Bank of Jamaica jacks up interest rate 1.5%

Bank of Jamaica (BOJ) jacks up its policy interest rate offered to deposit-taking institutions on overnight placements by 150 basis points to 4 percent per annum, effective 21 February 2022 and brings to four the number of increases implemented since September 2021.

BOJ interest cuts overnight rate.

According to a release from BOJ the bank also decided to pursue stronger measures to contain Jamaican dollar liquidity expansion and to maintain stability in the foreign exchange market. Finally, consistent with meeting its inflation target sustainably in the medium term, the MPC agreed to consider maintaining or expanding its suite of policy measures at subsequent policy meetings. This position is subject to inflation, inflation expectations and other macroeconomic data evolving as projected.
In general, monetary policy decisions taken by Bank of Jamaica are aimed at ensuring that the annual increase in the prices of consumer goods and services (i.e. inflation) remains within the Bank’s inflation target of 4 percent to 6 percent, the bank stated.

Junior Market cracks 4,000 mark

The Jamaica Stock Exchange Junior Market index traded over 4,000 points for the first time in its history.

Junior Market breaks the 4,000 mark at the opening of trading of the market on Thursday in putting on 92.34 points to 4,041.54 seconds after the open.
The market that ad five consecutive days of record close was breaking into the 4,000 level for the first time and is up just under 18 percent since the start of the year. With just over 30 minutes of trading, the Junior Market is at 4,025.25.
At the same time, the JSE All Jamaican Composite Index is up to 445,861.22 from 443,955.09 at the close on Wednesday as it continues to slowly move forward from a support base of 430,000 points.
Trading in two recent high flyers Dolphin Cove and Caribbean Producers have been halted as the prices fell sharply from $28.50 to $21.96 and from $20 to $16 respectively. Express Catering stock is also frozen at $7.20 from $6.25 on Wednesday.

Junior Market at record high

The Junior Market is trading at record high at the start of Monday trading at 3,700.02 points after surging 114.27 points and exceeding the record close of 3,662.94 points on August 14, 2019.

New record high for the JSE Junior Market.

The JSE Main market All Jamaican Composite Index jumped 3,232.66 points to trade at 442,490.38 within 25 minutes of the opening.
In trading Access Financial Services is up by $1 to $26, Caribbean Insurance Brokers rose 24 cents $2.90, Dolphin Cove gained to $1 to $23, Fosrich was up 21 cents to $14.44, Fontana gained 33 cents to $8, Lasco Distributors rose 12 cents to $3.25, Lasco Financial is up 21 cents to $3.27 followed by Lasco Manufacturing is up 38 cents to $4.98. Main Event rose 50 cents to $4.50, Paramount Trading rose 21 cents to $1.62 and SSL Venture Capital rose 41 cents to $1.69 following news of a proposed acquisition of 79 percent of the company’s shares.
In the Main Market, Caribbean Producers rose 61 cents to a new high of $16.50 and NCB Financial put on $2.13 to $130.
The Junior Market rise conforms to report that the market was poised to make a big break from the consolidation around the 3,300 points mark and head to over 4,000 points.

Remittances on track to exceed US$3.5B

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Remittances inflows to Jamaica surged to US$3.18 billion for the first 11 months of 2021 after pulling in US$274.5 million in November, an increase of 15.6 percent or US$37 million over the comparative period in 2020, data out of the Bank of Jamaica shows.
The performance for November puts the total intake for 2021 above the US$2.9 billion hauled in for January to December 2020. The outturn for 2021 seems set to exceed $3.5 billion for the year when the final numbers are tallied for December.
Based on the performance to date and the consistency of the monthly increase the 2021 inflows seem set to exceed by $1.1 billion the inflows of US$2.406 billion the country received in 2019 and just over $600 million more than the total for over 2020.
Data show Jamaica receiving around $2 billion more inflows in the last two years over and above the trend up to 2019. Between 2007 and 2019 inflows grew around US$1 00 million per annum, with no growth in inflows in 2015, 2017 and 2018. The increase in 2020 and 2021 broke the trend of low growth experienced since 2007.
Persons within the financial sector attribute the increased flows to a number of factors including many Jamaica who lives abroad buying real estate and contributing to the building boom in Jamaica others are of the view that the transfer of funds by the government’s fiscal stimulus to individuals, primarily in the United States is also a big contributor.

Junior Market investors having a blast

With just two weeks of the new year, Junior Market stocks are hot with the market index gaining just 1.2 percent year to date, but the index does not give a full picture of what is happening. In 2021 the market index rose just under 30 percent, already the gains in four stocks now exceed that performance.
AMG Packaging hits a 52 weeks intraday high of $3.90 last week is up a stunning 55 percent to the end of the week at $3.40. The company reported a 146 percent rise in profit for their first quarter and the price is expected to surge this week. KLE Group is up 42 percent with the price being driven by the expectation that the company will pull in a tidy sum by estimate could be $50-100 million from their north coast joint venture development during the course of the year. Newly listed Spur Tree Spices is up 32 percent on its first day of listing. With demand for the stock around 150 million units on the bid above $1.30 to $1.32 on Friday just before the close, with very little supply up to $2, so far, investors can expect to see another big hike in this stock’s price. Caribbean Brokers is up 27 percent on top of the 27 percent rise in late 2021 following the release of a big jump in profits over 2020 for the nine months to September. Dolphin Cove is up 27 percent to Friday at $19.05 but the stock traded up to $23.50 in the past week and is expected to rise sharply higher in 2021 as revenues and profits recovery as the tourism trade bounces back strongly in 2021 to match 2019 numbers or close to them.

Spur Tree Spices lists on Friday on the JSE

Shares of Spur Tree Spices will list on Friday on the Junior Market of the Jamaica Stock Exchange following the successful Initial Public Offering said to have attracted applications from more than 5,000 investors and raised $335.4 million before expenses for the company.
The company indicated that the issue attracted $1.3 billion and was 6 times oversubscribed. Proceeds will be used to pay listing expenses, with the remainder to be used for the repayment of debts of $170 million and to facilitate business expansion.
The listing, the second such listing on the Junior Market since the start of 2021 will bring the total stocks on the exchange to 42. A few others are expected to follow in short order as new offerings are made to the public early in 2022.
Earnings per share for Spur Tree should end the year at 11.5 cents before taxation at a PE of 8.7 times earnings, below the market average of 14.4 currently, with a high degree of oversubscription, the PE ratio will jump on Friday and into next week. IC projects 18.5 cents earning for 2022 from a profit of $300 million at a PE of 5.4 times 2022 profit.

12% allotment for Spur Tree shares

The staff at Spur Tree Spices lost a golden opportunity to make money from the company they worked for leaving a portion of the 10 million shares on the table for others to take up at a very low price that will likely double in rice sooner than later.
GK Capital Management released to the public the basis of allotment of the successful Spur Tree Spices Initial Public Offer of 335.4 million shares on Thursday.
Applicants in the staff key partner reserve pools will receive 100 percent of their application with the balance of the shares in these pools that were not applied for will become available for the General Public Pool Applicants, who will receive up to the first 10,000 shares plus a pro-rata allocation of approximately 11.76 percent of the excess shares for which they applied.
The prospectus indicated that allocation and refunds will take place within ten days of closing and trading in the shares no more than five business days after the Jamaica Stock Exchange approves the admission of shares to the Junior Market.
“It is the intention of the Company to apply to the JSE for admission of the Ordinary Shares to the Junior Market and to make such application immediately following the closing of the Invitation,” the prospectus stated.

Rule changes likely for Trinidad Stock Exchange

Many investors are concerned about the long held view that the trading of odd lots should not be used to set stock prices but this practice was changed by Jamaica Stock Exchange in recent years along with the Trinidad and Tobago Stock Exchange (TTSE).
Well the TTSE is currently, redrafting rules to enhance the speed and transparency of transactions and trades. According to a release from the TTSE, “the revisions are taking place under the guidance of the Trinidad and Tobago Securities and Exchange Commission and will be available for public review when completed, the Exchange disclosed.”
The revisions are expected to tighten regulation of companies listed on the TTSE, securities traded on behalf of investors, which is hoped will help boost public confidence in the role and function of trading on the capital market.
The main revisions to the Rules include proposed amendments to Disclosure Rules of listed companies which will be clarified further and possible violations will be included in the scope of self-regulatory supervision.
Proposed Changes to the Closing Price Methodology will restrict small volume trades from being included in the calculation of the day’s closing price and the proposed adjustment to the settlement period will reduce the settlement period from three business days.

JSE starts New Year with a bullish tone

Investors kept up the bullish stance in trading on the Jamaica Stock Exchange on the first trading day of the year with the All Jamaican Composite Index surging 8,895.04 points to 447,223.41, up from 438,328.37 at the close on Friday, with the Junior Market index(AJI) rising 45.88 points to 3474.18 from 3,428.30 on Friday.
By 10 am, the AJI had slipped down to 445,676.67 and the Junior Market index pulled back to 3,470.99.
On the Junior Market, Dolphin Cove jumped from $15 on Friday to $16.90 after trading 77,539 shares, Cargo Handlers dropped from $8.25 on Friday to $7.01 and MailPac fell from $3.78 to $3.50 and In the Main Market, NCB Financial fell from the last sale price of $128.70 to $125.

IPO gifts for Christmas and early New Year

The current year 2021 has not been a bumper one for initial public offerings in Jamaica, all of that could change as Santa has one or two gifts on his sleigh to deliver either a few days before Christmas or just after.
Word on the street is that investors should save some of the money earmarked for Christmas gifts and prepare for two Initial Public offerings that could hit the road ahead of Christmas and just ahead of the New Year.
The year is closing fast saw one outstanding offer returning a bid payoff for investors as the Junior Market listed Future Energy Source there were a few in the Main market but they failed to generate any excitement for investors. previously reported that the initial public offer of shares in Jamaica Fibreglass Products is expected to come to the Jamaican capital market in October, our source advises, with Spur Tree Spices to come shortly after. We said then that, “Jamaica Fibreglass Products produces fiberglass-based furniture and beddings, with revenues said to be in the region of $600 million, is expected to raise approximately $250 million for expansion purposes. The prospectus of the Metry Seaga-owned company is said to be at an advanced stage of preparation and should be moving through the various stages for approval soon.”
“Spur Tree Spices, with revenues, said to be just over $1 billion, should also be coming in October, if all goes well, intending to pull in $250 million. GK Capital are brokers of the two issues that are slated to list on the Junior Market.”
Various issues seem to have delayed both of the above but the various issue may have been dealt with and the runway is said to be cleared for flights to take off sooner than later.
These two are not the only ones coming. Word is that Mayberry Investments has a few potential IPOs with one or two at advanced stages of readiness to hit the market in 2022. IC gathers that one is an IPO to raise around $200 million in the educational line of business and one is for an existing listed company for a fresh capital raise.  There are some regulatory issues regarding the structure of reserve shares for the initial public issue, with the FSC is now proposing that the vast majority of an issue must be made to the general public, thus severely limiting the percentage that can be kept for select clients. It is a move intended to squelch the many concerns of investors of being shut out of getting reasonable amounts of issues.
In October this year, the social learning portal Edufocal disclosed that they signed an agreement to engage Mayberry Investments in a move to raise capital. gathers that the effort will likely bear fruit early in the New Year. The government of Jamaica’s intention to divest their 20 percent holding in JPS is at a fairly advanced stage and could be early in 2022, but that investment could be fraught with potential dynamite for small investors.
Keep watch, they all could be closer than you think.