The latest results for Treasury bill auctions, show a decline in the interest rates on all three instruments offered to the public. Importantly, the 182 days note fell to the lowest level, since June 2013, when the rate was 7.12 percent.
At the latest auction dated December 19, 2014, the average rate on 28 days instrument, ended at 6.38 percent. The rate fell from sharply, from 6.71 percent in November and 6.826 percent in October as $686 million chased the $400 million on offer.
Investors, demand for the 91 days Treasury bills offered, continued to climb, dropped to only $531 million from to $1.042 billion for the November auction. Demand for the longer-term 182 days instrument, was for $942 million for the latest auction in which the amounts available was $400 million for all three Treasury bills on offer.
The Treasury bill for the 91 days period, Friday, December 19 to mature on Friday, March 20 next year, attracted an average yield of 6.956 percent a moderate fall from November’s 7.052 percent, and 7.336 percent in October and 7.46952 percent, at the September auction. At the August auction the average rate out turn was 7.46767 percent. The yield for July was an average of 7.63643 percent, for the June issue 7.65893 percent and 8.2 percent in May, for the Treasury bill of same duration.
The offer of 182 days duration, maturing on June 19, 2015, attracted $925 million for the $400 million on offer resulting in an average interest rate yield of 7.14 percent, down from 7.387 percent at the November’s auction. At the October auction the average rate declined to 7.73187 percent from 7.99887 percent, at the September auction, 8.11578 percent, in August, 8.21982 percent at the July’s auction and 8.36502 percent for the June issue, of the same duration. At the May auction, the rate came out at 8.932 percent.
Jamaica’s trade deficit slips to September
Imports of Machinery & Transport Equipment increased
Jamaica’s trade deficit for the first nine months of 2014 widened marginally by US$27 million to US$3.28 billion compared to US$3,26 billion in the similar 2013 period. Imports during the period fell by US$81 million to US$4.4 billion.
Exports fell by US$108 million or 8.8 percent to US$1.11 billion compared to the same period in 2013. “During the nine-month period, there was a general downward trend in the value of imports, with six of the ten commodity groups registering declines,” Statin stated. “Mineral Fuels, etcetera” the main contributor, fell US$9 million to US$1.56 billion. “Chemicals” by US$108 million or 18.8 percent, to US$464 million. Lower imports of ethanol products were the primary contributor to this decline.
Compared to the 2013 period, Machinery and Transport Equipment valued at US$681 million grew by US$24 million due mainly to higher expenditure in the, divisions telecommunication, sound recording and reproducing apparatus, office machines and automatic data processing equipment, power generating machinery and equipment, machinery specialized for particular industries and electrical machinery apparatus and appliances. Manufactured Goods grew by US$14 million to US$449 million. “Misc. Manufactured Articles” increased by US$19 million to US$323 million.
Bauxite mining
GOJ targets on track but
Jamaica’s Ministry of Finance – newer office building
The primary surplus at the end of November is $54.4 billion against a target of $48.2 billion. The excess was achieved although revenues are off by $6.8 billion a slightly worse position than at October by $500 million with a revenue shortfall then of $6.28 billion. Tax revenues fell short by $700 million in November and was the major reason for the shortfall in the month.
On the payment side the wages bill in on target with very little variation but other cost fell by $1.36 billion in November bringing the year to date cut to $2.8 billion. Interest saved climbed to $3.4 billion in November from $3 billion in October. Capital expenditure is underspent by a further $2 billion in November and $7.4 billion so far for the fiscal
Collector of Taxes office, Constant Spring, Kingston, Jamaica
Government borrowed $10 billion less on the local market but foreign borrowing is up by $73.4 billion but loan repayments are in line with original forecast.
The fiscal deficit that was targeted at $34.4 billion is down by $9.6 billion to $24.75 billion and is better than the deficit at the end of October when it reached $26.8 billion.
Tax on interest brought in $2.9 billion in revenue over budget, PAYE is up by $1.7 billion. The shortfalls were mostly local GCT down by $4.3 billion, Corporation tax $4.6 billion, Special consumption $2.2 billion, International traded $2.4 billion and grants $1.2 billion.
Mayberry out of Access
There is trading in 135,339,271 units of access shares which were sold by Mayberry from their holdings and said to be purchased by clients in 33 trades at $9 each.
Reports to IC Insider.com, indicate that the mediator to both parties in the Access dispute between Marcus James and Mayberry, R Danny Williams was advised today that Mayberry has disposed of their holdings.
Up to late on Monday, the Chairman of Access confirmed that he was not aware of the trades on Monday, that IC Insider gather were cancelled by Mayberry. Under the stock exchange rules pertaining to insider trades, the intention to trades in the stock of a company by insiders must be communicated to the Chairman in writing.
Based on the price the block was old at the consideration is $1.218 billion. IC insider.com understand that Proven Investments purchased the shares which would bring their holdings to just under 50 percent of the 274 million shares outstanding at Access.
Strong price gains ahead on JSE
Activity on the Jamaica Stock Exchange was low, resulting in the prices of 5 stocks rising and 7 declining as 18 securities changed hands, ending in 3,633,602 units trading, valued at $6,595,479, in all market segments.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator was reflecting a very strong signal, showing 13 stocks with bids higher than their last selling prices and only 1 stock with the offer lower.
Main Market| The JSE Market Index lost 552.75 points to 75,560.44, the JSE All Jamaican Composite index fell 618.05 points to close at 83,198.39 and the JSE combined index declined by 406.69 points to close at 77,394.93.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Caribbean Cement ended trading with 1,650 shares 10 cents higher to $2.50, Kingston Properties reached a new 52 weeks’ high in trading 8,300 shares to close 92 cents up at $6.90, at the close there was a bid to buy 191,700 units at $6.90 and an order to purchase 914,000 units at $6. Mayberry Investments ended trading with 187,117 units 7 cent higher to $1.52.
Firm| The stocks in the main market to close without a change in the last traded prices are, Jamaica Money Market Brokers ending trading with 3,002 ordinary shares at $7. Jamaica Producers closed trading with 5,718 shares at $17.50, Kingston Wharves finished with 65,667 units at $6 and Pan Jamaican Investment ended trading with 34,067 shares changing hands at $60.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Cable & Wireless closing with 2,927,292 units trading with the price slipping 3 cents, to 47 cents. Carreras finished with 4,936 shares trading lower by $1.05 at $36.20. Grace Kennedy ended trading with 3,098 shares changing hands to close down $2.50, at $60.50, Sagicor Group closed with 9,000 shares, 9 cents lower at $10, Salada Foods had 131,000 units trading, with the price slipping 19 cents to $7.81 and Scotia Group traded 26,480 shares and the price closed lower by 49 cents to $20.01.
US to normalise Cuban relations
The long period or US embargo in trade in goods and services, with Cuba since the Castro regime seized power in the late 1950s, seems set to be reversed, according to a report earlier today.
According to Bloomberg news U.S. will begin to normalize relations in a surprising move by the Obama administration that will loosen a trade and travel embargo that is among the last remnants of Cold War policy. The action means not simply the opening of a U.S. embassy in Havana but the lifting of restrictions that have limited commerce and kept aficionados from legally bringing Cuban cigars to U.S. soil.
The change in the US attitude could have far reaching implications for Jamaica and the rest of the region specifically, as it affect tourism trade.
Jamaican prices fall expect more
Prices increased for October, by a mere 0.1 percent over September this year, in line with the increases in February and June but above a negative 0.3 percent in April. For November, this year, The Statistical Institute of Jamaica (Statin) reveals that as at the Consumer Price contracted by 0.5 percent versus October 2014.
The November fall, represents the lowest inflation rate since the start of the 2014. The division ‘Food and Non-Alcoholic Beverages’ declined by 0.1 per cent, and was mainly due to lower prices for vegetables. A reduction in the cost of electricity and lower rates for water and sewage were the key factors influencing the division ‘Housing, Water, Electricity, Gas and Other Fuels’, which declined by 3.6 percent. The latest inflation data brings the year to date level to 6.7 percent and the final number for 2014 should end up closer to 6 percent with the price of oil continuing to fall on the world market and local food products coming back in good quantities.
The fall in the price of oil helped in the negative price movement in November
Bulls want to take over JSE
Wednesday’s activity on the Jamaica Stock Exchange, resulted in the prices of 14 stocks rising and only 5 declining as 26 securities changed hands, ending in 7,178,648 units trading, valued at $38,478,576, in all market segments. Wednesday is the second day within less than a week, that the prices of more than 13 stocks rose, with only a few falling.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had 3 stocks with bids higher than their last selling prices and 1 stock with a lower offer.
Main Market| The JSE Market Index gained 980.87 points to 76,024.35, the JSE All Jamaican Composite index rose 1,096.76 points to close at 83,717.11 and the JSE combined index gained 980.32 points to 77,780.11. The market indices rose higher during trading, than the levels they closed at, but settled back lower at the close.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Cable & Wireless completed trading with 1,302,045 shares with the price rising 1 cent to 46 cents. Supply of the stock has fallen sharply since trading on Tuesday, now with only 12 offers to sell 6.5 million units, between 50 cents and $1 each. Caribbean Cement closed trading with 11,000 units and put on 1 cent to $2.41, Desnoes & Geddes concluded trading with 70,750 shares changing hands, with a gain of 1 cent to $4.66. Grace Kennedy ended with 20,239 units to close with a gain of 51 cents to $60.51, Jamaica Broilers finished trading with 228,433 shares, with the price rising by 1 cent to $4.06. Jamaica Producers contributed 155,000 units and put on $1.04 to $17, National Commercial Bank ended trading with 176,050 shares to end with an increase of 30 cents to $18.50, Scotia Group closed with trading in 977,666 shares, the price ended at 40 cents higher at $20.50 and Scotia Investments finished trading with 4,500 shares with a gain of 41 cents to $21.51.
Firm| The stocks in the main market to close without a change in the last traded prices are, Ciboney ending with 2,000 shares trading at 7 cents. Jamaica Money Market Brokers closed with 11,000 ordinary shares trading at $7, Kingston Wharves ended with 200 shares at $6 and Sagicor Group ended trading with 65,547 shares changing hands to close at $9.96.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Berger Paints closing with 30,350 units as the price slipped 9 cents to $1.51, a new 52 weeks’ low. Carreras finished with 68,034 shares trading lower by 84 cents to $36.16, Mayberry Investments ended with 1,224 shares with a loss of 3 cents to $1.49, Sagicor Real Estate Fund ended trading with 137,095 units and closed at 25 cents to $7 and Supreme Ventures closed with 2,000 units as the price slipped 5 cents to $1.90.
Preference| Jamaica Money Market Brokers 8.50% preference share traded 27,800 units to close at $3.50.
Bulls seen at JSE this morning
The Jamaica stock market is showing some bullish indications this morning, with the main indices all gaining over 1,100 points. The junior market index is also up from yesterday’s close. Main Market|
The JSE Market Index gained 1,179.75 points to 76,223.23, the JSE All Jamaican Composite index jumped 1,319.12 points to 83,939.47, the JSE combined index gained 1,208.88 points to close at 78,008.67 and the junior market index was at 678.07 up 10.65 points, at 11.05 o’clock this morning.
The main movers this morning so far are, Jamaica Producers up $1.04 to $17, National Commercial Bank up 30 cents at $18.50 and Scotia Group with a gain of 40 cents to $20.50 with 935,372 shares traded.General Accident Insurance gained 16 cents to $1.75 in the junior market.
US$ demand down $1B PA, supply up
Buying of foreign currency demand fell sharply in the first 5 days of December, this year compared with the same period in 2013, at a level that would translate to over $1 billion per year, if sustained.
At the same time purchases by dealers climbed US$4 million, at a rate around US$300 million per annum. According to data compiled by IC Insider from the daily Bank of Jamaica trading reports, a total of $163 million were purchased this week, this compares favourably with the $159 million purchased by dealers in the 2013 period. While dealers sold US$175 million in the first 5 days of December, last year, this year only US$155 million was sold, a fall of US$20 million, this translates to just over $1 billion per year.
The near evenest of inflows and outflows has not stemmed the slippage in the exchange rate versus the US dollar, after a period of slight revaluation between August and October. Bank of Jamaica stepped in by increasing their take from the market from 15 percent per day to 20 percent from November and even intervened on a number of days our source informed us, thus reversing the appreciation of the Jamaican dollar.
The Jamaican dollar ended 2013 at $106.38 to one US dollar and reached $113.79 on Friday, to one US dollar. The slippage since the start of the year is just 7 percent, and is in line with inflation to October and would result in a slight gain in competitiveness in the currency based on inflation differential between Jamaica and the USA, if inflation were to remain around these levels.
Last year December the rate started at $105.87 and ended at $106.38 with most of the slippage occurring in the first half of the month. Flows of foreign exchange usually pick up in the second half of December and is likely to slow the rate of decline, unless Bank of Jamaica determines that the currency needs to slip some more, but they could wait until 2015 to effect any needed adjustment to the rate, with 2014 almost over. With the price of oil well under US$70 per barrel the demand for foreign currency will fall and should allow BOJ to lower interest rates while building up the reserves in the first half of 2015 at least.