panama
By ANDREW C. REVKIN
While working in eastern Panama between 2002 and 2006, four young Peace Corps volunteers conceived of a plan to help restore the region’s disappearing tropical forests, provide income for struggling landowners and make money for investors and themselves.
It’s one thing to have an idea and another to start a business, of course. But the partners — using skills gleaned from academic programs in business, design and international relations — have pulled it off.
Their company, Planting Empowerment, leases land in the region — a pocket of biological riches that has been eroding under decades of slash-and-burn farming. Money from investors is used to plant and tend about 500 trees an acre that, in 25 years, should become a source of valuable tropical hardwood.
The key to the model is the concept of leasing, according to Damion Croston, a 29-year-old graduate student at Ohio University who is studying international development. (Another founder graduated in May from Thunderbird School for Global Management in Phoenix. The two others have degrees from Johns Hopkins and Virginia Tech.)
When land is bought outright for tree plantations, the farmer is displaced. But Planting Empowerment is using only uncultivated, deforested parcels of a farmer’s land, allowing agriculture to continue on other parcels. A lease clause prevents the use of the money to buy and clear more land. And to guarantee that the tree canopy is always increasing, trees are planted on different tracts at different times; as one patch of trees matures and is harvested, others will be in various stages of growth.
Investors, who must plunk down a minimum of $7,000, have so far been mainly family and acquaintances, Mr. Croston says. But Planting Empowerment is now selling $50 and $100 forest savings bonds with an expected return, after lumber is harvested, equivalent to 7.8 percent a year. Some income from the plantings, now on 50 acres, is possible after five years, when foresters start thinning the dense stands of young trees to make room for others to grow to maturity.
The business plan has won recognition in college-sponsored competitions aimed at fostering socially responsible ventures, including those at the University of Washington, Notre Dame, Yale and the University of Texas, Austin, where Planting Empowerment was second out of more than 1,000 ideas.
To promote sustainable economic opportunity, Planting Empowerment intends not only to pay indigenous people for the use of their land but also to provide some higher-level employment and a share of profits.
“We believe,” Mr. Croston says, “in a more inclusive sort of capitalism.”
While working in eastern Panama between 2002 and 2006, four young Peace Corps volunteers conceived of a plan to help restore the region’s disappearing tropical forests, provide income for struggling landowners and make money for investors and themselves.
It’s one thing to have an idea and another to start a business, of course. But the partners — using skills gleaned from academic programs in business, design and international relations — have pulled it off.
Their company, Planting Empowerment, leases land in the region — a pocket of biological riches that has been eroding under decades of slash-and-burn farming. Money from investors is used to plant and tend about 500 trees an acre that, in 25 years, should become a source of valuable tropical hardwood.
The key to the model is the concept of leasing, according to Damion Croston, a 29-year-old graduate student at Ohio University who is studying international development. (Another founder graduated in May from Thunderbird School for Global Management in Phoenix. The two others have degrees from Johns Hopkins and Virginia Tech.)
When land is bought outright for tree plantations, the farmer is displaced. But Planting Empowerment is using only uncultivated, deforested parcels of a farmer’s land, allowing agriculture to continue on other parcels. A lease clause prevents the use of the money to buy and clear more land. And to guarantee that the tree canopy is always increasing, trees are planted on different tracts at different times; as one patch of trees matures and is harvested, others will be in various stages of growth.
Investors, who must plunk down a minimum of $7,000, have so far been mainly family and acquaintances, Mr. Croston says. But Planting Empowerment is now selling $50 and $100 forest savings bonds with an expected return, after lumber is harvested, equivalent to 7.8 percent a year. Some income from the plantings, now on 50 acres, is possible after five years, when foresters start thinning the dense stands of young trees to make room for others to grow to maturity.
The business plan has won recognition in college-sponsored competitions aimed at fostering socially responsible ventures, including those at the University of Washington, Notre Dame, Yale and the University of Texas, Austin, where Planting Empowerment was second out of more than 1,000 ideas.
To promote sustainable economic opportunity, Planting Empowerment intends not only to pay indigenous people for the use of their land but also to provide some higher-level employment and a share of profits.
“We believe,” Mr. Croston says, “in a more inclusive sort of capitalism.”
Subscribe to:
Posts (Atom)