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.
Eppley seeks $317m from right issue
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.
Market activity picked up on Tuesday
Main market of the Jamaica Stock Exchange closed with moderate gains in the indices on Tuesday with trading volumes being light. Market activities picked up from the 33 securities that traded on Monday to close with 43 changing hands in all market segments of which 22 securities in the combined markets gained and 14 declined.
Eight stocks closed at 52 weeks’ highs and one traded at intraday highs as 4,319,632 units valued at $43,703,774 changed hands in all markets. The junior market accounted for 1,200,794 units changed hands, valued at $5,249,310.
The JSE Market Index advanced by 147.39 points to 159,472.83 the all Jamaica Composite Index closed with a gain of 164.72 points to end at 177,176.18 and the JSE combined index rose 175.31 points to close at 170,513.05.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator reading was 8 stocks with bids higher than their last selling prices and 2 with lower offers.
At the end of the market activities, Berger Paints gained 29 cents to end at $3.60 as 103,176 units traded, Cable and Wireless ended with 268,670 units changing hands to close with a gain of 1 cent at $1.57, Caribbean Cement rose $1 to close at $25, with 54,507 shares changing hands. Carreras traded 86,825 shares at $62.50, Gleaner traded 10,560 units with a loss of 7 cents at $2.60, Grace Kennedy jumped $1.49 and closed at $83.49, with 13,200 units changing hands. Jamaica Broilers rose by 49 cents and closed at 52 weeks’ high of $14 with 561,626 shares changing hands. Jamaica Producers lost $2 to end at $29 with 15,812 shares changing hands, Jamaica Stock Exchange gained 3 cents to close at $19.70 while trading 199,677 shares, JMMB Group traded 112,847 units to end with a rise of 28 cents at $11. Kingston Properties traded 79,853 shares but lost 24 cents to end at $6.80, Kingston Wharves traded 11,310 units to close with a fall of 1 cent at $11.14, Margaritaville Turks traded 27,000 shares at 11.05 US cents with a rise of 0.05 cents. Mayberry Investments traded 201,632 shares and fell 35 cents to close at $4.50. 
National Commercial Bank traded with a rise of $1.75 to close at $41.75, with 45,227 units changing hands, Pan Jamaican Investment gained $2 with 10,830 units changing hands to close at a 52 weeks’ high of $98, Pulse Investments gained 10 cents to end at $2.60 while trading 19,848 shares. Sagicor Group fell by 5 cents to close at $23 with 189,997 units changing hands, Sagicor Real Estate Fund traded 74,254 shares but the price rose 1 cent to $11.60, Scotia Group had 460,994 shares changing hands to close with a loss of $1.50 at $30.50, Seprod had 10,000 units changing hands at $20, for a rise of $1. Supreme Ventures closed at a 52 weeks’ high of $6.49 to record a gain of $1.49 with 223,971 units changing hands, the stock traded at an all-time high of $6.90 during the day. Proven Investments ordinary share traded 184,364 units at 22 US cents, JMMB 7.5% preference share traded 152,692 units at $2.25 after rising 15 cents and Proven Investments preference share traded 77,800 units at $5.
T-Bill rate slide continues
Interest rates on the 91 and 182 days Treasury bill instruments fell in the latest auction of the short-term government fund raising issues. Rates on the 28 days instrument auctioned on January 13, rose as the amount chasing the $400 million on offer fell below the offered amount with $391,812,700 applied for, with the rate rising from 5.97% to 6.04%. The 91 days instrument saw a slight drop in the rate below 6 percent for the second consecutive month with an average rate of 5.94%, a fall from 5.96% with $636,369,700 chasing the amount of $400 million on offer and the 182 days instrument fell from 6.04% to 5.94% with applications amounting to $872,369,200 for the $400 million on offer.
Inflation lowest in 32 years in Jamaica
Fuel prices at the pumps in May 2015.
Prices in Jamaica rose during 2015 by their lowest in 32 years. One has to go back to 1983 to find a lower rate of increase with the rate for that year was up by 2.964 percent.
Last year prices increased 3.66 percent with the rate of increase in December being 0.2 percent. A major factor in the deceleration in average prices, is the sharp fall in the price of petroleum prices on the world market as well as some other imported commodities. The decline would have been even lower but for the fact the devaluation of the Jamaican dollar would have pushed up the prices of some goods or prevented some from falling even lower than they did. in addition increased taxation also prevented prices from falling further.
In 2015, the Jamaican dollar lost 5 percent of its value with about half of the increase feeding into inflation.
Junior index jumps sharply
Lasco Distributors shot up to $9 in early trading with 247,586 shares in spirited trading in the overall market with 22 securities accounting for 594,059 units.
The Lasco share price movement is the main factor pushing the junior index to gain 130.74 or 6.25 percent to hit 2,223.11 points. The company made a claim for US$ 300 million for damages against Pfizer for losses incurred from halting sales of high blood pressure drug.
The combined index was pushed to 1,869.58 points within 15 minutes of trading. The JSE index is up 730.34 points to 157,453.71. The bid on tTech is up to $4 to buy 7,395 shares. Radio Jamaica traded 95,654 units at $5.50.
Shareholder pumps millions into KLE
KLE closed at a 52 weeks’ high in closing at $1.83 on Tuesday.
KLE Group operators of the Famous nightclub and Usain Bolt Tracks & Records received US$650,000 loan from its largest shareholder Joe Bogdanovich this financial year, IC Insider understands as the music promoter deepens his interest in the struggling junior market entertainment company.
KLE was listed in late 2012 after raising $90 million in an initial public offering.
Bogdanovich acquired 23 per cent of KLE Group at market value between $0.90 and $1 on the Jamaica Stock Exchange in 2014 when two directors exited the company. The loan listed on the books as other loan at J$73.59 million, represents more than four-fifths of its total loans payable at $87.6 million.
The loan propped up the cash position at the company to record cashflow and equivalents at $30 million in December 2014 but it now returned to a cashflow deficit of $6.9 million at September 2025. The loan was in part utilised to pay down debt, particularly trade payables but left very costly statutory debts at higher levels than before at $21 million, as well as credit card debt at $11 million, with the latter increasing from $2.5 million in 2014.
The company, however, continues to operate with huge negative working capital and negative equity capital of $8 million with accumulated deficit at $130 million.
On the positive side, the company made a rare profit of $2.6 million or 2.8 cents per share from flat revenues of $48.3 million, for the three months ending September 2015 which reversed the $8 million loss for the corresponding quarter a year earlier. Over the nine months, it however, recorded a $32 million loss. The quarterly profit came as the company cut administrative and interest cost sharply by $20 million, partially by limiting the number of days its operates the Portmore based Famous Nightclub. If the bottom-line trend were to continue, the struggling group could end up with profit of $12 million in a full year, and although small, would represent a major turnaround for a company that has been bleeding badly for the past 3.5 years, with losses amounting $139 million during that period.
The group continued its restructuring exercise from 2014 with base operating costs reduced to reflect the leaner organization. Further changes will be made to ensure total alignment with the company’s portfolio and its strategic direction. The Famous operating model was changed in August from a weekly 3 night per week club to a promoter model which saw the location being marketed to promoters as a venue. This has allowed for significant reduction in operating costs with a major shift from fixed to variable expenses,” stated management in the financials adding that it continues plans to franchise its Tracks & Records restaurants globally.
Since the release of the results were released on the December 2, last year, the stock has climbed from 73 cents to trade at $1.87 after bottoming at 43 cents in October.
2 new listings for JSE on Thursday
The junior market will have two new listings when trading commences on Thursday, with the technology based tTech and the air conditioners – CAC 2000 being added to the fledgling market for up and coming small companies, following successful IPO offerings. The listings were approved today by the Jamaica Stock Exchange.
IC Insider expects tTech to trade at an attractive premium to the IPO price of $2.50 based on the level of oversubscription and the low valuation of the IPO price, while CAC should trade close to its offer price of $4.85, based on the high valuation placed on the IPO price.
Both companies went to the market on December 16 to raise additional capital and obtained all they went for. tTech which went for $50 million with 25.65 million shares but the issue attracted 289 applications, valued at approximately $172.395 million and CAC was over by 10 percent in excess of the 29,032,258 ordinary shares on offer to bring in $120,545,327 that was targeted.
The listings will lift the junior market to 29 securities with 25 of them being ordinary shares.