Central America and Caribbean: cautious optimism.


GEORGE TOWN, Cayman Islands--Private and public sector officials from Central America and the Caribbean are generally optimistic about the outlook for their economies, despite the impact of the global crisis last year.

They shared their views at a recent HSBC Central American and Caribbean Capital Markets Forum held April 15, which brought together regional business and government leaders as well as institutional and retail investors that focus on investment in the region.

Ricaurte Vasquez, president and CEO of GE Central America and the Caribbean, and former Minister of Finance of the Republic of Panama, told the conference that the region was more buoyant than other markets. The Central America and Caribbean division of GE is the third largest in Latin America and typically can boast a compound annual growth rate (CAGR) of 20 percent, Vasquez said. "This year [2009], Central America outperformed the company," said Vasquez, who is a widely respected former Panamanian finance and canal affairs minister.

Top GE clients in the region include Panamanian airline Copa and the newly merged Avianca-TACA, which is domiciled in the Bahamas.

Mr. Vasquez' positive sentiment was echoed by Premier McKeeva Bush of the Cayman Islands, which recently tapped the USD bond markets with its first public bond, achieving the lowest yield ever by a Caribbean issuer. "The Caribbean region as a whole has certainly had its share of problems" Premier Bush told the conference. "But fortunately the Cayman Islands managed quite well."

In November, the Cayman Islands raised $312 million in a bond issue with HSBC as the sole book runner. Calling it a "historic bond issue by HSBC," Bush said it "proves our resilience [and shows continued] international confidence in [our] model."



The global economic crisis forced many companies in Central America to cut expenses and boost efficiency. That was the case at both auto distributor Grupo Q and retailer Grupo Unicomer, two companies based in E1 Salvador.

"The past 18 months have been very challenging," said Samuel Quiros, chairman and CEO of Grupo Q.

Grupo Q distributes 16 auto brands in Central America and Panama. "We have an auto financing business, which is key to growth [so] the crisis hit us from both sides," Quiros told the conference, alluding to reduced consumer spending and decreased financing from banks. To top it off, the owners of some of its brands--Chevrolet, Chrysler...

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