Sagicor Investments signs a definitive agreement to purchase the securities dealer book of business of Alliance Investment Management, a release to the Jamaica Stock Exchange by Sagicor Group stated.
Sagicor Group & PanJam hit new closing highs.Sagicor Group subsidiary, Sagicor Investments entered into a definitive agreement for the purchase of the securities dealer book of business of Alliance Investment Management. The purchase, which is subject to due diligence, is expected to be completed over the next two months. Sagicor Group President and CEO, Christopher Zacca stated that “this latest acquisition of the AIML book of business will further expand SIJL’s client base and allow us to offer the best possible service and investment returns to our new investment clients.”
This news comes on the heels of the Sagicor Group purchase of 100% of the shares in Alliance Financial Services and would have been encouraged by the reputational damage emanating from the debacle with their principals and the country’s central bank.
Archives for April 2022
Sagicor snaps up another Alliance company
Gains for JSE USD market
A total of seven securities traded, compared to six on Friday with three rising, two declining and two ending unchanged. The JSE US Denominated Equities Index gained 1.28 points to end at 224.77.
The PE Ratio, a measure used in computing appropriate stock values, averages 9.6. The PE ratio uses ICInsider.com earnings forecasts for companies with financial years ending, to the end of August 2023.
Overall, 125,525 shares traded, for US$6,699 compared to 213,719 units at US$4,901 on Friday. Trading averaged 17,932 units at US$957, compared to 35,620 shares at US$817 on Friday, with month to date average of 110,796 shares at US$4,439 versus 116,871 units at US$4,666 on the previous day. March ended with an average of 59,258 units for US$6,669.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated.
JSE Markets pull back from Friday gains
Markets gave back some of the gains made on Friday with the JSE Combined Index dropping 2,239.79 points to 412,681.84, but the All Jamaican Composite Index rose 77.65 points to close at 457,532.39 and the JSE USD market index rose 1.28 points to 224.77.
The JSE Main Index shed 2,186.81 points to end at 399,554.57 and the Junior Market fell 21.67 points to 4,348.26.
The market’s PE ratio ended at 25.4 based on 2021-22 earnings and 14 times those for 2022-23 at the close of the Jamaica Stock Exchange.
Investors need a series of measures and pertinent information to successfully navigate the many investment choices in the local stock market. The ICInsider.com PE ratio chart and the more detailed daily report charts provide investors with regularly updated information to help with decision-making.
Investors should make use of the chart to help make rational investment decisions by investing in stocks that are close to the average for the sector and not going too far from it unless there are compelling reasons to do so. This approach helps to take emotions out of the investment decision and put in on fundamentals while at the same time not being too far from the majority of investors. Investors who buy when the price of a stock is close to the average will find that they are not inclined to overpay for a stock.
The ICInsider.com PE Ratio chart covers all ordinary shares listed on the Jamaica Stock Exchange. It shows companies grouped on an industry basis, allowing easy comparisons between the same sector companies and the overall market.
The net asset value of each company is reported as a guide to assess the value of stocks based on this measure quickly. The chart also shows daily changes in stock prices and the percentage year to date price movement based on the last traded prices. Dividends payable and yields for each company are shown in the Main and Junior Markets’ daily report charts that show the closing volume for the bids and offers.
The EPS & PE ratios are based on 2021 and 2022 actual or projected earnings, excluding major one off items. The PE Ratio is the most popular measure used to determine the value of stocks.
Trading picks up on Trinidad Stock Exchange
Trading surged on the Trinidad and Tobago Stock Exchange on Monday, resulting in 378 percent more shares changing hands, with the value rising 52 percent higher than Friday, as the market closed with more stocks declining than rising.
A total of 20 securities traded up from 17 on Friday, with seven rising, ten declining and three remaining unchanged. The Composite Index advanced 2.85 points to 1,429.00, the All T&T Index slipped 2.32 points to 2,065.10 and the Cross-Listed Index rose 1.17 points to 104.79.
A total of 972,898 shares traded for $8,097,356 versus 203,374 units at $5,308,776 on Friday. An average of 48,645 units traded at $404,869 compared to 11,963 shares at $312,281 on Friday, with trading month to date averaging 42,813 units at $458,820 versus 42,385 at $462,772, previously. The average trade for March amounts to 36,197 units at $438,630.
Investor’s Choice bid-offer Indicator shows three stocks ended with bids higher than their last selling prices and two with lower offers.
At the close, Agostini’s shed 20 cents to end at $46 in an exchange of 280 shares, Angostura Holdings popped 24 cents to close at a 52 weeks’ high of $23 with the swapping of 10 stock units, CinemaOne declined 11 cents in closing at a 52 weeks’ low of $3.25 with an exchange of 1,101 stocks. Clico Investment Fund advanced 25 cents to $29.75 while exchanging 67,148 units, First Citizens Group remained at $52, with 3,083 stock units crossing the exchange, FirstCaribbean International Bank fell 35 cents in closing at a 52 weeks’ low of $5.50, clearing the market with 5,894 units. GraceKennedy climbed 61 cents to $6, with 454,000 shares changing hands, Guardian Holdings finished at $26.30, exchanging 1,240 stocks, JMMB Group lost 2 cents to end at $2.41 in an exchange of 10,000 units. Massy Holdings dropped 10 cents to close at $5.24 after trading 261,689 stock units, National Enterprises increased 5 cents to close at $3, with 40 stocks crossing the market, National Flour Mills rallied 20 cents, ending at $1.80 in trading 1,700 shares. NCB Financial Group gained 2 cents in closing at $6.10 after 3,515 units crossed the market, One Caribbean Media fell 3 cents to end at $4.15 trading 53,050 stocks, Republic Financial Holdings declined 73 cents to $140.02 in switching ownership of 2,271 shares. Scotiabank shed $1.10 to land at $80 in trading 1,883 stock units, Trinidad & Tobago NGL dropped 5 cents to $20.60 after exchanging 9,011 stocks, Trinidad Cement rose 8 cents in closing at $3.60, with 57,855 shares changing hands. Unilever Caribbean ended unchanged at $16 in switching ownership of 38,573 stock units and West Indian Tobacco lost 5 cents to close at a 52 weeks’ low of $23.90 with 555 units changing hands.
Prices of securities trading are those for the last transaction of each stock unless otherwise.
MPC Caribbean’s awful reporting
Disclosure of relevant information by listed companies provides information for proper investment decision making and reduces concerns and mistrust if all materially important information is disclosed, thus improving investor confidence in those companies.
In order to deliver pertinent information to investors, management including directors of listed companies will have to go beyond providing the minimum information stipulated by law or accounting regulations.
Against that background, it is instructive to examine MPC Caribbean Energy a company with its shares listed on the Jamaica and Trinidad stock exchanges. In looking at this company and its extremely poor reporting it is worth noting that the state-owned Development Bank of Jamaica invested US$1 million in the company’s shares. It has become the norm that companies that hold subsidiaries must consolidate the financial results of the subsidies with that of the parent company so that investors can get a full picture of the financial performance and standing of the group as a whole.
The company has been an excellent example of how not to communicate with investors as they destroy credibility with investors. That is pitiful when it is considered that it has a need to go back to the market for fresh capital to continue expansion.
The company made two public share offers to raise funds from the public with both coming up short of the target, due to poor communication and the management’s lack of understanding investors and how to communicate with them effectively.
MPC recently reported comprehensive income of US$1.14 million for the year to December 2021, flowing from the net change in unrealized gain on investment amounting to $1.136 million less expenses of US$205 million. Both the auditors and directors failed to inform investors as to the true nature of the gain. At the end of the year, the above mentioned gains, pushed shareholders’ equity to US$20.8 million with total funds invested at US$30.9 million.
The auditors’ report states, “as required by IFRS 10.31, the Company has reflected the 85.69 percent ownership in MPC CCEF at fair value through profit or loss.”
Of course, the above method of providing financial Statements to investors is clearly not acceptable for a publicly listed company as investors are not getting a clear picture of what is happening within the group. The question that arises is whether the fair value gain is equal to normal profit from operations or not? Investors should not have to guess about this. This is important due to the most important method that investors use to value companies.
In addition, shareholders should know what is the income, expenses and profit that are generated by the group and what the full financial status is. The current approach does not disclose this information which is critical, but awfully sad. There is no other company on the JSE that reports in the above manner.
The structure between the listed company and its subsidiary is confusing with each having similar names making it much more difficult to understand which one does what. The company’s management is German, which adds uncertainty to it. The directors by and large are not well known and the manner of communicating with the public makes it abundantly clear that they are not in sync with investors.
Another issue that exists with the company, is that directors tend to use industry jargon in their commentary. The December report starts with – “In the fourth quarter of the year, the commercial and technical performance of the underlying assets of the Company’s investment in the Investment Company were within the expected range. Necessary technical measures were carried out, thereby, stabilizing the production of the underlying assets. ”That is great but they go on to spoil it by talking about OpEx value in the next paragraph. What is OpEx value? They know but few others do.
The bright spot is to be found in the Outlook released at the time of the interim report. “After implementing all the technical measures to resolve limitations that took place in the course of 2021, we are looking forward to 2022. In addition to the expected performance improvement of the underlying assets, the Investment Company expects to further diversify its portfolio with the operational asset Monte Plata Phase 1 Solar Park (33.4 MWp) in the Dominican Republic. The expansion of the Monte Plate Asset with Phase 2 (40.5 MWp) is progressing well and financial closing with the senior lenders FMO and DEG is expected to take place in Q2 2022. The completion of the acquisition remains subject to CNE approval, which is expected to be obtained in the course of Q1 2022. The start of operations of the expanded solar park with a total capacity of 74 MWp is targeted for Q2 2023. The PPA was signed on 15th October 2021 for a period of 15 years starting from the Commercial Operation Date. It will become the largest asset in the portfolio expanding the geographic footprint to a total of four countries incl. Jamaica, Costa Rica, El Salvador and the Dominican Republic.”
Here again, investors are left in the dark as none except the directors have any indication as to what is to be expected. Investors cannot be asked to invest in companies with such poor reporting. The Jamaica Stock Exchange owe the investing public to bring this terrible reporting and lack of information on the finances of the group to an end. The least that can be done is for investors to be presented with the audited accounts of the subsidiary along with those of the listed company for the annual as well as quarterly, that way the full picture will be disclosed.
Former ICTOP10 stock jumps 130%
The star performer for the week was iCreate, up 132 percent and Supreme Ventures, with a 30 percent price movement in the market during the week, but several ICTOP10 stocks had some noted moves as well.
iCreate, more than doubled, surging from the previous week’s $1.36 close to $3.16. The move coincides primarily with two acquisition announcements with little or no information given as to the cost and funding, leading to wild speculation in the stock. Supreme Ventures (SVL) stock jumped to a 52 weeks’ high of $33.41 from $24.49 at the end of the previous week. The SVL was more solidly based as the company reported solid increased profits for the March quarter as investors pushed the price sharply higher in response.
There are two changes to this week’s ICTOP10 listing. Lasco Distributors returns to the Junior Market TOP10 as Stationery and Office Supplies slipped out. The latter rose 15 percent to close the week at $9.11. The expectations are that the company will have blowout first quarter results, helped by school opening and following a strong 2021 fourth quarter. The Main Market welcomed back Jamaica Stock Exchange share that will benefit from an upsurge in trading activity in the first quarter as Scotia Group fell out, still looking attractively priced at $35.20, with Bank of Jamaica increasing interest rates is positively impacting the results.
The Junior Market ended with three stocks rising from 8 to 15 percent. Caribbean Assurance Brokers climbed 10 percent for the week while Jetcon Corporation rose 8 percent to close at $1.40. Declining were Lasco Financial, down 8 percent and Access Financial and AMG Packaging, down 5 percent, as buying eased markedly following improved results released at the close of the market ahead of the Easter weekend. Investors seem not to be factoring in cost savings and increased efficiency that the newly installed machine brings to the business following the close of the recent quarter. With a 5 percent rise, Guardian Holdings was the biggest mover in the Main Market.
The average PE for the JSE Main Market TOP 10 ends the week at 6.2, well below the market average of 14.8, while the Junior Market PE for the Top 10 sits at 6 versus the market at 13.8. The Junior Market TOP10 is projected to gain an average of 249 percent by May 2023 and the Main Market 200 percent.
ICTOP10 focuses on likely yearly winners; accordingly, the list may or may not include the best companies in the market. ICInsider.com ranks stocks based on projected earnings to highlight winners from the rest, allowing investors to focus on potential winning stocks and helping to remove emotional attachments to stocks that often result in costly mistakes.
IC TOP10 stocks are likely to deliver the best returns up to the end of May 2023. They are ranked in order of potential gains, based on the possible increase for each company, considering the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in weekly movements in and out of the lists. Revisions to earnings are ongoing, based on receipt of new information.
Persons who compiled this report may have an interest in securities commented on in this report.
SVL profit for Q1 surges 68%
Gaming company Supreme Ventures posted a net profit of $1 billion for the 2022 first quarter to March, an increase of $400 million or 68 percent compared to the first quarter in 2021, resulting from Gaming income climbing just 18.7 percent to $12.7 billion, compared to $10.7 billion generated in the corresponding period in 2021.
“This huge uplift in profitability for the three months is a result of several factors including the hugely successful re-introduction of the popular Instants “Scratchaz” game and our successful implementation of significant cost-savings initiatives,” Gary Peart, Executive Chairman, stated in his report accompanying the results.
“Total gross ticket sales for the quarter was $27.7 billion, an increase of 164 percent over the corresponding period in 2021, as customers welcomed new initiatives that positively impacted their pockets during a difficult economic downturn,” Peart continued to state.
Direct expenses amounted to $9.8 billion and were $1.2 billion, or 13 percent, higher than the $8.7 billion incurred for the 2021 first quarter. Peart further reported that “with a continued focus on expense management, we have further invested in expanding the business as we prepare for the reopening of the economy and the expected upturn that will result. The increased cost resulted from the higher amounts paid to our key partners and regulators during the quarter.”
Gross profit for the quarter amounts to $2.9 billion, representing a rise of $864 million or 42.8 percent compared to the $2 billion pulled in during the first quarter of 2021.
Segment results show the Lotteries segment being the star performer in the group, accounting for nearly 93 percent of segment results in generating gaming income of $6 billion, a 31 percent increase of $1.4 billion in revenues, while segment results showed an increase of 82 percent to $1.2 billion from $630 million in 2021.
The Sports Betting segment reported $287 million and gaming income increased 16.6 percent by $490 million, to $3.5 billion, over the first quarter of 2021. PIN codes sales saw an increase of $116 million or 3.9 percent to $3 billion for the quarter, resulting in segment results of $85 million, almost doubling that earned in 2021.
Cash inflows from operations hauled in $1.65 billion, up from $1 billion in 2021, but mainly due to dividends paid amounting to $686 million, purchase of shares in a subsidiary and purchase of property and equipment, the company used up $935 million of the surplus at the end of December last year of $4.4 billion.
At the end of the period, Shareholders’ Equity stood at $4.55 billion and was augmented by borrowing $6 billion in long term loans and $443 million in short term funding. Current Assets ended the quarter at $7.6 billion, up from $7.1 in the previous year’s first quarter. Current Liabilities stood at $5.7 billion compared to $3.7 billion at the end of 2021 first quarter. Cash funds and short term investments ended the period at $3.4 billion, down from $5 billion in 2021. Net current assets deteriorated over the past year ending at $1.9 billion compared to $3.45 in March last year.
Earnings per share for the quarter is 37.79 cents, up 68 percent over the EPS in 2021 of 22.46 cents, if the trend continues, earnings for the full year should hit the $1.60 mark for the year with a PE of 20 at Friday’s closing price of $32. The company will pay a dividend of 34.01 cents per share on May 20.