“Liquidity of the financial sector was relatively comfortable. Commercial banks’ excess reserves at the Central Bank averaged TT$3,441 million in April 2017 and hovered around this level for much of May,” the Monetary Policy Committee (MPC) the Trinidad and Tobago central bank in commenting on the country’s economy stated recently.
The MPC went on to state that “credit growth remains slow with credit granted by the financial system to the private sector increasing by 2.6 percent (year-on year) in March 2017 compared with 3.2 per cent a month earlier, with loans to businesses actually declining by 0.7 per cent in the year to March.”
“Oil production in the first quarter of 2017 was higher than over the previous three quarters, but 1.6 per cent lower than in the first quarter of 2016. Evidence of a pick-up in energy exploration activity was visible which is expected to bolster output in the short to medium term. Natural gas production output in January to March fell by 8.4 per cent than the period in 2016. Other available non-energy statistics suggest that construction and distribution activities were very subdued in early 2017,” the MPC stated.
“Inflation remained low with the 12-month headline rate in March 2017 at 2.8 percent, up from 2.6 per cent in the previous month and close to the 3 percent averaged over the past 6 months. Core inflation was 2.6 per cent (year-on-year) in March. The weak inflationary pressures were also reflected in the indices of producer prices and building material prices (an increase of 2.8 per cent and a decline of 0.6 per cent on a 12-month basis respectively, in March 2017)” the Committee observed.
In its deliberations, the MPC noted that the domestic economy continued to need support toward recovery, and that the risk of overheating did not appear imminent in light of the recent information on inflation. At the same time, the narrowing of interest differentials between Trinidad and Tobago and the US has implications for the balance of payments. In light of these factors, the MPC decided to maintain the Repo rate at 4.75 per cent.
Archives for May 2017
Trinidad economy remains pressured
Trading sinks in Jamaican stocks – Monday
Trading in the main market of the Jamaica Stock Exchange closed on Monday with main indices rising as 24 securities changed hands and with 2 trading in the US dollar market. At the close, 8 stocks advanced and 6 declined with very low level of trading.
Trading in the main market ended at 836,055 units valued at $14,784,987 compared to 4,417,748 units valued at $73,092,399 at the close on Friday. Trading in the US dollar market accounted for 6,430 units valued at US$6,926.
The All Jamaica Composite Index advanced 922.05 points to close at 258,211.03, the JSE Market Index rose 840.09 points to finish at 235,259.48 and the JSE US dollar market index closed unchanged at 215.59.
IC bid-offer Indicator| At the end of trading in the main and US dollar markets, the Investor’s Choice bid-offer indicator reading shows 9 stocks with bids higher than their last selling prices and 2 with lower offers.
The main market ended trading with an average of 34,836 units valued at $616,041 per security traded, compared to an average of 152,336 units valued at $2,520,428 on Tuesday. The average volume and value for the month to date ended at 374,915 units with an average value of $5,236,889 compared with an average of 392,814 units with an average value of $5,480,092 on the previous trading day. The average volume and value for April ended at 382,748 units with an average value of $5,254,387.
In market activity, Berger Paints closed at $20, gaining $1 while exchanging 49,814 shares, Cable and Wireless closed at $1.30, with 268,988 shares changing hands, Caribbean Cement traded 25 cents lower to close at $28 with 17,316 shares. Carreras closed at $80, with 10,397 shares changing hands and closed with the bid at $81, Grace Kennedy closed at $41 trading 49,831 units, Jamaica Broilers traded 23,833 shares at $18, Jamaica Producers gained 1 cent to close at $16.01, with trades of 22,355 shares, Jamaica Stock Exchange closed at $7.30, with gains of 30 cents while trading 1,602 shares. JMMB Group lost 20 cents to close at $19.80 with 20,100 units, Kingston Wharves gained $1.50 to close at $32, with 7,444 units trading, Mayberry Investments traded 40,050 shares at $4.90, with a loss of 40 cents. NCB Financial Group closed at $71 after gaining 1 cent in exchanging 61,352 shares, 1834 Investments closed at $1.40, with 25,232 shares changing owners, 
138 Student Living exchanged 43,375 shares at $4.49, PanJam Investment closed at $35.50, losing 12 cents trading 65,096 shares. Pulse Investments traded 10,614 shares at $14.50, Radio Jamaica gained 5 cents to close at $1.70, with trades of 18,582 shares, Sagicor Group added 48 cents to close at $33.50 exchanging 14,500 shares, Sagicor Real Estate Fund lost 20 cents, closing at $10.60, with 9,981 units changing hands. Salada Foods closed at $8.50 trading 4,000 shares, Scotia Group closed at $42, with an exchange of 1,700 units, Sterling Investments closed at $15.50 trading 30,000 shares, Supreme Ventures lost 24 cents to close at $7.25 exchanging 10,893 shares. Proven Investments 8.25% preference share traded 29,000 units and rose 79 cents to $6, Proven Investments ordinary shares closed at 29 US cents, with 330 shares and JMMB Group USD 6% preference share gained 0.01 US cent to close at US$1.12, with 6,100 units changing hands.
Lower trading clips Juniors on Monday
Junior Market stocks closed lower on Monday.
The Junior Market closed down on Monday, with the index slipping 9.31 points compared to a dive of 71.37 points on Friday and ended at 3,284.26 with 19 securities trading, compared to 22 on Friday with reduced volume and value of stocks trading.
At the close of trading, 6 stocks advanced and 7 declined with 903,666 units valued at $5,900,159 changed hands, compared to 2,514,401 units valued at $21,351,143 on Friday. Trading ended with 7 stocks having bids higher than their last sale prices and 4 with lower offers.
The Junior Market ended trading with an average of 47,561 units for an average value of $310,535 compared to 114,291 units for an average value of $970,507, on the previous trading day. The average volume and value for the month to date are 89,667 units and $605,576 while at the close of the prior trading day it was 91,672 units and $621,105, well below the levels for April with averages of 502,597 units and $2,768,003.
At the close of the market, Access Financial climbed $2 and closed at $44 with 7,950 units changing hands, Blue Power ended at $52 with 1,097 units changing hands, CAC 2000 traded only 269 shares to close with a rise of 30 cents at $8, Caribbean Cream closed trading with 8,370 units to end at $8, after falling 40 cents, Caribbean Producers had 119,253 units changing hands, compared more than 3 million units each on Wednesday and Thursday, the price remained at $3.50 at the close, Consolidated Bakeries dropped 48 cents trading 107,952 shares to close at $2.52, strong> Derrimon Trading ended at $8.75 with 12,000 shares changing hands, Eppley had 51,213 units changing hands to close of $12, General Accident fell 10 cents and closed trading with 27,562 shares to end at $2.90 after attempts were made to trade the stock at $1.48
as demand thinned out, the trade was cancelled after the market closed. ISP Finance ended back at $28 with 450 units changing hands, after rising $1.50. Jamaican Teas rose 13 cents and closed trading with 8,000 shares, at $4.65. Jetcon Corporation ended at $14.90 with 30,149 shares trading, Knutsford Express fell $2 and closed with 9,938 shares trading at $68. Lasco Distributors added 5 cents and ended with 90,745 units trading at $7.10, Lasco Financial gained 5 cents to end with 2,881 shares changing hands at $4.05, Lasco Manufacturing lost 20 cents to close at $5 while trading 68,897 shares, Main Event lost 80 cents and ended trading of 48,063 shares at $7.20, Paramount Trading ended with a fall of 25 cents as 200,000 shares changed hands at $2.80 and tTech had 108,877 units changing hands at $7.50.
The Exuberant 10
The JSE stock traded at an outlandish $13.50 & dropped 47% since.
It is not nice to watch one’s investment lose value while others grow delivering big gains at the same time. Many investors plunge into investments that will result in just that happening, as they err and refuse to let go and reinvest, to recover their loss, from gains elsewhere.
A look back at prices in 2005, reveals shocking results of costly ill-timed investments. In June 2005, investors in a bout of excess exuberance, pushed Mayberry Investments to $8.40 from a listed price of $5.05, weeks after it listed on the Jamaica Stock Exchange, 12 years later it is still to reach back to that level. That is a huge blow to investors who held on to the shares from then.
The sad thing is that many investors who wanted to sell could not, as attempts were made to control the price from a big drop as selling started to overwhelm buying a few days after nearly 40 million shares were traded around the $7-8 level. Mayberry is an outstanding example of investors making huge errors based on inadequate information and paying dearly for it.
But Mayberry’s stock is not the only one that investors underwent a long period of suffering from, they have a number of top notch companies as their friends that that performed poorly until fairly recently. Scotia Group was pushed to $33.50 in March 2005 based on results that were not sustainable as the bank benefited by a poor decision of the Central Bank to push interest rates on CDS paying interest at elevated levels for about two to three years. The banks of course made a killing when rates fell back. Added to that, Scotia effected a stock split that sent the stock flying.
Well it was not until late 2016 that the price exceeded the 2005 high. JMMB Group’s shareholders saw the price of the stock peaking at $22 in April 2004 only to see it fall away and not getting back to that level until recently this year. That is not great for a stock that is not a great dividend payer.
Grace Kennedy hit a high of $123 (Now $41 after stock split in 2016), in January 2005, it has taken nearly 12 years to recover the loss and it has still not delivered much more in gains since its full recovery.
Markets tend to repeat past behaviors, over and over but sometimes they take a break from the norm. PE ratios are the end product of investors’ perception of values for stocks. There are other measures but the PE is the most widely used. When PEs are pushed well beyond where the majority of investors thing the value ought to be, they induce added buying or selling. Investors who buy when the market has pushed valuation well above what is considered the norm, usually pay a steep price for so doing. The 2005 examples are cases in point. An accepted concept is that the PE ratio should be line with profit growth. One year’s growth cannot be used by itself but investors have to try and determine that themselves.
Most of the stocks in the IC Insider’s Exuberant 10, were pushed in 2017 by excessive enthusiasm and in some cases wrong information. Stock splits helped to fuel some of the excess as well. The attached table shows the stocks that were pushed well above their appropriate values and the levels of correction since. Some may fall even more than their latest price as they can be considered overvalued based on known earnings for the current period. A few that are not on the list could see a decent fall as well, included in this latter list are Knutsford Express and Kingston Properties.
Only 2 price changes on Trinidad Stock Exchange
Guardian closed at a 52 weeks’ high of $16.03 on Monday in Trinidad.
Trading on the Trinidad & Tobago Stock Exchange on Monday, was muted with the price of just 2 securities changing, one closed at a 52 weeks’ high. There were no declining stocks while 11 closed unchanged.
At the close 13 securities changed hands, leading to 224,838 shares exchanged at a value of $1,570,480 compared to 12 securities trading on Friday, with 761,387 shares valued at $3,029,637. The Composite Index rose 0.18 points to 1,214.29, the All T&T Index gained 0.05 points to 1,793.45 and the Cross Listed Index was up 0.04 points to close at 85.13.
IC bid-offer Indicator| The Investor’s Choice bid-offer ended with 3 stocks with bids higher than last selling prices and 6 with lower offers.
Gains| Guardian Holdings added 1 cents to end at a 52 weeks’ closing high of $16.03 while exchanging 10,000 shares and Scotia Investments traded 12,552 shares at $2.50.
Firm Trades| Angostura Holdings held firm at $15 trading 400 shares, Berger Paints closed at $4.05 with trades of 100 shares, Clico Investment closed at $22.51 exchanging 14,758 shares valued at $332,055. First Citizens traded 1,230 shares at $31.85, JMMB Group traded 35,000 shares at $1.27. Massy Holdings closed at $51.45 trading only 65 shares, National Enterprises exchanged 200 shares at $10.50, Jamaica’s NCB Financial Group closed at $3.95 with an exchange of 102,000 shares valued at $402,900. Praetorian Property Mutual Fund traded 100 units to close at $3.02, Readymix closed at $11 with trades of 46,873 shares valued at $515,703 and Trinidad & Tobago NGL held firm at $20.75 trading 1,560 shares.
Carreras dividend yield 11.5%
Dividend hiked at Carreras
Carreras has declared an interim dividend of $2.10 per stock unit, payable on June 28, 2017, to stockholders as shown on the Register of Members as at June 9. The stock will commence trading ex-dividend on June 7. The payment will bring the dividends for the last twelve months to $7.50 per share, for a yield of 11.5 percent based on the price of $65.40, at the end of June 2016.
The company paid an interim dividend of $2.20 per stock unit to stockholders on the Register of Members at February 17, this year, an interim dividend of $1.70 per stock to stockholders on record at November 24, 2016 and a dividend of $1.50 per on August 30, 2016.
Carreras traded as high as $84 this year and is trading currently at $77.73 on the Jamaica Stock Exchange and traded at a low of $60 in the last twelve months.
For the December 2016 quarter, Carreras‘ profit after tax rose 24 percent to $1.1 billion, from $889 million and for the nine months, it moved 23 percent, from $2.28 billion to $2.79 billion. IC Insider.com is forecasting $11.50 earnings per share for the current year that ends in March 2018 as the price of cigarettes was raised this year. The increased earnings would result in an increased dividend payment.
Berger & Scotia Group drop TOP 10
Image courtesy of suphakit73/FreeDigitalPhotos.net
The two main markets of the Jamaica Stock Exchange, pulled back this past week as the volatility in the price of some stocks resulted in shifts in the position of some stocks in the TOP 10. Movements were not enough to change the Junior Market list, even as Caribbean Producers saw a 25 percent fall during the week with heavy volume, the stock enjoyed partial recovery by weekend.
This week’s pull back, seems to support the comment last week, “that both markets are trading close to recent resistance levels which could act as a short term restraint on upward movement.”
In the main market, decline in the prices of Seprod down to $30 and Sterling Investments to $15.50 moved them into the top list and replaced Berger Paints and Scotia Group that maintained their prices and are now some distance from the top list.
The average PE ratio for the Junior Market Top stocks is 7.5 and 6.8 in the main market, these compare favourably with 13.7 for the main market and 13.4 for Juniors, based on 2017 estimated earnings. With several stocks trading below the average, the potential for more gains for the rest of 2017 seems positive, barring any major negative developments.
Recent TOP 10 listings remain just below the top spots with Access Financial, Jetcon Corporation, AMG Packaging, Dolphin Cove, Caribbean Cream and Blue Power sitting just below, with potential gains of more than 100 percent and in the main market, Grace Kennedy and Sagicor Group are just below the Top spots with good potential gains ahead.
The history of the Top stock performance indicates that, it takes a few months for most of the stocks to reach potential targeted prices as they tend not to be the stocks favoured by a large segment of investors, in the short term.
At the close of the week, IC Insider.com’s TOP 10 Junior Market stocks now trade at an average discount of 44 percent to the Junior Market average, while those in the main market are trading at a 49 percent discount, to the average of the market, leaving several stocks with room for growth in the months ahead.
At the close of the week, bid volumes for junior market stocks remained relatively low ranging from a high of 66,436 units at $5.15 for Lasco Manufacturing with an offer of 16,685 units at $5.20, Access with a bid of 35,425 at $42.50, Caribbean Producers with 34,300 units on the bid at $3.50, with 100,000 shares on offer at $3.80. Key Insurance closed with 15,213 units on the bid at $2.90 and 51,361 offered at $3.80 and Lasco Financial ended the week with a bid of $4.05 to buy 24,000 units with 47,888 units being offered for sale at $4.40.
Seprod shares dropped from $45.10 in February to $30 on Friday.
Caribbean Cement had a bid to buy 54,903 units at $28.50 and offers of 7,850 shares at $29.95. Carreras had just 1,233 units on the bid at $77 with 4,954 shares being offered at $80, JMMB Group’s has bids to buy 8,272 units at $19.80 with an offer to sell 6,224 shares at $20, Radio Jamaica bid ended trading at $1.68 to buy 883 units with 30,000 units on offer at $1.79 while Scotia Investments closed the week with 14,753 units on the bid to buy at $36.50 and 14,049 units offered for sale at $37.85. Interest in Seprod has fallen with only 250 units on the bid at $29.50 and selling of 95,352 units at $30, this is way off from the 52 weeks’ high of $45 the stock sold at late February this year.
Sagicor Barbados undervalued but
The Barbadian based Sagicor Group is reporting net profit of US$23.4 million for the first three months of 2017, compared to the prior year of US$22.3 million. Profit flowed from revenues for the quarter of US$282.5 million, compared to US $264.4 million for the corresponding period in 2016, an increase of US$18.1 million.
Profit attributable to shareholders’ of the group ended at US$13.3 million, compared to US$13.9 million for the 2016 period. Earnings per common share was 4.4 US cents, compared to the prior year of 4.6 US cents.
Net premium revenue rose t0 US$167.7 million, exceeding the prior year amount of US$157.3 million. Net investment income and other income rose to US$114.8 million compared to the prior year’s US$107 million.
Operating expenses rose to US$115 million from US$101.4 million for the same period in 2016. “Higher administration costs were incurred as a result of the expansion of cards and payments business in our Jamaica segment, along with the incurrence of some non-recurring costs also relating to our Jamaica segment”, Stephen McNamara, Chairman, stated in his report to shareholders. Policy holders’ benefits inched to US$137.2 million from US$134 million for the previous year.
Sagicor Group Jamaica a subsidiary of the Barbadian compnay.
Total comprehensive income grew to US$28.6 million, compared to US$19.9 million for the same period last year. Included in comprehensive income were net gains on financial assets of US$7.9 million. “Retranslation losses Sagicor Group Jamaica, a subsidiary of the Barbados company.[/caption] amounted to US $0.7 million, compared to US $6.4 million reported in the prior year, and resulted from declines in the Jamaica and Trinidad currency against the United States dollar”, the Chairman stated.
Total assets amount to US $6.6 billion, with liabilities of US$5.8 billion and shareholders’ equity of US$818 million. The Group’s debt, which is included in other liabilities, was US$405.3 million.
The group’s stocks traded on the Trinidad and Tobago Stock Exchange atTT$8.99 and in Barbados at BD$2.45, (around US$1.30 per share. The price puts the PE ratio around 7 times 2017 earnings. The problem is that Barbados where the company is head quartered is in the midst of major economic problems that could make investing in the stock riskier than normal.
Trading improving for Jamaica stocks
The Jamaica Stock Exchnage main market fell on Friday with improved trading.
Trading levels hit rock bottom on the main market of the Jamaica Stock Exchange on Friday May 19, when less than 1 million units valued at a mere $11.8 million traded has been rebounding with this Friday’s level being the highest since Thursday last week. On Friday the value of traded stocks almost doubled that of Thursday this week.
Trading improved on the Monday with $31 million of trades but fell back on Wednesday to $27 million and picked up to $37 million on Thursday before moving higher on Friday. Trading levels in the main market ended at 4,417,748 units valued at $73,092,399 compared to 1,392,798 units valued at $37,103,714 at the close on Thursday. Trading in the US dollar market accounted for 56,375 units valued at US$17,199.
The All Jamaica Composite Index declined 1,094.79 points to close at 257,288.98 the JSE Market Index fell 997.48 points to finish at 234,419.39 and the JSE US dollar market index lost 1.69 points to close at 215.59.
The main market ended trading with an average of 152,336 units valued at $2,520,428 per security traded, compared to an average of 53,569 units valued at $1,427,066 on Tuesday. The average volume and value for the month to date ended at 392,814 units with an average value of $5,480,092 compared with an average of 406,174 units and $5,644,518 on the previous trading day. The average volume and value for April ended at 382,748 units with an average value of $5,254,387.
Trading ended with 31 securities changing hands including 2 trading in the US dollar market. At the close, 8 stocks advanced and 8 declined.
IC bid-offer Indicator| At the end of trading in the main and US dollar markets, the Investor’s Choice bid-offer indicator reading shows 7 stocks with bids higher than their last selling prices and 1 with a lower offer.
In market activity, Barita Investments closed at $7.20 trading 100 shares, Berger Paints exchanged 7,134 shares at $19, Cable and Wireless closed at $1.30, trading 982,050 shares, Caribbean Cement traded 25 cents lower to close at $28.25 exchanging 51,000 shares. Carreras closed at $80, losing $1 with 7,731 shares changing hands, Grace Kennedy gained $1 and closed at $41, with 22,872 units trading, Jamaica Broilers traded 9,249 shares at $18, Jamaica Producers gained 15 cents to close at $16, with 12,538 shares changing hands, 
Jamaica Stock Exchange closed at $7, after falling 69 cents while exchanging 351,722 shares. JMMB Group exchanged 50,672 units at $20, Kingston Properties traded 52,625 shares at $12, Kingston Wharves lost 50 cents to close at $30.50, trading 5,378 units, Mayberry Investments traded 1,900 shares at $5.30, NCB Financial Group closed at $70.99, with gains of 38 cents after exchanging 242,233 shares, 1834 Investments lost 6 cents and closed at $1.40, with 135,646 shares changing owners, 138 Student Living exchanged 15,000 shares at $4.49, PanJam Investment closed at $35.62, gaining 62 cents in trading 20,553 shares. Portland JSX gained 5 cents to close at $10.15 with an exchange of 2,416 shares, Pulse Investments traded 17,157 shares at $14.50, Radio Jamaica lost 7 cents to close at $1.65, trading 126,425 shares, Sagicor Group added 2 cents to close at $33.02 exchanging 1,021,346 shares, Sagicor Real Estate Fund gained 12 cents, closing at $10.80, with 17,797 units changing hands. Salada Foods jumped $1.02 to close at $8.50 trading 10,000 shares, Scotia Group closed at $42, with an exchange of 85,543 units, Scotia Investments closed at $36.50, with a loss of $1 trading 500 shares. Seprod closed at $30 exchanging 170,000 shares, Sterling Investments closed at $15.50 trading 11,700 shares and Supreme Ventures lost 1 cent to close at $7.49 in an exchange of 211,461 shares. Margaritaville Turks closed at 34 US cents, with 20,500 units changing hands, Proven Investments closed at 28.5 US cents, gaining 0.01 US cent in trading 35,875 ordinary shares and JMMB Group 7.50% preference closed at $1.10 with trades of 775,000 units trading.
TTSE turns positive on Friday
Trading on the Trinidad & Tobago Stock Exchange on Friday resulted in a turnaround in the fortunes of the exchange with the market indices breaking the 6 days losing streak as 12 securities changing hands compared to 14 on Thursday with 6 stocks rising and no declines.
The market closed with 761,387 shares exchanged at a value of $3,029,637 up from Thursday’s 128,271 units valued at $1,640,227.
The Composite Index rose 0.47 points to 1,214.11, the All T&T Index gained 0.36 points to 1,793.40 and the Cross Listed Index was up 0.08 points to close at 85.09.
IC bid-offer Indicator| The Investor’s Choice bid-offer ended with 5 stocks with bids higher than last selling prices and 6 with lower offers.
Gains| Grace Kennedy gained 4 cents to close at $2.85 exchanging 19,137 shares, Guardian Holdings closed at $16.02, with gains of 2 cents trading 4,302 shares, Point Lisas closed at a 52 weeks’ high of $4.05,
gaining 5 cents with 480 shares changing hands. Sagicor Financial gained 1 cent to close at $8.99, with an exchange of 5,000 shares, Scotiabank traded 1 cent higher, closing at $58.01 with trades of 3,921 shares and Trinidad & Tobago NGL gained 14 cents and closed at $20.75, with 3,346 shares trading.
Firm Trades| Angostura Holdings held firm at $15 trading 5,000 shares, Ansa Merchant Bank exchanged 8,000 shares at $40 valued at $320,000, Clico Investment closed at $22.51 exchanging 2,583 shares. First Caribbean International traded 21,000 shares at $7.75, JMMB Group closed at $1.27, with an exchange of 288,168 shares valued at $366,549 and NCB Financial Group traded 400,000 shares valued at $1,580,000 at $3.95.
