Archives for August 2013

First Citizens lousy investor’s relations

August 28, 2013 by IC Insider.com

It was once said that as a country, Trinidad wanted to be the financial capital of the Caribbean, but recent activity on the country’s capital market indicates that they have a far way to go in achieving such a goal — if that is possible.

First Citizens Bank launched the largest ever Initial Public Offering (IPO) of shares in the history of the T&T Stock Exchange with a market value of approximately TT$1.1 billion on Monday 15th July at an offer price of TT$22 per share for 48,495,665 shares. The bank said the IPO will assist in widening its capital base in order to facilitate future strategic expansion plans. The offer was slated to close on August 9 and was extended to Monday, August 12th 2013 as the 9th was a public holiday.

First Citizens Brokerage & Advisory Services, a subsidiary of First Citizens Investment Services, is the Lead Broker for the Offer for Sale. The handling of the entire issue is a classic demonstration of poor investor relations and that is not a good sign for investors.

Listing on September 16 | The T&T Stock Exchange has advised that First Citizens has applied to have its shares listed on the TTSE on September 16th 2013 subject to the approval of its application to list by the Board of the TTSE.

This is madness and is reflective of lack of sensitivity in their financial market. First off, the opening time for the issue was unnecessarily long so those who applied early had their funds tied up without any compensation. Even worse is after nearly a month of closing of the issue, investors are yet to know what is their allocation of shares. First Citizens said on their website that investors will find out between August 30 and September 6.

A check with the T&T Stock Exchange as to why it will take such a long time for the shares to be listed indicates that the problem is not with the Exchange, who are ready to list as soon the information is available and is approved by the Stock Exchange Council. A Stock Exchange source suggests that the delays maybe due to the broking community not being fully conversant with how to execute a timely IPO.

Oversubscription | Information obtained suggests that the issue was about two times oversubscribed with institutional investors probably being the main subscribers resulting in the high level of oversubscription.

While the management has made major missteps in dealing with this issue, IC Insider still rates the stock as Buy Rated based on the issue price and potential earnings. We believe there should be a steep appreciation in the stock’s value when it is compared with others within the financial sector.

Filed Under: Company News, General Business News, Initial Public Offers, Stock Market, TTSE Market Tagged With: First Citizens, Trading Activity, TTSE

FX: Buoyant market as US rate stable

August 27, 2013 by IC Insider.com

Tuesday, 27th August 2013 |The total foreign exchange purchased by authorised dealers amounted the equivalent of US32,639,090 with the equivalent of US35,446,396 sold. The average selling rate for the main currency traded, the US dollar, remained unchanged at the end of the day while the average buying rate just barely move by a cent.

The buying rate for the US dollar ended at $101.4299 up 1c as US$28,592,452 was bought by authorised dealers and the selling rate remained unchanged at $102.092 as US$32,461,468 was sold.

Buying of the Canadian dollar took place at $95.5065 up 66c, with C$890,410 being purchased and the selling rate was up by 27c to $97.5648 as C$639,956 was sold.

The buying rate for the British Pound was down by $1.39 to $156.3239 as £1,311,301, selling amounted to £670,839 as the rate went down 58c to $158.189.

The highest buying rate for the US dollar fell by 5 cents 102.60, lowest buying rate remain unchanged at $84.04. The highest selling rate remained unchanged at $107.70 while the lowest selling rate settled at 84.04 down by 12 cents.

The highest buying rate for the Canadian dollar increased by $1.81 to $99.50, the lowest buying rate increased by 42 cents to $78.44. The highest selling rate ended at $101.12, a decline of 5 cents and the lowest fell by 25 cents to $94.25.

The highest buying rate for the British pound declined by 25 cents to $159.50, while the lowest buying rate ended unchanged at $128.73. The highest selling rate ended at $166.49 down 6 cents and the lowest moved up $1.20 to $154.15.

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

JSE: Carreras tumbles

August 27, 2013 by IC Insider.com

Tuesday, 27th August 2013 | Carreras lost ground as the closed at $47, a 52 weeks low, with just 7,868 shares trading between $47 and $48.52, losing $2 in the process as demand for the stock evaporates following the smoking ban in public spaces and the sharp drop in profits in the June quarter. The stock seems destined to decline further as there are 343,835 units on the offer at $49 but only 6 bids for about 12,000 shares at the close with 10,000 of them at $42.01.

The market lost some ground in trading with the advance decline ratio being evenly matched with 9 stocks advancing in price to 10 that fell, the closeness is reflected in the small movement of the all Jamaican Composite Index that closed at 84,635.17, a fall of just 56.52 as the stocks of 31 companies traded, one of the highest numbers for some time. Thanks to a $1 fall in the heavily weighted First Caribbean International Bank, the Main Market Index dropped to 84,650.06, down 286.62. Trading resulted in 2.42 million units at value of $20,314,792.

Caribbean Cement lost ground after a relentless run, which took it from under a $1 prior to the release of the six months results, in trading 20,100 units to close at $2.75 a decline of 25 cents. On Friday last, the stock traded as high as $3.30. Grace Kennedy closed at $56.70 with 11,825 units changing hands as the stock lost 30 cents. Jamaica Money Market Brokers traded 69,034 to close at $8, down 3 cents; Jamaica Producers Group was the big trader on the day with 552,027 units valued at$10,045,787 at a closing price of $18.20 which is up 70 cents on the last traded price on Monday; National Commercial Bank had one of the better trading days for some time with 133,650 units at a closing price of $18.62, a 2 cents increase as trading accounted for $2,488,524.

Sagicor Life Jamaica contributed 35,895 units to trading at a closing price of $8.15, up 5 cents; Scotia Group chipped in with 27,963 units at a closing price of $21.05 up a cent and Supreme Ventures had 30,000 units trading at $2.65 up 10 cents. Salada lost 50 cents to close at $8.50 with 1.170 units.

Junior market | Ten junior market stocks traded, resulting in prices rising for 5 and falling for 2, helping to move the index up by 4.48 to 789.67. Stocks trading in worthwhile volume are Access Financial Services, 97,481 closed at $8.50 up 25 cents; Blue Power Grou, 166,271 closing at $10 for an increase of 50 cents; Caribbean Producers, 49,000, at a closing price of $2.03, down 7 cents; Dolphin Cove, 24,978 at $8.50 up 30 cents; Lasco Distributors contributed 63,652 units and closed at $1.46 off 9 cents on the day; Lasco Financial Services 956,518 units at $1.41 down 9 cents; Lasco Manufacturing 43,154 traded firm at $1.60 up 2 cents.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer indicator shows that bids for 5 stocks were higher with 4 stocks having offers lower than their last selling price. This ratio continues to reflect a weakened position for the market at least for the time being.

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

TTSE: TCL still roaring

August 27, 2013 by IC Insider.com

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Tuesday, 27th August 2013 | Trinidad Cement once more recorded another 52 weeks high as investors keep bidding the stock up with 87,000 shares changing hands for a value of $193,906 in today’s trading as it gained 25 cents to end at $2.31. The stock closed with the bid for 40,000 units at $2.36 and no stock on offer, a clear indication of further price gains.

Market activity resulted in 15 securities trading of which 8 advanced, 3 declined and 4 traded firm as 127,948 shares traded with a value of $930,672.

Sagicor Financial Corporation had a volume of 17,090 shares traded for $117,676 the price closed up 10 cents at $6.90. Neal & Massy Holdings contributed 4,663 shares with a value of $261,413 and closed at $56, while National Commercial Bank added 4,000 shares valued at $4,564 and closed firm at $1.15. Clico Investment Fund suffered a 3 cents fall to close at $21.27 as 7,207 shares valued at $153,291.

Angostura Holding traded a mere 346 units at $9.13 a gain of 6 cents, the bid closed at $9.14 for 10,150 units. ANSA merchant bank traded 1,056 units at $38.60 for a 2 cents gain; Jamaica Money Market traded just 2,705 shares at 55 cents down 2 cents; One Caribbean Media chipped in with 1,225 units closed at $18.00 for a 1 cent loss; Scotia Bank gained a cent at the close of $70 with a mere 600 units trading; West Indian Tobacco traded 400 units firm at $117.05 while Unilever was up 6 cents at $55.31, a new 52 weeks high as the stock traded 700 units.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer indicator shows that bids for 3 stocks were higher with 4 stocks having offers lower than their last selling price

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

General Accident undervalued, but . . .

August 27, 2013 by IC Insider.com

General Accident Insurance Company continued to perform well in the second quarter as they did in the first of this year with profit increasing 48 percent to $80 million in the second quarter bringing the six month results to $177.7 million, an increase of 57 percent over the same period in 2012. The company said they made more money in both our underwriting and investment operations and as a result were able to improve their overall profitability and capital efficiency.

Underwriting | For the two quarters, gross premiums grew to $3.2 billion, an increase of 21 percent over the first six months last year. Net earned premiums grew by 8 percent to $443 million. “Premium growth was driven by the healthy organic growth of our core commercial property and motor businesses as well as the execution of facultative transactions on behalf of large domestic and multinational clients,” the company said.

“Our combined ratio improved from 92 percent in the first six months of last year to 90 percent in the first six months of 2013. The improvement in our combined ratio, the insurance industry benchmark for underwriting profitability, occurred despite continued softness in insurance rates and a deteriorating loss ratio. As a result, our underwriting profit in the first half of 2013 stood at $42 million compared to $34 million during the same period last year”, management continued to state.

Claim expenses rose from $247 million for the year to June last year by 25.5 percent to $310 million in 2013. Management expenses rose from $145 million for the year to June 2012 by 14 percent to $165 million in 2013 and in the latest quarter from $75 million to $88 million, an increase of 17 percent.

Investment Performance | For the six months to June investment income amounted to $145 million, an increase of 68 percent compared to $86 million in the first half of 2012. Investment income in the June quarter was only $52 million much less than the amount generated in the first quarter. A slower fall in the value of the Jamaican dollar would have resulted in a lower gains from foreign currency trading or translation.

Summary | A sharp change in commission expense from a loss of $78 million in the June quarter of 2012 to a small surplus of $6.5 million helped in no small manner to boost the bottom-line in the quarter even as net premiums earned declined from $205 million to $187 million and claims jumped from $118 million to $157 million over the same period.

The company paid out $50 million in cash dividends to shareholders in the first quarter.

Assets jump | The company that had assets totaling $3.9 billion at the end of December last year, has seen a major jump to June to $7 billion mainly as amounts due from reinsurers and co-insurers doubled to $2 billion. The amounts due from policy holders climbed $1.3 billion to $41.8 billion and cash and short term investments increased by $500 million.

On the other hand, amount due to reinsurers and co‐insurers moved up by $1.75 billion, insurance reserves up by $1.3 billion and shareholder’s equity by a little over a $100 million to $1.4 billion since December last year.

Return on average equity is 25 percent which is attractive if the company can maintain the current profit levels. If they can, then earnings per share should reach 35 cents for the year, which makes the stock now priced at $1.85 cents a bargain.

The stock traded at $2.81 in 2011 when profits were not as strong as it is now. Additionally, a number of junior market companies are trading around 6-7.5 times 2013 earnings with General Accident at 5.3 times, suggesting there is room for capital gains in the medium term. Of course Jamaica is in the midst of the hurricane season and some investors may not want to be bold ahead of the end of the season, just in case there is major damage and claims. This stock ought to be watched for benefit from what could be a nice price gain before year end.

Insider call | General Accident is an IC Insider Buy Rated stock.

Filed Under: Company News, Company Results Tagged With: General Accident, JSE Company

FX: Big day with moderate rate change

August 26, 2013 by IC Insider.com

Monday, 26th August 2013 | Trading in the forex market was at a high level on Monday as othe equivalent of US$43.2 million was purchased by dealers and US$46.75 was sold,. This is in contrast last week Monday when the equivalent of US$39.9 million was purchased by dealers and US$47.65 was sold. The Monday level of trading has been pretty consistent since the end of July with buying in the $40 million to $50 million range.

Rates for buying and selling the US dollar climbed moderately with the buying rate moving up by 10 cents to reach $101.43 as dealers bought US$37.97 million and sold US$44.58 million at $102.09, an increase of 8 cents over Friday’s closing rate. It cost dealers 5 cents less to buy the US dollar at the highest rate of $102.65, but 12 cents more for the lowest rate, which ended at $84.04 and 16 cells more in selling at the highest level of $107.70. There was no price change in the lowest selling rate of $83.92.

The Canadian dollar shed 70 cents for the buying rate which closed at $97.69 as the market accounted for C$1.1 million and sold C$814,343 at $97.29 which is 4 cents up on Friday’s rate. The highest and lowest rates for the Canadian dollar all declined quite sharply. The highest buying rate fell $3.51 to S97.69, the lowest buying rate fell by $1.04 to $78.02 while the highest selling rate declined by 80 cents to $101.17 and the lowest was down by $1 to $94.

The Pound gained $1.31 to close at $157.71 as £2.54 million was purchased and just £674,840 was sold at an average rate of $158.77 or 94 cents less than the opening rate. The Pound was purchased as high as $159.75, a drop of 5 cents and the lowest rate at $1.04 lower at $128.73 than the opening rate. Selling took place as high as $166.55 or 80 cents lower than the opening, while the lowest rate increased by $1.35 to $152.95.

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

JSE: Moderate trading

August 26, 2013 by IC Insider.com

Monday, 26th August 2013 | Even as stocks of 26 companies traded on Monday, trading levels continued to be low with 4.67 million units trading valued at $15.4 million of which the Proven preference shares accounted for 1.7 million units valued at $8,692,193 as the stock price closed at $5.09.

There were 6 stocks advancing and 4 declining as the main indices declined with the junior market index closing up marginally to close at 785.19. The all Jamaican composite index closed at 84,691.69 down 263.02 points and the main market index was down 149.48 and closed at 84,936.68.

Cable & Wireless had a volume of 1,141,222 with the price closing firm at 18 cents; Caribbean Cement accounted for 518,445 and closed firm at $3; Desnoes & Geddes 17,385 shares closed at $4.50, down 5 cents; Jamaica Money Market Brokers 12,507 shares closed at $8.03, down 7 cents; Kingston Wharves 50,100 traded firm at $7.40 at the close; Mayberry Investments traded 45,622 units and closed at $2.61, down 2 cents; National Commercial Bank had 12,486 units to close at $18.60, gaining 7 cents; Scotia Group Jamaica chipped in with 96,763 at $21.05 and gained 2 cents.

Junior market | Caribbean Cream 709,724 units at $1.05; Consolidated Bakeries 135,500 traded at $1.50 at the close, up 9 cents; Lasco Financial Services 83,000 at $1.50 up 5 cents; Lasco Manufacturing 25,500 traded firm at $1.58; Paramount Trading, traded 60,000 firm at $3.30.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer indicator shows that bids for 3 stocks were higher with 2 stocks having offers lower than their last selling price. This ratio is now reflecting a weakened position for the market, at least for the time being.

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

TTSE: Neal & Massy drops $2.93

August 26, 2013 by IC Insider.com

Monday, 26th August 2013 | Neal & Massy drops $2.93 to close at $56.01 but with a miniscule 100 shares as 14 securities of which 5 advanced, 3 declined and 6 traded firm. The market registered a volume of 228,272 shares valued at $2,841,213.

Stocks trading in good volume include Grace Kennedy, 74,189 shares valued at $245,543, Sagicor Financial Corporation; 55,088 shares valued at $374,978, the stock price increased by 30 cents to end the day at $6.81. Jamaica Money Market Brokers 43,108 valued at $24,569 as the price closed at 57 cents, a gain of 2 cents; ANSA McAL 22,949 shares valued at $1,521,289. Clico Investment Fund had a volume of 27,630 shares valued at $588,519, the stock remained firm at $21.30.

Trinidad Cement traded only 472 units at $2.06 up a cent on the day but closed with a bid at $2.13 without any stock on the offer. Guardian Holdings lost 50 cents in trading 2,000 shares as the price closed at $15, a new 52 weeks low.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer indicator shows that bids for 3 stocks were higher with 3 stocks having offers lower than their last selling price.

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

IMF predicts 1.5% growth for T&T

August 26, 2013 by IC Insider.com

The staff of the IMF projects real gross domestic product (GDP) growth of some 1.5 percent for the economy of Trinidad and Tobago in 2013, with risks slightly to the downside, should development spending be under-executed.

The economy of Trinidad and Tobago is poised for a modest recovery in 2013 after disappointing growth in 2012 that was due largely to supply constraints, including maintenance operations in the energy sector and an industrial dispute in the non-energy sector. A release from the IMF staff who reviewed the economic data said headline inflation rose to 9.3 percent in 2012, but core inflation, which excludes food prices, remained moderate at 3.1 percent and has since fallen further to 2.2 percent in March 2013. Unemployment is low at about 5 percent, but underemployment remains significant. The external current account surplus fell slightly on increased dividend outflows, but remained high at 10 percent of GDP. Gross official reserves remained strong at US$9.2 billion at end-2012.

The central government realized a deficit of 1.1 percent of GDP in fiscal year 2011/12 (October–September), after near balance the previous year and was more than explained by a decline in energy revenues due to output shortfalls. Gross government debt increased by some 6 percentage points of GDP to a still-manageable 39 percent of GDP. Most of this increase relates to a one-off issuance of bonds relating to a failed insurance company (CLICO), about half of which is expected to be retired in 2013.

Despite accommodative monetary policy, private sector credit growth was modest. The Central Bank of Trinidad and Tobago (CBTT) cut its policy repo rate to 2.75 percent in September 2012. The CBTT continues to mop up considerable excess liquidity via voluntary term deposits by commercial banks and a recent TT$1 billion government bond. Commercial banks remain well capitalized, profitable and liquid and at the end-2012, non-performing loan (NPL) ratio fell to 5.4 percent.

Executive Board Assessment | Executive Directors welcomed the signs of economic recovery fueled by growth of the non-energy sector. They agreed that the authorities’ macroeconomic policies are appropriately supporting the recovery in the near term given downside risks. Over the longer term, the policy priority should be to recast fiscal policy in the context of the country’s non-renewable resource endowment while pursuing structural reforms aimed at diversifying the economic base.

Directors commended the authorities’ adoption of a medium-term fiscal consolidation target. Specific measures should be identified, which would also improve the composition of public spending. This should include the phasing-out over time of poorly-targeted and unsustainable subsidies (notably on fuels) and transfers, while protecting the most vulnerable segments of society and priority social spending. Looking ahead, Directors recommended adoption of a longer-term strategy embodied in a fiscal framework to extend the benefits of current natural resource wealth to future generations. Increasing non-energy revenues and containing current expenditure to raise development spending over time will be important.

Directors underscored the need for structural reforms to facilitate economic diversification and improve competitiveness. In this context, they welcomed the authorities’ commitment to improve the business climate.

Filed Under: Economy Tagged With: Economy, Trinidad & Tobago

JSE: Advancing stocks clobber decliners

August 23, 2013 by IC Insider.com

Friday, 23rd August 2013 | The market turned around today having lost altitude fairly sharply on Wednesday and Thursday with the prices of 11 stocks increasing to just 4 the at fell. Importantly, at the end of trading 10 stocks had bids that were above the last traded price with a mere 2 that had offers below the last price — a pretty bullish indicator — but this is after 2 two days of decline and will be worth watching.

The market traded 10,030,006 shares valued at $78.4 million with Jamaica Money Market Brokers being the dominant trade on the last trading day of the week with 6 million units valued at $48.5 million as the price gained 7 cents to end the day at $8.10. Jamaica Money Market Brokers sold 1,992,204 for a client at $8.10 to Mayberry Investments on behalf of a client. JMMB crossed the rest on behalf of clients. Caribbean Cement continues its relentless run with the price closing at a new 52 weeks high of $3 but not before it traded as high as $3.30, having recovered from a low of 60 cents earlier this year. A volume of 431,780 was the level of trading as the price gained 35 cents.

Main Market trades of note | The all Jamaica Index gained just 34.67 points to close at 84,854.71 and the JSE market index moved up by 19.70 to close at 85,086.16. Stocks trading with reasonable volume were Carreras 99,390 units at a value of $4.87 million as the stock closed at $49, Grace Kennedy 73,795 shares valued at $4.2 million and had a closing price of $57 for a gain of 25 cents, Kingston Wharves 389,475 valued at $2.9 million, between $7.40 and $7.70 but closed at $7.40 down10 cents, Sagicor Life Jamaica 149,000 at $1.2 million to close at $8.30 after shaving a cent off Thursday’s price and Scotia Group with 146,208 units with a value of $3 million, the stock closed at 21.03, up a cent.

JMMB 8.75% traded 216,447 at $3 valued at $649,341 and Proven Investment 8% preference shares traded 2.06 million units valued at $10.485 million while the ordinary shares, which are quoted in US dollars, traded 3,900 units at US12 cent.

Junior market | Trade in the junior market was light with stocks of only 7 companies trading, with the index inching up 1.33 to 783.46. Caribbean Cream traded 120,000 units at $1.05 the same price as Thursday, Caribbean Producers gained 7 cents while trading 10,104 units to close at $2.10, Lasco Distributors had trading in 102,609 shares, gained a cent to close at $1.55, Lasco Financial Services traded 45,040 shares, closed down 3 cents to $1.45 and Lasco Manufacturing lost a cents to $1.58.

Eppley shares have still not traded but the bid remains at $400 for 423 units. There are no stocks on offer at the close of trading.