Remittance inflows to Jamaica is up a strong 21 percent for 2020, with inflows jumping US$499.4 million to a record US$2.905 billion for January to December 2020 period, with the United States contributing US$386 million of the increase, data out of Bank of Jamaica shows.
The USA accounted for $1.69 billion of total inflows while the United Kingdom provided US$271 million. up by $34 million, Canada delivered US$52 million more than in 2019 after landing US$257 million in 2020. Contributions from the Cayman Islands, Jamaica’s fourth largest contributor to the country’s remittances, were virtually flat year over year, with US$145 million of inflows in 2020 versus US$142 million in 2019.
In the first two months of the year, gross inflows rose 9 percent and 8 percent, respectively, but fell 9 percent in March and 10 percent in April, compared with the same periods in 2019. In May, inflows rose 16 percent but jumped sharply by 42 percent in June, to record the highest growth for the year with inflows of $275 million. The other months of the year grew in the 30 percent range, except for November that increased by 19 percent.
Inflows for December grew 35 percent to record the highest monthly inflow for the year at US$301 million. July followed with US$293 million, increasing 37 percent over the 2019 period and August was next with US$280 million with an increase of 31 percent over 2019.
Remittances jump 21% or US$500m in 2020
Sharp drop in January visitor arrivals
Stopover visitor arrivals to Jamaica fell 80.7 percent in January 2021 to just 43,831, a decrease of 183,369 compared to 227,200 recorded in the same month in 2020. The January numbers are well below arrivals in December last year with 90,164 stopovers that fell 68 percent with 190,951 fewer arrivals than the 281,115 recorded in December 2019.
Stopover arrivals from the United States fell 73 percent in January 2021, with 38,500 arrivals than the 143,460 arrivals in January 2020, with all US marketing regions recording decreases. Arrivals from the Canadian market dipped 93 percent, with just 3,274, down 42,608 from 45,922 visitors in January 2020. Visitor arrivals from the Caribbean region were down 79.5 percent to 1,070 compared to 5,217 in January 2019, while Latin American arrivals fell 89 percent with 565 stopovers compared to 5,219 in January 2020. Just a sprinkling of arrivals came from the United Kingdom and Europe in 2021.
While the numbers were down, there was some good news as the lent of stay was up sharply by 60 percent over 2020, with Non‐ Resident Jamaicans jumping 65 percent. The increased length of stay suggests that individual visitor spend could be close to twice what it was in 2020.
According to data from the Jamaica Tourist Board, “the average length of stay of Foreign National arrivals in January 2021 was 13.8 nights, compared to 8.6 nights in January 2020. The average length of stay in hotels was 7.9 nights in January 2021, compared to 6.4 nights in January 2020. The average length of stay of Non‐Resident Jamaican arrivals in January 2021 was 27.9 nights, compared to 17 in January 2020. The average length of stay in hotels in January 2021 was 9.8 nights, compared to 7.3 nights in January 2020.”
Data out of Aeroportuario del Pacifico suggests that arrivals for February could be worse than in January with an 82 percent fall in arrivals through Sangster International Airport and 75 through Normal Manley compared to 2020, with the total arrival numbers being well down from January
Looking forward, word out of the industry is that bookings are in the 70 to 80 percent region for the summer months as the vaccine is rolled out over the United States Jamaica’s largest market for visitors.
Another Grace acquisition this week
Fresh on the heels of announcing an agreement to acquire all the shares on Scotia Insurance Eastern Caribbean shares, Grace Kennedy announces another agreement to acquire, this time the brand of 876 spring water from Bliss Limited and UniBev Limited (UniBev).
Under the acquisition agreement, Grace Kennedy will assume ownership of the 876 brand, while UniBev will continue to manufacture the product.
“ 876 spring water has been distributed by World Brands, a Grace Kennedy subsidiary since it entered the market in 2017” a Grace release states. The release further states, “this is the second announcement of an acquisition by Grace Kennedy this week. The acquisition of 876, which remains subject to customary closing conditions, places GK in a stronger strategic position in the Jamaican spring water market”.
Commenting on the latest move from Grace Kennedy, Group CEO, Don Wehby stated, “Brand acquisition is a key component of the growth strategy for our Foods Division. Since GK began partnering with UniBev to distribute 876, the brand has shown strong growth and we see opportunities to expand this even further through possible line extensions and the export market. We’re excited to be taking steps to grow our portfolio of products to provide a wider selection to our consumers.”
2020 a great year for Grace Kennedy
The year just past may have been a terrible one for many, for at Grace Kennedy, they have much to be thankful for and management wish must be for another repeat performance like 2020.
Grace reports record profit of $6.2 billion attributable to shareholders for 2020, jumping 39 percent from $4.49 billion in 2019 after taxation more than doubled to hit $2.85 billion for an increase of 178 percent.
Profit before tax rose a strong 58 percent compared to 2019 to end at $9.7 billion. Importantly profit before other income jumped a stunning 82 percent to $6.8 billion while other income rose 20 percent to $3 billion. In what was a spectacular year for the 100 years old company, revenues grew 12 percent to $115 billion, surpassing the $99 billion generated in 2019. Direct and operating expenses rose 9 percent to $109 billion. Other comprehensive income brought total profits to $9.2 billion versus $9.26 billion in 2019.
The groups’ segments had a mixed performance, with Food trading profit almost doubling from 11 percent rise in sales while Insurance and Money transfer contributed 21 percent and 26 percent in profit but banking and Investments fell.
“GK’s Food Trading segment saw improved revenue and profitability primarily due to the outstanding performance of its international food businesses. GraceKennedy Foods (USA) LLC showed triple digit increase in gross profit and marked growth in revenue, with the Grace and La Fe brands recording growth and improved margins; and GK’s Jamaican food distribution business recorded strong growth in both revenue and pre-tax profit, coupled with improved operating margins,” a release from the company stated.
The group earned 6.26 per share for the year versus $4.51 in 2019 and the stock price closed on Friday with a last traded price of $84.50 for a PE ratio of 13, well below the market average of 20. ICInsider.com projects 2021 earnings of $11 per share and see the stock heading close to $200 for the year and receives the coveted IC BUY RATED stamp of approval.
Total shareholders’ equity stood at $29 billion at the end of December, up from $27 billion in 2019. the group paid $1.59 billion in dividend during the year, up slightly from $1.54 billion in 2019.
Barita acquires 20% of Derrimon Trading
Barita Investments now owns 20% of the issued shares of Derrimon Trading Company following the closing of the Derrimon additional public offer of shares, Barita disclosed in a release to the Jamaica Stock Exchange.
Barita headquarters.
Commenting on the investment, Jason Chambers, Director of Barita and Chief Investment Officer of Barita’s parent company, Cornerstone, said: “The Board of Directors of Barita and the leadership team of Cornerstone are very satisfied with this investment as Derrimon embodies several of the characteristics we typically look for in assessing investment opportunities. DTL has built up an enviable track record of growth and value creation, and the management has demonstrated their ability to achieve scale both organically and through the successful integration of several accretive acquisitions. Barita has, over the course of the last two-plus years, established significant capacity to expand its portfolio of investments into sectors that are viable alternatives to traditional ones that are now fully priced in our view and therefore not likely to generate alpha for our shareholders in the medium to long term. This minority acquisition should be seen as a by-product of our increased investing capacity as we prudently seek to unearth both value and growth-oriented investment opportunities within the context of the current global investment landscape.”
Chambers continued, “We also note the diversification factor that this investment adds to our portfolio as it provides exposure to the real sector via a company which has recently begun an international expansion.
Mayberry tried trading 420m Derrimon Trading shares but the transaction was disqualified.
At Cornerstone and Barita, our goal is to positively impact the lives of our stakeholders through the tireless pursuit of opportunities that provide solid risk-adjusted returns throughout their investment horizons. We believe this investment is aligned with that ethos and we look forward to collaborating with the team at DTL to the mutual benefit of our collective stakeholder groups.”
Paula Barclay, General Manager of Barita, in commenting on the Company’s investment in Derrimon, stated: “At Barita, we continuously seek out unique strategic opportunities to build shareholder value while balancing the interests of our clients, team members, and other key stakeholders. We are confident that our association with a company like Derrimon will only contribute positively to our overall future performance. Consummating this investment took significant effort from the team at Barita and I would like to take this opportunity to extend my gratitude to them for their hard work.”
Barita Investments is a publicly-traded Securities Dealer listed on the Jamaica Stock Exchange and majority-owned by Cornerstone Financial Holdings.
Derrimon Trading is listed on the Junior Market of the Jamaica Stock Exchange and distributes dry and frozen bulk commodities. It also operates retail outlets and Supermarkets.
The shares of Barita are trading at $81.14 and Derimon at $2.56 on early Friday morning after the release.
Airbnb more than doubles IPO price
The very popular Airbnb listing that follows its recent IPO hit the market today and only recently started trading with nearly 30 million shares exchanged up to 2 pm, with the price more than doubling.
The stock issue price was US$68, but it started trading at US$147.61 and moved up to a high of $165, but it is now trading at $148.34 for a rise of $118. The company is a booking service for travelers in non-traditional accommodations.
Bulls pushing JSE stocks higher
JSE Main market is up over 6,000 points in early Wednesday trading.
The bulls continue to prowl Wednesday on the Jamaica Stock Exchange with the All Jamaican Composite Index up to trade at 435,382.80, up 6,446.29 points after an hour of trading and is back the April 15 level.
The JSE Main Index is up 5,761.51 points to 397189.72. Junior Market Index rose moderately moving from 2,529.92 points to 2,544.20.
Grace Kennedy rose from $59.99 to $67.98, while JMMB Group is trading up at $34.90 and Sagicor Group is up to $51.51.
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
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.