Rates of Government of Jamaica Treasury bills which have been on the decline since March 2014 is down in the latest issue held on November 18, for the 182 and 28 day instruments but rose slightly on the 91 days bills.
Rates fell 13 basis points on the 182 days instruments the same as in October and the 28 day instrument declined 28.5 basis points to 6.09 percent but the 91 days rose 2.5 basis points to 6.15 percent.
At the latest auction, the 28 days Treasury bill average rate came out at 5.91 percent, down from 6.195 percent at October auction.
A total of $707,851,300 chased the $400 million on offer for the 28 days bills, $435 million went after the $400 million on offer for the 90 days instruments and $1.2 billion went after the $400 million offered for 182 days.
The fall in the rates have had a positive impact with the stock market and should continue to impact the fortunes of the market.
Liberty Global strikes C&WC Plc deal
Cable & Wireless HQ
John Malone’s Liberty Global Plc agreed to buy Cable & Wireless Communications Plc in a cash-and-stock transaction valued at 3.5 billion pounds ($5.3 billion). Including the Special Dividend, the transaction values CWC at approximately $8.2 billion, including debt CWC Plc said in a release on the deal. The transaction is expected to complete by the calendar second quarter of 2016.
“The deal represents a multiple of 10.7 times Cable & Wireless Communications’ adjusted annual earnings before interest, depreciation, taxes and amortization, (EBITDA) after taking into consideration cost synergies, according to a statement. Cable & Wireless’ shareholders will get a special 3 pence a share dividend at the deal’s close,” Bloomberg Business reported.
The report did not indicate what is planned with the Jamaican company Cable & Wireless Jamaica with nearly 20 percent minority ownership. IC Insider.com Has earlier suggested that the local operation could be valued around $3 using (EBITDA) measure.
NCB hikes dividend as Q4 profit rises
NCB reports improved Q4 profit but yearly amount is flat
National Commercial Bank hiked their dividend payments for 2015 by 11 in announcing the payment of a final dividend of 85 cents per share, to be paid December 11 with the record date of November 27. NCB paid three interim dividends of 45 cents each, during 2015, the latest brings the total to $2.20 and is up from $1.98 in 2014. The final payment for 2014 was 96 cents with dividend payments amounting to 35 cents per share in August and May and 32 cents per share on February.
The dividends for 2015, represent a yield of 12 percent on the price of the stock at the start of the year of $18.50.
NCB reported profit of $12.3 billion for the year ending September slightly lower than the banking group’s revised 2014 profit of $12.33 billion which is revised upward from $11.6 billion.
For the final quarter profit grew 12 percent to end at $3.75 billion for earnings per share of $1.52 from $3.36 billion in 2014. For the full year earnings per share amounts to $5. Pretax profit for the quarter is up 17 percent to $4.8 billion.
The result for 2014 was revised upward from for earnings per share of $4.73 to $5.01. Earnings should move to the region of $6 per share in 2016.
The 2014 results have in $650 million relating to gains on acquisition of a subsidiary and sale of associated company which makes the 2015 performance much better than it appears. Credit losses fell from $2.3 billion in 2014 to $1.79 billion in 2015 and for the quarter $387 million versus $987 million in 2014.
NCB made decent progress in growing income and keeping cost under control. Loans grew by 5 percent year over year to reach $165 billion, growing this asset will allow for continued growth profitability. The group also enjoyed growth in investment securities and pledged assets which moved from $265 billion to $$276 billion. Customers’ deposits and repurchase agreements that helps to fund asset growth, moved from $337 billion to $328 billion.
NCB shares are listed on the Jamaica Stock Exchange and last traded at $34.50.
Juniors up 103% for 2015 to date
Lasco Manufacturing drink factory, which help push profit & the stock to new highs on Tuesday.
The market ended with 5 stocks closing at new 52 weeks’ high and 2 at an intraday high, while 2 securities ended with no bids to buy and 10 had no stocks being offered for sale. A total of 6 stocks closed with bids higher than the last traded prices and 2 closed with lower offers.
In trading, Cargo Handlers closed at $35 with 2,730 units changing hands to end at a new 52 weeks’ high of $35 while gaining $2, Caribbean Cream with 60,000 shares changing hands ended at $3.95 but traded for a new 52 weeks’ high. Caribbean Flavours gained 10 cents while trading 485,543 units to end at $4.50, for a new 52 weeks’ high, Caribbean Producers traded 60,000 units for a rise of 10 cents to end at $3, Consolidated Bakeries traded 15,000 shares, to end at $1.80 with a loss of 10 cents.
Derrimon Trading rose 10 cents to end at a new high of $3.10, with only 12,000 units changing hands, General Accident ended with 1,149,000 shares changing hands, in closing at $1.90, after falling 10 cents, Jamaican Teas had 50,000 shares trading to close at $3.90, Knutsford Express had 5,780 shares changing hands at $7 after rising by 50 cents to close at a new 52 weeks’ high. Lasco Distributors ended with 738,362 shares changing hands and closed with a gain of 20 cents at $3.40. Lasco Financial closed with a 15 cents increase at $2.45 after trading earlier at $2.71, with a total of 954,116 shares changed hands and Lasco Manufacturing ended at a new all-time closing high of $3.90 with 663,465 shares changing hands with a rise of 50 cents.
GOJ rakes in $5b more tax revenues
Government of Jamaica raked in 2.6 percent more tax revenues amounting to $4.9 billion over the $190 billion budgeted to reach $195 billion. Grants fell $3 billion short of budget of $6 billion, and non tax revenues by $800 million resulting in nearly half a billion excess revenue over budget, for the nine months to September.
At the end of the period the fiscal deficit projected, was cut in half, with a deficit of $14 billion. The primary surplus measured in at $51 billion some $11 billion better than planned.
The improved revenues flows came mainly from corporate profit tax of $1.9 billion, SCT on local goods $1 billion, tax on interest $2.6 billion, GCT and SCT on imports of $2 billion. PAYE was off by $474 million, telephone tax $400 million, custom duty $800 million and bauxite levy $500 million.
On the expenditure side, recurrent payments are down by $7.3 billion fueled mainly by $3.4 billion reduction in interest payments and $3.9 million in wages. Capital expenditure is under spent by $6.5 billion.
Lasco Distributors blow out profits
Lasco Distributors with responsibility to distribute “I Cool” drink.
The Gross profit for the period was S1.1 billion, an increase of $299 million or 36 percent over the prior year. The Gross Profit margin for the quarter was $628 million, or 32 percent over the same period last year. Gross profit margin for the august 2015 quarter is 17.26 percent versus 17.5 percent in 2014 and year to date 16.2 percent in 2015 and 16.28 percent in 2014.
The huge gain came from increased revenues of 34 percent for the quarter, amounting to $6.95 billion and 36 percent for the six months of $3.64 billion.
“This growth was driven mainly by contributions from our iCool and Unilever lines of business, both of which have been doing very well”, Peter Chin, Managing Director reported to shareholders in the directors’ report accompanying the financial data.
An interesting element of the results is the 10 percent growth in revenue over the June quarter a continuation of the quarter over quarter growth evident from late in 2014 with an average of 8 percent for the last three quarters.
Earnings per stock for the six months amount to 11 cents and 7 cents for the quarter. IC Insider projects profit of 34 cents for the current year and 50 cents for the year to March 2017.
Cost were held well below the growth in revenues with Operating Expenses in the latest quarter rising to $396 million from $377 in 2014 and for the six months this year the company incurred $779 million versus $658 million in 2014 for a rise of 18 percent.
Cash flow from operations increased by 94 percent to $391 million from $202 million for the similar period to September 2014 swelling Cash and Equivalents at the end of the Period to $904,043 compared with $191,277.
The company’s shares are listed on the junior market of the Jamaica Stock Exchange. Its principal activity is the distribution of pharmaceutical and consumable items, ii distributes all of Lasco Manufacturing’s products locally.
The stock may be considered fully priced currently with a PE of 10 being one of the higher priced junior market stocks, but with strong growth expected and lower interest rates to come, investors with a long term time horizon may want to accumulate from now, bearing in mind the limited supply available.
All Jamaica at new record high
The JSE all Jamaica Composite index is at a new all-time high of 139,537.61 at 11.13am on Monday morning after gaining 2,027.33 points, breaking the old record close of 138,917.59 set on 24th of January 2005.
The rise in the price of Cable & Wireless shares by 20 cents or 24.4 percent for the day would be the main contributor to the rise. Others to contribute would be Caribbean Cement up $1.72 to $16.72, Mayberry Investments up 50 cents to $3.50 and Sagicor Real Estate X Fund up $1.05 to $9.20.
D&G offer pushes JSE, juniors at new high
Activity on the Jamaica Stock Exchange on Wednesday morning has been slow but the news dominating the market is a J$31 offer proposed by Heineken to buy out all the shares in Desnoes & Geddes it does not now own. Heineken bought out the subsidiary of Diageo that owned the shares in Desnoes & Geddes thus giving them majority holdings in the local company. D&G traded at $8 with an increase of $1, the bid is now quoted at $10.50.
Elsewhere, trading so far has seen the junior market at a new all-time high with only a few of the stocks being active. Overall only 10 securities have traded at 11:15 am with a volume of a mere 57,540 units, 2 stocks declined and 6 gained.
Trading activity resulted in the JSE Market Index 535.63 points to 98,338.12. The JSE All Jamaican Composite index rose 598.60 points to 108,854.67, the JSE combined index 617.64 points to be at 102,281.64 and the junior market is up 12.53 points to 1,056.68 for a new record and is not very far off from the all-time high of 1,040.59.
HEINEKEN J$31 offer for D&G shares
Heineken N.V. (“HEINEKEN”) is to make an offer to acquire all of the minority shareholders shares in Desnoes & Geddes at US$0.259 per shares or the equivalent of J$31, the company stated in a release today. Udiam shall offer US$ 0.259 (the “Offer Price”) for each D&G Share. The Offer Price is the same price per D&G Share as Heineken International paid to Diageo in respect to the Acquisition.the offer represents a huge premium on the last traded price of the stock of $8 in trading today. The bid on the stock is now at $10.50.
Heineken N.V. (“HEINEKEN”) today has announced that Heineken International B.V. (“Heineken International”), a wholly-owned subsidiary of HEINEKEN, has acquired the entire issued share capital of Udiam Holdings AB (“Udiam”) from a subsidiary of Diageo plc (Diageo plc and its subsidiaries being “Diageo”) for the sum of US$420,992,826 (the “Acquisition”). Udiam owns 1,625,549,827 shares in D&G, which constitutes approximately 57.87% of the share capital of D&G. Heineken International has also acquired a small shareholding which Diageo 
held directly in D&G. The price paid by Heineken International to Diageo for Udiam, and the direct shareholding, equates to US$ 0.259 per D&G share. Prior to the Acquisition, another subsidiary of HEINEKEN already owned 434,033,141 D&G shares, which constitutes approximately 15.45% of the share capital of D&G. Following the Acquisition, HEINEKEN indirectly owns 2,059,610,670 shares, which constitutes approximately 73.32% of the share capital of D&G.
As a consequence of the Acquisition, and pursuant to Regulation 12(1) of the Jamaican Takeover Code, Udiam intends to make an offer (the “Offer”) to the shareholders of D&G for the acquisition of any and all of the shares which HEINEKEN does not, directly or indirectly, currently own (the “D&G Shares”). The Offer will be made through a formal tender offer pursuant to the Jamaican Takeover Code and applicable requirements.
Interest saved cuts Phillips’ cost by $10B
Peter Phillips’ assertion that there will be a near $9 billion cut in the 2015/16 budget might have come as a shock to the country already reeling from the pains of severe economic adjustments but much of the work has already be done with a sharp $4.7 billion cut in interest payments to August.
The savings works out at more than $10 billion for the full year and might be even more with Treasury bill rate continuing to fall as such the Minister’s work seems a mere formality of recognizing that interest cost was over estimated in the first place and not for the first time.
Up to August, apart from the big drop in interest cost capital expenditure was underspent buy $4 billion with just spent out of the $16.3 billion budgeted for the 5 months period. The wages bill was underspent by $3.4 billion with just $$67.9 billion spent out of $71.3 planned. Other areas of recurrent expenditure saw arise of $1.4 billion above budget.
Collector of Taxes office, Constant Spring, Kingston.
Government borrowed $14 billion less in the local market than budgeted taking only $5.8 billion in new funds as opposed to almost $20 billion planned. But they borrowed $255 billion on the foreign side versus $59 billion planned but paid out $180 billion more than budgeted.