Jamaica Stock Exchange main market indices surged sharply by the mid-day to come within a shade of a new resistance level of 280,000 point on the all Jamaica index.
By Mid-day the All Jamaica Composite Index hit a new all-time high of 279,335.69, after surging a huge 6,471.87 points at 11:50 but by mid-day it was up 5,527.76 to 278,391.58. The JSE Market Index jumped 5,896.61 points to a record 254,506.45 and at mid-day it was up 5,036.42 to 253,646.26 and the Combined index leaped 5,738.73 points to 268,155.40 at 11:50 and by mid-day it rose 5,041.53 to 267,458.20. The Junior Market index rose 37.30 points to 3,145.49 at mid-day.
JSE AJI index flirts with 280,000 points
August 8, 2017 by
Barita in takeover talks
August 4, 2017 by
Barita closed at $6.85 on Thursday.
Well known brokerage house, Barita Investments is currently in discussion for the sale of majority shareholdings in the Company.
A release from the company to the Jamaica Stock Exchange on Thursday advised that the Company has received an offer to acquire the majority shares and that the offer is under consideration by the Company’s Board of Directors and that discussions continue, pending the preparation and conclusion of definitive agreements.
The 76 percent majority shareholder with 339,975,664 shares and chairman, Rita Humphries-Lewin who started the company from the 1970s, is currently in her 80’s and close to retirement, making the offer opportune for her.
The offer comes at an interesting time just after Proven Investments closed their rights issue that raised US$16,547,873 (J$2.1 billion) resulting from the sale of an additional 68,949,472 ordinary shares. Barita could be a good fit for them as well as others within the sector, especially with an established Unit Trust portfolio. In the past investors were of the view that Barita could make a good fit for Mayberry Investments. Information glean suggest that they are not one of the arties showing an interest just now. Victoria Mutual Group has just started a Unit Trust schemes but the cost of a start up is high until it gets to a critical mass, Jamaica National has no unit trust portfolio and just started in the stockbrokerage business. Barita would make a great fit for them but it is unsure that their Chairman, Oliver Clarke would want to sanction that move at this time.
VMBS seems to be an interested party.
Barita has 445.877 million shares issued with a market capitalization of just over $3 billion, a simple majority holding would cost just over $1.5 billion at current price, assuming a price higher than the current one would result in a higher sum. The amount of capital raised by Proven would translate to $10 per share for a simple majority in Barita. IC Insider.com projects earnings for the current year at 90 cents. With the listed investments banks trading at PEs around 11 times, 2017 earnings, a reasonable value of $10 per share seems probable. With the company having unrealized gains not showing in the normal profit, a price around $10 should be attractive to both buyers and sellers at this time. An investor with cash would want to get as much of the shares of the majority owner, but with a mandatory offer having to be made to minority shareholders, they may want to go for a smaller amount initially with 65 to 70 percent looking viable. NCB Group have been on expansion run as well and the combination of NCB Capital Markets and Barita could create synergies. NCB group owns all of the investment arm making a merger with Barita down the road very viable.
Barita is primarily involved in stockbroking, Unit Trust management and repo business. The Unit Trust business that is poised to grow rapidly in a low interest rate environment, would be a big attraction for Proven who currently have no such business within their portfolio.
Inflation rate drops in May
June 16, 2017 by
Inflation in Jamaica after rising 0.4 percent in January and March and 0.3 percent in April has now fallen to just 0.1 percent for May this year, half of the 0.2 percent rise in February.
The increase for May brings the year to date 1.4 percent and the fiscal year-to-date to 0.4 percent. The inflation rate over the last twelve months rose to 4.6 percent. With the price of oil on the world market slipping recently, a low level of inflation can be expected for some time to come and could result in the year over year rate declining form the above level.
According to Statistical Institute of Jamaica the inflation for May is due to an increase of 0.1 percent in the index for the heaviest weighted division, Food, Non-Alcoholic Beverages and Tobacco. Within this division the group Food rose by 0.1 percent while other notable increases were recorded in the following divisions: Transport 0.2 percent, Alcoholic Beverages and Tobacco 1.6 percent and Restaurants and Accommodation Services 0.3 percent. The upward movement in the index was tempered by a 0.2 percent fall in the division Housing, Water, Electricity, Gas and Other Fuels due to lower rates for electricity, water and sewage.
Main Event flat profit before tax
June 7, 2017 by
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Main Event Entertainment that went public with an IPO in January this year is reporting flat profit before tax and slightly lower net profit after tax of $3.3 million. Profit before tax for the year to October ended at $59.8 million com-pared to $60.3 million in 2015.
Profit after tax came in at $56.5 million versus $60 million in 2015, the out turn is lower than the $60 million the internal figures to September last year that was included in the prospectus showed. The net profit translates to earnings per share of just 23.5 cents with 240 million shares applicable at the date of the financials.
Return on average equity amounted to a strong 41 percent, with shareholders’ equity at the end of the period being $242 million.
The results emanated from a 9.5 percent rising in revenues to $1.13 billion, the growth was slowed b y a big drop in revenues from Digital Signage. With gross profit climbing 13 percent to $429 million. Expenses rose by 15.7 percent to $354 million. Revenue during the year was generated mostly by Entertainment promotion activities of $854.7 million in 2016 from $742.7 million in 2015. Audio and film contributed $189.5 million compared to $140 in 2015 and Digital signage of $88 million versus $151 million in 2015. The auditors signed off on their report on the 5th of June, an indication that all was not well with the financial reporting.
Main Event went public at $2 in January and now trades on the Junior Market of the Jamaica Stock Exchange at $6.50.
Juniors up 44 points to record close
April 26, 2017 by
The Junior Market of the Jamaica Stock Exchange ended trading at yet another record closing high with a big gain of 43.64 points, with an increase of 1.36 percent to 3,247.20 points on Wednesday. The market surged over 72 points to a record close on Tuesday.
Key Insurance traded at a 52 weeks’ high of $3.95 while Jamaican Teas was in good demand and ended as the market leader with over 500,000 shares.
Junior Market jumps sharply to new record
April 25, 2017 by
The Junior Market of the Jamaica Stock Exchange traded up more than 129 points after midday on Tuesday.
The market index hit a new intraday record high of 3,261.11 points with Lasco Manufacturing trading at a new high of $6.25 with over 4 million shares trading and Lasco Distributors trading up to $7.30 with 569,000 shares. The Junior Market index has since slipped back to 3,212.92, up 81.29 for the day at 12:30 but the All Jamaica Composite index dropped 3,016.25 points to 248,857.65.
Sagicor caught in JSE ownership restriction
March 30, 2017 by
Sagicor Group JSE ownership exceeded 10% restriction..
The article sets a 10 percent limitation for ownership by any one shareholder. The restriction is meant to prevent anyone shareholder from dominating management of the company. The prospectus when the company sold ordinary shares to the public in June 2103 stated: Ordinary Shares – Special Provisions to Prevent Unacceptable Control Situations. Article 48 of the Articles of Incorporation of the Company contains provisions that are designed to prevent any Shareholder (including a Member Dealer) from holding Shares above the “Prescribed Percentage”, being over 10 percent of the issued share capital of the Company. If the voting power of any person (either alone or together with others) is more than the Prescribed Percentage, the Articles deem that an unacceptable control situation exists. In those circumstances, the same Article also deems that any Shares above the Prescribed Percentage are default shares that no longer carry rights to vote at general meetings of the Company. The Company has a power to give notice to the holder to dispose of any default shares, failing which the Company may dispose of them.
On March 3, a total of 35.3 million units of Jamaica Stock Exchange shares were trading through the market.
Increased FX cost for Jamaican banks
February 20, 2017 by
Bank of Jamaica announced changes to the cash reserves and liquid assets that deposit-taking institutions are required to hold against foreign currency liabilities effective March 1.
According to the central bank the change will see a three percentage points increase to the current requirement. The adjustment will be in two steps, beginning with an increase of two percentage points on the first business day in March 2017, with the remaining one percentage point will be effected on the first business day in April 2017.
The adjustment is aimed at reducing the incentive to hold foreign currency liabilities.
No change is being made to the reserve requirements applicable to Jamaican dollar prescribed liabilities.
During the last three months of 2016, Bank of Jamaica gradually increased the cash reserves and liquid assets requirements for foreign currency liabilities in the banking system to bring them in line with the reserve requirements for Jamaican dollar liabilities. This removed the bias in the structure of the reserves requirements that favoured foreign-currency deposits.
At December 2016, the cash and liquid assets reserve requirements were twelve per cent (12%) and twenty-six per cent (26%), respectively, for both foreign currency and Jamaican dollar liabilities. Remuneration for foreign currency cash reserves was also discontinued, bringing it into conformity with the treatment for Jamaican dollar cash reserves.
The net effect is that it will cost banks more to hold foreign currency than before and is likely to drive up lending rates for foreign currency loans. Depositors will most likely see a dip in the interest they currently earn on foreign exchange deposits. The move will mean more funds will be available in the market for either the build-up of the country’s reserves or a further strengthening in the value of the Jamaican dollar. Real estate and stocks will definitely benefit from the changes as well.
The change come partially, as commercial banks accumulated large pool of surplus foreign currencies since mid-2016, forcing the central bank to issue bands to pull the funds out of the system, as well as the fact that Jamaican have increasingly been dollarizing their financial activities.
Huge gains for Jamaican stocks
January 27, 2017 by
The Jamaica stock market, recorded the highest points gain in trading on Friday, with some big moves in the prices of National Commercial Bank, Scotia Group, Kingston Wharves and Jamaica Producers Group as some of the main 
movers contributing in a major way to the gains in the main market indices.
In the process the all All Jamaica Composite Index jumped sharply by 9,082.60 points to close at 226,121.49 and the JSE Market Index surges 8,121.44 points to finish at 206,567.37.
A combination of factors helped in the big move. The bullishness of the market is coming at a time of very low supplies for a number of stocks, including the four mentioned above, while NCB reported record profit for their December quarter, with a jump of 49 percent, to $3.56 billion, helping in moving the price from $52.02 at the close on Thursday to $58. The bank also announced increased dividend payment, from 50 cents per share in 2016 to 60 cents being paid in February.
The gain on Friday was the biggest daily increase, but in percentage terms, it sits in at the 5th largest daily gain.
All Jamaica breaks 210,000
December 30, 2016 by
Bulls pushing Jamaican stock to new highs.
The all important index that measures the movement of all Jamaican stocks listed on the main market, rose 4,178.53 to 210,557.50 prior to midday, to be up 25.8 percent for the year.
At these levels, the market has just broken the resistance levels around 210,000 points mark and suggest that it could climb much higher in the days ahead if it holds around the current level at the end of trading today.
