Wigton Windfarm IPO out very soon

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

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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.

Huge 44% drop in Jamaicans murdered

Murders in Jamaica have plummeted by a huge 44 percent in the first 14 days of 2019, compared to the similar period in 2018.
According to Radio Jamaica murders for the first 14 days of 2018 is 37. In 2018, Television Jamaica reported in 2018, that Police Crime Statistics reported that Jamaica recorded 61 murders between January 1 and 13, last year. When the data is adjusted to reflect similar number of days, the rate of decline  over last year is an incredible 44 percent and now places murders below 1,000 per annum if the trend should hold. The data is for just a few days of the year and may or may not hold but the dramatic decline is worth watching.
RJR was reporting on an increase in murders in Trinidad and Tobago, with homicides hitting 20 as of Wednesday morning and compares to Jamaica with a population twice the size of Trinidad and Tobago that recorded 37 murders as at January 14.

Prices in Jamaica plunged for December

Prices in Jamaica on average, fell sharply by 1 percent in December last, bringing inflation as measured by the country’s Consumer Price Index to 2.4 percent for the calendar year. The fall in inflation for December occurred across several main categories of goods and services.
The movement in the index for the fiscal year-to-date was 2.7 percent. The rate of increase on average is well below the target set by the government for the central bank to aim at, for the fiscal year of 4 to 6 percent. Had it not been for a spike in the rate of exchange between April and September last year, the rate for the year would have been even lower than the final numbers reported.
Food and Non Alcoholic Beverages and the Transport division declined by 1.5 percent. The fall in Food and Non-Alcoholic Beverages resulted from a decline of 6.2 percent in Vegetables, Starchy Foods due to increased supplies of agricultural produce the Statistical Institute of Jamaica (STATIN) stated. The decrease in the Transport was due to lower prices for petrol, while Housing, Water, Electricity, Gas and Other Fuels fell by 1.3 percent, due mainly to reduced rates for electricity, sewage and water rates.

Heavy demand for Fontana shares

Fontana shares are now listed on the Junior Market of the Jamaica Stock Exchange with bids now in to purchase 7.7 million shares up $2.50 prior to the opening of trading. There is just one offer at $4 to sell 4,500 shares.
The heavy demand in in keeping with heavy over subscription the IPO received. A number of investors in the stock are not pleased that the company varied the terms of the allocation of shares to persons in the general pool from the stated treatments included in the prospectus that stated that multiple applications would be merged and treated as one.
The share issue attracted 2,770 applicants for shares in the company. The order book on the buy side is shown in the accompanying chart with orders at 10 am.
The PE based on last year’s earnings is a low 8, suggesting that a price in the mid $4 region or higher is likely, once it can trade at those levels. Subsequent to the time the attached chart was created, the highest bid is now at $2.60 to buy 130,000 units with total bids in the syetem to purchase 17.7 million shares. One more offer at $3.77 to sell 30,610 units was posted after trading commenced. The maximum price the stock can trade at today is $2.44, 30 percent above the IPO price of $1.88.