By NATARIO McKENZIE
Tribune Business Reporter
An investment banker is predicting that despite the phased Baha Mar opening, 2017 will still relatively slow with the full impact to be felt next year.
Michael Anderson, Royal Fidelity Merchant Bank & Trust’s president, also forecast a pick-up in Bahamian capital markets activity during the 2017 second half, following the general election.
“I think that the major event for this economy is Baha Mar coming on stream. I think we will see a level of activity increase this year, but I think realistically we won’t see much in terms of full employment until the end of this year, maybe next year,” Mr Anderson said of the project.
“I don’t think we will see a significant benefit to the economy this year, but as people get employed, their ability to spend in the economy should improve and we should see some growth coming from local community spending.”
Mr Anderson then added: “I think that by the time we get to the end of this year, and we have gotten into the 5,000 region in terms of people employed, that will start to benefit maybe going into 2018.
“I think 2017 will be a slow year. I think the drop in Prime [interest rates] will help borrowers reduce their cost, but I don’t know that you will see many new borrowers getting qualified. I think it will be a slow year really.”
Mr Anderson said three transactions, designed to collectively raise about $70 million, are expected to come to the Bahamian capital markets prior to the election.
“I think that towards the end of last year coming towards election, in typical fashion people put off big decisions pending understanding what the implications might be of the re-election of the existing government or a change in government,” he explained.
“As we came in towards the end of last year a lot of the transactions we have been looking at basically got deferred. Coming into the start of this year we knew that there were a few transactions looking to come to market because some have been deferred for a while, so there is a need to get to market. The other ones I anticipate we will start to see later on after the elections.”
Mr Anderson added: “I think there are about three transactions that are working their way through and will get done over the next three months. I think we will see more once we have gone through the election and other people start to figure out what they do on the other side of it.
“There is about $70 million that people are looking to raise through those three transactions. In a typical year here I think that somewhere between $100-$150 million would be a reasonable year in terms of corporate borrowing.”