Archives for December 2013

Central depository merger in Ghana

December 24, 2013 by IC Insider.com

The Central Securities Depository GH and GSE Securities Depository Company are to merge with effect from the beginning of 2014. The Central Securities Depository (GH) Ltd shall be the surviving entity with the effective date of the merger is January 1, 2014. Bank of Ghana will own 82% of the new company and transfer 18% to the Ghana Stock Exchange. The Ghana Stock Exchange will be allowed to increase its shareholding up to 30% within one (1) year at a price existing at the time of the merger.

The merged entity will handle securities listed and unlisted on the Ghana Stock Exchange as well as Government of Ghana and Bank of Ghana Instruments, Cooperate Bonds and Money Market Instruments. It will also operate the registrar services under the licence granted by the Securities and Exchange Commission.

“The merger will provide a common depository platform for the two institutions and harmonisation of trading as well as clearing and settlement practices. This will generate benefits and thus create significant additional value for all market participants,” a release from the Ghana Stock Exchange said.

“The merger will make for a more efficient trading of fixed income and equity securities and reduce operational cost for the merged depository and lower transaction costs for market participants. It will also make the market more attractive to investors. Investors will maintain only one account for all their portfolio. The resources of the shareholders, Bank of Ghana and Ghana Stock Exchange can be pooled together to build a state-of the-art infrastructure to modernise the operations of the depositor.” the release went on to state.

A new Board of Directors will be appointed by the two shareholders to manage the affairs of the company. Stephen Tetteh, maintains his position as Chief Executive Officer while Melvina Amoafo, the current Executive Director of the GSE Securities Depository Company assumes the position of Deputy Chief Executive. All staff of the GSE Securities Depository Company will be absorbed into the new company.

The Central Securities Depository GH Ltd was established in 2004 to manage the issue, redemption and maintain the records of ownership of securities issued by Government of Ghana, Bank of Ghana and the Ghana Cocobod. The Central Securities Depository is wholly owned by the Bank of Ghana.

In 2008, the Ghana Stock Exchange (GSE) established the GSE Securities Depository Company Limited (GSD) as a subsidiary to provide custody for securities listed on the Ghana Stock Exchange and also to provide for the dematerialization of share certificates.

“It has been realised that the capital market in Ghana is not big enough to be served by two depositories. The Ministry of Finance facilitated discussions since 2010 between the Bank of Ghana and the Ghana Stock Exchange towards a merger of the two subsidiaries,” the release said.

In April 2013, a Transaction Advisor was engaged to advise on the process. The Due Diligence Reports and Valuations Reports of the Transaction Advisor were accepted by the Boards of the Bank of Ghana and the Ghana Stock Exchange.

Knutsford IPO gets in before door closes

December 24, 2013 by IC Insider.com

Investors will have just one day to subscribe to shares in Knutsford Express, the latest IPO to hit the market, that is scheduled to open on December 27 as the company gets in just before the door closes on the 10 year tax break for junior market companies. The issue is scheduled to close on the same day.

The Company invites Applications on behalf of itself and the founding shareholders for 20,000,000 Ordinary Shares in the Invitation of which 4,867,338 shares are newly issued shares for subscription that will raise net of $20 million for the company and 15,132,662 shares are existing shares of the current shareholders. At the end of the IPO, the total number of shares issued will be 100 million, an increase from the 95,132,662 now in issue.

The Company intends to use the proceeds for working capital support, acquisition of one new coach and upgrade of existing coaches and payment of the expenses of the Invitation, estimated not exceed $4 million. Applications from the general public must be for a minimum of 100 Ordinary Shares and be made in multiples of 100. A processing fee of $110 per Application is payable to the Registrar of the Company (JCSD) and is payable by each applicant. Proven Wealth are the brokers for the issue.

Free Advertising | This company should be known by most as it earns free publicity just by its vehicles plying the routes proudly displaying its name and logo for all to see. Many have seen it between Kingston and Monetgo Bay and recently from Kingston to Negril. Knutsford Express seems set to be the next company to list on the stock exchange as it seeks to raise only a small sum for itself and some for its owners. The company, which has reported a profit from 2009, has filled a big gap left by Air Jamaica Express ending service between to two major cities. Customers seem to be impressed with the quality service and timeliness and the growth speaks volumes.

Revenue has increased by 27 percent in 2010 to $99.4 million from $78 million and in 2011 the growth inched to 28 percent to $127.5 million and jumped by 33 percent in 2012 to $170.4 million. In 2013 it moved to $203.2 million and increase of 19 percent, the slowest year so far. Profit rose from $7.9 million in 2009 to reach $51 million in 2013 with growth of varying percentages for each of the years. The last being 2013, with an increase of $30 million or 135 percent.

Revenues | Revenue of $ 71 million, a $17 million or 31% percent increase was generated for the first quarter of the 2014 financial year compared to the similar period in 2013 and flowed primarily from an increase in business from existing routes. Management projects further growth in revenue from the South Coast expansion in the third and fourth quarters. However, the expansion has led to an approximate $18 million increase in administrative and general expenses.

The Company recorded other income of $4.7 million derived from settlement of an insurance claim and as at August. Profit before tax stood at $21 million, a twenty-five percent (25%) improvement compared to the first quarter of 2013. Without the insurance inflows earnings would have been flat with 2012 of $16.7 million. The first quarter numbers suggest profit from ongoing operations of approximately 70 cents per share, that may be a tad high with seasonal factors affecting revenues and cost.

Asset base grew by fifty-two percent predominately due to growth of the fleet or “investment properties” which increased by twenty-one million to $75 million. In addition, accounts receivables grew to $18 million stemming from a deposit made on a coach. Approximately $8.8 million is due from Total Waters Limited, a related party, and settlement of this amount is expected in the third quarter of 2013/14. “There was also an inflow of $40 million from a facility used to expand our fleet for which a restriction was placed on a term deposit.” the company stated. Shareholders’ equity expanded to approximately$105 million. Loans payable of $49 million and cash funds of $15 million were on the books at the end of August. Current liabilities stood at $13 million and is mostly tax payable, while current assets stood at $61.5 million.

Who are they | Knutsford Express Services is a transportation company dedicated to offering customers an intercity luxury coach experience in Jamaica. The service began on June 1, 2006 with twenty-eight (28) departures weekly between Montego Bay and Kingston and now have one hundred and five (105) departures weekly and expanded this reach to Falmouth, Negril, Savanna-La-Mar, and Mandeville. The Company is required to hold Express Carriage Licenses for each bus in its fleet. Carriage licences are issued by the Transport Authority and are renewable on March 1st each year.

Principals & Directors | Oliver Townsend is the Managing Director and Chairman of the Company. Mr. Townsend has served in the Tourism & Service Sector for over 24 years in various management capacities including those that involved marketing locally & overseas. His career began in Caribic Vacations, a family-owned Destination Management Company, where he served as Director of Transport and C.E.O.

Gordon Townsend is a Director and Company Secretary of the Company. Prior to joining the company he has served for over 40 years in the Tourism Industry where he has held numerous positions. His career in tourism began as a hotelier where he served as Managing Director of Montego Bay Club Resort for 11 years. In 1982, he shifted his focus to his own newly formed company, Caribic Vacations, a Destination Management Company which provided hosting, transportation and other holiday services to the Tourism Industry where he remains as Chairman.

Anthony Copeland is a Director of the Company with special focus and responsibility on Operations, Maintenance and Standards. Copeland began his career in the Private Sector at Manhattan House in the area of Marketing before leaving to serve his country, which led to 18 years in the Jamaican Defense Force in the Engineering Regiment. With this expertise gained in Transport and Logistics his career led him in 1996 to become the Technical Advisor in Metropolitan Management Transport Holdings.

Peter Pearson is a graduate of Cornwall College and a graduate of the University of West Indies from which he holds a BSc. Peter is a Fellow of the Institute of Chartered Accountants and a Fellow of the Chartered Association of Certified Accountants. He retired as a partner of PricewaterhouseCoopers in 2013.

Mr. Wayne Wray is the Mentor to the Board for the purposes of the Junior Market Rules and has several years’ experience within the financial sector.

Stock Value | The stock is priced around 7 times 2014 earnings before taxation, which is not highly attractive but appealing with the rate of growth they have been enjoying, although that could slow down as the market matures.

Price to book is 5 to 1, which is somewhat on the expensive side compared with other junior market companies but the growth makes up for it. It appears that investors should hold some of these but don’t expect a ton loan of gains in the short term.

Filed Under: Company News, General Business News, Initial Public Offers, JSE Main Market, Stock Market Tagged With: JSE Company, Knutsford Express

Inflation drops sharply in November

December 24, 2013 by IC Insider.com

The Statistical Institute of Jamaica (STATIN) reported a slowdown in inflation for November compared with 0.9 percent in October and 1.03 percent in September.

According to the body charged with collecting and collating economic data on behalf of the Government of Jamaica, the All Jamaica ‘All Divisions’ Consumer Price Index for November 2013 was 209.9 reflecting an inflation rate of 0.5 percent when compared to the index of 209.0 for October. This upward movement was mainly the result of a 0.7 percent rise in the index for the most heavily weighted division, ‘Food’ & Non-Alcoholic Beverages’. The impact of this movement was however tempered by the 0.2 percent fall in the index for the second most heavily weighted division ‘Transport’. This was the only division to record a decline for the month, with lower petrol prices being the contributing factor. The index for the division ‘Housing , Water, Electricity Gas and Other Fuels’ rose by 0.2 percent, and there was a 0.3 percent advance in the index for ‘Education’ impacted mainly by an increase in the cost of examination fees.

For the first 11 months of the calendar year 2013, the inflation rate was 9.1 percent. Year over year, inflation for November was 10.2 percent and for April-to-date the movement was 6.2 percent.

The other divisions that recorded increases in the All Jamaica ‘All Divisions’ index were: ‘Clothing and Footwear’ 0.7 percent, ‘Restaurants and Accommodation Services’ and ‘Miscellaneous Goods and Services’ each recorded increases of 0.6 of percent,’ Furnishings, Household Equipment and Routine Household Maintenance’ 0.5 percent, Alcoholic Beverages and Tobacco’ 0.4 percent, ‘Health’ 0.3 percent, and ‘Recreation and Culture 0.2 percent.

There were upward movements in all three regional indices: Greater Kingston Metropolitan Area 0.7 percent, Other Urban Centres recorded a movement of 0.4 percent and Rural Areas 0.4 percent.

Filed Under: Economy Tagged With: Economy, GOJ, Inflation, Statin

Ghana inflation elevated but falling

December 24, 2013 by IC Insider.com

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Ghana’s year-on-year inflation as measured by the CPI stood at 13.2 percent in November 2013, up from the 13.1 percent recorded in October 2013. The rate is well above the target set by the Central Bank of 9 percent for 2013. The monthly change rate for November 2013 was 0.8 percent, against the 2.3 percent recorded in October 2013.

The Food and non-alcoholic beverages group recorded an average year-on-year inflation rate of 7.3 percent, 0.4 percentage points higher than the 6.9 percent recorded in October 2013. Three subgroups of the food and non-alcoholic beverages group recorded inflation rates above the group’s average of 7.3 percent.

The non-food group recorded an average year-on-year inflation rate of 17.6 percent in November 2013, compared to a rate of 17.7 percent recorded in October 2013. Four subgroups recorded year-on-year inflation rates above the group’s average rate. Housing, water, electricity, gas and other fuels recorded the highest rate of 34.1 percent followed by Transport (26.4%), followed by Miscellaneous goods and services (17.8%) and Clothing and footwear (17.7%). Inflation was lowest in the Communications subgroup (4.3%).

Interest Rates | The inflation rate for 2012 was 8.8 percent and in 2011 8.6 percent. As a result of the hike in the inflation rate earlier in the year, the Central Bank of Ghana hiked policy interest rates to 16 percent in May and is unchanged since then.

The latest Treasury bill rates as of December 20 is 18.6721% for 91 – Days, 18.8305% for 182 – Days and 17.0000% for 1 and 2 – Year Notes.

Related posts | Ghana GDP up strongly to June

Filed Under: Economy Tagged With: Economy, Ghana Stock Exchange

Ghana GDP up strongly to June

December 24, 2013 by IC Insider.com

Ghana’s Real Quarterly GDP for the second quarter of 2013 grew by 6.1%, (year-on-year) compared to 6.7% recorded in the first quarter. The Services sector recorded the highest growth of 9.2%, followed by the Industry Sector 2.5%, while the Agriculture sector showed a negative growth of 3.9% (see Table 1).

The positive growth recorded by the Services sector was due to increases in Information and Communication activities, and Real Estate, Professional, Administrative & Support Service activities. Financial and Insurance activities (27.5%), Information and Communication activities (24.5%) and Public Administration (19.7%) were the main contributors to the Services sector.

The main contributors of the Industry sector were Mining and Quarrying (29.1%); followed by Electricity (9.4%) and Construction (6.8%).

Image courtesy of wandee007/FreeDigitalPhotos.net

The Mining and Quarrying subsector within the Industry sector, recorded a growth of 3.7% due to the increase in the production of Oil and its development activities and Diamond over the first quarter. However, the manufacturing subsector recorded a negative growth of 19.8 percent, partly due to lower production in the food, beverages, and tobacco division, refined petroleum products, and chemicals and chemical products division.

Key findings of the performance in the Agriculture sector for the 2nd quarter of 2013 compared with the 2nd quarter of 2012 are Fishing (2.9%), the only subsector with positive growth, while the Crops and cocoa (-1.4%), Livestock (-12.6%) and Forestry and Logging (-8.6%) subsectors contributed negatively to the sector.

In the Agriculture sector, economic activity in the crop subsector reflected a positive growth of 1.5 percent due to its seasonal pattern (planting season). Economic activities in the Livestock, Forestry and logging, and Fishing subsectors recorded negative growths partly due to their seasonal patterns.

Filed Under: Economy Tagged With: Economy, Ghana

Barbados gets US$150m loan

December 24, 2013 by IC Insider.com

The Barbados Government has secured a 5-year US$150 million floating rate loan from regional and international investors.

The amount raised provides foreign financing for the current fiscal year and serves to augment the stock of international reserves while the recently announced fiscal measures take effect.

Consistent with Government’s medium-term fiscal and growth strategy, part of the loan proceeds will be invested in a number of critical capital projects. Government’s net public debt ratio is expected to increase to approximately 68.1% as at December 2013.

Related post | Barbados faces major economy challenges

Filed Under: Economy Tagged With: Barbados, Economy

JSE: Rally has legs

December 23, 2013 by IC Insider.com

Monday, 23rd December 2013 | The Jamaican stock market had two stocks recording all-time highs and one trading at its 52-day high reached earlier in the year. The prices of 10 stocks advanced and 5 declined.

Access Financial Services recorded a new all-time high and so did the Sagicor Real Estate Fund as trading took place in 4,467,343 units with a value of $18,405,855 as the main indices all rose.

Indices | Trading activity resulted in the JSE Market Index advancing by 188.00 to close at 78,855.65, the all Jamaican Composite moved up by 326.83 to close at 78,902.49 and the JSE Junior Market Index closed at 774.03 for an increase of 2.76.

Stocks trading included Berger Paints with a nice volume of 1,242,398 units to close at $1.75; Cable & Wireless 209,006 units to close at 16 cents; Caribbean Cement 257,372 share to close up 14 cents at $2.99; Carreras 35,758 shares at $36 for a gain of 75 cents; Gleaner with 30,000 units, gained 10 cents to close at $1.20; Grace Kennedy 40,000 shares at $59, gaining $3 in the process; Jamaica Money Market Brokers 148,163 shares to end at $7.60, a fall of 7 cents; Jamaica Producers Group 9,687 units with the price closing unchanged at $18.25; National Commercial Bank 38,700 units to close up 50 cents at $17.50; Sagicor Group, traded under its new name for the first time as the holding company for the banking and insurance companies, had a volume of 184,073 shares as the price ended at $8.05; Sagicor Real Estate X Fund recorded another record with 4,500 units as the price jumped 70 cents to $7; Scotia Group 125,757 shares to settle unchanged at $19; Scotia Investments gained $1.82 to close at $27 in trading 1,000 units.

Proven Investments 8% preference share traded 212,000 units at $5.11.

Junior Market | Access Financial Services reached another high of $11.48 by gaining 10 cents with 26,100 units changing hands. Caribbean Flavours traded 28,420 units to close at $2.50, after declining by 14 cents; Derrimon Trading exchanged 1,509,426 shares and closed firm at $2.50; Dolphin Cove traded 17,000 units to close up 11 cents at $8.50; Lasco Distributors traded 195,000 units to close at $1.40; Lasco Financial Services put on 23 cents while trading 69,400 units to close at $1.30 and Lasco Manufacturing traded 71,488 units to close down 5 cents at $1.40.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer indicator had 10 stocks with bids higher than their last selling prices versus only 3 stocks with offers that were lower. The strength of this indicator points to more gains ahead. For how far into the future the gains will take place, we’re unable to predict.

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

TTSE: First Citizens profit pushes price to new high

December 23, 2013 by IC Insider.com

Monday, 23rd December 2013 | In very moderate trading, First Citizens Bank gained $1.43 to end the day at $40 for yet another new record high with a volume of 9,460 shares being traded for $378,356. The bank released results for the full year with earnings around $2.45 thus justifying the movement in the stock, which we reinstated to our IC Insider Buy Rated list.

There was trading in only 6 securities of which 3 advanced, 0 declined and 3 traded firm which accounted for 53,527 shares trading at a value of $1,058,738. The Composite Index advanced by 4.08 points to close at 1,183.84, the All T&T Index advanced by 8.23 points to close at 1,992.55 and the Cross Listed Index remained at 49.27.

Guardian Holdings traded 37,957 shares with a value of $535,604 as the price closed firm at $14 but after trading at $14.11; National Enterprises contributed a paltry 171 shares with a value of $2,999 but the price remained at $17.54, while Republic Bank added 104 shares valued at $12,045 and gained 5 cents to land at $115.82.

Clico Investment Fund traded 5,800 shares valued at $127,194 as the price advanced by 18 cents to end at $21.93.

IC bid-offer Indicator | At the end of trading the Investor’s Choice bid-offer indicator had 5 stocks with bids higher than the last selling prices, versus only one stock with an offer that was lower.

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

D&G $1billion pay day

December 23, 2013 by IC Insider.com

Desnoes and Geddes (“D&G”) advised the Jamaican Stock Exchange that they have sold their 5% shareholding in Brasserie Nationale d‟Haiti (“BNH”) and their 10% shareholding in Windward & Leeward, St Lucia (“W&L”) to Heineken (“HKN”) on 19th December, 2013 for a total value of J$982,486,000 (US$9.26 million).

“This is the right time to dispose of these minority shareholdings as we have ambitious plans for Red Stripe with several major initiatives being undertaken. These include the installation of our co-generation plant, plant optimization and Project Grow, which is the conversion to locally sourced raw materials. We are focusing on growing the Red Stripe business locally and internationally,” commented Cedric Blair, Managing Director of Red Stripe.

“The breweries in Haiti and St. Lucia will continue to brew Guinness under license for Diageo, in addition to the other licensed breweries in Guyana, Trinidad, the Bahamas, St. Vincent, Belize, Grenada, St. Kitts, Barbados, Panama, Dominica and Antigua.” added Blair.

The sale is not a surprise as the company had reflected the values as investment available for sale in the last audited financial statements at a value of $960 million. The value was determined by professional business valuators based on an a recent bid made for the shares by a third party, suggesting the company’s intension to sell.

Related posts | Profit inches up at D&G | D&G poor 4th quarter

Filed Under: Company News, General Business News Tagged With: D&G, JSE Company

First Citizens paying 12% dividend

December 23, 2013 by IC Insider.com

Trinidad’s First Citizens Bank has declared a $1.09 per share final dividend that will be paid January 24, 2014 to shareholders on record as of December 31, 2013, the Ex-dividend Date is December 27.

The dividend is equivalent to a 12 percent rate of return on the initial IPO price of $22 per shares in August. That adds to the return of 78 percent on the stock price for those persons who were able to get shares at the IPO price and hold them till the XD date. The dividend policy of the First Citizens Bank is to distribute to its ordinary shareholders funds surplus to the operating capital and strategic requirements of the Group, as determined by the Directors, with an annual target dividend pay-out percentage range of 45 to 55 percent of net profit after-tax. The 2013 dividends translates to around $273 million versus $263 million paid for 2012.

The bank reported profits of $742 million before tax and $606.5 million after tax compared to 2012 pre-tax profit of $714 million and $446 million after tax but the big increase after tax is due to tax adjustment in 2012 that depressed the aftertax profit.

In the prospectus, management in commenting on a large jump in tax liability indicated, “In 2012, the Group recorded a taxation charge for the year of $267.8 million. This was due to management re-assessing its tax strategy in relation to the pursuit of tax benefits to be derived from derivative instruments. This change in strategy, which was done after careful evaluation of all relevant factors and in consultation with its tax advisors but prior to the filing of its 2011 corporation tax return, resulted in a difference between the tax liability as per the tax return for 2011 and the estimate of the tax provision recognised in the financial statements for the year ended September 30, 2011, as well as changes to the deferred income tax estimates. This change in estimate, amounting to an additional one-off tax charge of $128.3 million in 2012, was recognised in the income statement in 2012”.