Stress test of a different kind

LUCAS STOCK INDEX The LSI increased by 1.8 percent in trading in the fourth week of April. The stocks of Banks DIH (DIH) and Demerara Tobacco Company (DTC) recorded substantial gains of 8.7 and 4.44 percent respectively. The stocks of Demerara Bank Limited (DBL), Demerara Distillers Limited (DDL) and Republic Bank Limited (RBL) traded unchanged. As a result, the index rose significantly and has a 5.95 percentage point advantage over the yield of the 364-day Treasury Bills.

Aftershocks

Four years ago, the global financial system experienced a serious credit challenge.  That event had a deleterious impact on a wide swath of the US economy, but was particularly damaging to the real estate and labour markets.  Caught in that financial/real estate trap was the investment of a major Caribbean financial services organization, Colonial Life Insurance Company (CLICO).  CLICO (Guyana) was ensnared in the debacle stemming from its investment in CLICO Bahamas which was heavily invested in the US real estate market.  CLICO (Guyana) ended up being liquidated.  As the drama unfolded, the administration of the day ordered that a stress test be performed on the commercial banks in Guyana.  The stress test