More gains for Jamaican Dollar

The Jamaican dollar closed trading on Thursday at $144.48, an improvement over Wednesday’s closing selling rate of $145.30 to one US dollar.
Since August when the rate hit a low of $151.27 against the US dollar, the local dollar has rebounded 4.5 percent. A number of developments have occurred to help the local currency. Unbeknown to many is an issue of $5 billion government bond with a duration of more than 30 years that pulled liquidity out of the market to purchase them at an average rate of just over 7 percent, there was also another issue at the beginning of September for J$3 billion bonds resulting in an average rate of 2.91 percent for the instrument that has a two and a half years life. In addition, the reopening of the tourism sector would be adding some badly needed US dollars to the system.
The trendlines shown in yellow, on the chart suggest further appreciation that could take it below $140 to one US dollar. The chart shows the local currency on an upward rise since December 2018 as it meanders upwards to hit the low point in August and has since been correcting. It could return to the support line at around $138 later in the year but it could face resistance at the $144 region.
In Thursday’s trading, dealers sold $58 million at $144.48 and bought US$42 million at an average rate of $143.36. National Commercial Bank was the biggest seller on Thursday with US$18.3 million at a rate of $144.20, up from $7.7 million sold on Wednesday, while they bought just US$3.5 million on Thursday at $141.10. JN Bank bought just US$315, 000 at an average of $141.10 and sold US$8.8 million at $143.75. Mayberry Investments bought US$4.6 million at an average of $144.21 and sold only $873,000 at $144.59.

BOJ resets FX market

Massive speculation in the US dollar in Jamaica since March this year, maybe ending with the latest move by Bank of Jamaica exposing the extent of the market’s acceptance of rates above J$150 to one US dollar, currently and effecting some revaluation of the local dollar.
Bank of Jamaica placed on sale through their B-FXITT Flash sale mechanism, US$20 million on Tuesday, with the results suggesting exhaustion of the speculative bubble. The sale was the first on record when the demand was less than the amount offered by the central bank since they started this method of intervention three years ago.
At the latest auction, only ten eligible bids amounting to a mere $7.8 million went after the amount offered. The Central bank accepted only five Bids for $6 million at $146.81 to the US dollar. The highest accepted bid was for US$2 million at a rate of US$148.30 to one US dollar. The move spilled over into the daily exchange market, with the average rate declining. Dealers bought US$55 million at an average rate of $147.545 to one US dollar and sold $53.85 million at J$148.6516 to the US. On Monday. Dealers bought US$42.68 million at an average of J$147.3109 and sold US$57.28 million at J$149.2881 each.

Jamaica’s Central Bank sold only US$6M in its FX flash auction on Tuesday.

Trading on Friday last saw buying by dealers of US$40.5 million at $148.3155 and selling of US$28.9 million at J$149.5907 each.
In August, Bank of Jamaica sold US$30 million to Authorized Dealers and select Cambios on Tuesday 18, through a B-FXITT Flash Auction that saw US$36.4 million demanded. Bank of Nova Scotia, First Caribbean International Bank, bought US$6 million, each and JMMB Securities with US$4.45 million, were the largest takers, buying between them. NCB Group was notably absent from the buyers in the August sale when the average rate was J$150.64 to the US.

10 to 1 stock split for Caribbean Flavours

Caribbean Flavours and Fragrances (CFF) is set to split their stock, subject to the approval of shareholders at a meeting to be held to consider the matter.
The company will hold a special board meeting on August 27, to consider the approval of resolutions to increase the authorized share capital and approve Stock Split.

Caribbean Flavours a Derrimon’s subsidiary

Based on the release from the company, the approval by shareholders will result in the authorised share capital moving from just 91.452 million shares to 2,6 billion, by the creation of an additional 2.509 billion shares. Each existing issued share will be subdivided into 10 ordinary shares with effect from the close of business on September 23. The split will result in the total issued shares increasing from 89,920,033 shares to 899,200,330 shares.
The company should consider increasing the authorized share capital to an unlimited amount that will not cost them any more funds in doing so and would give them greater flexibility. CFF recently released quarterly results with revenues rising 42 percent in the June quarter to $161 million, with profit before tax rising 18 percent to $30 and revenues rose 37 percent for the six months to $311 million, with pre-tax profit rising by 23 percent to $49 million.
The stock closed trading on Friday at $14.95 with just two lots of stocks on offer at the close.

NCB releases Q3 results next week

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NCB Financial Group advises that its board meeting to consider and approve the release of the nine-month unaudited financial statements at a board meeting scheduled for August 4, 2020.

NCB Financial Head Office

The company stated that further releases issued in April and May this year, they are confirming that a dividend is not likely to be declared at the meeting.
The group enjoyed a 41 percent increase in profit in its first quarter, but that fell in the second quarter, with a net profit of $13.4 billion for the first six months of the 2020 financial year. Net profit attributable to our stockholders was $9.6 billion, a 23 percent or $2.9 billion decline from the prior year. The preceding year’s results included a one off-gain of $3.3 billion from the disposal of our interest in an associate company. Excluding this gain, net profit would have increased by $408 million or 4 percent over the prior year.

Wigton profit climbs 30%

Profit at Wigton Windfarm jumped 29.5 percent after-tax to $664 million or 6 cents per share for the March 2020 financial year, up from $513 million or four cents per share in 2019.

Wigton closed at anew high of $1

Wigton posted a profit of $66am for the twelve months to March 2020

Sales of power generated, to Jamaica Public Service Company, declined slightly to $2.417 billion from $2.448 billion in 2019. Gross operating cost slipped from $740 million with depreciation cost of $670 million in 2019 to $764 million that includes depreciation of $665 million and resulted in gross profit of $1.65 billion in 2020 from $1.7 billion in 2019.
Other income, including $456 million in foreign gains in 2019, dipped to $221 million from $503 million in 2019 while finance cost dropped to $527 million from $1.05 billion due mainly to foreign exchange loss incurred in the 2019 period amounting to $662 million and none in the 2020 fiscal year. Administrative cost moved slightly higher in 2020 to $479 million from $434 million in 2019.
Gross cash inflows amounted to $1.55 billion and helped push cash and bank balances to $2.7 billion. Current assets ended the year at $3 billion and current liabilities at just $847 million. Loan funding stood at $6.3 billion, with $730 million due for repayment by March next year. Shareholders’ equity stands at $3.5 billion, comprising issued shares of 11 billion units.
The stock closed trading on the Main Market of the Jamaica Stock Exchange at 78 cents for a PE ratio of 13 times earnings. Going forward into the 2021 fiscal year, there is uncertainty as to the outturn for profit, with earnings remaining around the six cents per share the most likely outcome.

Jamaica’s Inflation stays low

Inflation in Jamaica for the first five months of 2020 remained extremely low, with the rate for May, coming in at 0.1 percent following April’s increase of just 0.2 percent, leading the year-to-date inflation rate at negative 0.4 percent.
Inflation over the past twelve months came out at 4.2 percent, with the period between July and November rising by exactly 4.2 percent, mostly due to a hike in the exchange rate of the Jamaican dollar versus the US dollar.
The May movement resulted mainly from a 1.1 percent increase in the heavily weighted Food and Non-Alcoholic Beverages division, according to a release from the Statistical Institute of Jamaica due to higher prices for agricultural produce, with a 2.3 percent rise. The division of Housing, Water, Electricity, Gas and Other Fuels increased 1.5 percent due mainly to electricity rates, which resulted in a 5.6 percent upward movement in the index for the group.
The index for the Education division fell 22.1 percent, primarily due to a decrease in tuition fees for the summer term and the Transport division index fell 0.3 percent, with lower prices for petrol contributed to this decline.

Crude oil plunged 45% Monday

The price of West Texas crude has plunged 45 percent to the lowest level in decades, with the price hitting US$10.85.

Imports of fuel fell in 2016

On Thursday, the price dipped to close on the world market at US$19.73 from over US$62 in December last year. The fall takes place even as major oil producers agreed to cut production by nearly 10 million barrels a day, effective May.
The news is terrible for oil-producing countries but a tremendous gift to net importers of the commodity. In the Caribbean, Trinidad and Tobago and Guyana net exporters of the product will be negatively affected, net importers in the rest of the Caribbean will enjoy a windfall should the low price persist. Jamaica will find the plunge a great gift as it will play a huge role in offsetting the fall in revenues from the tourist trade as at the current price, the country would save around one billion per year.
For consumers, the drop means lower fuel prices, electricity charges, but the government will see less advalorem taxes on petrol collected.

Junior Market up 33% from March low

The Junior Market of the Jamaica Stock Exchange continues its recovery from the savage decline of March and is back to levels reached in the first week of that month and is up 33 percent from the March low.
Within half an hour of trading, the Junior Market Index crossed over the 2,700 points mark to 2,706.06 and is up 63.25 points from Thursday close and is ahead of the March 5 ending of 2,656.41 points but lower than the close on March 4 of 2,758.76, but is some distance from the February close of 2,911.92.
The Main Market continues to recover and the All Jamaica Composite Index is up 5,703.56 points to 443071.44 and is above the March 16 close of 434,832.42.

Trans Jamaican Highway trades at $1.02

Shares of Trans Jamaican Highway trades at $1.02 after listing this morning. The stock that was sold to the public at $1.41 in February traded 17,804,223 up to $1.39 at 11.18 AM and has fallen 28 percent from the Initial Public Offer in the Jamaican dollar market but far less based on US dollar trading.
Bids in the market to buy are sparse with twenty bids to buy between $1.02 and a low of 50 cents, while sellers are dominant with 600 on the offer to sell from $1.03 upwards.
The public offer attracted 36,062 applicants and was oversubscribed and with a total intake of $25.12 billion.
The public offer attracted 36,062 applicants and was oversubscribed and with an intake of $25.12 billion.
The Concession Company and the Public Sector Employees reserve shares pool were undersubscribed. The excess was transferred to the Registered Pension Funds and E-Tag Reserve Pools. Applicants in the Registered Pension Funds Reserve and E-Tag Reserve Pool were fully allotted based on transfers to the Registered Pension Funds and E-Tag Reserve Pools. Underwriters Reserve Pool was allocated shares on a pro-rata basis as the pool was oversubscribed, with the excess moved to the General Public Pool.
Allocation to the General Public as a result of oversubscription was allocated up to 10,000 shares with applications in excess of 10,000 shares allocated increments of a further 10,000 shares until all shares were allocated.
Trans Jamaica came to the market at a PE ratio of 24 times 2020 earnings. Since the opening of the IPO much has happened in the capital market with prices falling sharply with the spread of the Coronavirus. Importantly, since March traveling around Jamaica has declined and that is expected to affect the revenues for the highway as long as business activity remains low.

Palace Amusement closes cinemas

In the wake of COVID 19 in Jamaica and recent reports of community spread, the management of Palace Amusement Company has taken the decision to close its four cinemas – Carib 5 and Palace Cineplex in Kingston, Sunshine Palace in Portmore and Palace Multiplex in Montego Bay – until further notice.

Carib Cinema, the flagship for Palace Amusement.

This on the heels of increased sanitization measures rolled by the Company this week to help minimize threats to valued patrons and its staff alike.
Marketing Manager, Melanie Graham says that Palace Amusement is now in unchartered territory with the uncertainties of this global pandemic. “We have been watching developments closely and staying tuned to local advisories on the virus since the news of COVID 19 broke earlier this week”, she said. “This has been a challenging week but we have made the difficult decision to close in the best interest of patrons and our employees alike. We will certainly be hard hit on many levels and at this time we are unable to project when we will resume”.
Globally the movie industry is undergoing a sharp downturn due to COVID 19, as producers and film companies continue to pull their pictures.
Among blockbusters which have been rescheduled, are the highly anticipated Fast and Furious 9 now pushed back one year to April 2021, No Time to Die, the new James Bond movie, now set be released in November and Disney’s Mulan and New Mutants which are delayed without any new release dates attached.
The fallout has also hit Alternative Content now shown exclusively at Palace Cineplex, with the Met Opera’s recent announcement of the cancellation of all performances through March 31.
“Palace Amusement wishes to extend heartfelt sympathy to all persons and families affected by COVID 19. We all have to do our part to ensure that we get through this difficult period in the best way possible.” Graham concluded.