The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas has launched its $1.5 million share buy back to support its stock value and create “liquidity in an illiquid market” for investors.

David Burrows, Cable Bahamas’ marketing chief, in response to Tribune Business questions, said the company’s second such ‘buy back initiative was designed to bolster the company’s share price in a small market where stocks did not often trade on fundamentals.

Tribune Business understands that senior Cable Bahamas management, and the Board, believe the stock is undervalued given the company’s recent growth - especially its $100 million acquisitions and expansion into south Florida.

Mr Burrows did not directly comment on that, although he listed Cable Bahamas’ achievements over the past four years, including the four Florida purchases.

He said the BISX-listed communications provider had completed the digitisation and modernisation of its network between 2010 and 2012; launched fixed-line voice services via the Systems Resource Group (SRG) purchase; upgraded its broadband infrastructure; and increased its dividend from 10 cents to 14 cents per share.

“The Cable Bahamas share buy back is a part of the company’s overall strategy of supporting its share price in the market,” Mr Burrows told Tribune Business.

Cable Bahamas’ share price is currently at $11.51 on BISX, joint second highest with J. S. Johnson, and only below Arawak Port Development Company (APD).

It is closer to its 52-week high of $12 than its 52-week low, which was $10.80.

Mr Burrows’ described Cable Bahamas’ $1.5 million share buy back commitment as “creating liquidity for our shares in an illiquid market, fulfilling our strategy promoting shareholder value”.

He told Tribune Business: “We believe that the market in the Bahamas is not sufficiently liquid. Therefore, strategies like those listed above allows us to introduce more liquidity into the market for Cable Bahamas shareholders.

“The illiquidity in the market is less a function of BISX and more a function of the market size with only 17 companies listed.”

Mr Burrows said that as a publicly-listed company, Cable Bahamas had to stipulate the share buy back duration, which lasts until April 30, 2015. It also had to state the maximum amount of capital committed.

He added that Cable Bahamas would look at similar initiatives in the future, its first share buy back having lasted for two years.

Cable Bahamas is far from the first BISX-listed company to introduce a share buy back programme. Others, who have sought to provide liquidity/mop up small retail sellers desperate to exit at any price, plus support the share price and signal its ‘true value’ to the market, include AML Foods, Bank of the Bahamas International and Bahamas Waste.