Jamaica’s historical low unemployment

The unemployment rate fell to its lowest level on record, with January 2019 unemployed falling 1.6 percentage points from 9.6 percent in January 2018 and ending at was 8 percent for the first month of 2019.
The fall in the unemployed number arose from an increase in the Employed Labour Force for January 2019 of 1,232,700, some 28,600 or 2.4 percent more than in January 2018. The largest increase in employment was in the occupation group ‘Clerks’ 12,800 or 15.8 percent, which moved to 94,000 in January 2019. Of the increase in employment in this group, females accounted for 8,300 persons.
Female employment was 3.5 percent more and males 1.4 percent than in the 2018 period, Statin data shows. The increase in employment for females was more than twice that of males. The number of employed males increased by 9,500 to 673,500 and employed females by 19,100 to 559,200.
More females were employed in the occupation groups ‘Professionals, Senior Officials and Technicians’ and ‘Clerks’. There was also an increase in the number of females employed in the industry groups ‘Hotels & Restaurants Services’ and ‘Real Estate, Renting and Business Activities’.

How the east was won?

Annmarie Vaz winner of the East Portland seat.

Anne Marie Vaz increased her party’s support by a stunning 58 percent, over the JLP’s haul in the 2016 General Election to win the East Portland by-election on Thursday with just 11 votes less than 10,000.
At the same time, Damion Crawford only pulled out 5 percent more votes than was polled for the PNP, in 2016. The story gets increasing bad for the PNP and it is not just in this election. The writing was on the wall for years but poor candidature, by the JLP lent the view to many onlookers, that East Portland was safe PNP territory. The 2007, results with the PNP winning by less than 800 votes, should have sent a clear warning to them that things were changing rapidly.
In this latest election, the number of new voters on the list, grew by 5.6 percent, but Crawford’s increase of 4.8 percent was less than the rise in registered voters. Looked at differently, he picked up just 354 votes more than in the 2011 elections or only 3.8 percent more. On a net basis, he garnered only approximately 25 percent of new voters, while Vaz got 75 percent. This is consistent with a pattern seen island wide since 1993 and is one that is not likely to change, anytime soon.
The Labour party was able to get out their 8,000 voters of 2011 and add 24 percent more voters to it, in addition to commandeering the vast majority of new voters, the vote tally at the end of the preliminary count suggests.
The results on the surface is a major about turn for the seat. Closer examination of the numbers for a longer period tells a clear tale. The huge 2019 increase is due to a below performance for the JLP in the 2016 elections, when the votes by the party sank by a hefty 22 percent and  well against the national trend. The trend since the 1993 elections, suggests that the natural growth in party support should have seen them polling over 9,700 votes, just below the numbers she got in the latest polls.
The data also points out that the trend is indicating that the JLP should have polled around 2,000 more votes than they did, this time around.  Those voters are there in their corner based on the growth in support, reflected in the average gains in votes cast in prior elections. This bit of information is also reflected in public opinion voting survey data.

IC Insider spot on for Portland by-election

Annmarie Vaz winner of the East Portland seat.

In an article published March 10, IC insider.com had this to say about polls, “observation of public polls for individual constituencies published in the past, show them to be unreliable, although they may well point in the right direction in some cases.”
The articles concluded, “historical trend suggests the likelihood of a close result, for the East Portland seat, but whichever party can mobilize voters to get the out turn back to the traditional level of 60 percent, will win.”
The results are now in, ending with a 51 to 49 percent split of the votes, with around 55 percent turnout.
The article stated that in the 2016 general election, the East Portland seat, had just 44 percent of registered voters casting votes, ranking it as one of the lowest rural area voter turnout. The low out turn suggests a high level of dissatisfaction with the parties’ representatives. The PNP picked up 57 percent of the votes to the JLP’s 42 percent in that election, a wider gap than in 2011 that moved contrary to the swing in overall general elections. The article was commenting on the results of two sets of polls that were carried in the Jamaica Observer, showing incredible substantial leads for both parties.
The results of the elections show the pollsters to be off the mark, but the results of the election, confirms that there is a continuing swing for the governing JLP, well over the level that saw them winning the 2016 elections.

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Wigton Windfarm IPO out very soon

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Report reaching IC Insider.com is that the long awaited prospectus for Wigton Windfarm is due this week. The stock is set to come to the market at 50 cents each.
According to the government’s public bodies accounting records, “the divestment will be by way of listing PCJ’s 100 percent shareholding in WWFL on the Jamaica Stock Exchange.” The company is expected to report profit of $587 million to the end of March this year, down from $826 million earned in 2018. The 2018 earnings were helped by other income of $637 million versus just $52 million in 2018.
The company generated sales revenue of $2.5 billion in 2019 and $2.36 billion in 2018. Depreciation charge is high at nearly $700 million, this will result in a healthy cash flow per annum, allowing to either pay down debt or fund expansion from internally generated resourses and provide a basis of growing profits going forward.
The annual growth in profit before finance cost is minimal, growing just over 11 percent in 2015 and 2016 and a much slower 7 percent in 2017 and 2018, with a 6 percent decline in 2019.
The company is heavily indebted with $7 billion of borrowed funds, $1.4 billion in cash funds on hand and equity of $2.4 billion. Current assets exclusive of cash and payables are minimal. Borrowed funds were mostly in US dollars and resulted in annual swings in net profit, as the exchange rate of the Jamaican dollar moved up and down against the United States dollar. Loans that were previously denominated in US dollars, were swapped for Jamaican dollar funds, in preparation for the initial public offer.
The company’s generating capacity is 63 mega-watts with the output contracted to Jamiaca Public Seervice Company. Assuming a PE ratio of 10, the company would be valued at just under $6 billion.

Tourism drives Jamaica’ GDP to 4%

Big increase in visitor arrivals in the first quarter of 2019 set to give Jamaica’s GDP a big lift in the quarter.

The huge increase in tourist arrivals in the first quarter of 2019 is likely to result in a 4 percent growth in the country’s gross domestic product (GDP) for the first quarter of the year, data compiled by IC Insider.com suggest.
While the category of Hotels and Restaurants that tourism sector falls only accounts for around 7% of total GDP, the huge increase in stop over arrivals being enjoyed by the sector in the March quarter, will most likely more than compensate for its size in GDP computation and could add as much as one percentage point, to the quarter’s growth.
According to the Jamaica Tourist Board, “stopover arrivals in January 2019 were 216,509 an increase of 11.3% or 21,900 additional arrivals over the 194,609 recorded in January 2018.” Importantly, the arrivals from USA, the country with the high tourism spend is up 20 percent and would have contributed more in inflows as a result of the higher spend even as number of nights they stayed slipped a bit form 2018.

Construction sector is also expecetd to continue to lift the economy in 2019.


February, is up by 14.9 percent, Minister of Tourism Edmund Bartlett told The Sunday Gleaner and reported by that publication on March 3. The Jamaica Observer stated, “data provided by Delano Seiveright, communications strategist and advisor in the Ministry of Tourism, show that total visitor arrivals for the period March 1-17 amounted to 148,052, a 24.8 percent increase over the 118,597 recorded for the same period last year. Breaking down the numbers, Seiveright said that for the period March 1-17 this year Montego Bay welcomed 125,069 visitors, an increase of 22.7 percent compared to 101,967 for the same period last year, while the numbers for Kingston were 22,983, up 38.2 percent over the same period last year.”

BOJ cuts interest rate & cash reserves

Bank of Jamaica announces its decision to lower the policy interest rate (the rate offered on overnight placements with Bank of Jamaica) by 25 basis points to 1.50 percent.
The central bank also announced a cut in cash reserve requirement of commercial banks by 3 percentage points to nine percent effective the begining of March.This reduction will increase liquidity in the financial system by $16.8 billion and thereby support
the expansion of credit to businesses and households at lower rates and at better terms, the central bank stated.
The liquid asset requirement is also being reduced by the same amount.

NCB the stock to watch

NCB tis the stock to watch with big jump in profit from continuingh operations.

Investors in aggressive buying of NCB Financial shares in late 2018, pushed the group’s shares up to a record high of $161 on last day of November last, following full year’s results that were released earlier in the month.
If investors reacted so strongly to results that were telegraphed previously by the nine months results, it will be interesting to see how they react to the 29 percent hike in dividend and a 40 percent rise in profit before one-time income and taxation.
With profits from ongoing operations seeming set to rise to the $14 region this year, NCB Financial is clearly the stock to watch today.
The results could spark the start of the 2019 rally in the main market and push the price well beyond resistance around the $160 market and unto the next resistance around $200.
In pre market activity, the indication is that the stock will move higher than the $145 it last traded at on Thursday. With just over ten minutes to the start of trading, there are 20,300 units on the bid at $147 and ten at $145 to $145.01.

ICreate prospectus is here

The prospectus, for ICreate initial public offer of shares, is now out. The company seeks to raise $70 million to help fund expansion.
The offer opens on Thursday, January 31 and scheduled to close February 14, with 74,062,500 ordinary shares offered to the public at $1.01 each. The company will list on the Junior Market of the Jamaica Stock Exchange, if the issue is successful. Applications are to be made for a minimum of 1,000 shares and multiples of 100 thereafter. If the issue is successful, the share capital will be 197,592,500 units, with 123.5 million units owned by EMedia and Sagicor Investments.
iCreate says “it is a creative learning institute developed with the aim of filling the gap in skills training and development of creatives in the Caribbean and North America. We provide students with a wide range of career opportunities in the Creative Economy while being a key partner of the Advertising Industry, Film Production Companies, Animation and Gaming Companies, and Creative Outsourcing initiatives.”
Existing locations are Kingston, Montego Bay, and Miami. Kingston is currently the only location that offers the full suite of courses. In Montego Bay, the company currently offer our flagship course (Professional Diploma in Digital Marketing) with the remainder to come on board once they built out the infrastructure required to deliver the courses based on our iCreate standards. “Our projected timeline for this is by or before the end of the first quarter of 2019. Miami is in the early business development stage,” the company stated in the prospectus.
The company reported a loss of $4 million for the six months to September from revenues of $18 million and projects profit of $8 million from revenues of $147 million for the year to December 2019 with profit of $62 million from revenues of $250 million in 2020.  Shareholders equity is negative $1.3 million dollar at the end of September.
The company is small, has only recently started business and is at a risky stage of development. Investors need to bear this factor in mind. While the forecast for 2020 appears attractive, the income generated in 2018 does not show a trajectory to support the high income growth, that the above forecast reflects. The business will benefit from the exposure that the IPO and listing will bring and that could help drive revenues. The positive is that current operations show signs of profit with at least two quarters last year, enjoying a profit.
The board is extremely large with nine members for a small company when seven seems more appropriate. The board comprise, Sandra Glasgow, Chairman, Tyrone Wilson, Rhys Campbell, David Wan, Mischa Mcleod-Hines, Sheree Martin, Devon Lawrence, Dr. Jennifer Bailey and Kenneth Benjamin.
The majority shares are owned by EMedia Limited, with Sagicor Investments, holding a minority position. Broker to the deal is Sagicor Investments.

ICreate ipo opens January 31

The ICreate initial public offer of shares will open on Thursday, January 31.
The issue is scheduled to close on February 14, with the prospectus set to be released this week, word reaching IC Insider.com reveals.
The issue is a sale of 74,062,500 ordinary shares to the public at $1.01 each. The shares will be listed on the Junior Market of the Jamaica Stock Exchange, if the issue is successful. Revenue is said to be running in the region of just under $50 million per annum with prospects for strong growth going forward. Already the company is making a small profit, IC Insider.com gathers. The business is the training of students in graphic designs and animation.
The majority shares are owned by EMedia Limited, with Sagicor Investments, holding a minority position. Broker to the deal is Sagicor Investments.

More females employed

Females accounted for 7,600 persons of the 7,800 persons between October 2017 and October 2018 to 261,800 persons employed as ‘Professionals, Senior Officials and Technicians’ that had the second largest increase in employment in the period in Jamaica, data from Statistical Institute of Jamaica (Statin) reported today.
The largest change in employment by industry group was in ‘Real Estate, Renting & Business Activities’ with an increase of 9,700 persons, (11.9 percent) moving from 81,700 in October 2017 to 91,400 in October 2018. Employment, however, decreased in ‘Transport, Storage and Communication’ by 7,500 persons (9.4 percent) to 72,000 over the same period.
Statin stated, “the unemployment rate was 8.7 percent in October last year and represented a reduction of 1.8 percentage points relative to 10.5 percent in October 2017”. There was an increase in the number of persons employed, particularly females in the industry group ‘Real Estate, Renting & Business Activities’
The Employed Labour Force for October 2018 was 1,219,700, 14,400 or 1.2 percent higher than in October 2017.