Tag Archives: finance

Media, Trinidad & Tobago

Let the layoffs begin

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The global financial system and the world economy are facing unprecedented challenges, but you wouldn’t know that if you only read Trinidad’s so-called “newspapers.”

There has been an almost complete lack of coverage of the meltdown that started in the US housing market, other than occasional Pollyanna-esque comments from government and the Central Bank that everything is just fine.

This occasional series at The Liming House – The Credit Crisis and the Caribbean – will provide a different perspective, and an analysis of the potential effects of this economic and financial crisis on Trinidad & Tobago and the Caribbean.

It will also engage in bad-tempered criticism of business and economic reporting from the region.
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The Guardian’s front page story headilne on Saturday August 30th: “HCL FIRES 100”

The accompanying story, on page A5, bore the headline: “HCL retrenches 100”

Here’s the story, with my comments in brackets:

Inflation and a slow down in the real estate market are said to be the cause of Lawrence Duprey’s Home Construction Ltd having retrenched at least 100 workers between Wednesday and yesterday. (Are said…by whom? Loathe the lack of sourcing. Did one person say so? What were this person’s credentials, if any? Does he/she work at HCL (i.e a person familiar with the company)? Or is this the conclusion of the reporter, Sandra Chouthi?)

Commenting on the reports, Lisa Ghany, communications manager at HCL, said workers were not fired, but retrenched.

(At least there’s a comment from the company. But what an appalling lack of context. And what reports? So did this story appear elsewhere? And what’s the difference between retrenched and fired? From a company perspective, and in business -speak, a retrenchment is a reduction in the workforce in order to ensure the continued financial viability of said company. In other words, you retrench workers when it no longer makes financial sense to retain their services. All is not well at HCL. And where are the details on inflation? What’s the rate in Trinidad at the moment? Why would rising inflation hurt HCL? Total lack of actual reporting.)

She said more than 100 temporary, casual and permanent workers were retrenched, not 300, and that the “exercises are continuing.”

(From whence comes this 300 reference? Sparta? Context and background, please.)

She said HCL’s operations were being restructured in light of inflation and a slow down in the real estate market.

(Aha, so here’s the source of the boldfaced assertion in the lead of the story, a better version of which would have read: “Lawrence Duprey’s Home Construction Limited cut at least 100 jobs this week due to cost pressures from inflation and a slowdown in the real estate market, a company spokesman said.”)

Ghany said the retrenchment was part of a restructuring exercise as HCL had increased its staff from 500 to 2,500 in five years.

(What a sodding non-sequitur. Questions that should have been answered, or even asked: why does HCL need to restructure? Why had it quintupled its staff over five years? Come on.)

The HCL group has 22 companies.

(This sentence gets its own paragraph. Inexplicably.)

“We have different companies throughout the group that needed to be restructured to operate more efficiently,” Ghany said.

(And the Guardian provides not a jot of additional detail. Analysis? Forget it. I might as well be reading a press release.)

The retrenchment comes one week after Michael Fifi officially retired as chief executive officer of HCL. (Are the two events related?)

Its big project One Woodbrook Place is overbudget and behind schedule.

(What is One Woodbrook Place, for those readers who might not know? Where is it located? What is it? Condos? Office space? Was it a speculative build? (i.e. built on the hope that it would be rented out, but without any guarantee of such?))

Reports reaching the Guardian stated that HCL “fired” over 300 workers between Wednesday and Thursday of this week, with a total of 600 expecting to be sent home.

(Again with the lack of sourcing. Reports from whom? Why did you put “fired” in quotes? Is that what your source(s) said? Or are you obliquely acknowledging that “retrenched” is a more accurate description?)

Neither chief executive officer Hayden Ameerali nor chief operating officer Richard Le Blanc was available yesterday for comment.

(How many times did you try to reach them?)

One source said HCL was “significantly downsizing” with close to 1,000 workers due to be retrenched. Asked if the retrenchment exercise was linked with billion-dollar OWP, which is now 18 months behind schedule, the source said, “The whole thing has to do with One Woodbrook Place. It can make or break HCL.”

(This story is badly organised. And has no analysis in it whatsoever. How could OWP “make or break” HCL? Reputation? Financial stability? Did they bet the house on it?)

The source criticised the “inhumane manner” in which workers were informed of the retrenchment, some of whom have between five and ten years of service with HCL.

The source said workers were individually met with at HCL’s Organisational Centre, Orange Grove, and told they were “going home today.”

The cost of building OWP went from $800 million to $1.2 billion. The original completion date was December 2007.

(The lack of cohesion in this story reeks of poor editing. And alright, finally some numbers. But no indication of projected revenues from the project, so it’s left to the reader to surmise that “slow real estate market” + over-budget project = big headache. Sigh.)

On July 31, HCL announced that Fifi was retiring following a July 16 board meeting. Fifi officially left HCL’s helm of HCL on August 22, the same day he turned 66.

(What’s the retirement age in Trinidad again?)


| Next entry in the "The Credit Crisis and the Caribbean" series
Media, Trinidad & Tobago

Says who? (or, why bylines matter)

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Trinidadian newspapers infuriate me.

I’ve already written at length about their lack of a systematic corrections policy, and the superficiality of much of our reporting; today’s bugbear is their casual approach to bylines.

In the context of a newspaper article, a byline is simply the name and often, the title or position of the person(s) who wrote the story.

Sometimes, particularly in the case of editorials – which are opinion pieces written by editors or columnists – explicit bylines are omitted. Editorials in The Express, for instance, are labelled “Express Editorial.”

Since an editorial represents the officially-endorsed (or mandated) “line” of the newspaper on a given topic, the identity of the author is unimportant. The author is the newspaper.

But news stories and analysis pieces are different; they are supposed to be objective and fact-based, rather than polemical and necessarily partisan.

But no one is entirely objective, and no reporter, however scrupulous, is immune to bias.

Moreover, as the bloggers over Eastwick Communications, a technology PR agency, noted:

By the time we read any news article or watch any news segment, even the most “objective” news has been run through a series of bias filters. Each news department selects which stories to cover and which reporters to cover it. Each reporter selects which aspects of a story to focus on and which details of all possible details to include in the story. And editors make selective changes to fit a variety of criteria.

All news is filtered. This is an inescapable fact, and it is why the identity of the author of the story – or in the case of syndicated or externally-sourced content, the source – is so important.

If a story appears in a newspaper (or on a newspaper’s website) without a byline, I have no way of knowing who wrote it, or where it came from.

Here are a few case studies of why bylines matter.

The Trinidad Express ran a piece on Monday 17 March titled “RBTT…what to do?”. The online version of that story, and the only one I have access to, nowhere states where it came from, or who the author was.

It began thus:

In our last article we evaluated the fairness of the valuation of the Per Share Consideration in the proposed Amalgamation of RBTT Financial Holdings Ltd (RBTT) and RBC Holdings (Trinidad and Tobago).

The valuation was conducted using the Discounted Cash Flow methodology. You would recall that based on our calculations the Per Share Consideration of TT$40.00 was not considered unreasonable.

Our article today, the last in our short series, concludes our discussion of the question of valuation, by examining the Earnings Multiple Method, in order to further test the fairness of the valuation of the deal. We will also provide our recommendation to shareholders.

Now, this was not a news story, or even an analysis piece, and it was most certainly not written by a reporter.

This is investment advice, and I don’t know who this “we” is. If I were an RBTT shareholder (and I am not), I would want to know whether the entity advising me to accept the RBC buyout had a vested interested (i.e. they’d make money) in seeing the deal go through.

Without knowing who wrote the piece, I would have no way of checking that.

A counterpoint to the way this report is presented is a similar story in the Jamaica Observer, which the Express syndicated on March 19th (with the a glaring typo in the headline: “Jamacian analysts look forward to bank purchase.” Aargh.)

A financial expert in Jamaica believes that the proposed sale of RBTT Bank to the Royal Bank of Canada (RBC) would increase diversity in the sector while another is saying the potential deal should be looked at in a long-term perspective.

Alexander James, a stockbroker at First Global Financial Services, echoed the view that “the RBTT sale brings a lot more diversity into the market”, the Jamaica Observer reported.

I object to the description of Mr Alexander James as a “financial expert”; a stockbroker is someone who buys and sells shares on behalf of clients on a commission basis. Mr James is not a financial analyst or investment advisor.

Still, at least the Observer named names and companies, and the piece as a whole is well reported.

Here’s another example of a missing byline, also from the Express on March 19, in the Business Magazine section:

Microsoft Corp chairman Bill Gates said he expects the next decade to bring even greater technological leaps than the past 10 years.

That’s fine. That’s uncontroversial. That’s seriously dishonest.

No Express reporter wrote that story. The author was a business writer named Matthew Barakat, of the Associated Press news service.

Now, the Express regularly uses material from services like AP, Reuters and Bloomberg. In newsroom jargon, these are the major “wire” services, which newspapers and other media outlets use for the stories and photographs they don’t themselves have the resources to produce.

These wire services allow newspapers like the Express to syndicate their copy – for a fee, and with the agreement that they will be credited as the source.

Reproducing content from outside sources – without attribution and without permission – is not just sloppy. It’s plagiarism.

The Express isn’t the only one to do this sort of thing, and on a regular basis. The Newsday is notorious for this.

The Media Watch blog highlighted a recent example, in which Newsday “reprinted” an article about the murder of British socialite Gale Benson in Trinidad in January 1972.

The piece, which Newsday ran on February 24, was lifted wholesale from a British newspaper – the Daily Mail. Newsday did not credit either the author (Victoria Moore), or the source.

This kind of behaviour would get an university undergraduate expelled, but the editors of Trinidad’s daily newspapers seem unconcerned – which is, in itself, deeply distressing.

Media, Trinidad & Tobago

T&T needs better reporters

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There are many, many things about Trinbagonian media in general, and our newspapers in particular, that make me want to pull my hair out.

I am continually bemused by our haphazard approach to errors and corrections, for instance.

But it is our apparent lack of reporters who actually understand business, finance, law and (the non bacchanalist aspects of) politics that is most worrying.

These are complex, multi-layered, specialist subjects, and to successfully cover them requires, in no particular order:

– Knowledge of/training in the subject areas, either academic or professional
– A commitment to keeping abreast of changes and developments in the field
– A significant amount of research and reporting, often on a daily basis
– A solid and informed network of sources and contacts

And even more so than in other areas of journalism, those charged with covering these beats must be able to explain often complicated concepts in a manner that can be grasped by non-specialists.

From my obsessive perusal of the major dailies, I’d say all of the above are lacking – or at least not evident.

There are exceptions: Camini Marajh of the Trinidad Express is an excellent business reporter.

Ms Marajh broke the story of RBC’s $2bn offer for RBTT, scooping the international news media who took days to catch up

Her coverage of the deal should be framed and used as a model by editors and reporters in other newsrooms:

In what is likely to be the biggest takeover deal in the Caribbean in recent times, Royal Bank of Canada (RBC) is getting ready to buy out local banking giant, RBTT, in an acquisition priced at well over US$2 billion.

Sources report that an acquisition agreement is close to sign off by the Peter July-led Board of RBTT Directors.

Perfect. She leads on the significance and size of the deal, and immediately backs it up with reference to her sources.

She continues:

The RBC offer is said to contain a mix of cash and stock in a buyout that sources say has already secured the approval of key shareholders, among them the National Insurance Board (NIB) which has a 22 per cent interest, Guardian Holdings Ltd, a 14 per cent stakeholder and business tycoons Arthur Lok Jack, Richard Azar and Imtiaz Ahamad, who are listed among the largest individual stakeholders.

A crucial bit of information, although she could have explained why this important: if RBTT’s major shareholders were opposed to the deal, it would be unlikely to succeed.

And while the Peter July board has refused to say anything more than the bank is having “strategic discussions with other parties”, the Sunday Express understands that RBC, the latest in a series of Canadian suitors to knock on RBTT’s door, is the favoured partner for a takeover deal.

Both have financial incentives to see the deal through, according to financial sources. RBC, Canada’s largest bank is flush with acquisition dollars, assets of Can$563 billion and a market capitalisation of Can$69 billion.

Wonderful. Wonderful. And it gets better:

It is also trailing behind rivals Bank of Nova Scotia and First Caribbean International Bank (FCIB),a subsidiary of Canadian bank, CIBC in its Caribbean operations.

RBTT, Trinidad’s largest bank with assets of US$7 billion, has stumbled in recent years on issues related to management, flat earnings and growth limitation.

The RBC offer, comprising 60 per cent cash and 40 per cent RBC stock, if approved by shareholders, would give RBTT stockholders a much-needed boost with an option of cash and RBC shares – Can$55.26 at the close of trade on the Toronto Stock Exchange on Friday.

These paragraphs establish why the deal would be beneficial to both parties, are neatly hedged (“if approved by shareholders”) and give relevant financial details.

Still to be worked out, however, is the price of RBC shares which are to be listed on the local Stock Exchange under the depository receipt system used on the Nasdaq and other major Exchanges where a specified number of shares of foreign companies are issued and traded.

Sources say the listing of a big international bank like RBC on the TT Stock Exchange would be a major coup for this country and could well catapult Trinidad centre stage and a step closer to the Prime Minister’s dream of making this country the financial capital of the Caribbean.

When I got to this point in the story, I was tempted to applaud. Ms Marajh clearly had spectacular sources on this one, because details like that are gold dust. She explained, clearly and concisely, the concept of depositary receipts and gave still more context on why the deal would be important for T&T.

Financial analysts say if 20 per cent of the cash or $TT1.6 billion from the RBTT sale goes back into the local market, it could help the recovery process of the stock market which has been in the doldrums in recent time.

Speculation of a takeover has seen RBTT stock climb from the start of September by $3 closing at the end of trade on Friday at $34.01.

GHL, a substantial shareholder in RBTT, has also benefitted from the market speculation, closing at $25 on Friday after starting September at $20.02.

This story had everything – the interested players, the context of the negotiations, and crucially for an acquisition story, all the important numbers given in context.

But this story was exceptional. Too often, our media fail to get the basics, the fundamentals right.

More on that soon.