JSE: 5 straight days of gains

Thursday, 12th September 2013 | It was another day dominated by Cable & Wireless with 13.798 million unit trading at 18 cents. The market closed with the price of 9 stocks climbing and 11 declining, the latter in stark contrast to Wednesday when only two were down.

Stocks of 29 companies were active as the volume amounted to 15.79 million units with a value of only $10.44 million. While the indices showed promising signs before the close of trading, in the end there was moderate movement with the all Jamaica Index rising by 49.32 to close at 85,883.53 and the main market index closed at 85,359.55 up 28.03, for the fifth straight days of gains. On the other hand, the junior market index slipped by 1.34 to 781.87.

Carreras traded 12,323 units and closed at $48.50, up 85 cents on the day as the price tries to make a slow recovery from the $45 mark it fell to recently. Desnoes & Geddes traded 500,000 units $4.55 for an a 5 cents increase; National Commercial Bank traded a mere 18,822 to close at $18.60 up 5 cents; Kingston Wharves lost 91 cents while trading 16,652 to close at $6; Sagicor Life exchange 47,866 units and closed at $9 up 49 cents; Scotia Group 62,745 units to close at $21.51 off 19 cents at the close. Supreme Ventures traded 162.342 to close at $2.55, down 25 cents.

JMMB 8.75% preference shares had 202,673 units trading firm at $3 and PROVEN 8% exchanged 195,500 units at $5.09.

JSEIndicesSept12Junior Market | Access slipped 22 cents to land at $8.28 cents but only with 2,731 shares trading. Blue Power Group had another fairly good day with 40,000 trading to close firm at $9.28; infrequently traded C2W Music put in a big volume of 155,000 units at 97 cents down 3 for the day, a new all time low; Caribbean Cream had 100,000 units exchanged at $1.03 up a cent at the close; Caribbean Producers had 20,287 units changing hands firm at $2.10; General Accident Insurance put in 44,350 units at $1.8,up 5 cents; Jamaican Teas lost 20 cents to close at $4 with 29,837 shares changing hands; Lasco Distributors 70,014 $1.45, up 5 cents; Lasco Financial Services 108,150 down 5 cents to $1.25 and Lasco Manufacturing accounted for 136,163 firm at $1.60.

IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator was showing signs of a fluid situation for the market with bids for 8 stocks being higher with 6 stocks having offers lower than their last selling price.

TTSE: Trading picks up

Thursday, 12th September 2013 | Activity on the Trinidad & Tobago Stock Exchange picked up resulting in trading in 15 securities of which 5 advanced, none declined and 10 traded firm as 796,303 units traded valued at $8.24 million. There were two new 52 weeks high during the day as National Enterprises traded as high as 16.05 but closed lower at the end of trading and Scotia Bank closed at a new 52 weeks high at $70.03.

Jamaica’s Grace Kennedy fresh from a road show in Trinidad, which an IC Insider source indicates was well received, had volume of 200,000 shares changing hands for a value of $660,000, followed by Jamaica Money Market Brokers with a volume of 163,000 shares for $81,500. ANSA McAL traded 20,000 units at $66.28 with no change in price at the end of trading; National Enterprises contributed 117,336 shares valued at $1,878,749; Neal & Massy exchanged 32,616 units at $56; Sagicor Financial Corporation added 96,953 shares valued at $668,898. Trinidad Cement had 92,000 units changing hands firm at $1.95 and Clico Investment Fund share price gained a cent to close at $21.55, with a volume of 58,598 shares valued at $1,262,510.

TTSESept12Ansa Merchant Bank exchanged just 1,000 shares at $39 up 40 cents.

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

Image courtesy of watcharakun/FreeDigitalPhotos.net

JBG profit held back

A drop in Hi Pro profit from flat sales, increased corporate taxes provision and increased finance cost held back profit for the first quarter of the new fiscal year for Jamaica Broilers Group, one of Jamaica’s leading agro product company. This is despite a big jump in revenues and profit from the US operations, as well as a turnaround from a big loss in the ethanol operations in 2012 into a profit in this latest quarter.

Jamaica Broilers’ financial results for the quarter to July, 2013 show profits attributable to stockholders increasing by 10 percent to $140 million or earnings per share of 11.68 cents against $127 million or 10.60 cents per share last year. The moderate improvement in profit flows from revenues of $7 billion, a 17 percent increase over the $6 billion generated in the corresponding period last year. Gross profits for the quarter amounted to $1.32 billion, a 17 percent increase over the $1.13 billion of the corresponding period last year.

Expenses up | Distribution and selling expenses grew by a strong 26.5 percent to $280 million while administrative costs increased 13.4 percent to $838 million. Management states that the increases essentially reflect the impact of inflation along with costs related to organizational strengthening. Finance cost rose from $51 million to $79 million in the quarter reflecting increased borrowing from $4.5 billion in 2012 to $5.3 billion at the end of the quarter.

JaBroilerseggsSegments | The US operations climbed sharply in sales to $805 million, a 176 percent increase to external parties, contributing to a rise in segment profit to $76 million from $7 million in 2012. The broiler segment sales rose by 14 percent to $3.5 billion as segment profit moved to $234 million versus $189 million in 2012. At Hi Pro division, sales, which include feed and retailing of non-feed products, were flat at $2.56 billion but profit slipped from $230 million to $149 million. Ethanol sales at $248 million in 2013 was lower than for 2012 at $289 million, as profit from the operation ended up at $16 million, a turnaround from a $49 million loss. Other operations, which delivered sales of $200 million and profit of $36 million in 2012, reported a 154 percent sales jump to $309 million in 2013 but profit inched up to only $39 million. Other operations include the sale of feed ingredients, beef products, fish, cattle rearing, processing and co-generation energy supply.

The recent expansion in fertile egg production in Georgia and increased procurement activities is beginning to show positive results as stated by management in their release to shareholders.

Acquisitions | The quarterly results do not include revenue and profit from the just concluded acquisition of England Farms Company, a well-established fertile egg operation based in Arkansas. While this company operates in a different state than the current Georgia one economies of scale can be achieved by merging most of the administrative activities into one thus cutting cost. Specialisation may also be possible as well as savings in shipping cost where each unit can deliver supplies closer to the individual plants. In the release announcing the acquisition of this entity, management stated that it will double existing sales.

JB_farm-pigThe purchase of Hamilton’s Smokehouse will result in an expansion in the volume of products available under the Hamilton Smokehouse brand and will provide opportunities for greater utilization of the Best Dressed Further Processing facilities at Spring Village, St Catherine, management stated. With the processing of Hamilton products to be done in JB existing facilities will mean higher profit margins as most of the former overhead cost of a stand-a-lone operation will no longer exits.

The build out in the 68 percent owned Haiti operations is continuing with increased sales of Haitian produced baby chicks, feed, layer birds, table eggs, and processed chicken.

The group has been spending on capital improvement apart from acquisitions, nevertheless they still had $1.4 billion in investments and cash at bank at end of July.

Insider Call | Jamaica Broilers is still on track to report between $1.50 – $1.80 earnings for the year notwithstanding the almost flat first quarter results and is an IC Insider Buy Rated stock.

Related posts |Jamaica Broilers is buy rated | Another acquisition for Jamaica Broilers | Jamaica Broilers buy US egg company | Jamaica Broilers major profit gains

JSE Junior market pushing Jamaica’s economy

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Written by, Dennis St Bernard; Business Contributor, 10-Sep-2013 | At the recently concluded Caribbean Diaspora Business Week in London, one of the consensus from leading Jamaican and Caribbean Businesses was the point that they saw the growing success of the Jamaican Junior Stock Exchange as key catalyst for growth of the Jamaican economy, by the creation of jobs by MSMEs, increase in foreign direct investment (FDIs) and GDP growth, once the present incentives remain intact.

A number of Diaspora Businesses are now actively looking at listing. ‘This could be a major replacement for the reducing remittance to Jamaica, and the stakeholders should now focus on this major opportunity.

JrStockExPhoto“As Jamaica continues to battle with putting together the right growth strategies, we in the business diaspora continue to be excited by the growth of the JSE Junior Market”, sighted St.Bernard, spokesperson for Caribbean Business Diaspora.

“Overseas and Diaspora Business interest in Jamaica are definitely on the increase, the focus is now on conversion” sighted JAMPRO’s UK Regional Manager Laurence Jones.

FX: Buying & selling even

Wednesday, 11th September 2013 | Buying of US dollars on Wednesday amounted to US$25,410,189 at an average rate of $101.7472 and sales took place for US$25,074,975 at an average rate of $102.376. C$534,105 was purchased at an average of $96.7598 and C$368,380 was sold at an average of $98.8734 while £1,123,610 was purchased at $159.1744 and amount sold amounted to £893,261at $161.922.

Overall the equivalent of US$27.83 million was purchased and selling took place for the equivalent of US$27.22 million.

The highest and lowest rates were mostly up with just two declining on Wednesday. The big mover was the British Pound,which closed with the highest buying rate at $162.70 and the lowest buying rate jumped by $30.35 to settle at $130.35. Authorised dealers sold the Pound as high as 49 cents more at $168.53, while the lowest selling rate moved up by $1.80 to close at $156.80.

FX_TRADE+Currency+Sep11The United States currency moved up by 10 cents to $103.15 for the highest buying rate with no change for the lowest buying and highest selling rate but it was 40 cents more for the lowest selling rate at $99.90.

FX_TRADE+HighLow+Sep11Dealers bought the Canadian dollar as high as $99.35, which is 15 cents cheaper than on Tuesday and it took 25 cents more to purchase at the lowest rate, which was $79.85. Selling took place as high as $102.13, less by 48 cents on Tuesday’s highest closing rate and was 45 cents more for the lowest selling rate which ended the day at $96.15.

JSE: Proven 8% saves day

Wednesday, 11th September 2013 | With just $7.4 million spent on stocks, Wednesday marked the worse trading day since April 25, a day when only $3.074 million worth of trading took place. Thanks to Proven Investments, it wasn’t the worse day for the year as 1.068 million of the company’s shares valued at $5.43 million crossed the floor.

The market closed with 8 stocks climbing and only 2 down as only stocks of 22 companies were active for a volume of 8.3 million units. At the end of trading, the all Jamaica Index rose by 473.29 to close at 85,834.21 and the main market index closed at 85,331.52 up 268.99, these increases are the fourth straight days of gains. The junior market index slipped by 2.94 to 783.21.

Cable & Wireless came in for increased interest not seen since the strong trading prior to the release of the June quarterly results as it traded 5,755,007 at 17 cents; Carreras seems to be gaining more and more buying interest as traded 31,130 at $47.65, up by 64 cents and so did Caribbean Cement with 327,540 shares, which closed at $2.78 up 28 cents after trading as high as $2.87. Desnoes & Geddes traded 29,200 units to close at $4.51; Grace chipped in with 7,000 units closing at $56.99, up 24 cents; Pan Jam had 11,324 units trading at 15 cents off at $51.05. Scotia Investments price was up 50 cents to $27.50 with 20,205 units. Supreme Ventures price moved up 25 cents to close at $2.80 with only 3,500 units.

JSEIndicesSept11Junior market | AMG Packaging traded 50,571 firm at $4; Blue Power 50,000 units at $9.28 the same price as the day before; Caribbean Cream traded 20,518 units firm at $1.02; Caribbean Producers traded 15,000 firm at $2.10; Consolidated Bakeries exchanged 64,290 and the price remained firm at $1.40. Lasco Distributors put through 207,000 units at the last selling price as on Tuesday at $1.40, so too did Lasco Financial Services that exchanged 53,317 units at $1.25 and Lasco Manufacturing had a good day with 414,655 units to close at $1.60, same price as the day before.

IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator was showing signs of a fluid situation for the market with bids for 9 stocks being higher with 6 stocks having offers lower than their last selling price.

Mystic Mountain $500m Pref shares

In July, Mystic Mountain issued $500 million in 10.50 percent preference shares in a private placement. So how do they look financially? IC Insider got hold of some data to help investors understand what the operation is looking like. The funds raised are expected to cut borrowing cost, provide working capital and allow for expansion.

The company intends to apply to the Jamaica Stock Exchange for the listing of all of the Preference Shares by way of introduction and to make such application six months or as soon as conveniently possible after the closing of the Offer.

The company operates an attraction facility in Ocho Rios, Jamaica catering to all, but relying a great deal on foreign visitors to the island.

Information from the company states that “The Rainforest Sky Explorer is a chairlift ride which takes riders from the entrance to the heart of the action, 700 feet higher. The journey takes approximately 15 minutes each way and covers approximately 1.3 miles, giving riders superb views of the rainforest, the beautiful Caribbean Sea on the north coast of Jamaica and educational pictorial displays featuring Jamaican Olympian athletes that are set up at the top of the route.

Mystic MountainCHARTRFA is a British Virgin Islands registered corporation that, through its Hong Kong wholly owned subsidiary, is the majority owner of five ecotourism parks, two in Costa Rica, one with a management agreement in Mexico, one in St. Lucia, and Mystic Mountain in Jamaica. RFA owns 54.9 percent of Mystic Mountain. The remaining 45.1 percent is owned by Mike Drakulich, Norma Clarke and John Dalton. Additionally, the Company is planning to build a sixth park in St. Maarten and is in advanced negotiations to develop a seventh park in Rio de Janeiro.”

Profitability | Net profit for September 2012 amounted to US$1.186 million up from US$1,018 million in 2011 with profits being made in the last four years, the period that the company disclosed results for. Financial performance for 2nd quarter ended March this year and March 2012 showed operating revenues up to US$2.20 million, a US$179,000, or 7.5 percent decline compared to 2012. Direct operating expenses totalled US$940,000 in the quarter, a 10.4 percent or US$48,000 increase over the 2012 quarter. Administrative expense increased marginally by 3 percent from US$441,000 in the second quarter 2012 to US$455,000 this year. Finance costs fell from US$56,000 to US$40,000 in the second quarter this year compared to the similar period in 2012. Net Income declined by 34 percent or US$299,000 to US$580,000 in the quarter.

Revenues for the 2012 fiscal year amounted to US$7.146 million, an increase of 16 percent or $1 million over 2011 primarily as a result of an increase in visitors over the year. The compounded average growth rate (CAGR) for the 4 year period is 9 percent. Direct operating cost of US$2.40 million increased by 25 percent or US$500,000 compared to 2011, resulting in a gross profit of US$4.75 million for a 12 percent improvement over the previous year.

Operating expenses of US$3.36 million increased by 12 percent or US$358,000 relative to 2011, primarily as a result of increases in general operating expenses such as repair and maintenance and office expenses. Gross profit margin declined from 67 percent in 2011 to 66 percent in 2012. In 2009 gross profit margin was 74 percent.

Finance costs of US$205 thousand declined by US$27 thousand or by 12 percent relative to 2011 of US$232 thousand. Finance cost was reduced from a high of US$611 thousand in 2009.  Mystic has reduced its total borrowings from US$4.824 million to US$2.454 million in 2012 by paying down loans resulting in reduced interest cost.

Liquidity | As at September 30, 2012, the company had a current ratio of 1.05. This represents an increase of 22 percent of the liquidity position relative to 2011, in which the current ratio stood at 0.86. The level of equity to debt which was 110 percent in 2011 improved sharply to 160 percent in 2012.

The company’s working capital has been negative for the three years to 2012 and just went into the black in 2012.

TTSE: Low activity day

Wednesday, 11th September 2013 | In a low trading day, market activity on the Trinidad & Tobago Stock Exchange resulted in trading in 8 securities of which 2 advanced, none declined and 6 traded firm.

Market activity resulted in a volume of 372,425 shares valued at$2,043,195. Trinidad Cement had 310,000 shares changing hands for a value of $604,500 as the stock closed firm at $1.95, Sagicor Financial Corporation had 16,397 shares traded valued at $112,319. Agostini’s contributed 9,246 shares with a value of $159,494, while Scotiabank Trinidad & Tobago added 8,350 shares valued at $584,629, increasing by a cent to end the day at $70.02.

TTSESept11Clico Investment Fund was the only active security on the Mutual Fund Market, posting a volume of 24,000 shares valued at $516,940. CLICO INVESTMENT FUND remained at $21.54.

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

First Citizens shares set to explode

A whopping $3.3 billion chased $1 billion of shares that were on offer in the twin island state of Trinidad and Tobago between July and August leading to a massive oversubscription for the 48 million First Citizens Bank shares at a very attractive price of TT$22 each. The high level of oversubscription is bound to result in a massive jump in the stock price after it opens on Monday, September 16 as some of 12,435 applicants who got less shares than they wanted will enter the secondary market to snap up more shares before the price gets too high.

Employees of the bank got 3.78 million units accounting for 7.8 percent of the amount offered and just more than half of what they were entitled to based on the allocation noted in the prospectus. The public got 12,852,807 units or 25.5 percent, which is 10.5 percent more than the prospectus had assigned them.  Pensions and other trust funds got 12.1 million units representing 25 percent; mutual funds and unit trusts, 10 million units or 20.7 percent; the National Insurance Fund 10 percent amounting to 4.85 million units and well as companies registered in Trinidad and Tobago and the Caribbean Investment Fund.

The prospectus had indicated that if the Offer is oversubscribed, consistent with the Government’s policy of promoting the widest possible participation in share ownership, priority to receive the allocation (as a percentage of the maximum Offer) shall be given as follows in descending order of priority:

  1. Employees of the Issuer 15%
  2. Individual investors who are nationals of Trinidad & Tobago 15%
  3. Registered pension and other trust funds, Credit Unions and Cooperatives 25%
  4. Registered mutual funds including The Trinidad & Tobago Unit Trust Corporation 25%
  5. National Insurance Board 10%
  6. Companies registered in Trinidad and Tobago and other investors such as the Commonwealth Development Corporation and the Caribbean Investment Fund 10%.

The stock went on the market at a PE of 14.67, which is well below BNSTT at 22.6, BCB Holdings of 25.78 and Ansa Merchant Bank at 19.30 but just below Republic Bank at 15. Heavy oversubscription usually mean that the price will rise sharply as investors try to get more shares to satisfy their thirst.

IC Insider has labelled the stock, Buy Rated and this remains intact.

Related posts | T&T Citizens Bank IPO oversubscribed |  First Citizens’ $1B IPO opens today | First Citizens lousy investor’s relationsBuy Rated stock list grows

FX: Rates slowly slipping

Tuesday, 10th September 2013 | There was more selling of the US dollar than the amount purchased by some degree as the selling rate increased by 4 cents, which now seems like the daily rate movement but the buying rates was lower by 22 cents.

US$25.2 million was purchased at an average rate of $101.477 and selling amounted to US$29 million at an average rate of $102.316. C$1.35 million was purchased at $97.155 an increase of 76 cents and selling amounted to C$788,392 at an average rate of 98.85, up 21 cents. £1.867 million was purchased at $158.34, for an increase of 70 cents and selling amounted to £945,289 at an average rate of $161.15 up 54 cents.

Overall the equivalent of US$30.39 was purchased and US$31 47 was sold.

FX_TRADE+Currency+Sep10The highest and lowest rates saw moderate changes except for the lowest selling rate for the US dollar which rose $15.33 to end at $99.50. There were no change to the lowest buying rate which remained at $84.17 nor the highest selling rate for the US dollar which remained at $107.86 but the highest buying rate moved down by 77 cents to $103.05.

The highest buying rate for the Canadian dollar remained unchanged at $99.50 but the lowest buying rate inched up by 17 cents to $79.60. The highest selling rate was 21 cents higher than on Monday at $102.61 and the lowest was at $95.70 60 cents higher.

FX_TRADE+HighLow+Sep10The British pound was 30 cents more for buying at the highest level as it ended at $161.50 and was unchanged at $100 for the lowest buying rate. It was 80 cents more for the highest selling rate, which ended at $168.04 and 40 cents more for the lowest selling rate at $155 at the close.

Image courtesy of Marcus/FreeDigitalPhotos.net