After the big trade in Kingston Wharves shares on Wednesday worth over $3 billion, Thursday’s trading seem light in contrast. The main attraction in today’s trading, was the gain in Scotia Group share price, accompanied by more than 1.2 million shares, helping to push the index up, quite sharply. Market activity on the Jamaica Stock Exchange, resulted in the prices of 6 stocks rising and 6 declining as 17 securities changed hands, resulting in 12,983,655 units trading, valued at $63,224,180, in all market segments.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator showed 6 stocks with bids higher than their last selling prices and 6 stocks with offers that were lower.
Main Market| The JSE Market Index jumped 1,007.75 points to 73,071.76 and the JSE All Jamaican Composite index rose 1,126.85 points to close at 80,415.69.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Berger Paints with 3,500 shares trading, rose of a cent to $1.66, Jamaica Money Market Brokers with 10,212 ordinary shares, gained 5 cents to end at $7, Scotia Group rose 99 cents, as 1,230,365 shares changed hands at $20 and Scotia Investments increased 10 cents with 4,825 units to $21.80.
Firm| The stocks in the main market to close without a change in the last traded prices are, Carreras 13,736 units at $34.65, Jamaica Producers with 1,000,520 shares at $15.20 and Proven Investments with 8,639 shares, closing at 17.99 US cents.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Barita Investments with 6,777 shares, lost 1 cents to end at $2.18, Kingston Wharves traded just 5,000 units at $6.30, with the loss of 20 cents, National Commercial Bank had 17,500 shares changing hands, with a 25 cents cut in price to $17.95, Sagicor Group with 11,325 shares, closed 10 cents less at $9.65 and Sagicor Real Estate Fund had 306,147 units being active, the price fell 2 cents to $6.50.
Preference| Jamaica Money Market Brokers 8.50% preference share traded 87,271 units at $3.45 and Jamaica Money Market Brokers down 7.50% preference share traded 8,660,000 units at $2.
Archives for September 2014
TTSE ends Thursday little changed
Trading on the Trinidad Stock Exchange was in 11 securities changing hands of which 2 advanced, 3 declined and 6 traded firm with 220,110 units changing hands, with a value of $4,122,720. The market was closed on Wednesday for Public holiday.
The Composite Index declined 0.10 points to close at 1,146.21, the All T&T Index fell by just 0.87 points to close at 1,978.93 and the Cross Listed Index increased by 0.03 points to end at 41.04.
Gains| Stocks increasing in price at the close are Clico Investment Fund with 32,308 shares valued at $712,391, increased by 5 cents to end at $22.05 and Massy Holdings contributed 7,093 shares with a value of $ to end at $68.52 with a gain of a cent.
Declines| The stocks declining at the end of trading are Ansa McAl traded 12,550 shares valued at $831,284 to close down 2 cents at $66.22, Scotiabank lost 2 cents and closed with 25,042 units for $1,522,553 at $60.78 and Trinidad Cement 2,000 shares traded at $2.36 for a 18 cents decline.
Firm Trades| Stocks closing with prices unchanged at the end of trading are Angostura Holdings contributed 5,393 shares at $12.70, Firstcaribbean International Bank with 1,250 shares at $5 First Citizens added 9,397 shares valued at $342,051 and closed at $36.40, Grace Kennedy with 810 shares to end the day at $3.70, National Commercial Bank with 120,100 shares traded at $1, Sagicor Financial Corporation with 4,167 at $6.20
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 5 stocks with the bid higher than their last selling prices and 4 stocks with offers that were lower.
Not much change in rates for J$
The Jamaican dollar lost just a cent against the US dollar, gained value versus the Canadian dollar but slipped slightly against the Pound Sterling, in Wednesday’s forex trading. Authorized dealers purchased the equivalent of US$34,448,840 versus US$38,385,284 on Tuesday, and the equivalent of US$31,858,399 was sold compared with US$39,434,800 on Tuesday.
In US dollar trading, dealers bought US$32,026,453 compared to US$32,424,472 on Tuesday. The buying rate for the US dollar drifted 6 cents to $112.32 and US$30,237,505 was sold versus US$34,668,805 on Tuesday, the selling rate gained a cent up to $112.70. The Canadian dollar buying rate fell $1.14 to $100.39 with dealers buying C$1,165,397 and selling C$983,084 at an average selling rate that slipped 22 cents to $101.94. The rate for buying the British Pound declined $1.38 to $181.13, for the purchase of £787,089, while £406,481 was sold, the selling rate rose 3 cents to $183.99. Other currencies bought, amounted to the equivalent of US$111,545, while selling was for the equivalent of US$67,967.
Highs & Lows| The highest buying rate for the US dollar, fell $1.10 to $112.90. The lowest buying and the highest selling rates remained unchanged at $91.85 and $117.70 respectively and the lowest selling rate fell back $18.15 to $91.85 The highest buying rate for the Canadian dollar lost 20 cents to $102, the lowest buying rate remained at $81.17. The highest selling rate fell $1.16 to $103.80. The lowest selling rate was unchanged at $97.80. The highest buying rate for the British Pound, fell 30 cents to $184.20, the lowest buying rate was unchanged at $146.29. The highest selling rate rose 60 cents to $189 and the lowest selling rate is unchanged at $176.25.
Jamaica Producers buys more KWH shares
Kingston Wharves $3 billion trade, dominated activity on the Jamaica Stock Exchange, in Wednesday’s trading. The Wharf company had 466 million units of its stock sold to Jamaica Producers and Seaboard Corporation, a United States company, involved in food, energy and the shipping industry, by National Commercial Bank.
The stock traded at $6.50 up from $5.01 on Tuesday, but it had a bid of $5.75 which allowed the trade to take place 29.75 percent above the closing price on Tuesday. Normally, there would be a 15 percent limitation on the daily trading price movement, from the prior day’s last traded price. but allowances are made for cases where the bids or offer of the previous day better reflect the market value of the stock.
Trading activity resulted in the prices of 10 stocks rising and 5 declining as only 20 securities changed hands, resulting in 470,310,461 units trading, valued at $3,066,292,531, in all market segments.
Main Market| The JSE Market Index gained 631.80 points to 72,064.01 and the JSE All Jamaican Composite index rose 706.45 points to close at 79,288.84.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had only 4 stocks with bids higher than their last selling prices and 7 stocks with offers that were lower, suggesting a likely negative movement in prices on Thursday.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Berger Paints with 3,799 shares trading, with a 3 cents rise to $1.65, Carreras with 1,500 shares changing hands, 35 cents higher at $34.65, Desnoes & Geddes put through 13,083 units with a gain of 10 cents to end at $4.80, Grace Kennedy had 4,955 shares changing hands and gained $1, to $59, Kingston Wharves 466,435,712 shares traded with a gain of $1.49 to $6.50, Mayberry Investments closed with a 2 cents gain at $1.47 after 9,000 units went through the market, there were no stock on offer at the close of trading, National Commercial Bank never benefited from the big sale of Kingston Wharves shares and had 89,031 units active, with a 20 cents increase to $18.20 and Sagicor Group saw 3,157,519 units moving 50 cents higher, at $9.75.
Firm| The stocks in the main market to close without a change in the last traded prices are, Proven Investments with 30,000 units, closed at 17.99 US cents and Radio Jamaica with 2,132 shares at $1.04.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Caribbean Cement with 93,220 shares, lost 19 cents to end at $2.36, Sagicor Real Estate Fund traded just 14,436 units with 28 cents loss at $6.52 and Scotia Group with 93,248 shares, closed 8 cents lower at $19.01.
Preference| Jamaica Money Market Brokers 8.75% preference share traded 10,500 units at $3 and Jamaica Money Market Brokers 7.50% preference share traded 27,546 units at $2.
JSE Junior Market low trading interest
The junior market enjoyed trading in 324,780 units valued at $353,366. The JSE Junior Market Index fell 2.40 points to close at 649.56 as just 5 securities traded with 2 advancing and 2 declining.
Gains| Stocks recording gains, at the end of trading in the junior market are, Caribbean Cream with 29,240 units, gained 4 cents to 65 cents and General Accident had 9,000 units trading with 4 cents gain, to end at $1.50
Firm Trades| The only active stocks in the junior market that closed at the same price as the day before is Honey Bun with 1,442 shares to end at $2.12.
Declines| Stocks declining in the junior market at the end of trading are, Lasco Distributors with 263,098 units changing hands lost 2 cents to end at $1.11 and Lasco Financial with 22,000 shares lost 13 cents to end at 85 cents for anew 52 weeks low.
At the end of trader there were 2 securities with bids higher than the last selling price and two with offers that were lower.
Little gain from NCB’s KWH sale
National Commercial Bank will collect $3 billion for the sale of its 32.59 percent investment in Kingston Wharves, which it executed today, on the Jamaica Stock exchange at $6.50 per share. But the banking group will not see a boost in its profit from the transaction although the shares were purchased at much lower price than what they have been sold at.
At the end of September last year, the investment was booked at $2,705,495 as the group accounted for their share of profit from the time the investment was made some years ago shortly after the banking was taken over by Lee Chin the majority owner of the bank. Since then Kingston Wharves reported profit of $734 million of which $240 million would be attributable to the bank’s holding. That would bring the amount booked up to June this year to $2.945 billion leaving a small difference which is less than the amounts of profit they would have booked had the sale not taken place.
The group will benefit going forward, from funds that it can either lend or invest in other areas. Jamaica will benefit from some foreign exchange inflows, as a result of the sale.
Kingston Wharves dominates
Kingston Wharves $3 billion trade dominated activity on the Jamaica Stock Exchange, in Wednesday’s trading. 466 million units of the stock, was sold to Jamaica Producers and an overseas entity in the shipping industry. National Commercial Bank was the main seller. The stock traded at $6.50 up from $5.01 on Tuesday but it had a bid of $5.75 which allowed the trade to take place at 29.75 percent above the closing price on Tuesday.
Trading activity resulted in the prices of 10 stocks rising and 5 declining as only 20 securities changed hands, resulting in 470,310,461 units trading, valued at $3,066,292,531, in all the market segments.
Main Market| The JSE Market Index gained 631.80 points to 72,064.01 and the JSE All Jamaican Composite index rose 706.45 points to close at 79,288.84.
Junior Market| The enjoyed trading in 324,780 units valued at JSE $353,366. The Junior Market Index fell 2.40 points to close at 649.56 as just 5 stocks traded with 2 advancing and 2 declining.
JPG ups Kingston Wharves holding, NCB out
NCB Capital Markets purchased 466,435,712 on behalf of a client. Shares held by the NCB group were part of the transaction. NCB Jamaica Limited had 360,807,145 or 28.27 percent of the company and NCB Capital Markets Ltd. A/C 2231 had 105,283,757 or 8.25 percent. Steven Gooden of NCB Capital Market only comment is “a release will be made after the close of the Jamaica Stock Exchange today”.
The transaction is clearly not one of a name change as that would have been done as a block transaction. As a result of the transaction, Seaboard is acquiring 21 percent and Jamaica Producers 11.59 percent of the outstanding Kingston Wharves shares. Producers will now own approximately 42 percent of the company. Jeffery Hall CEO of Jamaica Producers confirm the groups interest in the deal and advised of a release after trading on the Jamaica Stock Exchange, to provide the full details.
Jamaica Producers Group already owns 431,777,188 or 33.83 percent of the company and would end up with just over 70 percent of the company. The transaction which was mostly done at $6.50 per share or $1.49 above Tuesday closing price cost $3 billion and would effectively trigger a compulsory takeover offer to the minority shareholders if it was all purchased by Jamaica Producers. The transaction took place in three main blocks that were all done at $6.50,and include 300,345,000 units costing 1,952,242,500, 60,462,145 shares costing $393,003,943 and 105,283,757 at a cost of $684,344,421. Apparently, the largest block was sold to more than one party to the transaction and would have been the reason for the split up of it. This arrangement could mean that Jamaica Producer’s Group would not be a majority shareholder and therefore not trigger the take over clause. the increase in the price exceeds the 15 percent rule of the JSE but the stock had closed Tuesday with a bid of $5.75 which was a set up to allow for the traded at todays price.
In 2012,Jamaica Producers had increased their holdings in Kingston Wharves when they bought Three Hundred and Fifty Seven Million Five Hundred and Fifty Thousand (357,550,000) ordinary shares of KWL at a price of $5 per share to help fund the company’s expansion and modernization in pursuit of increased business expected to flow form the Panama canal expansion.
the transaction will boost NCB 2014 earnings as it comes days ahead of the bank’s year end and whatever gains there will be, will be in the incorporated into the results.
Insider sells 1m JMMB stock
Jamaica Money Market Brokers advised the Jamaica Stock Exchange that a connected party sold 1,000,000 of the Group’s shares, on September 18, 2014.
The sale was executed through Scotia Investments which seems strange, as onlookers would consider that a connected party to group would have used the JMMB brokerage house instead of a non-related entity.
Why Dividend matters
Investing in stocks is not only for those big capital gains that create excitement for many investors. Dividends are an important part of the investment returns, but are often underestimated. They carry additional message, than the pure pay out of profits to shareholders. Dividends provide cash flow while one waits on a stock to increase in value. Stock prices move up and down over time.
Because of such movements and that sometimes, good companies have bad patches, when profits fail to grow much and can hold the stock price down for long periods, investor can just collect dividends while waiting on the return to stock price growth. Look at the example quoted below, while the stock price gained nearly 700 percent, since the end of 1993, the dividends have grown by over 2,000 percent in the same period. The exciting thing is that investors got paid every year since 1993. The amount accumulated over that time is large, amounting to $23.58 cents per share or more than the increase in the stock price.
Best Signal| The level of payment or future payments, may well be the best signal that investors will get from within a company that the stock price is set for upward movement. Dividend yields on stocks usually fall well below the interest paid on government paper. History dictates that yields usually return to their norm over time. We can use the level of present or future dividends as a predictor of stock prices. At the heights of the stock market in Jamaica, dividends yields fell to round two percent on average. Yields currently are 7% for many stocks, in the case of
Carreras one of Jamaica’s best dividend payers
Carreras well over 10 percent, suggesting huge gains ahead for stocks, not taking the sharp fall in interest rates, locally into consideration from high teens.
High priced stocks| New investors should not be afraid of what some persons will regard as expensive or high priced stocks, if they have the qualities to rise in value above lower priced stocks. The absolute price of a stock is not determinant, if an investment in it is warranted or not.
History confirms that a good dividend policy will provide an attractive rate of return on original investment over time. A very good example is Scotia Group. In 1993 they paid out $220 million or fifteen cents per share but paid out $4.98 billion or $1.60 as dividends, this fiscal year. The stock price at the end of 1993 was just over $3 and is at $20 now and yet the stock is undervalued presently. Those returns happened during one of the most turbulent periods, in the local capital market.
Useful indicators| Some useful indicators to follow are, financial results, one wants to see a nicely rising trajectory of earnings. Take the chart of Access earnings and revenues this is a excellent example of the picture an investor ought to be looking for. It is not surprising that the stock price of Access has done so well since it was listed.
Information such as major expansion, could mean increased sales and with that profits ahead. Developments within the economy, lower interest rates are major factors that influence the movement of stock prices. An increased dividend payment is another good indicator that things will be better going forward, as companies are unlikely to increase dividends, if profits are not growing.
