August inflation increase moderate

The inflation rate for August 2013 compared to July 2013 rose by 0.4 per cent as measured by the All Jamaica ‘All Divisions’ Consumer Price Index.

The index for the division ‘Transport’ recorded the highest movement of 0.9 per cent for the month, largely the result of a rise in the cost of airfares, motor vehicles and petrol and its related products. The most heavily weighted division ‘Foods & Non-Alcoholic Beverages’ recorded an upward movement of 0.2 per cent. In this division the highest movement of 2.0 per cent was recorded for the class” Fruit’.  This movement was however moderated by the decline of 1.0 per cent for ‘Vegetables and Starchy Foods’. The index of 2.2 per cent in “Water Supply and Miscellaneous Services Related to the Dwelling” which was tempered by a decline of 0.3 per cent in “Electricity, Gas and Other Fuels” the report from Statistical Institute of Jamaica disclosed.

The year–to-date inflation was 4.8 per cent, 1.5 percentage point above the 3.3 per cent that was recorded for the similar period in 2012.The point-to-point movement was 9.5 per cent.

Jamaica_coat_of_arms_280X150All other divisions that make up the All Jamaica index recorded increases below 1.0 per cent. ‘Alcoholic Beverages and Tobacco’ rose by 0.4 per cent, ‘Clothing and Footwear,’ 0.4 per cent, ‘Furnishings Household Equipment’ and Routine Household Maintenance’, 0.2 per cent, ‘Health’, 0.3 per cent, ‘Recreation and Culture’, 0.7 per cent, ‘Restaurants and Accommodation Services’ 0.4 per cent, and ‘Miscellaneous Goods and Services’ 0.8 per cent. There was no movement recorded for both ‘Communication’ and ‘Education.’

There were increases in all three regions: Greater Kingston Metropolitan Area, 0.4 per cent, Other Urban Centres, 0.6 per cent and Rural areas, 0.2 per cent.

First Citizens off Buy Rated list

First Citizens Bank is now off the Buy Rated list as the price has shot up to $33.45 in Wednesday’s trading. However, the stock remains on the Watch List as it is poised to go higher with good bids to buy 1.2 million shares and none on offer at the close.

From here on, the stock becomes one that is more for the long term gains as the PE ratio has risen to 22.3 times this year’s earnings, just a fraction below Scotiabank and well above Republic’s 15 times PE. The price of the stock would have to retreat quite a bit in valuation for it to get back into the Buy Rated list.

TTSE PE RatioSept18thNot much has changed elsewhere in the market except that Trinidad Cement and Guardian Holdings seems to have bottomed and are slowly recovering.

Image courtesy of Jeroen Van Oostrom/ FreeDigitalPhotos.net

TTSE: First Citizens up 52%

Wednesday, 18th September 2013 | First Citizens Bank traded 23,952 units valued at $801,194 as the price hit another 15 percent maximum price movement, the third consecutive day the stock activated the circuit breaker.

Importantly there are 1,272,755 units to buy at the closing price of $33.45, which was up $4.36 for the day. Although the advance decline ratio was positive as 6 advanced and 2 declined, it was the movement of First Citizens stock that was behind the gain of the All Trinidad & Tobago index by 23.24 to 1,886.79.

Upward price momentum seems to be in favour of First Citizens as demand remains intact. However, First Citizens’ PE ratio at 22.3 times this year’s earning is now close to Scotiabank, while Republic Bank is way down at 15 times. Rational investors will take these factors into consideration when investing. The PE suggests that a short term top is not too far off. IC Insider had projected $35 but that seems a bit conservative based on what has happened to date and the lack of offers in the market so far. This is one worth watching.

Trading accounted for stocks of 11 companies changing hands as 616,236 units traded for a value of $2,479,793.

TTSESept18Jamaica Money Market Brokers continue to be in demand trading 514,481 shares for a value of $257,241; Jamaica’s Scotia Investments contributed 25,000 shares for $50,000 as the stock closed down 5 cents to close at $2. Sagicor Financial Corporation added 13,629 shares valued at $94,841. Scotia Bank gained 2 cents to $70.04 a new 52 weeks high as it traded 11,743 units; Guardian Holdings moved up 2 cents to $14.52 on 2,350 shares changing hands. Trinidad Cement inched up 2 cents to $2.02 but with just 4,000 units and Angostura Holdings traded at a new 52 weeks high of $10.01 but with just 500 units trading. Clico Investment Fund traded 18,375 shares valued at $396,063 as the price inched down a cent to end at $21.55.

IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator showed that there were bids for 4 stocks being higher and 2 stocks with offers lower than their last selling price.

Related post | First Citizens off Buy Rated list

Sagicor offers shares in Real Estate X Fund

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Sagicor Real Estate X Fund is offering shares in an initial public offering (IPO) which opens on September 24, 2013 and will close on October 18, 2013. The offer is subject to the right of the Company to close the Subscription List at any time without notice if subscriptions have been received for the full amount of the shares available for subscription and also subject to the right of the Company to extend the closing beyond that date. The shares are expected to be listed on the Jamaica Stock Exchange.

A maximum 500,000,000 shares are available for subscription in this IPO with a minimum of 100 shares and in multiples of 100 shares. In the event that subscriptions or applications are received for more shares than the number of shares available for subscription and sale in this IPO, X FUND reserves the full, unqualified and absolute right to increase the number of shares in the IPO in order to satisfy all or part of the applications in excess of the 500,000,000 shares, which are comprised in the IPO but not exceeding a further 750,000,000 shares. Sagicor Jamaica and PIF have indicated that they jointly intend to exercise their options to buy shares at the IPO price with a view of holding up to 80% of the issued shares of X FUND.

The fund will invest in Sagicor real estate unit trust which holds the following properties in the fund: The R. Danny Williams Building (formerly Sagicor Centre in New Kingston), • 63-67 Knutsford Boulevard (New Kingston) • 78a Hagley Park Road (Kingston) • Sagicor Industrial Park (Marcus Garvey Drive Kingston), • Sagicor Industrial Park (Freeport, Montego Bay) • Sagicor Montego Bay Commercial Centre (Montego Bay) • Sagicor Industrial Park (Norman Road Kingston) • Spanish Town Shopping Centre (St Catherine) • 23-25 Seymour Avenue (Kingston) • Jewel Dunn’s River (St Ann)  • Jewel Runaway Bay (St Ann) • Jewel Paradise Cove (St Ann).

SagicorRealEstFundLogo280x150The authorised capital of the Company is US$5,000,001,000. There is a Special Share which is held by Sagicor Jamaica, which the company sates is to ensure that the structure of the investment is not subverted by investors who may acquire substantial interest in the Company.

Sagicor Real Estate X Fund Limited (“X FUND”) is an International Business Company incorporated in Saint Lucia. Since its incorporation on May 31, 2011 it has not conducted any business on its own account other than to enter into certain agreements in anticipation of this IPO. The fund proposes to apply the proceeds of the IPO (“the IPO Proceeds”) to acquire other units in the Sigma Real Estate Portfolio. Pending investment of excess cash in units in the Sigma Real Estate Portfolio, the X FUND may invest in other assets including marketable securities. Thereafter the Company will carry on business as a passive investment holding company.

X Fund intends to distribute by way of dividends up to 85% of its annual net realised income.

The Articles of Incorporation of X FUND specifically authorises X FUND, from time to time, by a resolution of its directors, to issue additional shares in exchange for units in the Sigma Real Estate Portfolio. This will allow X FUND to purchase additional units from Sagicor Jamaica and/or PIF or direct from Sigma Real Estate Portfolio, without securing the approval of the shareholders in general meeting.

IC Insider call | Return on real estate in the form of income is low and growth in the value of the share price is unlikely to be rapid and may not show any growth in the short run. The fund provides a means of diversifying into the real estate market as well as in the tourism sector, but the latter can be great for a few years and not so great for some years.

This IPO is a real estate play that will not give investors the best return for their money. Investors will be buying shares at 100 percent book value with roughly a 4 percent yield in Year One. Meanwhile, the Pan Jamaican Investment Trust, which has real estate assets amounting to around 25 percent of total assets and generating a third of gross income from real estate, is selling at a huge discount to book value of $51 versus book of $78. Additionally, Pan Jamaican’s decision to invest in the new Marriott Kingston hotel, and no doubt with low interest rates, as well as other ventures into real estate developments, is likely to enhance the real estate portfolio over time. More importantly, the share price of Pan Jam stands a much greater chance of appreciation than a pure real estate fund.

The fact is that real estate does best when leveraged. Specifically, the Kingston Properties REIT is an excellent real estate play that could outperform the Sagicor Real Estate X Fund over time.

Related posts | Pan Jam profit stable | KPREIT a medium term investment

FX: Inflows decline

Tuesday, 17th September 2013 | Inflows into the forex market declined sharply from Monday’s good flows to end up at US$22.9 million being bought by as authorised dealers and selling of US equivalent of US$26.5 million.

The buying price for the US dollar fell slightly by 9 cents as dealers bought US$20.25 million at $101.75 and sold US$$24.27 million at 3 cents more than on Monday at $102.57. The Canadian was bought for $98.42 an increase of 79 cent as C$864,656 was purchased but selling took place for 43 cents more than on Monday at $99.73 for CS$795,050. Purchasing of the Pound amounted to £1,060,506 at an average of $161.04, a 95 cents increase and selling amounted to £825,065 at $163.56 one cent down.

There was no change in the lowest buying rate and the highest selling rate for the United States dollar, which stands at $84.34 and $108.07 respectively but the highest buying rate moved down 40 cents, the same amount it increased by on Monday to $103.10 and the lowest selling rate was up 17 cents, nothing like the $15.63 drop on Monday as the rate closed at $84.34.

FX_TRADE+Currency+Sep17Changes in the Canadian currency saw an increase of 80 cents for the highest buying rate that ended at $100.45 and 21 cents gain for the lowest buying rate, which closed at $80.26. The highest selling rate moved up 11 cents to $103.47 and 35 cents was put on the lowest at $96.70.

FX_TRADE+HighLow+Sep17The British Pound was bought for 50 cents more at the highest level of $164 and a 24 cents increase to the lowest buying rate that ended at $131.80. The highest selling rate jumped 79 cents to $169.92 and the lowest was dropped $1.30 to $156.70.

JSE: Grace $3.23 drop pulls market down

Tuesday, 17th September 2013 | In today’s trading, advancing stocks were overtaken by declining stocks 8 to 4 leading to a decline in all active indices. Trading levels were once more low with 6 million units being exchanged for $23 million. Preference shares accounted for $5.1 million of the amount traded. The all Jamaica index fell 297.39 to 84,897.19; the main market index was off 169.03 to close at 84,798.97 and the Junior market index was down 1.82 to 777.66.

Main Market | In trading Barita lost 23 cents to close at $2.27 with only 250 units; Cable & Wireless traded 394,815 at 17 cent down a cent; Carreras posted 7,082 shares to close at $47.60 down 5 cents; Caribbean Cement accounted for 65,799 units as it closed at $2.40 down 30 cents; Grace Kennedy put in 12,626 as the price dropped big time by $3.23 to close at $53.52; Jamaica Broilers Group saw 119,448 being exchanged at $5 at the close; Jamaica Money Market Brokers traded 510,000 valued at $4 million as the price remained firm at $8; National Commercial Bank 41,659 units were exchanged firm at $18.65 at the close; Sagicor Life Jamaica 423,000 units crossed hands firm at $$9; Scotia Group 52,670 traded to close firm at $21.30; Jamaica Money Market Brokers 8.75% traded 267,000 firm at $3 and Proven Investments 8% traded 840,000 firm at $5.09.

JSEIndicesSept17Junior Market | On a day of high volumes in the junior market, Access Financial Services put in a healthy volume on Tuesday of 206,353 units valued at $1.7 million as the price closed at $8.35 an increase of 7 cents; Caribbean Producers put in 232,300 units to close at $2.10 off by 5 cents; Consolidated Bakeries exchanged 56,829 units firm at $1.35; General Accident Insurance had 161,642 units changing hands at $1.75 down 2 cents at the close. Lasco Distributors traded 826,639 at $1.50 up 5 cents; Lasco Financial Services put in a good volume of 1,692,047 units valued at $2.1 million as it traded firm at $1.25 while Lasco Manufacturing 91,880 units traded up 5 cents to close at $1.55.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer indicator showed that there were bids for 8 stocks being higher and 2 stocks having offers lower than their last selling price. This is the same level as on Monday and shows a bias to more price gains ahead.

Image courtesy of Photokanok/FreeDigitalPhotos.net 

TTSE: First Citizens in high demand closes at $29.09

Tuesday, 17th September 2013 | There was only trading in 20 units of the newly listed First Citizens Bank (FCB) but that was all that was needed to push the price to an all time high of $29.09. The price movement triggered the circuit breaker again, as it did on Monday, the first day of trading for the stock.

The price movement helped the all Trinidad & Tobago Index to climb 1 percent or 20 points to 1,863.55. At the end of trading there were 2,224,089 FCB shares on the bid to buy at $29.09 and there were no shares on offer as happened on Monday. The stock can trade as high as $33.45 on Wednesday. IC Insider’s initial forecast that it will hit $35 in this run up seems much closer now than before the start of this week. At the current price, the PE is 19.4 times this year’s earnings. Scotia Bank is at 22.50 times earnings presently, which means that if the FCB PE gets to that level, the price would be $34, a nice 54 percent gain in a few days from the issue price of $22. Meanwhile, another stock with appreciation potential, Trinidad Cement, claimed back the $2 level as the price rose today by 5 cents to close at $2 with 10,000 shares.

TTSESept17Trading took place in 13 securities as 3 advanced, 2 declined and 5 traded firm as 732,197 units traded at a value of $2,920,110. Jamaica Money Market Brokers had 618,901 shares changing hands for a value of $310,611 with the price closing firm at 50 cents. Jamaica’s National Commercial Bank traded a volume of 40,644 shares for $46,741 firm at $1.15. Neal & Massy Holdings contributed 24,578 shares with a value of $1,376,496, the price lost 10 cent to close at $56. Republic Bank traded 4,033 units at $110.04 up 2 cents. First Caribbean International Bank fell $1.00 to close at $6.75, a new 52 weeks low with just 1,029 units trading.

Clico Investment Fund share price remained unchanged to close at $21.56, with a volume of 31,084 shares valued at $670,094.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer indicator continues to show signs of a fluid market with bids for 3 stocks being higher and 3 stocks having offers lower than their last selling price.

FX: Strong inflows and outflows

Monday, 16th September 2013 | The buying price for the US dollar fell slightly by a cent as authorised dealers bought US$37,622,636 at $101.837 and sold US$37,803,396 at 8 cents more than on Friday at $102.53. The Canadian was bought for $97.6266, down a cent as C$1,314,269 was purchased but they sold the currency for 16 cents less than on Friday at $99.30 with C$889,856 purchased. Purchasing of the Pound amounted to £1,322,607 at an average of $160.0845, which was 50 cents less than Friday’s rate and selling amounted to £952,876.91 at 34 cents more at $163.57.

Overall the equivalent of $41.2 million was purchased and US$40.46 was sold.

There was no change in the lowest buying rate and the highest selling rate for the United States dollar, which stood at $84.34 and $108.07 respectively but the highest buying rate moved up 40 cents to $103.50 and the lowest selling rate was down $15.63 to $84.17.

FX_TRADE+Currency+Sep16Changes in the Canadian currency was moderate with a 15 cents fall in the highest buying rate that ended at $99.65 and 13 cents off the lowest buying rate which closed at $80.05. The highest selling rate remained unchanged at $103.36 and 20 cents was put on the lowest at $96.35.

FX_TRADE+HighLow+Sep16The British Pound was bought for 5 cents more at the highest level of $163.50 with no change to the lowest buying rate at $131.56, but the highest selling rate jumped $4.54 to $169.13 and the lowest was up $2.40 to $158.

JSE: Proven preference dominant in slow trading

Monday, 17th September 2013 | In another slow day of trading on the Jamaica Stock Exchange, 10,033,867 shares changed hands valued at $41,529,935. Proven Preference 8 percent shares accounted for 4,555,000 valued at $23,184,950 as the price closed firm at $5.09. There were 8 stocks that closed with increased in prices versus 6 that fell. The junior market index climbed 5.62 to close at 787.49 but the two main market indices fell quite a bit with the all Jamaica index going down 819.45 points to 85,064.08 and the main market index falling 465.72 to 84,893.83.

Carreras 22,532 units resulted in the stock closing at $47.60 down by 10 cents; Gleaner Company 178,398 units traded at $1.17 and was off by 3 cents at the close; Jamaica Broilers Group 23,082 units traded at $5 but slipped 10 cents; Jamaica Money Market Brokers traded 171,892 units firm at $8; Jamaica Producers Group 12,890 units traded firm at $18.25; National Commercial Bank 107,550 units closed trading at $18.65 up 4 cents; Pan Jam traded 44,294 units firm at $51; Sagicor Life Jamaica 21,500 units closed firm at $9 and Scotia Group Jamaica contributed 216,865 units as it traded at $21.30 up 10 cents.

JSEIndicesSept16Junior market | Caribbean Cream traded 48,093 firm at $1.03; Caribbean Producers exchanged 150,000 shares to close at $2.15 up 5 cents; while Lasco Distributors put in a good volume of 191,670 at $1.45, down 5 cents for a value of $1,726,670; Lasco Financial Services contributed 2,618,867 firm at $1.25 and valued at $3,273,584 and Lasco Manufacturing just exchanged 126,264 units as it closed firm at $1.60.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer indicator showed that there were bids for 8 stocks being higher and 2 stocks having offers lower than their last selling price.

TTSE: First Citizens triggers breaker

Monday, 16th September 2013 | First Citizens Bank stock hits $25.30, up 15 percent in early trading on the Trinidad & Tobago Stock Exchange as just 1,000 units traded. At the end of trading there were bids for 3,187,700 units at $25.30 and there were no stocks on offer, a clear sign of higher price in the days ahead.

The company that had a successful initial public offer of shares (IPO) between July and August when it was twice oversubscribed saw the stock price hitting the maximum it could trade a for the day based on the circuit breaker rule. At the current price, the PE of the stock is 17 times earnings based on the level of oversubscription and the value of other bank stocks IC Insider sees the prospects for the stock to reach $35 in this run up.

Other significant trading saw Jamaica Money Market Brokers exchanging 410,000 units firm at 50 cents for a value of $205,000 after the company announced that it has been cleared to acquire the remaining 50 percent of Intercommercial Bank to bring their shareholding to full 100% ownership.

Trinidad Cement traded 69,000 shares for $134,550 as the stock traded firm at $1.95; National Commercial Bank of Jamaica contributed 10,000 shares with a value of $11,500, while Republic Bank added 5,000 shares valued at $550,100.

Guardian Holdings closed up 48 cents at $14.50 but on only 100 units; National Flour traded 2,352 units and put on a cent to close at 76 cents, while Neal & Massy put in 3,103 units gaining 4 cents to close at $56.04. Clico Investment Fund, swapped 125,081 shares valued at $2,696,856 as the price remained at $21.56.

TTSESept16Trading activity on the First Tier Market registered a volume of 628,942 shares crossing the floor valued at $3,937,088 as there was trading in 14 securities of which 6 advanced, none declined and 8 traded firm.

At the end of trading, the Investor’s Choice bid-offer indicator was showing signs of a fluid market continuing with bids for 2 stocks being higher and 4 stocks having offers lower than their last selling price.

Related posts | First Citizens shares set to explode | T&T Citizens Bank IPO oversubscribed | Buy Rated stock list grows | JMMB grows assets $24B to $200B