Archives for June 2013

Proven, FCIB declare dividends

June 3, 2013 by IC Insider.com

Proven delivers 10% cash return | PROVEN Investments has declared a dividend of US$0.0032 per ordinary share payable on June 26, 2013 to shareholders on record as at June 12, 2013. The stock will trade ex-dividend date is June 10, 2013.

This brings the amount of ordinary share dividends to US97 cents in the last twelve months. The dividend yield is close to 10 percent based on the stock price in early June 2012.

A dividend of US$0.0022 per ordinary share was paid in March this year. One was paid in December 2012 amounting to US$0.0025 per share in August they paid US$0.0018 per share.

The company will also pay a dividend of $0.10 per preference share payable on June 24, 2013 to shareholders on record as at June 10, 2013. The ex-dividend date is June 6, 2013.

First Caribbean International Bank | Operating throughout the Caribbean region and listed on the Barbados, Trinidad and JSE exchanges, First Caribbean has declared an interim dividend of US$0.015 cents per share payable on June 28, 2013 to shareholders on record as at June 13, 2013. The ex-dividend date is June 11, 2013.

The bank reported net income for the six months ended April, 2013 of US$34 million that is up $4.6 million versus net income of $29.4 million for the same period in the prior year thanks to a sharp reduction in loan loss provisions. Total revenues of $263.3 million were down $5.9 million and continue to be challenged by the struggling economic conditions of the region. Loan loss impairment expenses were down $22.4 million.

Filed Under: Company News, Dividends Tagged With: Dividends, First Caribbean, Proven

Lasco Financial strong profit

June 3, 2013 by IC Insider.com

The smallest of the three listed Lasco companies, Lasco Financial posted impressive results for the year ended March 2013. Revenues climbed 30 percent to $485 million and profits jumped 60 percent to $164 million. The net results is even more impressive considering that in 2012 there was net addition to profits coming from revaluation of a $90.3 million property which was partially offset by the write off of $$46.28 million for the full purchase costs incurred from the take over of Supreme Venture Financial Services MoneyGram operations, in December 2011.

Quarterly results | In the quarter to March 2013, revenue was $144 million versus $184 million but the latest quarter figures are better than the $132 million generated in the December 2012 quarter. The revaluation gain was booked in the March 2012 quarter thus swelling the revenue figure in the period.

The quarterly profit for March was also down compared to 2012. More importantly, the $52 million earned in the last quarter of the 2013 financial year was just $2.5 million less than that earned in the high-earning December 2012 quarter.

Cost has been kept under control with a slight dip in administrative cost, most of that would relate to the removal of the one-off cost of $46 million reflected above. Selling and promotional cost were up by half to reach $152 million but the growth was much slower than the rise in trading revenues of 73 percent.

Business lines | The company is involved primarily in the business of cambio operations, money transfer and lending. It has a ready market for the foreign currencies that it purchases which it can sell to the other companies within the family.

Much of last year’s growth came from the acquisition of the business purchased. Operations have been extended to Barbados but it will take hard work to come close to repeating the 2013 performance.

The capital base is $475 million with total assets of $640 million and enjoys return on equity of a strong 39 percent and a gross profit margin of 34 percent.

The stock | This company seems to be coming into its own and investors have noticed. The stocks has gained 100 percent since December last year, when it traded at $4.90 and closing on Friday at $9.80. The results were released after trading closed on Friday. The other two Lasco companies are trading around 10 times 2013 earnings and if this company does the same it should be trading around $13 this coming week. The PE is currently 7.5 and the share price to book 2.6 times. The company, which is not subject to taxation on profits for another three years, should report around $1.70 per share for the 2013/14 year.

Filed Under: Company News, Company Results Tagged With: JSE Company, Lasco

Is the FX market being manipulated?

June 3, 2013 by IC Insider.com

Friday, 31 May 2013 | The local foreign currency market seems odd at best. There is more buying by financial institutions than they are selling, to the extent that they are picking up the currency for less than the did yesterday but buyers form these institutions are buying at higher and higher rates. The amount of currency bought on Friday amounted to US$30.46 million and the equivalent of US$28.1 million were sold. For the entire week the authorized dealers bought $16.8 million more than they sold with only Monday being a day of sales exceeding purchases. The signals are at best conflicting.

Oblivious to some traders is the fact that the country’s central bank is using open market methods to mop up excess liquidity from the system. Additionally, although the IMF or some executive may say the Jamaican dollar is still overvalued and adjustments are needed is not to say that the currency needs to move in nominal terms. There are other methods that can get greater level of competitiveness in the system. One such is tax reform that can lower the cost of production if properly applied, another is to allow the recent tax package and the effect of government reducing their spending to have moderating effect on inflation and therefore improve the competitiveness of the currency.

Regardless the selling rate for the US dollar climbed today by 11 cents to close at J$99.45, the pound sterling climbed 97 cents to close at J$151.29 and the Canadian closed at $96.48 up just 6 cents. But while Jamaican were paying more for funds from the institutions that trade in foreign currencies the finance houses were paying the public less for the funds. In the case of the US dollar it was 3 cents less , 55 cents less for the Canadian and 34 cents less for the pound sterling. Is the public more knowledgeable than the banks and cambios?

Filed Under: FX Market, Stock Market Tagged With: Daily Trading, FX Market, Trading Activity

JMMB posts improved profit

June 3, 2013 by IC Insider.com

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Jamaica Money Market Brokers reported improved 2013 fiscal year results to March with net profits of $3.87 billion, the first time in its history. Not even the $750 million loss incurred in the write-off of investment premiums that the company had to effect in swapping government debt for lower yielding ones could dent the profit for the year.

All the good news did not come about from normal operations. In 2012 the company acquired all the shares of Capital & Credit Group (CCFG) and merged some elements into JMMB‘s other operations. The acquisition price was less than the net asset value of the acquired company resulting in a book gain of $2 billion. Had it not been for these one-off items, profit would have been lower by approximately $1.1 billion. In 2012, the company earned $2.2 billion after tax but those results were boosted by a large one-off gain from a security sale. IC Insider’s assessment is that earnings from ongoing operations, is around $1.65 per share.

Interest earned | For the year ending March, JMMB earned $11.25 billion in interest. In 2012, the comparative amount was $9.17 billion. The company improved the interest margin considerably, from 63 percent to 70 percent, garnering $4.648 billion compared to $3.54 billion in 2012. Net interest and other income amounted to $6.997 billion up from $5.99 billion in the previous year. The 2013 figures have 9 months income from the CCFG acquisition. Unfortunately, operating cost rose faster that the income with expenses climbing $1.4 billion to $4.6 billion. When the one-off gain in income realised in 2012 is taken into consideration, the increase cost does not look that bad against the growth in income.

Size can matter | Total assets climbed to $167 billion, higher than the amount at the time of the take over. Growth here is important if the group is to keep profits on the rise. Mergers and acquisitions usually result in duplicated cost which is reduced overtime. JMMB should fully integrate CCFG operations during this year and should minimize cost and start to enjoy most of the benefits of the merger. To date, not much is seen in the profit results to suggest that the group has benefited much from the acquisition. The improved interest margin may have been one of the benefits.

The last quarter had revenues of $3.85 billion, a gain of 28 percent over the similar period in 2012 and is up from an increase of 20 percent realised in the December quarter. Pretax profit before exceptional income and charges was up to $735 million compared to $590 million in 2012. In spite of the debt swap charge, a tax credit of $791 million for the quarter resulted in after tax profit climbing to $647 million versus $441 million in 2012. In the March 2012 quarter, there was a tax charge of $144 million.

Capital | In spite of the write-off of the premium on GOJ bonds that were swapped, JMMB still carries $1.7 billion as investment fair value reserves up from just $400 million in 2012. The gains have helped, along with the profit reported for the year, to push the equity capital to $16.7 billion up from $10.8 billion in 2012.

Undervalued | JMMB will be acquiring the shares it does not already own in International Bank in Trinidad, no terms have yet been announced. This acquisition will put management in full control and enable them to optimize business and returns from it. The annual accounts show minority interest of $118 million, so this share of profit plus whatever increase obtains for this year will flow to profit.

JMMB could produce net earnings in the order of $3.2 billion for the year ending in March 2014. The outcome could be positively influenced by trading gains and how active the stock market becomes. An active stock market would result in increase brokerage fees and gains from trading shares for their own account as well as increase in the size of the unit trust portfolio that would also result in increased fee income.

Stock outlook | The shares that were languishing at $8 jumped on the release of the results to $9 on heavy volume. The shares which are listed in Trinidad are also in demand on that stock exchange. The PE is around 6 times 2013 earnings from ongoing business and is selling below net book value as well.

Filed Under: Company News, Company Results Tagged With: JMMB, JSE Company

JSE: Junior market jumps 23% in May

June 3, 2013 by IC Insider.com

Junior market stocks climbed 23 percent on average in May as all but 5 stocks increased in price. Three stocks registered price losses and one, C2W, did not trade. Caribbean Cream, newly listed during the month, traded as a high as $1.15 but closed on the last day at the issue price of $1. Lasco Distributors gained 56 percent, Lasco manufacturing gained 46 percent, Lasco Financial Services 32 percent, Blue Power 24 percent and Consolidated Bakery fell 37 percent. A major part of the move was fueled by the announcement last week by Lacso companies that they were calling a meeting of shareholders to consider a 10 for 1 stock split for all three entities that are listed on the junior market.

The main market activity was not as robust as the junior market. In contrast to the 23 percent movement in the junior market index the JSE Market Index advanced by 4,101.54 points (4.68 percent) to close at 87,577.92. The JSE Cross Listed Index advanced by 8.29 points (1.02 percent) to close at 810.31, the JSE Combined Index advanced by 4,806.77 points (5.36 percent) to close at 89,724.01 and The JSE US Equities Index remained unchanged. The main market did have some attractive gains by some of the companies. Good results helped Kingston Wharves climbed 30 percent during the month, Ciboney recorded a gain of 50 percent, Berger Pzints moved up 22 percent, D&G 21 percent, Pan jam 15 percent, JMMB 13 percent as only 4 stocks fell and 21 gained in price.

While the junior market may have lead the main market so far, there are signs that the main market could do well in the weeks ahead as investors reassess the fortunes of some of the listed companies.

Filed Under: JSE Main Market, Stock Market Tagged With: Daily Trading, JSE Company, Trading Activity

JSE: Trading picked up momentum

June 3, 2013 by IC Insider.com

Friday, 31st May 2013 | The stock market had one of the most active days with 33 stocks trading for a volume of 24,880,202 units with a value of $53,568,552. Although 10 stocks advanced in price with 6 declining, all indices fell marginally by less than 10 points.

Consolidated Bakeries had one trade which amounted to 18.3 million units at $1.01 each. This was a cross done by Stocks & Securities on behalf of clients. Two of the Lasco companies responded to the release of audited full year results with Lasco Manufacturing gaining 19 cents to close at $15.39 and Distributors gained 40 cents to close up at $15.

Results impact | Lasco Financial Services which released results after trading closed lost 35 cents to close the day at $9.80. The company reported earnings of $1.33, up strongly on the 83 cents earned in 2012. This should be enough to push the stock up next week.

Access Financial traded at an all-time high of $8 with 65,151 units changing hands. Carreras gained 45 cents to close at $60.45 with 9,324 units trading. The company had reported slight improvement in earnings from ongoing business of $6.14 versus $5.35 in 2012.

JMMB put on 50 cents while trading 1,169,369 units valued at $10.54 million. The stock responded to full year results to March with earnings of $2.35 per share compared to $1.55 in the previous year. The group’s earnings were boosted by a one-off gain of $2 billion booked when it acquired the shares of Capital & Credit Group last year, the effect of this was reduced by $750 million loss when government bonds were swapped out in February this year as well as $181 million written off for impairment to financial and intangible assets. Without these charges earnings would have been up to approximately $1.65 per share. In 2012 the group had picked up a large one-off gain from trading in certain security that was not expected to recur.

Late Move | Late in trading, National Commercial Bank gained $2 to close at $21, Pan Jam posted a $2 gain on to close at $57 with just 4,980 units trading. Scotia Group shed 74 cents to close at $21.06 after it traded as high as $22 with 306,220 units trading for $6.48 million. Scotia Investments lost 42 cents to close at $26.48 with 7,000 shares trading. Supreme Ventures traded 2.76 million units between $2.90 and $3 but closed at $3. in the junior market, newly listed Caribbean Creams traded 1.12 million units between a $1 and $1.10 and closed at $1, the IPO price.

Stocks that could move | At the close, 9 stocks had bids that were higher than the last selling price and there were 3 offers below the last selling price. Lasco Manufacturing closed at a 52 weeks high, Access Financial closed at an all time high. Kingston Wharves traded at a 52 weeks high of $8.50 but closed lower than yesterday’s price.