Trading on the Trinidad Stock Exchange closed with 9 securities changing hands of which 4 advanced, only 2 declined and 3 traded firm with a total of 619,796 units, valued at $21,385,138.
At the close of the market, the Composite Index rose 0.76 points to close at 1,160.25, the All T&T Index fell 0.08 points to close at 1,969.34 and the Cross Listed Index increased by 0.22 points to end at 46.08.
Gains| Stocks increasing in price at the close are, ANSA McAL closing with 300,000 shares changing hands for a value of $20,112,000, the price gained 2 cents to $64.04, National Commercial Bank gaining 3 cents to end at a new 52 weeks’ high of $1.68 after trading 2,000 shares. Sagicor Financial Corporation traded 1,000 shares to close with a gain of 1 cent at $6.01 and West Indian Tobacco traded 514 shares to close 1 cents higher at $125.28.
Declines|The stocks declining at the end of trading are, Massy Holdings traded 2,362 shares to close with the loss of 1 cent at $64 and Trinidad Cement with a volume of 263,622 shares being traded for $725,128 but lost 2 cents to close at $2.75.
Firm Trades| Stocks closing with prices unchanged at the end of trading are, Firstcaribbean International Bank added 10,450 shares to closed unchanged at $5.03, First Citizens Bank traded 2,556 shares to close at $35.80 and Flavorite Foods contributed 37,292 shares with a value of $179,001,to close unchanged at $4.80.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator shows 3 stocks with the bid higher than their last selling prices and 2 stocks with offers that were lower.
Ansa Mcal TT$20M trade dominates
FX demand rises J$ falters Wednesday
Demand for foreign currency climbed on Wednesday with US$43 million being purchased by the public and resulted in a slight decline for the Jamaican dollar against all the three main currencies the Jamaican dollar usually trades against. The purchase of all currencies by dealers amounted to the equivalent of US$40,851,340 compared with US$25,499,013, on Tuesday and selling, the equivalent of US$44,427,944 versus sale of US$29,260,764, previously.
In US dollar trading, dealers bought US$38,957,982 compared to US$24,763,312 on Tuesday. The buying rate for the US dollar rose 18 cents to $115.72 and US$42,974,812 was sold versus US$23,550,793 on Tuesday, the selling rate increased by 3 cents to $116.11. The Canadian dollar buying rate declined 88 cents to $92.36 with dealers buying C$466,971 and selling C$524,583, at an average rate that rose 38 cents to $95.25. 
The rate for buying the British Pound fell 59 cents to $177.87 for the purchase of £931,844, while £623,692, was sold, at an average rate that rose 5 cents to $179.87. At the end of trading it took J$129.17 to purchase the Euro, $2.78 less than on Tuesday, according to data from Bank of Jamaica, while dealers purchased the European common currency at J$126.64 for a fall of $3 on Tuesday’s rate. Other currencies bought, amounted to the equivalent of US$88,288, while the equivalent of US$56,655, was sold.
Highs & Lows| The highest buying rate for the US dollar, rose 8 cents to $116.30. The lowest buying, the highest and the lowest selling rates were unchanged at $94.98, $121.71 and $94.77 respectively. 
The highest buying rate for the Canadian dollar fell 50 cents to $94.80. The lowest buying rate was down 67 cents to $75.36, the highest selling rate slipped $1.10 to $98 and the lowest selling rate rose 70 cents to $92. The highest buying rate for the British Pound, declined $1.50 to $180.30, the lowest buying rate dropped $1.45 to $144.63, the highest selling rate climbed $2.30 to $186.45 with the lowest selling rate being unchanged at $175.50.
20 stock gained 8 declined on JSE
Berger closed at a 52 weeks’ high of $3 on Wednesday
The JSE Market Index lost just 78.06 points to 98,270.35, the JSE All Jamaican Composite index declined 87.29 points to close at 108,589.10 and the JSE combined index dropped by 142.03 points to close at 100,587.96.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator shows stocks with bids higher than their last selling prices and with offers that were lower.
The stocks trading in the main market at new 52 weeks’ high, are, Berger Paints, Caribbean Cement, Desnoes & Geddes, Jamaica Broilers, Jamaica Producers, and Sagicor Real Estate Fund.In trading, Berger Paints traded between $2.58 and the closing price of $3 with 80,658 shares and ended with an increase of 45 cents, Cable & Wireless had 806,875 shares trading between 42 cents and 47 cents, to close at 45 cents, with a loss of 2 cents from Tuesday’s last price. Caribbean Cement traded 1,477,569 shares between $5.50 and the final price of $5.30 to gain 30 cents, Carreras traded just 2,871 units with a gain of $1 to close at $50. Desnoes & Geddes traded 197,238 shares at $7.70 at the end, by putting on 45 cents. Grace Kennedy posted 25,988 units but lost $1.40, to end at $62.15. Jamaica Broilers put through 136,039 units and closed at $5.50, 1 cents higher than on Tuesday.
Jamaica Producers traded at $20 with a gain of $1.45 with 3,303 shares changing hands, JMMB Group lost $1.04 in trading 81,226 shares at $8.45, Mayberry Investments had 280,022 shares changing hands at $3.10 after trading at $2.85 and added 10 cents at the close. National Commercial Bank had 136,390 units with all trading at $30. Sagicor Group closed at $11.50 with 820,961 shares trading 49 cents down at the close, Sagicor Real Estate Fund had 5,880 units trading at a new high of $8 to gain 80 cents. Scotia Group traded 104,903 shares at $25.01, Proven Investments 93,007 shares at 19.5 US cents as the price slipped 1 US cent, Jamaica Money Market Brokers 7.50% preference share traded 145,200 units at $2.40 and Jamaica Money Market Brokers 8.75% preference share traded 199,980 units at 3.05.
Interest rates slip slightly
The lastest issue of Treasury bills saw a slight slippage in the rates investors will be getting from the government over the next three to six months.
The 6 months issue of Treasury bills maturing in November this year attracted $656.586 million and yielding an average of 6.714 percent, compared with 6.787 percent in April. The the 3 months’ bills are yeilding 6.568 percent versus 6.61 percent in April, the latter auction attracted bids of $655,977,500. Both issues offered bills of $400 million each.
Rates have been sliding on Treasury bills since March last year, there was a slight uptick in the rate out turn at the February auction. The pace of decline of the rates seems to have slowed, in this auction compared with earlier declines. Bank of Jamaica will probably have to lower CD rates to induce a faster decline with inflation for the year still subdued.
6 stocks up on paltry volume
Scotia sheds 47 cents on Wednesday on TTSE
At the close of the market, the Composite Index lost 0.76 points to close at 1,159.49, the All T&T Index fell by just 1.52 points to close at 1,969.42 and the Cross Listed Index remained at 45.86.
Gains| Stocks increasing in price at the close are, Ansa Merchant Bank while adding 1,000 shares, gained 1 cent in closing at $38.92, Clico Investment Fund with 1,285 shares gained 1 cent, to end the day at $22.51. Guardian Holdings with 16,854 shares changing hands, for a value of $239,301, gained a cent, in closing at $14.20, followed by Massy Holdings trading 638 shares, to close with a gain of 1 cent, at $64.01. Trinidad Cement that traded 88 shares to close with a gain of 2 cents at $2.77 and West Indian Tobacco had 148 shares trading and gained 2 cents to close at $125.27.
Declines|First Citizens Bank traded 7,017 shares with a value of $251,209 to close $35.80, down 1 cent and Scotiabank declined at the end of trading with the price shedding 47 cents to end at $62.53 while trading just 69 shares.Firm Trades|Stocks closing with prices unchanged at the end of trading are, Agostini’s with a volume of 12,611 shares being traded for a value of $217,540, closed at $17.25 and Republic Bank traded 448 shares at $115.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator shows 7 stocks with the bid higher than their last selling prices and 1 stock with a lower offer.
9 stocks rose on junior martket
A fall in the price of dolphin cove helped pull the junior market index south
At the close of the market, there were 3 stocks with bids higher than their last selling prices and 8 with lower offers. The junior market ended with only 2 securities closing with no bids to buy and 7 securities that had no stocks being offered for sale.
Stocks trading in the junior market are, Access Financial ending with 3,540 shares changing hands, to close lower by 2 cents at $17, Caribbean Cream closed with 100 shares trading at $1.19 to gain 14 cents, but ended with an offer of 120,000 shares at $1.10. Caribbean Flavours finished trading with 15,774 units to close with a gain of 24 cents at $2.10, Caribbean Producers with 28,511 shares trading, ended higher by 15 cents to a 52 weeks’ high of $3.15, but had an offer of 18,000 units at $3.
Consolidated Bakeries traded unchanged at $1, with just 1,045 shares, Derrimon Trading finished with 38,000 shares changing hands and gained 15 cents to $2.15, Dolphin Cove had just 1,398 units changing hands at $10 while losing 75 cents, General Accident Insurance concluded trading with 6,507 shares changing hands, to close 17 cents higher at $2.17. Lasco Distributors traded 21,609 shares, 10 cent higher, at $1.65, Lasco Financial Services finished trading with 60,200 units, the price rose just 1 cent, to $1.31. There was dealing in 22,900 shares of Lasco Manufacturing as the stock traded lower by 3 cents to $1.37, Medical Disposables contributed 34,000 shares with the price rising 10 cents, to $1.90 and Paramount Trading ended trading with 4,000 shares to end with an increase of 4 cents at $3.76.
BOJ may ease monetary policy
Bank of Jamaica may ease monetary policy in the context of a slower rate of depreciation of the Jamaican dollar, the precipitous fall in oil prices and with inflation expectations fallen sharply.
The bank stated that notwithstanding the sharp fall in inflation, expectations by the business community were above the inflation outturn at end-March 2015, as well as the Bank’s projections for the near-term. The bank went on to state that with the downward adjustment in inflation expectation, in conjunction with favourable developments in the macro financial environment, will allow the Bank to pursue an even more accommodative stance than they have done so far. Notably, developments in the international economy including a faster than projected reversal of oil prices and the timing of tightening of monetary policy in advanced economies will increasingly influence the direction of domestic monetary policy.
“For the March quarter, the Bank’s monetary policy stance remained generally accommodative while being consistent with achieving the monetary targets under the Extended Fund Facility (EFF) supported programme”, the governor reported. In particular, the Bank purchased net amounts of foreign exchange from the market and introduced a 3-month lending facility (Occasional Term Repo Operation), which enhanced liquidity assurance. In the context of the outturns for these
Macro-economic variables and the outlook for inflation over the near-term, the Bank lowered its policy rate by 25 bps to 5.50 per cent on 17 April 2015. This policy action was also consistent with declines in inflation expectations and the country’s risk premium.
Growth of possible 1% in Q1
Real growth in the Jamaican economy (GDP) is estimated to have increased in the March 2015 quarter between 0.0 to 1.0 percent, following two consecutive quarters of contraction, Bank of Jamaica’s governor, Brian Wynter disclosed at the bank’s quarterly press briefing today.
The estimated outturn for the quarter mainly reflected increases in tourism activity, domestic agriculture and Transport, Storage & Communication.
For Fiscal year 2015/16, real GDP is forecasted to expand between 1.0 to 2.0 percent. Agriculture, Forestry & Fishing, Hotels & Restaurants and Transport,
Agriculture is expected to contribute in Jamaica’s growth in the second quarter
T&T Stock Exchange fowls up FCB report
We carried the following report on the poor level of reporting of First Citizen Bank (FCB) of Trinidad and Tobago when we castigated management their poor reporting to their shareholders, with the release of the March quarterly results and wondered why the Trinidad and Tobago Stock Exchange accepts such substandard reporting.
We stated that afterall, information is what creates good markets. When various parties in markets get relevant information at once, then they have a far better idea where to price a security.
First Citizens contacted IC Insider and informed us that they did in fact submit the correct information to the Trinidad and Tobago Stock Exchange, unfortunately, the exchange copied the unconsolidated report and posted it on their website. The report gave wrong information on the banks operation but it remained posted until our article came to the attention to the bank and the Financial Securities Commission in that country the bank advised us. The bank indicated that the large increase in other income reported below represents a divided paid by a subsidiary to the group company.
Stock exchange staff must understand that they are handling price sensitive information that can result in huge gains or losses for some, accordingly, special care need to be taken, to ensure that information they release to the public reflect accurately what has happened. The TTSE did not take care in positing the report and to think that the error remained there for days is alarming.
First Citizens actual Q2 results. The bank in fact made profit of $148 million for the quarter, slightly higher than the $146 million made in 2014 and $326 million in the six months, an increase of $5 million, from revenues of $290 million for the quarter and $578 million for the half year, in net interest income, with other income coming in at $150 million for the quarter and $294 million for the six months. Earnings per share is $1.30 for the six months, just ahead of the $1.28 in 2014. The most encouraging feature for the bank is the continued growth in loans which moved from $11.57 billion to $12.9 billion. Lending is the area that increased profits are to come from if there is growth of good quality loans. Shareholders’ equity stands at $6.4 billion at March and customers’ deposits at $26.7 billion. With lending translating hovering around half of the deposits, the bank will be unable to optimize the profits as the spread between loans and deposits are usually higher than on money market instruments.
The following is the rest of the report which was carried. It is puzzling that FCB latest interim report states that it is prepared in accordance with IAS 34 interim financial reporting but on examination it shows that it has not fully comply and it falls down badly in two critical areas.
Here is and extract of IAS 34 says – “If the financial statements are condensed, they should include, at a minimum, each of the headings and sub-totals included in the most recent annual financial statements and the explanatory notes required by IAS 34. Additional line-items or notes should be included if their omission would make the interim financial information misleading.”
“The explanatory notes required are designed to provide an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the entity since the last annual reporting date. Examples of other disclosures required [IAS 34.16A] changes in accounting policies explanation of any seasonality or cyclicality of interim operations unusual items affecting assets, liabilities, equity, net income or cash flows.”
Earnings per share is one such line item for listed companies in their audited financial statements, accordingly, any compliance with the standard would see earnings per share calculation shown in the interim report. Certainly the big bump up in income is of an unusual nature that requires some explanation. Regardless of the accounting standards prudent management would certainly want their shareholders to understand what is happening in their company.
First Citizens Bank posted a big jump in earnings for the March quarter of this year, but there is not even one line giving an indication as to what resulted in the huge jump. Is it one off, is it sustainable nobody seems to know or worse nobody seems to care, not the company not the stock exchange, not the Financial Services Commission? Just nothing for investors to digest. The income statement shows a line item for net interest income of $211 million for the quarter but an item 3 times that size is listed as other income. What insensitivity? As John McEnroe once screamed at a tennis referee, you can’t be serious. As a result of this big jump in other income, more than twice the $298 million they raked in in the same period in 2014, and more than they hauled in in all of the 2014 fiscal year of $537 million the amount is just $5 million more than the net income for the quarter after tax of $630 million. In 2014 for the similar quart profit was $292 million.
For the six months the bank is reporting profit of $728 million up from $378 million but one would be led to believe the numbers are suspect for thy seem too good to be true and begs the question as to their sustainability, bearing in mind the flat first quarter numbers. It is only in looking at the segment results that one can glean a bit of where the increased profits are coming form that does not show what caused the big income gain. The company’s net income for banking was virtually flat compared to 2014 for the six months but treasury and investment banking saw a big leap in net income to $661 million from $289 million, the source of the increased profit.
The problems don’t stop there. Investors in the stock market need to know the earnings per share even more than the absolute profit in order to easily value the shares, a search throughout the document reveal no such item but the situation get even worse than that the company has not even paid investors the courtesy of including in the document, the total issued shares so they can compute it easily.
Exchange web site, the bank has 251,353,562 shares issued, putting the earnings for the six months at $2.50.
Citizens had had several missteps since going public. First they miscalculated the closing date incorrectly, as it fell on a public holiday and it was put back which was not needed as it was heavily oversubscribed and could have closed ahead of time, secondly the date for listing was pushed back thus tying up investors’ money longer than was stipulated in the prospectus. The company also suffered some uncomfortable moments when it was discovered that a manger bought up large amounts of shares beyond his or her allocation in the scarce IPO issue.
The stock traded at $35.80 on Friday but has hardly moved since the results were published an indication that investment don’t see the big jump in profit as sustainable.
JSE softens 7 up 8 down
The all Jamaican Composite Index slipped 173.68 points to be 108,502.71 at 11:30am 
and the JSE Index fell 149.08 points to 98,199.33 but the junior market index is up 1.47 to 884.69. A total of 22 securities traded with 1.64 million units changing hands as seven stocks rose and 8 declined. Only 4 stocks traded in the junior market so far with small volumes.
Trading in the main market has resulted in a number of ne w52 weeks’ high, these include Berger at $2.60, Desnoes & Geddes at $7.50, Jamaica Broilers at $5.50, Jamaica Producers at $20 and Sagicor Real Estate Fund at $8.
