$100,000 invested in NCB would be worth $1.3 million in 5 years if price rose to $1,200 per share.
“Unless something changes, NCB Financial Group is the best buy on the Jamaica Stock Exchange and will be for the next 5 years. My exit price? $1,200!” That is a recent quote from a seasoned financial analyst.
That is astounding, for a stock that traded on the Jamaica Stock Exchange just below $90 this past week and around $95 on the Trinidad market and was selling at $19 at the start of 2015. To reach $1,200 in 5 years, would require growth in profits averaging close to 30 percent per annum and the PE ratio rising to match that growth rate. If that were to happen it would mean that $100,000 invested now in the stock, would be worth $1,348,314 in 5 years.
How possible is that? First with interest rates receding to lower levels than they have been recently and seems poised to fall some more, PE ratios for stocks will increase. Not only will they increase but demand will increase for good quality stocks that are enjoying robust growth.
NCB delivered net profit of $14.7 billion for the nine months to June, this year, an increase of 48 percent over the prior year’s nine months profit of $9.9 billion. In the June quarter, profit grew 33 percent over 2016. Loans, the major fuel for growth in profits, increased a very strong 18 percent, year over year, in an economy that is probably growing around 2 percent in real terms.
Sagicor should be watched for strong gains over the next 5 years.
If growth were to pick up, and that seems likely, with several major projects on the drawing board to commence sooner than later, with some already started, then lending could picked up even more, boosting profit in the process.
In this regard, investors should not ignore Sagicor Group that reported profit jumping 31 percent to $5.65 billion, for the six months to June this year over 2016, with a 5 percent rise in revenues to $30.36 billion and was negatively affected by realized losses on securities that were sold. In the June quarter revenues slipped to $15.1 billion from $15.29 billion in 2016, as net investment income dropped from $5.55 billion to $4.24 billion, but net profit increased from $2.4 billion to $3.06 billion. While growth in insurance premium is important to fuel continued gains in profit, it is the ability to manage the investment funds effectively that will generate the growth that will make the stock price move.
Sagicor not only has the life assurance arm, but a commercial bank as well, health insurance and manages pension and other funds and a property development and management division.
Interestingly, these two companies are heavy dividend payers, investors stand to gain from sharply higher dividend income if the profit continue to grow close to current levels.
Lower interest rates make real assets more valuable than before, as such the biggest change to stocks this coming week may well be guided by the recent cut in interest rates, with 
as a fall in the most recent Treasury rates could well positively impact prices.
IC bid-offer Indicator| At the end of trading in the main and US dollar markets, the Investor’s Choice bid-offer indicator reading ended at 8 to 1.
Trading in the Jamaican foreign exchange market on Friday resulted in the Jamaican dollar rising modestly in value against the US dollar for the second consecutive day, with the selling rate ending at J$128.41 from J$128.65 previously. 
At the close of the market, the last traded prices of securities and volume changing hands are, AMG Packaging concluding at $3.48 with 4,000 shares, Blue Power with a loss of $1.50 to settled at $40 with 862 shares, CAC 2000 finished at $7.95 with 5,574 shares, Cargo Handlers climbed 50 cents higher to settle at $10 with 3,064 units, Caribbean Producers gained 20 cents to end at $3.80 with 526,752 stock units. Eppley dropped $1 and ended at $12 with 17,606 shares, Express Catering fell 2 cents to $4.49 with 72,414 shares, Honey Bun climbed 77 cents higher to $5.50 with 34,946 units, Iron Rock fell 22 cents to $2.88 with 94,238 stock units. ISP Finance closed $1 higher to $20 with 6,101 shares, 
Jamaican Teas added 15 cents to finish at $4.90 with 16,266 units, Jetcon Corporation finished at $5 with 119,344 shares, KLE Group rose 15 cents to $2.75 with 154,726 shares, Knutsford Express climbed 80 cents higher and concluded trading at $14.50 with 4,512 shares, Lasco Distributors closed 20 cents higher at $7 with 29,318 shares, Lasco Financial jumped 50 cents higher to $4 with 4,649 shares. Lasco Manufacturing concluded trading at $4.50 with 61,225 shares, Main Event ended with a loss of 5 cents, at $4.50 with 94,318 shares, Medical Disposables closed with a loss of 50 cents at $5 with 6,459 shares, Paramount Trading gave back 40 cents and ended at $2.60 with 10,000 shares, Stationery and Office rose 15 cents to $4 closing with 1,933,085 shares changing hands, including a lot of 1,322,345 units at $3.95 and tTech ended with a loss of $1 at $7 with 11,299 shares.
NCB Financial Group reached a new high of $5 (J$95.50) in trading on the Trinidad & Tobago Stock Exchange on Friday with just 2,920 shares trading with a rise of 15 cents. 
Firm Trades| The last traded prices of securities and the volume traded unchanged at the close of trading are Angostura Holdings closed at $15 with trades of 5,000 shares, Grace Kennedy remaining at $2.85 with 62,114 shares, Guardian Holdings ending at $16.50 with 25,359 shares valued at $418,437, National Enterprises trading 6,795 shares at $10.48. National Flour Mills closing at $2.10 with 1,000 shares, Point Lisas exchanged 3,955 shares at $3.88, Republic Financial Holdings that closed at $101.90 with 100 shares, Sagicor Financial unchanged at $8.30 with 236 shares and Scotiabank closed at $58.02 with 1,194 shares.
Market activity on the Junior Market of the Jamaica Stock Exchange returned to more normal levels after heightened levels on Wednesday closing trading on Thursday with 1,314,753 units valued at $5,648,856 traded.
The average volume and value for the month to date amounts to 277,412 units valued at $1,733,535 compared to 292,254 units valued at $1,833,412 previously. In contrast, July closed with average of 536,395 units at $1,905,441 for each security traded.
Iron Rock closed 10 cents higher to finish at $3.10 with 2,750 shares, ISP Finance rose 50 cents higher and closed at $19 with 2,000 shares, 
Main market indices of the Jamaica Stock Exchange made huge gains in trading on Thursday, to close at new record highs.
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 11 stocks with bids higher than their last selling prices and 7 with lower offers.
Kingston Wharves climbed $2 to $31.50 with only 800 shares, Mayberry Investments rose 32 cents to $4.50 with 20,438 shares, NCB Financial Group traded $1.99 higher to $87.99 with 252,941 shares, 138 Student Living closed at $5.15 trading 7,850 shares, PanJam Investment closed at $33 with 32,820 shares, Portland JSX lost 11 cents, closing at $9.30 with 200 shares. Pulse Investments ended with a loss of 40 cents at $1.80 with 7,800 shares, Radio Jamaica traded 234,820 shares at $1.30, Sagicor Group fell by 60 cents, closing at $31 with 42,184 shares, Sagicor Real Estate Fund added 1 cent to close at $12.06 in trading 11,185 shares, Scotia Group gained 45 cents and closed at $46.95 with 56,384 shares, Seprod lost 25 cents to close at $29.75 with 56,860 shares, Supreme Ventures held firm at $8.80 with 82,070 shares. Proven Investments US ordinary shares lost US 1 cent and closed at 23 US cents with 25,097 units and JMMB Group US 6% preference share traded at US$1.10 with 1,717 units.
Trading in the Jamaican foreign exchange market on Thursday resulted in the Jamaican dollar rising modestly in value against the US dollar, with the selling rate ending at J$128.65 from J$128.73 previously. 
