Jamaica’s remittances upward climb

Remittances600x250Jamaica net remittances for May this year, grew US$10 million or 6 percent, to US$172 million, versus May 2013. The increase resulted from gross inflows growing by US$7 million to US$189 million, and a contraction in outflows.
Remittance Companies accounted for an increases of US$13 million in inflows, while Other Remittances saw a reduction of US$5.5 million, Bank of Jamaica stated in their report on remittances.
Net remittances for the year to May, amounts to US$795 million, representing growth of US$42 million or 5.6 percent, compared to 2013 period. The outturn for the review period, reflected an increase in gross inflows, and a reduction in outflows. For the period total remittance inflows were US$887 million, representing an increase of US$33 million or 3.8 percent.

Scotia Group’s profit down, future much brighter

JSharp+BNSScotia Group Jamaica made profit of $2.6 billion for the third quarter ending July, $337 million above the previous quarter ended April but $278 million below the quarter ended July 2013 and $7.4 billion for the nine months period, down from $8.2 billion last year.
The group increased bad loan provisions by $130 million to $497 million for the quarter over April this year and an Increase of $320 million over the July 2013 level. For the nine months to date provisions for loans is up $550 million to $1.376 billion.
Operating expenses have been under control with an increase of 7.3 percent for the quarter and 6.7 percent year to date but this is much higher than the 2.7 percent increase in income, net of interest cost for the quarter, and 1.4 percent increase for the nine months to July. “This is due primarily to higher staff related costs of $279 million and operating expenses of $579 million, reflecting an increase in the asset tax of $498 million, resulting from the recent increase in the rates,” management said in their report to investors.
The group would have enjoyed higher income from foreign exchange trading in 2013, as the value of the Jamaica dollar slipped more than it has done during the current period, leading to a $300 million decline for this line item. Importantly, while gross interest income was flat, at $15 billion up to April versus 2013, it has grown in the July quarter, due to the stronger loan growth.
Earnings per share (EPS) for the nine months is $2.36 compared to $2.64 for the same period last year and seems set to report $3.45 for the full year ending October and $4.50 for the next fiscal year.
The Return on Average Equity was 13.74 percent, down from 16.67 percent last year.
Scotia approved a third interim dividend of 40 cents per stock unit payable on October 16.
Total assets increased year over year by $12.5 billion or 3.2 percent to $401 billion, due primarily to growth in the loan portfolio of $13.6 billion. Loans grew by 10 percent since July 2013, to hit $144.6 billion. More importantly, while loans grew only by $2 billion up to April from October last year, it jumped $8 billion in the latest quarter, a 20 percent increase, annualised, putting it on track for a big surge in lending going forward if maintained, and strong growth in profits, as well. Deposit declined marginally to $197 billion at the same time. The stock remains Buy Rated.

Trade balance maintains improvement to May

Jamaica’s trade deficit narrowed between January and May this year, compared to the same period in 2013 by US$125 to US$1.78 billion. For the same period last year, the trade deficit narrowed by just US$36 million.
KingstonWharves150x150The 2014 improvement emanated from imports of US$2.4 billion, a decrease of US$224 million or 8.5 percent and exports of US$616 million, down from US$715 million for the comparable 2013 period. The value of exports fell by US$99 million or 13.9 percent. Decline in fuel, food and beverage imports accounted for the bulk of the decline and alumina exports accounted for 14 percent of the export decline and non-traditional exports the rest.
Imports| Mineral Fuels import amounted to US$856 million, compared to the US$966 million for the January to May 2013 period. Imports of Raw Materials and Intermediate Goods fell to US$1.45 billion, a decrease of US$265 million or 15.4 percent. Imports of Other Fuel and Lubricants with the US$513 million was lower than the US$576 million recorded for the similar period of 2013, with a decline of US$63 million or 11 percent. Crude Oil imports at US$342 million, moved from US$389 million in the similar period of 2013, a fall of US$47 million or 12 percent.
Industrial supplies declined by US$146 million to US$350 million and Food and Beverages fell from US$146 million in the 2013 period to US$129 million. Capital Goods excluding Motor Cars increased moving from US$203 million to US$218 million in the current January to May 2014 period. Machinery and Equipment was the main contributor to the increase in this group moving up by 18.4 percent to US$121 million.
Traditional exports declined by 4.7 percent to US$327 million for review period versus the previous 2013 period due mainly to a decline in Alumina of US$13.5 million. Non-traditional exports decreased during the January to May 2014 by US$81 million or 23.7 percent to US$259.9 million. Statistical Institute of Jamaica (Statin) who compiled the data did not state which item accounted for the largest portion of the decline. Previous information indicate that export of ethanol fell sharply due to low demand in the USA market for the product.

What’s up with Grace’s stock?

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Grace HQAt the close of trading on Monday, there were two lots of Grace’s stock on offer on the Jamaican Stock Market, 9,360 units at $63 and 200,000 at $65.
Over at the Trinidad Stock Exchange, the bid on the stock was the same as the last sale price, at TT$3.55 which equates to J$63, but only for 886 units. There was an offer to sell 12,300 units at TT$3.70 or J$65.50. Could the stock be set to jump? Probably.
Grace has been in the news recently with rise of 21 percent in profit for the six months to June and the purchase of a USA trading operation, La Fe Foods with revenues of US$80 million per annum, that should add nearly $9 billion to revenues in a full year.
Grace expects much benefit to flow from this acquisition, as La Fe Foods services the Hispanic market with a large population that should allow some of Grace’s branded products to find new markets. In addition, the acquisition will allow some products with inadequate margins, to be sold to a non-related distributor, to be exported by Grace to the USA market.

Board resignations at Carib Cement

caribcementlogo150X150News just out from the Jamaica Stock Exchange, now confirm that Caribbean Cement Company has advised that Brian Young – the company’s Chairman, Judith Robinson – Chairman – Board Audit Committee and Bevon Francis – Member of the Audit Committee have resigned from the Board of Directors of Caribbean Cement Company effective August 19, 2014.
No mention is made of Rollin Bertrand, the former CEO of Trinidad Cement in the release. IC Insider expects that at some time, his tenure will come to an end on the Jamaican board, as well. The release did not state who the replacements are but as indicated in an earlier story IC Insider expects Christopher Dehring to head that board. IC Insider expects that there will be changes at the executive level in keeping with the removal of Bertrand as CEO of the group. Persons seen to be loyal to him will most likely be shifted from key position.

Major management changes likely at Carib Cement

caribcementlogo280x150The shareholders revolt that effectively ousted directors and Chief Executive officer at Trinidad Cement, earlier this week, is likely to have far reaching impact at the company’s subsidiary, Caribbean Cement.
The changes in Trinidad, saw the non-appointment of Caribbean Cement chairman Brian Young, who seems unlikely to win the favours of the new board and is hardly likely to see the new board in Trinidad accommodating him in the critical chairmanship position in Jamaica. Bevan Francis and former CEO of the group Rollin Bertrand also serve of the Jamaican board and are not included in the new board composition at the group level. Christopher Dehring who is now on the TCL board, may well be the man tipped to head the local board, when the time comes for the changes locally. Such changes cannot be far off as the new management in Trinidad, try to unearth whatever facts they their mission to determine the true state of health of the group, may uncover. Judith Robinson who is a former partner of Brian Young at Price Waterhouse could well be getting the axe as well.

Shareholders’ revolt oust directors at Trinidad Cement

TCement_280x150 Shareholders revolt ousted directors and Chief Executive officer at Trinidad Cement, at a special meeting on August 19th called to make changes to the directorship.
The former directors of the company decided to fight a battle that they could not win in an attempt to stave off the appointment of some new directors and removal of others. In December last year, IC Insider in an article on the debacle between some disgruntled minority shareholders and Trinidad Cement Limited (TCL) indicated, that it’s a fight that the directors were not likely to win. The effect of their intransience is a costly legal battle in which has cost the company unnecessarily.
IC Insider went on to say “in a battle with some local shareholders who want representation on the company’s board of directors and requested that the annual general meeting that should have been held on Friday July 12, 2013 to be put off pending court hearing as to whether a resolution to nominate them should be put on the agenda for consideration. The request by the minority shareholders to seek to nominate directors and have their names included as such on the notice calling the annual general meeting is reasonable, but that would have to be done ahead of the notice period which is usually 21 days ahead of the meeting. Information from the Guardian newspaper suggest that the company was formally informed of the request well ahead of the deadline date and the shareholders seem well within their right to have sought to prevent the AGM from going ahead without their names being put on. In all probability, the minority shareholders will win their initial battle with the company but it’s left to be seen if they will succeed at the general meeting of 2013 which now seems likely to be held in 2014 instead.”
At the special meeting called to change directors following a failed attempt to get the courts to block such a meeting the disgruntled shareholders who managed to garner more than 50 percent of the votes ousted to dissident directors including the CEO. The changes are likely to have repercussion of the board of Caribbean Cement as subsidiary of TCL. Bryan Young Chairs that board and it would be hard to see the new board accommodating him in the critical chairmanship position in Jamaica, Francis and Bertrand also serves of the Jamaican board.
Prior to the meeting Andy Bhajan, Rollin Bertrand, Brian Yopung, Leonard, Carlos Hee Houngand Bevon Francis resinged. At the meeting Wilfred Espinet, Alsion Lewis, Christopher Drehring, Michael Glenn Hamlel-Smith, Francisco Aguilera Calos Alberto and Nigel Edwards wefre appointe ddirectors.
The move should no pave the way for the legal battle now in the courts to be withdrawn and put the company in a psoitioon to hold the general meetings for 2013 and 2014 which were postpone pending the outcome of the court action.

Watch this one – Big inside trades at Jamaica Broilers

Jamaica-BroilersEthanolPlant280x150Investors should be keenly watching development at Jamaica Broilers. The company recently, advised the Jamaica Stock Exchange that senior management and directors purchased a total of 7,854,620 shares on August 15 and a Director purchased 237,500 shares on August 14, 2014.
The total cost of these trades would be in the order of $36.5 million. More significantly, there has not been any trade of this magnitude for years by insiders.
The trades may be carrying coded messages to the wider investing public as to what may be happening to profit. On July 30, this year, a director sold 500,000 shares, and a director purchased 574,651 of the company’s shares on March 28 and back in 2013 a related party sold 1,500,000 of the company’s shares to another related party on November 14.
A check with the Jamaica Stock Exchange shows the only other year recently that there was major trading in the stock by insiders was back in 2012, when seven Senior Managers purchased a total of 8,774,697 of the group’s shares on September 14.
The other times of major buying of the stock by managers and directors, was between April 2006 and April 2008. The trades in late 2007 triggered some outcry by investors which led to the company making a public statement in connection with the trades.
At the time of major trading of the shares by insiders in 2007, the company released a report to the Jamaica Stock Exchange around October 4, which stated that “Shares in Jamaica Broilers Group were traded by some directors and senior management in September 2007 during the time window which is allowed by the Jamaica Stock Exchange providing there is no material event requiring disclosure. We wish to State unequivocally that, when these shares were traded, there were no inside knowledge of any circumstances that were no available to the general public.
When these trades took place the company was of the view that – based on a sale contract with affixed selling price – good results would have been realised for the second quarter, irrespective of the reduction in world market prices for fuel graded ethanol.”
IC Insider projects that profits for the current year should hit a record $1.25 per share or $1.5 billion up from 79 cents per share or $950 million for the year to April 2013. The next set of results are due around the 8 of September and will be for the first quarter to July.

Jamaica’s Inflation jumps for July

inflationahead280x150The inflation rate for July 2014 jumped by 1.4 percent, the highest rate recorded since September 2013, the Statistical Institute of Jamaica (Statin) reported.
According to the report put out by the body charged by the Government of Jamaica with data collection, Statin, “contributing to the rise in inflation, were increases in the cost of some agricultural products as the drought affecting most of the island, resulting in a shortage in supply. The highest weighted division ‘Food and Non-Alcoholic Beverages’ increased by 2.0 percent with the classes ‘Vegetables and Starchy Foods’ moving up by 6.3 per cent and ‘Fruit’ by 5.8 percent.”
Since the start of the year the monthly inflation rates are Feb 0.1 percent, March 1.1 percent, April, negative 0.3 percent, May 1.0 percent, June 0.1 percent and July 1.4 percent. The movement in the index up to June this year is for an inflation rate of 2.5 percent, with the July included, the year to date is now at 3.9 percent. The impact that drought is said to have on the rate could subside in the latter months of the year thus allowing food prices to moderate and bring down the monthly rate of increase going forward.

Massy Holdings rebranding cost TT$59M

Trinidad based, Massy Holdings rebranding and change of name, from Neal & Massy Holdings, to Massy Holdings has cost the group TT$59 million according to information included in the group’s nine months results to June.
Masst LogoThe amount helped pulled the net profit for the quarter below that of the similar period in 2013, from $128 million to $99 million. Most of the companies within the sprawling group now carry the Massy name except in Guyana and St Lucia, the company stated in their report to shareholders.
The company’s former name came out of the merging of two companies operated by their founders, Harry Neal and Charles Massy that carried the individual names which were combined to form Neal & Massy. According the group’s 2013 annual report “In 1933, rising to the challenges of survival and growth, two entities concluded an historic merger, and became one – Neal & Massy Engineering Company Limited. They were responding both to world economic conditions of the Great Depression, and to the promptings of shrewd local bankers.”
According to information accompanying the nine months results, half of the rebranding cost relates to signage and painting for all Massy buildings, many of which were due for a face lift. The rest of the cost relate professional services training materials, advertising and events.