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It is good news that the global bank has finally made a local presence.

HSBC office at MTCC Tower adds a special richness to the physical landscape of the Male’ waterfront. But that is not all. It plans to add greater richness to the financial landscape of the Maldives as a nation… as an economy. According to its Branch Manager Sarath Weerakoon, HSBC’s local activities will follow a clear and gradual plan consisting of various phases. Its phase by phase and cautious approach is designed ultimately to lift the banking standards in the country, educating the customer base and traders, providing excellent service and offering unmatched products and services. In short, it aims to the change the character of banking in the Maldives.

Internet banking, Hexagon - the global electronic banking feature for which HSBC is so famous, and global ATM machines are amongst the few milestones on the HSBC plan for Maldives.

MIGA: GATEWAY FOR PROTECTING DIRECT FOREIGN INVESTMENT

Next time you find your investor or lender to be a little hesitant to go ahead, tell him about MIGA…

Maldives has signed the MIGA Convention. Maldives is the 155th nation to join this important member of the World Bank Group.

MIGA stands for Multilateral Investment Guarantee Agency. It was born in 1988. Its mission is to promote and encourage foreign direct investment into developing countries and improve people’s lives and reduce poverty. MIGA fulfills its mission by offering political risk insurance (guarantees) to investors and lenders, and by helping developing countries attract and retain private investment.

MIGA provides Guarantees or political risk insurance to investors who are investing in developing countries. This insurance protects investors against the risks of Transfer Restriction, Expropriation, War and Civil Disturbance, and Breach of Contract (for contracts between the investor/project enterprise and the authorities of the host country). These guarantees may be purchased individually or in combination.

MIGA also offers investment marketing services to help developing member countries promote their own private investment opportunities more effectively.

Since its inception, MIGA has issued 550 guarantees for projects in 79 developing countries. Its total coverage issued exceeds US$9 billion, pushing the estimated amount of foreign direct investment facilitated by MIGA over US$42 billion.

Only new investments can be covered. These include: new, green field, investments; new investments contributions associated with the expansion, modernization, or financial restructuring of existing projects; and, acquisition involving privatization of state enterprises.

MIGA enjoys the flexibility to cover different types of investments, including equity, shareholder loans, and loan guarantees made by an investor.

Apart from cash, an equity investment may take the form of machinery and equipment, capitalized technology, and reinvested retained earnings.

MIGA may also insure loans by unaffiliated financial institutions to a project, provided that a shareholder's investment is covered or will be covered in the future.

Two aspects of MIGA's coverage are particularly noteworthy:

1) It is non-cancelable by MIGA (unless the insured defaults on its contractual obligations), though it can be terminated by the insured on any anniversary date, after the guarantee contract's third anniversary; and

2) It is long term, and can be issued for up to 15 (in certain cases up to 20) years, and can cover up to 90-95 percent of the investment or loan amount at risk. Additional coverage may be available for future earnings (up to 450% of initial investment) and/or loan interest attributable to the insured investment (up to 135% of principal).

For more information you may visit the MIGA website at www.miga.org or call Ms Federica Dal Bono Business Development Officer on 00 1 202 458 9292 or send a mail to her at fdalbono@worldbank.org

RESORT VALUATION: IMPORTANT FOR MANY REASONS

How many of us give attention to the value of a resort when we sell it or buy it.
Or try to find finance for it?

Valuation of a resort hotel is important for many reasons.

In the event of a sale, it is important for the buyer. Because a valuation helps him to make a fair estimate of the property that he is intending to buy. It is also important for the seller. Because a valuation lets him understand the true value of the property as will be acceptable to an impartial average buyer or a professional third party who understands resorts and resort hotel business.

If one is looking for less expensive finance, a valuation gives a professional and independent impression of the value of that resort property derived based upon recognized benchmarks.

For an idea on resort valuation, you may contact HVS International.

HVS International is a global Hospitality Consultancy and Hotel Appraisal firm with offices worldwide. They have evaluated over 20,000 hotels and resorts in more than 75 countries, including the Maldives. They possess the largest data base on hotels. They are a true leader in hotel valuation. Their signature is honored by the banks and lending agencies.

HVS International has worked with numerous reputable international financial institutions, lenders, hotel developers and hotel management companies around the world.

Their commitment to the industry is reinforced, with a number of their professionals teaching at reputable universities such as Cornell University School of Hotel Administration, USA; hosting of Hotel Investment Conferences; and writing a number of books on hotel valuations and feasibility studies.

For more information on HVS International you may visit its website at www.hvsinternational.com or address your queries to Mr Erik van Keulen, Managing Director of HVS International Singapore Office via evankeulen@hvsinternational.com.sg

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