Cable & Wireless reports profit for the year ending March of $1. 2 billion, up from a loss of $8.9 billion in 2015. The company got help from net exceptional credit of $1.2 billion, even without this credit, the company made a small profit after finance cost but before taxation.
Importantly, C&W made an operating profit in the second half of the year of as Mobile revenues climbed by 22 percent.
The exceptional income stems from a reversal of $3.4 billion of restructuring cost written off in the 2015 fiscal year offset by employment restructuring cost in 2016. The company reports profit of $178 million in the March quarter compared with $486 million in the December quarter.
Revenues for the group rose moderately to $23 billion from $21.9 billion in the 2015 period while operating expenses fell to $15.8 billion from $17.4 billion but depreciation rose to $2.3 billion from $1.7 billion. Amortisation cost climbed to $1.1 billion from $848 million while finance cost remained fairly steady at $3.9 billion.
The company’s stock trades at $1.48 up 10 cents in the morning session from Monday’s closing price, on the Jamaica Stock Exchange today.
Bank of Jamaica cuts interest rate
BOJ sold US dollars into the system on Monday
The rate was last reduced from 5.50 percent to 5.25 on August 18, 2015.
According to the central bank “the adjustment to the signal rate reflects the Bank’s assessment that the inflation outlook for the fiscal year 2016/17 will continue to be favourable and is expected to be within the lower half of the 4.5 percent to 6.5 percent target range for the fiscal period. Although growth has been weaker than expected, macroeconomic indicators have been reflecting generally positive trends. Inflation expectations remain firmly anchored in single digits, international reserves are above adequacy levels, the current account of the balance of payments is projected to be at a sustainable level, private sector credit is expanding, market interest rates have been trending downwards and the fiscal accounts continue to be strong.”
The reduction follows falls in Treasury bill rates that are now just ahead of the pre adjusted CD rate.
Jamaica’s $ competitiveness may be up 5%
The Jamaican dollar may have gained 5 percent in competitiveness for the year to date against the US dollar. The closing selling rate for 2015 ended at $120.42 and has so far slipped by 3.5 percent to Monday, with inflation being negative 1.7 percent between January and April this year, the Jamaican dollar has picked competitiveness above the change in the rate of exchange.
The foreign exchange market closed on Monday, with dealers buying the equivalent of US$47,761,762 and selling US$44,338,122, in contrast to US$35,541,148 purchased and US$47,935,497 sold on Friday with the rate for the important US dollar rising to record new lows for the Jamaican dollar.
In US dollar trading, dealers bought US$44,507,300 compared to US$32,883,247 on Friday, as the buying rate for the US dollar rose 5 cents to $123.83.
A total of US$42,340,729 was sold versus US$41,138,924 on Friday with the selling rate rising 8 cents to $124.65. The Canadian dollar buying rate dipped 8 cents to end at $92.26 with dealers buying C$1,069,725 and selling C$866,429, at an average rate that rose 86 cents to $96.50. The rate for buying the British Pound fell 89 cents to $174.92 for the purchase of £1,621,031, while £658,096 was sold, with the rate falling $1.81 to $177.42.
At the end of trading, the selling rate for Euro, fell $1.08 to close at J$140.75, from Friday’s rate, according to data from Bank of Jamaica, while dealers purchased the European common currency at J$137.76, for a fall of $1.14 from Friday’s rate. The US dollar equivalent of other currencies traded amounts to US$167,489 being bought, while US$390,004 was sold.
Highs & Lows| Notable changes to the highest and lowest rates the Jamaican dollar traded at in the foreign exchange market on Monday, include, a decline in the highest selling rate of $29.21 for the US dollar to $130.79, a drop of $19.40 in the lowest selling rate to end at $100.70. There was a rise of $3.45 in the highest buying rate of Canadian dollar to end at $98.75 and a rise of $3.11 in the lowest buying rate to end at $76.11, while the lowest selling rate fell $2 to $89. The highest buying rate for the British Pound dropped $3.35 to $179.65 and the highest selling rate slipped $1.08 to $184.68.
$1.275m threshold for all
Minister of Finance Audley Shaw
Shaw stated that 251,000 persons will benefit from the plan which is said to cost $12 billion in this fiscal year. The Minister announced a series of tax measures to fill the gap caused by the shortfall arising from the tax plan. Taxes will go up on cigarettes, petrol, heavy fuel, LNG and departure tax.
Tax payers earning over $6 million per annum will pay taxes above the threshold at 30 percent instead of the current 25 percent.
The Minister stated that the plan is to move from direct taxation to indirect taxation with the expectation to fully phase out personal tax.
Shaw presentation place a great deal of focus on growth and development, including focus on improved infrastructure including extension of the south coast highway to Negril.
The minister projected economic growth at 1.8 percent for the fiscal year up from 0.8 percent for the 2015/16 fiscal year. The Minister also stated the drive for comprehensive tax reform to be pursued.
Grace Kennedy’s blow out quarter
Grace Kennedy profit for Q1 jumped 153%
Grace Kennedy reported a 153 percent jump in it results for the first quarter ending March with profit after tax of $1.5 billion versus $589 million in 2015. Grace reports that $606 million of the increase came from disposal of investment, with the bulk of it coming from the liquidation of a subsidiary.
Earnings per share ended at $4.51 compared to $1.78 in 2015 and the full year’s earnings looking to exceed $13 per share.
Grace reported sales revenues of $22 billion up from $19.36 billion in 2015, with profit from operations doubling to $1 billion, while other income amounted to $991 million up from $316 million in 2015.
Group Chief Executive Officer, Don Wehby steering the Grace ship to safer waters.
The food and trading division enjoyed the most growth, moving from $398 million to $855 million, the banking and investing segment recorded lower profits of $29 million than the $89 million in the 2015 period, while the money transfer segment, continues to deliver attractive increases of 26.5 percent, with profit of $587 versus $464 million and the Insurance division went up 48 percent from $67 million to $99 million.
The company attributed the strong increase in the food and trading division to “improved performance of our food distribution and manufacturing business in Jamaica and internationally.”
Grace’s stock has come in for increased demand on the Jamaica Stock exchange over the last few trading days, with the price closing at $84 on Thursday with 1,021,582 units traded.
Pan Jam’s 5 for 1 split
IC Insider.com long standing BUY RATED stock, Pan-Jamaican Investment Trust (PJAM) may now be set to come into its own with an announced 5 for 1 stock split approved by the board in February, with the Jamaica Stock Exchange being informed more than 2 months after they should have been.
The stock last traded on the Jamaica Stock Exchange at $98, but based on its earnings of $15.19, the price should be much higher. The stock price has struggled for some time to achieve the valuation that most other stocks in the main market have attained, since the start 2015. As one of the highest priced stocks on the Jamaican market, investors have been looking elsewhere, to invest their money, leaving the stock attractively priced and undervalued.
Various investors in the past, have been saying that the company needed to split the stock to make it more attractive for investors. Management felt otherwise, saying that a split would make it appear to be a penny stock, in the eyes of overseas investors.
It seems like the decision of both Jamaican Teas and the Lasco group to split and the impact that the spilt has had on the prices of these stocks may have convinced the Pan Jam directors to take the plunge.
The company in a release to the Stock Exchange today, advised that the following resolution was recommended by the Board of Directors at its meeting held on February 29, 2016: “Special Resolution- Resolution for the Sub-Division of Shares – “That each of the 250,000,000 ordinary shares in the capital of the company be subdivided in 5 ordinary shares each thereby making a total share capital of 1,250,000,000 ordinary shares of no par value at the existing total stated capital of 2,141,985,000 with effect from the close of business on May 31, 2016”.
The resolution is subject to approval at the Annual General Meeting scheduled for Thursday, May 26, 2016.
Interestingly, the Jamaica Stock Exchange rule states that a company is required to give notice to the Exchange of at least a week in advance, the date of the Board meeting at which the declaration or recommendation of a dividend, bonus issue or rights issue will be considered. Question did Pan Jamaican comply?
Eppley seeks $317m from right issue
Eppley limited, providers of insurance premium financing, is expected to raise $317 million from its renounceable rights issue of ordinary shares, when it offers 487,703 new ordinary shares priced at $650 to ordinary stockholders this month. The record date for the issue is Friday 6 May and the date for the stock to start trading ex rights, is May 4.
Proceeds from the rights will doubled the company’s existing equity capital of $314 million and improve the debt to equity ratio which is heavily weighted towards medium term redeemable preference shares with total borrowings of $997 million at the end of March, this year.
The company reported a 17.7 percent increase in profit after tax for the first quarter this year, of $10.6 million over the $8.7 million made in the first quarter of 2015. Profit for 2015 financial year ended at $56.5 Million.
Since the company announced plans for the issue, the price moved from $400.01 to $650 in this morning’s trading for an increase of 62.5 percent. The proceeds will allow them to expand their offerings and or pay down debt.
Eppley is listed on the junior market of the Jamaica Stock Exchange, and last traded at $650 with a PE ratio of 8.
Big losses in early JSE trading
Trading on the Jamaica Stock Exchange got off to a rocky start coming from the record run on Thursday in the main market and the big gains in the junior market. The performance of the market showed sharp fall in the indices in Friday’s morning session with declines of more than 1.65 percent in the main market indices.
The declines in the main market resulted mainly from National Commercial Bank falling $1 to $44 and Scotia Group dropping to $31.15 from $33.90 at the close on Thursday with 137,276 units but ended at $33.50. Lasco Manufacturing slipped back to a low for the day of $4.50 with the release after trading on Thursday of nine months results to December, but headed back to $5 with 346,640 units. On the positive front, Honey Bun that released results showing a huge increase in sales and profit, hit a record high of $10. Jamaican Teas traded just 64,051 units at a new high of $6. 
Barita Investments ended trading 655,019 units but the price slipped back to $4.28, Gleaner Company saw 1,012,500 traded at $2.77, Jamaica Broilers Group traded 328,619 units but fell to $14.80, Margaritaville Turks had 102,000 trading at a new high of 13.5 US cents, Mayberry Investments had 388,873 units changing hands at $4.65 and Pulse traded at a new 52 weeks’ high of $3.95 with 385,173 shares.
Trading after 75 minutes of the market’s opening, ended with 35 securities being active amounting to 4,208,620 units. 13 stocks recorded gains and 11 declined.
The all Jamaica Composite Index dropped 3,216.04 points to 180,150.35, the JSE Market Index dived 2,877.75 points to 162,134.14, the JSE combined index dropped 2,910.04 points to 173,228.84 and the junior market index fell 21.76 points or 0.96 percent to 2,252.95 as this market continues to make recovery from recent declines.
Jamaica National lowers loan rate
With mortgage rates on the decline, the local mortgage industry has received a further boost, following Jamaica National Building Society’s (JNBS) recent announcement of a reduction in rates to 8.5 percent for new mortgage applicants residing in Jamaica and across the Diaspora.
“The 8.5% offer spans across five JNBS mortgage product lines with a maximum of $20 million. The rate applies to Home Purchases and Construction loans, both having a 40 year repayment term; as well as Equity loans, Refinance loans, and Home Improvement loans,” Tiffany Gordon, Mortgage Sales Executive of the building Society, announced.
Jamaica National was silent on rates for existing borrowers but a reduction may well occur later in the year with interest rates on treasury bills declining from as far back as 2014 and continuing into 2016 with the last Treasury bill auction in January.
10 junior stocks gained – Monday
Medical Disposables traded at new high on junior market on Monday.
The volume of 1,032,255 units changed hands, valued at $4,390,508. At the close, 1 security ended with no bid to buy and 10 securities had no stocks being offered for sale.
In trading, AMG Packaging closed trading with 32,286 units changing hands at $15, Blue Power closed with 5,000 units changing hands at $11, C2W Music closed with 9,935 units changing hands to close at 49 cents. Caribbean Cream ended with a loss of 10 cents as 23,065 shares changed hands to close at $4.75, Caribbean Flavours traded 1,600 units to end at $8.95, Caribbean Producers traded 10,700 units to gain 50 cents and close at $5.50, Consolidated Bakeries traded 58,060 shares but rose 10 cents to $1.40. Dolphin Cove traded 4,631 units but gained 3 cents to close at $15.72, General Accident fell 10 cents while trading 231,733 shares to close at $2.05, Honey Bun ended at a 52 weeks’ high of $9.15 with 1,066 units trading with a gain of 15 cents.
Jamaican Teas gained 10 cents with 26,443 shares trading to close at a $5, KLE closed with 4,400 units changing hands at $2.50, after recovering the 28 cents it lost on Friday, Lasco Distributors closed with 38,198 units trading and ended with a gain of 5 cents at $7.25. Lasco Financial rose 14 cents to close at $4 with 59,100 shares changing hands, Lasco Manufacturing ended trading 311,557 shares to close at $5, Medical Disposables closed at a new 52 weeks’ high of $3.58 with 215,200 shares trading to gain 35 cents, tTech closed at $4.75 with 8,388 shares trading and Eppley preference share traded 888 units at $6.
