Grace Kennedy is advising that the terms to dispose of their holdings in Hardware and Lumber (H&L) include a maximum price of J$18.50 per ordinary share subject to conditions and with completion anticipated by the end of July.
The above price is just around book value at the end of March this year and would give Grace Kennedy who owns 58.1 percent of the 80.842 million shares in issue, $845 million.
Don Wehby CEO of Grace indicated that the agreement is conditional and stated that “GraceKennedy is looking forward to the conclusion of the transaction in a timely manner and will communicate further as soon as it is finalized.” He reiterated that Grace Kennedy’s decision to sell its shares in H&L was a strategic one, having regard to its core strategy of expansion in the foods and financial services sectors. He added, “We feel very positive about the continued growth of H&L under the prospective new owners who have signalled that they are excited about the possibilities for the future”.
H&L currently comprises two separate divisions – Rapid True Value local supplier of hardware and home improvement products, and the Agro Grace business, local wholesaler and retailer of agricultural products.
There are currently 10 Rapid True Value outlets across Jamaica, along with six Agro Grace Retail Centres. The company is headquartered at 697 Spanish Town Road in Kingston.
Greystone Equity Partners Inc. the proposed purchaser is a Caribbean based and Caribbean focused private equity firm with a stated strong commitment to the Caribbean.
H&L reported profit in 2014 of $217 million or $2.69 per share. Profit after tax for the three-month ended March, 2015 was $34.5 million, 14.5 percent less than the $40.4 million for the same period last year and earnings of 43 cents per stock unit, compared to 50 cents for the comparative period in 2014 after revenues fell 4.5 percent to $1.73 billion.
$18.50 per share max price for H&L
Treasury bill rates fall
At the latest auction for the issue of Treasury bills held today, rates on the 28 days, the 91 days and 182 days bills declined from ay auction, continuing the decent starting March last year.
The latest rate on the 91 days instrument is now at 6.48 down from 6.57 percent at the May auction and the 182 days is now at 6.63 percent, a fall from 6.7 percent. The 28 days instrument ended with a rate of 6.23 percent down from 6.27 percent in May. The rates are far off from the BOJ CD rate of 5.25 percent.
A total of $1.2 billion was available for the public to bid on, split equally between the three issues. The 28 days offering attracted $475 million the 91 days attracted $602 million and the 182 days instrument attracted $828 million. With the interest rates on some of the Jamaican government’s bonds tied to Treasury bill rates, the latest development of lower rates will mean lower cost for the variable rate bonds.
With inflation looking as if it could end 2015 around 3.5 percent Bank of Jamaica may have to intervene by lowering the CD rate to speed up the fall in Treasury bill rates.
Jamaica’s Inflation flat May up 0.5%
Price increases in Jamaica since the start of this year is zero, measured by the All Jamaica Consumer Price Index but it increased by 0.5 percent for May over April this year, the Statistical Institute of Jamaica report shows.
Inflation since May last year is put at 4 percent and was helped by declines in the price of petroleum late in 2014, resulting in just 0.1 percent inflation in October and negative inflation from November to February.
The divisions contributing significantly to the upward movement in the index were Food and Non-Alcoholic Beverages influenced by mainly by higher prices for vegetables and starchy foods increased with a 0.5 percent increase.
Increased fuel prices added to inflation in May
Increased fuel prices added to inflation in May[/caption]Other divisions recording increases were: Alcoholic Beverages and Tobacco 0.7 percent Clothing and Footwear 0.2 percent, Furnishings, Household Equipment and Routine Household Maintenance 0.2 percent, Health 0.2 percent, Recreation and Culture 0.1 percent, Restaurants and Accommodation Services 0.1 percent, Miscellaneous Goods and Services 0.3 percent.
Tempering the categories with increases was a fall of 1.7 percent in the index for the group Water Supply and Miscellaneous Services Related to the Dwelling.
Junior market closes at new high
Dolphin Cove was one of 6 stocks ending at 52 weeks’ high
At the close of the market, there were 4 stocks with bids higher than their last selling prices and 3 with lower offers. The junior market ended with 5 securities closing with no bids to buy and 9 securities that had no stocks being offered for sale.
Stocks trading in the junior market include, Access Financial with just 100 shares changing hands, to close lower by 25 cents at $16.75, Cargo Handlers finishing with 500 units to close with a gain of 51 cents, to a new all-time high of $23.51. Caribbean Cream with 435,000 shares trading at an all-time high of $1.55, gained 20 cents, Dolphin Cove finished trading with 1,000 shares to closed at an all-time high of $11, to gain 75 cents, Honey Bun concluded trading with 20,000 shares changing hands to close 25 cents higher at a 52 weeks’ high of $2.95.
Lasco Distributors traded 23,150 shares at $1.65, Lasco Financial Services finished trading with 495,970 units, with the price rising 4 cents to $1.95. Lasco Manufacturing traded 79,899 shares at $1.45, Paramount Trading ended with just 1,000 shares changing hands with an increase of 54 cents to $4.80, a new all-time high. The stock closed with a bid to buy 49,500 units at $5 and Eppley 9.5% preference share closed trading with 4,000 units and put on just 1 cent to $6.01 to new high, with a 1 cent gain.
Carreras pays $2 Mayberry 20 cents
Carreras declared an interim dividend of two dollars ($2) per share unit, payable on June 25, 2015 to shareholders on record as at June 11, 2015. The X-date is June 9. The company paid an interim dividend of $1.60 per share payable on March 12, 2015
Dividends paid prior to the one in March are, $1 per stock on December 18, and an interim dividend of $1.20 per stock unit on December 11, 2014. In September, last year Carreras paid an interim dividend of $1.20 per stock unit, $1.75 per stock unit was paid on June 26. A special capital cash distribution of $1.34 per stock unit was paid on July 31.
Mayberry Investments declared a dividend of twenty cents per share (20 cents), payable on June 17, 2015 to shareholders on record as at June 10, 2015. The X-date is June 8. The company last paid a dividend of 12 cents per share on June 18, 2014.
Board of Directors of JMMB Group will convene a meeting on Monday June 1, 2015 to consider an interim dividend payment to ordinary shareholders.
Jamaica Money Market Brokers the forerunner to JMMB Group last paid a dividend of 16 cents per ordinary on December 16, 2014, prior to that the company paid a dividend of 17 cents per ordinary share on June 26, last year.
BOJ may ease monetary policy
Bank of Jamaica may ease monetary policy in the context of a slower rate of depreciation of the Jamaican dollar, the precipitous fall in oil prices and with inflation expectations fallen sharply.
The bank stated that notwithstanding the sharp fall in inflation, expectations by the business community were above the inflation outturn at end-March 2015, as well as the Bank’s projections for the near-term. The bank went on to state that with the downward adjustment in inflation expectation, in conjunction with favourable developments in the macro financial environment, will allow the Bank to pursue an even more accommodative stance than they have done so far. Notably, developments in the international economy including a faster than projected reversal of oil prices and the timing of tightening of monetary policy in advanced economies will increasingly influence the direction of domestic monetary policy.
“For the March quarter, the Bank’s monetary policy stance remained generally accommodative while being consistent with achieving the monetary targets under the Extended Fund Facility (EFF) supported programme”, the governor reported. In particular, the Bank purchased net amounts of foreign exchange from the market and introduced a 3-month lending facility (Occasional Term Repo Operation), which enhanced liquidity assurance. In the context of the outturns for these
Macro-economic variables and the outlook for inflation over the near-term, the Bank lowered its policy rate by 25 bps to 5.50 per cent on 17 April 2015. This policy action was also consistent with declines in inflation expectations and the country’s risk premium.
Growth of possible 1% in Q1
Real growth in the Jamaican economy (GDP) is estimated to have increased in the March 2015 quarter between 0.0 to 1.0 percent, following two consecutive quarters of contraction, Bank of Jamaica’s governor, Brian Wynter disclosed at the bank’s quarterly press briefing today.
The estimated outturn for the quarter mainly reflected increases in tourism activity, domestic agriculture and Transport, Storage & Communication.
For Fiscal year 2015/16, real GDP is forecasted to expand between 1.0 to 2.0 percent. Agriculture, Forestry & Fishing, Hotels & Restaurants and Transport,
Agriculture is expected to contribute in Jamaica’s growth in the second quarter
NCB Raises US$250m
NCB Financial Montego Bay branch
National Commercial Bank (NCB) has advised that they have successfully completed the securitization transaction.
The transaction closed on May 18, 2015 and generated financing of US$250,000,000 via issuance of notes backed by future flows derived from international merchant voucher receivables acquired by NCBJ in Jamaica.
The notes were issued by Jamaica Merchant Voucher Receivables Limited, a special purpose vehicle incorporated under the laws of the Cayman Islands, in private placement within the United States to qualified institutional buyers. The notes were assessed by Fitch, Inc. and achieved a BB+ rating, the release stated.
The notes have not been registered under the Securities Act of Jamaica and may not be offered or sold in Jamaica without registration or an applicable exemption under the said Securities Act and regulations
Jamaica’s 2015 inflation remains tame
The inflation rate, increased by a mere 0.2 percent in April 2015 while the year-to-date inflation rate for April 2015 is minus 0.5 percent, the point-to-point 4.4 percent.
Statin said the lower increase for April is due mainly to upward movements in the index for the divisions of Food and Non-Alcoholic Beverages 0.5 percent, Alcoholic Beverages and Tobacco 1.3 percent and Transport 1.1 percent. The fall in prices the group Electricity, Gas and Other Fuels’ which fell by 4.6 percent. This resulted mainly from lower fuel rates, as well as an appreciation of the Jamaican dollar.
The calendar The other divisions that recorded increases in the All Jamaica ‘All Divisions’ index were: ‘Clothing and Footwear’ 0.4 percent, ‘Furnishings, Household Equipment and Routine Household Maintenance’ 0.4 percent, ‘Health’ 0.2 percent, percent, ‘Recreation and Culture’ 0.3 percent, ‘Restaurants and Accommodation Services’ 0.2 percent, and ‘Miscellaneous Goods and Services’ 0.3 percent.
Junior market at new record high
The junior market that has been lagging the performance of the main market, recorded 
a new high on Monday and in the first half an hour of trading, surged to yet another new high at 863.50 with a gain of 19.20 points. Eleven junior market stocks have traded so far, with new 52 weeks highs being reached by 4 of them with Access Financial trading 37,672 units at $15.10, Caribbean Producers with 181,547 at $3 and Lasco Manufacturing 63,000 units at $1.34.
The main market is up as well, with new 52 weeks high being reached by JMMB Group while trading at $9.50, but with 12,680 shares, Scotia Group is back at $27. Carib Cement traded 391,598 units at $5.
A total of 27 companies have traded so far in the overall market with an hour just ended. The main market indices are up with the All Jamaica Composite index now at 109,218.56 with an increase of 137.28 and the JSE market index at 98,833.35 an increase so far of 122.79 points. The combined index jumped 313.39 to 101,022.09.
