Bank of Jamaica cut interest rate by 25 basis points effective today April 5 resulting in the rate offered on its 30-day certificate of deposit, the policy rate, falling to 4.75 percent from 5 percent.
The last time the rate was adjusted was in May 2016 when 0.25 percent was cut off the 30-day certificate of deposit. “The rates applicable to the Bank’s overnight lending and deposit facilities that are linked to the policy rate will correspondingly fall by 0.25 percentage points,” the central bank stated.
The decline comes against the back ground of a slight decrease in the 192 Treasury bill rate rate at the March auction and IC Insider forecast that Treasury bill rates should fall towards 4 percent by 2018.
The central bank cited a number of developments that led to the recent cut. The adjustment reflects “the Bank’s assessment that inflation for FY2017/18 will be within BOJ’s inflation target of 4 percent to 6 percent for the fiscal year. This assessment has been reinforced by the Government’s strong commitment to maintaining a 7 percent primary surplus for FY2017/18 and to meet the overall public sector fiscal targets under the precautionary Stand-By Arrangement, as approved by Parliament. The continued tight fiscal policy posture supports an easing in monetary conditions.”
“Jamaica’s main economic indicators continue to improve in the context of a strong reform programme and a favourable external environment. Economic activity continues to expand although at a slower pace than its potential rate of growth. Other key macroeconomic indicators have been reflecting generally positive trends: inflation expectations remain firmly anchored in single digits, international reserves remain strong, the current account of the balance of payments is projected to remain at a sustainable level, private sector credit is expanding strongly and market interest rates have been trending downwards.
The change in rates has implication for investments and is very positive for the stock and real estate markets and should lead to a rise in value around 5 percent as a result. The move should also result in more demand for preference shares on the local market as they become more appealing with their fixed coupon rates and help boost lending at banks and improve their profit.
Readymix heads higher on Tuesday
Market activity on the Trinidad & Tobago Stock Exchange on Tuesday resulted in 13 securities changing hands compared to 11 on Monday with 3 rising, 6 falling and 4 remaining unchanged. At the close, 445,375 shares were exchanged at a value of $5,118,190 compared to Monday’s 238,247 shares valued at $1,151,376.
The Composite Index fell 1.62 points to 1,231.25, the All T&T Index declined 2.39 points to 1,807.82 and the Cross Listed Index lost 0.11 points to 87.80.
IC bid-offer Indicator|The Investor’s Choice bid-offer ended with 6 stocks with bids higher than last selling prices and 7 with lower offers.
Gains| JMMB Group closed at $1.18 with a 1 cent gain trading 112,080 shares, Point Lisas traded 1 cent higher with 7,159 shares changing hands to close at $3.76, Readymix advanced 49 cents, closing at $12 with an exchange of 155,862 shares valued at $1,870,387. In the last two years the company stock traded only 11,218 units prior to the buy-out offer.
Losses| Guardian Holdings closed at $15.50, losing 40 cents trading 454 shares, Massy Holdings lost 4 cents to close at $52.95 with an exchange of 188 units, NCB Financial Group closed 1 cent down to $3.78 exchanging 24,872 shares. One Caribbean Media lost 10 cents to close at $16.90 with trades of 1,450 units, Republic Financial Holdings closed at a 52 weeks’ low of $101.95, with a loss of 4 cents trading 203 units and Trinidad & Tobago NGL traded at $21, losing 12 cents with an exchange of 120,691 shares valued at $2,534,710.
Firm Trades| Angostura Holdings closed at $14.95 with 333 shares changing hands, Clico Investment traded 14,000 shares at $22.50 valued at $315,000, National Enterprises exchanged 1,234 shares at $10.82 and Sagicor Financial closed at $9 with trades of 4,590 shares.
Juniors rise moderately – Tuesday
The junior market index rose 13.19 points on Tuesday, to end at 3,055.55 with 22 securities changing hands, up from 19 on Monday with 12 advancing and 5 declining.
Trading fell back on Tuesday from Monday’s levels, with a volume of 2,082,552 units valued at $21,125,705 passing through the market, compared to 4,276,697 units valued at $28,791,862 that were traded on Monday.
The junior market ended trading with an average of 94,661 units for an average value of $960,259 traded, compared to 225,089 units for an average value of $1,515,361 on the previous trading day. The average volume and value for the month to date ended at 159,875 units and $1,237,810. The average volume and value for March was 137,459 units and $1,313,411.
Trading ended with 5 stocks having bids higher than their last sale prices and 3 ending with lower offers, than the last traded price.
At the close of the market on Tuesday, AMG Packaging gained 10 cents to close at $6.10 with 113,640 units changing hands, CAC 2000 closed at $7.85 with 6,890 shares trading, Cargo Handlers traded 8,000 shares but fell 90 cents to end at $20.10, Caribbean Cream traded 5,276 units to end with a rise of 1 cent at $7.26, Caribbean Producers climbed 25 cents in trading 2,029 units to end at $4, C2W lost 5 cents to end at 25 cents with 40,000 shares changing hands, Derrimon Trading rose by 10 cents and ended at a new high of $8.60 with 15,423 shares changing hands, Dolphin Cove ended at $20 with 2,370 shares trading to gain $2. General Accident traded 2,500 shares and fell 10 cents to end at $3.05, Honey Bun had 39,797 shares changing hands and gained 20 cents to close at $7.50, Jamaican Teas traded 11,971 shares to close at $7.75, Jetcon Corporation rose 10 cents to end at $12.10 with 1,408,900 shares being exchanged, KLE Group traded 20,545 units and rose 20 cents to $3.50, Lasco Distributors ended with 22,400 units trading at $6.90 after losing by 10 cents, Lasco Financial rose 20 cents, with 115,225 shares changing hands, to end at $3.80, Lasco Manufacturing closed with 70,000 units changing hands at $5, Main Event slipped 10 cents and closed at $5 with 14,141 shares changing hands, Medical Disposables traded 29,766 shares to close at $6.50 after rising 50 cents, Paramount Trading gained 15 cents with 11,835 shares changing hands, to close at $3.75. tTech traded 22,487 units to gain 9 cents and closed at $7.49, Derrimon Trading preference share traded 117,687 units at $2.11 with a rise of 1 cents and Eppley 10% preference share traded a mere 1,670 units at $6.80.
Jump in Caricom exports fall in imports
The improvement flowed from a decline in imports by 22 percent to US$466 million, down from US$598 million in 2015 and a sharp 42 percent increase in exports of US$26.5 million to US$90 million.
Imports of Mineral Fuels, Chemicals, Beverages, Tobacco and Food, mainly contributed to this decline in the import bill.
Re-exports to Caricom were valued at US$21 million, US$11 million greater than the US$10 million recorded in 2015. Domestic exports were valued at US$68 million, US$15 million or 29.0 percent than the US$53 million in 2015, due mainly to higher exports of Chemicals and Food.
2 for 1 stock Kingston Properties stock split
The company’s Board of Directors took the decision on March 31, to recommend to the shareholders of that each of the 500,000,000 ordinary shares in the capital of the Company be subdivided into two ordinary shares each thereby making a total share capital 1,000,000,000 ordinary shares.
On March 6, the directors reported to the Jamaica Stock Exchange that they would be recommending a stock split to shareholders. The stock traded before the announcement at $11 moved up after to a record $16.35 on March 16 and remain sat that price on April 3.
The directors at the same meeting approved a dividend to shareholders on record as at April 18 in the amount of US$0.00124 per unit. The payment date is May 9 and the X-dividend date is April 12.
Dolphin Cove late dividend
The Board of Directors of Dolphin Cove is just announcing that they declared an interim dividend of 20 cents per share that is payable on April 4, 2017.
The only problem is that the public was not made aware of it until late on Monday when it was posted on the stock exchange website. Investors in the stock would not have benefited from the announcement as the record date has long gone from March 16, 2017. The ex-dividend date was March 14, 2017.
The company paid dividends of 20 cents per stock unit in May, August and November last year. The stock last traded at $18 on the junior market of the Jamaica Stock Exchange and is up from $15.50 at the start of 2017.
KLE profit but no profit in 2016
KLE reported profit of $164 million but $164 million came from a one off inflow from gain on sale of shares in a subsidiary. The breakeven performance for continuing operations is a huge improvement over the $64 million loss incurred in 2015.
Going forward, KLE needs to keep growing income faster than cost. At the end of nine months last year Administrative and other expenses came out at $32 million and $97 million year to date. The last quarter showed an unusual jump of $47 million, even as revenues in the December quarter was in line with that of the September quarter at $52 million. In contrast admin expenses were at $127 million in 2015 to September and ended at $143 million for the full year.
There are no indications from the revenue data that investors can expect good levels of growth in 2017, if the flat numbers for the last two quarters of 2016, is anything to go by. Big losses of recent years may be behind them, while franchising could add to profit, from royalty income.
The group’s balance sheet that was shattered up to 2014, has seen major repairs, not before some investors lost out big on the stock. Equity capital that was negative at $34 million at the end of 2015 is now $130 million with the overall profit reported for 2016 and long term liabilities stands at $11 million. Current liabilities are down to $80 million from $160 million the prior year while current assets sit at $71 million including cash of $9 million.
The stock last traded at $3.30 on the junior market of the Jamaica Stock Exchange.