First Citizens staff lose huge payday

Several staff members of Trinidad’s First Citizens Bank lost out on the huge return investors got when the bank offered shares to the public and allocated shares to the staff in August 2013.

The shares, which were very attractively priced at $22 and at an attractive PE, exhibited all the signs of a big pay day. So attractive was the issue, that IC Insider immediately placed the stock on our Buy Rated list from the IPO opened. Surprisingly, information obtained from the Trinidad & Tobago Stock Exchange was that a large percentage of the bank’s staff never bought shares that were allocated to them. As such, the excess was made available to the public who clamoured for more shares. Employees of the bank bought only 3.78 million units accounting for 7.8 percent of the amount offered and just more than half of their entitlement.

RiseinProfitsFREE150x150pxThe stock price has since hit $40.63, a gain of on 84.6 percent. In addition the bank declared a $1.09 per share final dividend that will be paid January 24, 2014 to shareholders on record as of December 31, 2013. The dividend is equivalent to a 12 percent rate of return on the IPO price. When the dividend is added to the return of the stock price, the result is a 96 percent gain on investment in just five months.

Based on the 2013 results, IC Insider returned the stock to the Buy Rated list and projects the stock price to exceed $50 per share during the course of 2014. Those are huge returns in a country where interest rates on money market instruments are below 5 percent.

The IPO was heavily subscribed as $3.3 billion chased $1 billion of shares that were on offer leading to a massive oversubscription for the 48 million First Citizens Bank shares. While the staff only picked up a portion, there were 12,435 applicants who got less shares than they wanted.

Related posts | First Citizens shares set to explodeT&T Citizens Bank IPO oversubscribedFirst Citizens paying 12% dividend

JSE could face law suit over Knutsford

IC Insider understands that Proven Wealth received a letter from the Jamaica Stock Exchange (JSE) indicating that Knutsford Express failed to be approved for listing under the junior market rule 501 governing listings.

Christopher Williams, CEO of Proven Wealth, stated that the brokerage firm received the letter from the JSE to which their lawyers have responded. According to Williams, “the lawyers pointed out in their response that the company qualified under section 502 of the listing” amongst other issues.  This is in keeping with IC Insider’s report of Tuesday December 31, the day the listing was turned down. The stock exchange is being given the opportunity to respond before more drastic action, if needed, is taken, Williams stated.

The development is black eye on the Jamaica Stock Exchange, the sponsoring broker and an embarrassment to all concerned with the capital market. The stock exchange and the Financial Services Commission would have reviewed the prospectus and ought to have been aware of any deficiencies that could have derailed the listing before giving the approval. Nevertheless the JSE gave their approval subject to the listing committee meeting. The process is backhanded, which is a view that Williams is in agreement with. The approval of the powerful listing committee should have been done ahead of the IPO and not after, with the JSE executive to ensure that administratively all the post-IPO conditions were met.

KnutsfordBus150pxThe Rules | The preamble to the rules states: For the purposes of initial admission, an eligible company shall issue its participating voting shares by way of an initial public offering in accordance with the requirements set out in Rule 502.

Section 502 states: An eligible company shall, for the purposes of its initial admission, issue participating voting shares by way of an initial public offering subject to a prospectus seeking a minimum subscription of new shares (or allotment of existing shares) of not less than J$50 million and not more than J$500 million only.

Rule 501 Minimum Requirements differs from 502 with the former saying: No request for the initial admission of any eligible company will be considered by the JSE unless the eligible company has demonstrated to the satisfaction of the JSE that, following its initial public offer:

  1. It has not less than 25 participating voting shareholders who hold, in aggregate, not less than 20% of the fully paid, subscribed participating voting share capital; and
  2. The fully paid, subscribed participating voting share capital is not less than J$50 million and not more than J$500 million, and such capital is fully paid.

Discretion of the JSE | (a) Initial admission of any eligible company to the Junior Market shall be in the absolute discretion of the JSE. (b) For the purposes of (a) above, the JSE may waive or supplement the provisions of certain of these Junior Market Rules as it sees fit.

In summary, the JSE had the power to use the discretionary clause with conditions for the company to increase the issued capital.

Related posts | JSE rejects Knutsford Express | Knutsford Express share allotment | Knutsford IPO gets in before door closes

Image courtesy of StuartMiles/FreeDigitalPhotos.net

GSE: PZ Cussons up 339%

Friday, 3rd January 2013 | PZ Cussons recorded gains of 339 percent for 2013 on the Ghana Stock Exchange in a year when the stock market racked up gains of 78.66 percent.

PZ Cussons is a manufacturing and distribution company of soaps and electricals. PZ Cussons was followed by Enterprise Group, a business development and management consultancy company; Cal Bank came next with 155 percent and Mechanical Lloyd, agents for the sale and servicing of BMW cars and motor cycles, Ford vehicles, Massey Ferguson agricultural machinery and Delphi products, was close behind with 153 percent.

For the year ended December 2013, the indices closed at 2,145.20 for the GES composite and 1786.60 for the financials. For the year, 20 stocks recorded gains and 8 declined with no price change for 9 stocks. The gains range from a low of 14 percent to a high of 339 percent with 9 stocks gaining more than 100 percent and 6 between 50 and 87 percent.

GHana2013StocksPerformanceThe market started 2014 in a positive note with the two indices recording gains at the close on Friday, January 3. Total volume for week amounted to 1,488,967 units as GSE Composite Index closed the week at 2,152.54 for a gain of 9.75 points and the financial index closed at 1,801.42 for a gain of 17.67 points or 0.99 percent for the week. For the week, 6 stocks gained against 3 that recorded losses. CAL Bank gained 2 percent, Ecobank Transnational Incorporation gained 5 percent, UT Bank gained 2 percent and Total Petroleum loss 3 percent.

Banks dominant | The market performance was dominated by the banking sector with banks increasing loans at a fast pace thus boosting profit and stock prices at a very strong pace. The Ghanian economy continues to benefit from an excellent growth rate flowing from increased investment in the variety of commodities the country processes. Ghana’s economy grew by 7.9 percent in 2012 and is projected to grow 7 percent as reported by the International Monetary Fund in the latter part of 2013,

Towards the end of the year, the stock market was reflecting bearish symptoms with bids in for only a third of the stocks listed in December. This continues to be the case but with 17 stocks with bids at the end of the week and 19 with offers. There may be pull back in the prices of some of the stocks, especially so with several companies reporting losses or reduced profits. However, the banks seem poised to continue to generate hefty gains in 2014 with strong growth continuing in the economy, which should lead to continued demand for loans and propel the stock market to another robust performance for the year.

Related posts | Ghana stocks poised for correction

Buy Rated: H&L up 74%

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Friday, 3rd January 2013 | The Buy Rated list counts another major winner! This time Jamaica’s Hardware & Lumber closing at $8 up from $5.10 last week for a 74 percent gain since selection.

The stock is a recovery opportunity with the price falling sharply to a low of $3 in 2012, flowing from losses incurred after hitting hard times post-2008 and 2009 and poor profits in 2011 and 2012. With the potential for them to earn $2 per share for 2013, Hardware & Lumber stands a good chance of reaching $20 this year.

BuyRatedJan3rdJunior Market stock, Access Financial Services, which was moved to a Market Watch, gained this week and ended up at $12.20 up from $12 last week. Caribbean Producers continues to produce gains climbing to $2.70 this week, up from $2.65 to register gains of 33 percent since elevated to the list.

Pan jam moved up to $54 at the end of the week and now shows positive gains, Jamaica’s Scotia Group moved to $20 this week from $19.06. Caribbean Cement also gained this week to end at $3.50 and so did Jamaica Broilers that closed at $4.61 up from $4.51.

On the Trinidad Market, First Citizens was put back on the Buy Rated list, the price closed this week at $40.63 and should be heading into the $50 region before too long.

Related posts | H&L – big profits boost | Access moved to Market Watch

Image courtesy of Tungphoto/FreeDigitalPhotos.net

Trinidad PE moving slowly

Friday, 3rd January 2013 | The only significant movement to take place during the week on the Trinidad Stock Exchange is the continued rise in the stock price of First Citizens but that had little effect on the potential gains for the company as shown on our PR Chart. The stock closed the week at a record $72.61 price.

TTSE_TopStocksJan3rdFor others that had gains during the past week, the movements were even less impactful on potential gains. Trinidad Cement’s gain during the week helped to reduce the gains going forward while Republic Bank keeps inching up but still has much room to cover before it becomes fully valued.

By the looks of the IC Insider PC Chart to start off the New Year, the Trinidad market is poised to enjoy another year of healthy gains for some stocks.

TTSE_PEJan3rdThe Top Stocks with potential gains by PE Ratios are Trinidad Cement leading with 291%, Berger 206%, Guardian Holdings 202%, National Flour 178%, Neal & Massy 133%, Point Lisa 116%.

Stocks with less than 100% potential gains are Republic Bank, OC Media, Prestige, Agostini and Citizens Bank, who has given investors over 96% gains (including dividends) in the 5 months since listing as an IPO in August, 2013.

Related Posts | First Citizens staff lose huge payday | Buy Rated: H&L up 74%

FX: Rates slip on more buying than selling

Friday, 3rd January 2013 | Today there was more buying of currencies than the amount sold by nearly US$5 million; the purchase of the currency mostly in demand, the US dollar, was more than the amount sold by almost US$4 million as the selling rate for the US dollar and British Pound slipped but the Canadian rose.

Buys & Sales | Dealers picked up US$32,556,966 on Friday as the buying rate climbed by 27 cents to $105.73. The selling rate slipped 5 cents to $106.34 as dealers only sold US$28,900,623 of the amount bought. C$1,375,007 was bought at 98.14 for a 22 cents increase and selling was for C$920,996 at a rate of $100.23 down by 50 cents; dealers bought £1,110,238 at an average rate of $172.19, down 65 cents and sold £603,311 at $175.46 for a fall of 47 cents.

FX_TRADE+Currency+Jan3Other currencies purchased amounted to the US dollar equivalent of $293,346 and sales translate to US$236,126. The total amount of currencies bought was US$35,934,681 and the total amount sold US$31,000,271.

Highs & Lows | There were mixed results in buying and selling at the highest and lowest rates with 4 declines 4 increases and 4 rates closing unchanged. The US dollar was bought as high as $107.35, slippage of 15 cents but all the others were unchanged at the end of trading and as low ended at $86.42; the highest selling rate remained at $110.75 and the lowest selling closed at $86.01.

FX_TRADE+HighLow+Jan3The highest buying rate for the Canadian dollar went at $101.50, a 25 cents increase and the low was unchanged at $79.10; the high for selling was $102.54, a decrease of 46 cents but the low jumped 85 cents to $96.15.

The British Pound went as high as $176 or $3.32 lower in buying and surge by $40.27 to hit $140.27 for the low and the high for selling came out at $179.12, up by 84 cents and the low fell by 25 cents to $ 168.75.

JSE: Stocks mostly up for 2nd day

Friday, 3rd January 2013 | Advancing stocks out distanced declining ones 8 to 3 making it the second straight trading day of the year that this ratio has been positive on the JSE, which is a continuation of the trend from mid-December. Trading resulted in 1,681,231 shares changing hands valued at $23,421,414, a better performance than yesterday with Hardware & Lumber hitting a new 52 weeks high of $8 as the price gained $1.90 on 5,000 units.

Market activity resulted in the JSE Market Index declining by 471.33 points to close at 80,531.48 and the JSE All Composite declining by 714.90 points to close at 81,695.23 as a result of pull back in the prices of National Commercial Bank, Grace Kennedy and Sagicor Group shares. The JSE Junior Market Index advanced by 8.12 points to close at 768.49.

Main Market| The main movers in trading in the main market are Caribbean Cement with 112,485 units to close unchanged at $3.50; Carreras gained $2 to close at $38 while trading 44,750 shares; Jamaica Broilers with traded 100,000 shares as the price moved up 8 cents to $4.61; National Commercial Bank had just 6,000 units changing hands as the price closed down 35 cents at $16.15; Sagicor Group shed $2.32 in trading 4,145 shares as the price dropped to $8.28; Sagicor Investments  gained 47 cents to end at $17 with $6,700 units, and Scotia Group exchanged 906,022 units as the price moved up during trading to $21.96 but closed unchanged at $20.

Jamaica Money Market Brokers 7.50% preference shares traded 205,438 unchanged at $2.

JSEIndicesJan3Junior Market| It was a subdued day for trading of junior market companies with Caribbean Cream trading 10,000 units to close firm at $1; Caribbean Producers swapped 70,852 shares at $2.70 with no change in the price; General Accident Insurance had a volume of 20,000 shares as the price rose 18 cents to $1.80; Lasco Manufacturing traded 131,751 shares and the price closed up 3 cents at $1.28 and Medical Disposables & Supplies swapped 30,000 shares to close firm at $2.15.

IC bid-offer Indicator | At the end of trading the Investor’s Choice bid-offer indicator had 6 stocks with bids that were higher than the last selling prices versus only 2 stocks with the offer lower than the last sale price.

TTSE: Positive start to year

Friday, 3rd January 2013 | The Trinidad market continued the trend it started on the first trading day of the New Year with another positive performance with more stocks rising than declining. Trading occurred in 12 securities of which 6 advanced, 1 declined and 6 traded firm as the Composite Index advanced by 1.29 points to close at 1,186.51, the All T&T Index increased by 2.41 points to close at 1,996.47 and the Cross Listed Index gained 0.02 points to close at 49.45.

Trading activity on the market resulted in a volume of 190,370 shares changing hands valued at $3,672,861. Scotia Bank closed up 1 cent to close at $72.61 along with IC Insider Buy Rated First Citizens Bank closed at new 52 weeks high at the end of trading.

First Citizens Bank traded 13,402 shares for a value of $544,477 to close firm at $40.63 for a gain of 38 cents as the stock recorded yet another record price; National Flour Mills exchanged 39,946 shares for $37,969 to close at 95 cents; Neal & Massy Holdings added 6,980 shares valued at $418,816 and traded firm to end the day at $60.01; Republic Bank gained 6 cents to end the day at $115.96 with a mere 38 shares trading; Sagicor Financial Corporation added 31,631 shares valued at $90,423 with the price closing up 5 cents at $7.30; Trinidad Cement traded only 650 shares but the price moved up by 5 cents to close at $2.25.

TTSEJan3Clico Investment Fund traded with a volume of 113,551 shares valued at $2,554,898, the price advanced by 50 cents to end at $22.00.

IC bid-offer Indicator | At the end of trading the Investor’s Choice bid-offer indicator had 5 stocks with bids higher than the last selling prices versus only 1 stock with an offer that was lower.

Image courtesy of Photokanok/FreeDigitalPhotos.net.

FX: Fluid market 1st day of year

Thursday, 2nd January 2013 | Forex trading on the first trading day of 2014 saw the equivalent of US$22,004,093 being bought by dealers and US$25,258,390 sold.

Trading in the individual currencies saw US$18,632,067 being bought with the rate falling 25 cents to $105.46 and selling of US$22,604,821, the rate inched up a cent to $106.39. There was buying of C$1,416,816 with the rate declining by $1.07 to $97.92 and selling of C$716,902, the rate closed up a cent to $99.73. Buying of the British Pound resulted in £1,102,913 being acquired by dealers at $172.85, which was down by 72 cents. Sales amounted to £760,451 at a rate that was up by 8 cents to end at $175.92.

Trading in other currencies amounted to the equivalent of US$249,021 being bought and selling of US$724,021.

FX_TRADE+Currency+Jan2Highs & Lows | There were mix results in buying and selling at the highest and lowest rates as the US dollar was bought as high as $107.50, unchanged at the end of trading and as low as $86.42 for an increase of 41 cents but there was no change to the highest selling rate of $110.75 while the low was $2.04 down to $86.01.

The highest buying rate for the Canadian dollar went at $101.25, a 25 cents fall and the low was at $79.10, a decrease of 41 cents; the high for selling was $103.00, an increase of 50 cents but the low remained unchanged at $95.30.

FX_TRADE+HighLow+Jan2The British Pound went as high as $179.32 or $2.02 higher for the buying and declined $38.61 to hit $100.00 for the low and the high for selling came out at $178.28, down by 84 cents and the low increased by 90 cents to $169.00.

JSE: Light trading greets the new year

Thursday, 2nd January 2014 | Trading on the first day of 2014 on the Jamaica Stock Exchange was very moderate but prices closed mostly higher with stocks of 17 companies be active of which 7 advanced and 3 declined as 494,825 units valued at $3,580,089 changed hands.

The price changes were reflected in the main indices of the market with the JSE Market Index advancing by 369.26 points to close at 81,002.81, the JSE All Jamaican Composite index gained 560.09 points to close at 82,410.13 and the JSE Junior Market Index increased by 2.51 points to close at 760.37.

Main Market | Carreras traded 59,217 units at $36 for a decline of 75 cents; Kingston Wharves traded 37,894 units to close firm at $6.06; Mayberry Investments had 44,335 shares changing hands at $2; National Commercial Bank dropped $1.50 to close at $16.50 with 5,251 units traded; Scotia Group exchanged 10,850 units and closed firm at $20; Seprod put on $2.50 to end at $13 while trading just 1,400 units.

Jamaica Money Market Brokers 7.50% preference share traded 250,000 units, firm at $2.00.

JSEIndicesJan2Junior Market | Access Financial Services reached a new all time high in trading 1,500 units to close at $12.20 up 20 cents; Caribbean Producers traded 50,940 units to close unchanged at $2.70; Lasco Manufacturing traded 16,390 units at $1.25 with a gain of 5 cents.

IC bid-offer Indicator | At the end of trading the Investor’s Choice bid-offer indicator had 8 stocks with bids higher than the last selling prices versus only 3 stocks with offers lower than the last sale price.