Blue Power 2024 best performing JSE stock


The Junior Market lost 2.9 percent in value in 2024, the second consecutive year of decline and one of the few years it underperformed the Main Market but turned out the stock with the greatest gain in the entire Jamaica Stock Exchange for 2024. Blue Power, a manufacturer of soaps was the best performer for the year by far, with a surge of  111 percent in the price, helped by a 23.5 percent growth in profit for the half year to October, the only stock gaining more than 100 percent for the year.

In a year when only 20 stocks gained and 28 declined, Iron Rock Insurance gained 59 percent with a big jump in profits for 2023 and the nine months in 2024, followed by Regency Petroleum, up by 40 percent, buoyed by continuation of expansion in service stations. Everything Fresh rose 36 percent following improved 2024 profit and Tropical Battery 32 percent, while Honey Bun and Caribbean Assurance gained 31 percent.
The worst performing stocks, mostly suffered from poor profit results and in some cases financial distress. Edufocal fell a whopping 78 percent and is the leading losing stock for the year, as the company struggles to turn around it’s loss making operation, placing severe pressure on its finances. MFS Partners followed with a drop of 76 percent, as it was still unable to be consistently profitable after having a third set of owners at the helm, CAC 2000 lost 56 percent, with results up to the third quarter still heavily in the red, despite reporting a profit in the third quarter, KLE Group fell 42 percent and Medical Disposables 40 percent.

The market continues to message investors, in a year when interest rates remained relatively high, careful stock selection is the best way of successfully investing as companies posting increased profit will usually increase in value, over those that have not.

3 JSE Main Market stocks top 70% in 2024


Lasco Manufacturing, TransJamaican Highways and Wigton Energy gained over 70 percent on the Main Market of Jamaica Stock Exchange during 2024, a year in which the overall market gained just 3.1 percent while the Jamaica based stocks gained 5.8 percent.
The three top performing stocks are Caribbean Cement rose 53 percent, following the release of outstanding third quarter results, Carreras jumped by 51 percent benefitting from lower interest rates in the second half of the year and increased price for cigarettes, Scotia Group stock popped a healthy 41 percent, following a 17 percent rise in 2024 profits, QWI Investments gained 38 percent followed by the Jamaica Stock Exchange with a 33 percent return on the share value during the year, with blowout third quarter results. Lasco Manufacturing with a 74 gain, topped the Main Market stocks but was far short of the overall best performer on the exchange, the Junior Market listed Blue Power with a gain of 111 percent. Pulse investments was the worst performing stock in market with a fall of 45 percent followed by the big loss maker RJR Group down 35 percent, Eppley chipped with a fall of 31 percent, NCB Financial Group pressured by the lukewarm public share issue during the year, declined by a a meaningful 27 percent for the year and 21.5 percent from the APO price of $65 and Margaritaville with a slippage of 24 percent.

Murders poised for 22 year low with unemployment at record low


Murders in Jamaica have plunged sharply in recent months, data from the Jamaica Constable force shows, putting the rate at an annualized level of under 1,000 per annum, levels the trend in 2024 suggest is possible for 2025 as increased employment and low unemployment is helping in a major way in aiding the reduction as indicated by historical data.

If the above is achieved, it would put murders in line to match the 976 cases in 2003 and the lowest in more than two decades. If the security forces make further inroads the social malady, the numbers next year could fall well below the 2003 outcome.
For the period to November 9, this year murders dropped a significant 20.5 percent compared to the similar period in 2023. The latest date shows continuing acceleration in the fall from 14.5 percent up to July 6. Earlier in the year the number of murders per day was over three and is now running around 2.67 percent, still high but moving in the right direction.
The economy is cooperating with crime reduction, by delivering low unemployment and less potential recruits for criminal activities. Historical data shows a strong relationship between increased unemployment and increased murders starting in late 1990s and the reverse is now taking place with low unemployment.
Unemployment rose sharply between in 1977 as the economy contracted significantly, accompanied by capital and human flight. The unemployment rate of just over 11.2 percent in 1975 jumped to 23.8 percent in 1977 and to 27.7 percent in 1979 and remained around 26 percent to 1989, with a few years of modest fall. From 1990 the unemployment numbers started to moderate as can be seen from the chart, but increased murders had just started to climb in 1990 a 15 year lag from the sharp jump in unemployment that provided a greater pool of recruits for criminal activities for several years.
Except for 1980, when murders climbed to 889 amidst a bitter general election, murders were kept below 500 per year until 1990 when it hit 542 and gradually climbed to a high of 1,683 in 2009 with 2005 not far behind with 1,674 and 2017 with 1,647 as employment worsened.

More declines for Jamaica Tourism


Tourist numbers continue to deteriorate in Jamaica with passenger traffic passing through the critically important Sangster International Airport in Montego Bay, falling a significant 8.8 percent in October to 319,300 from 350,000 in 2023.

For the capital city of Kingston, traffic passing through the Norman Manley airport rose a solid 8.5 percent to 139,600 from 128,700 in October 2023 and for the year to date a decline of 0.2 percent from 1,467,600 to 1,464,500 in October, this year.  experienced a year to date decline by 2.2  percent from 4,313,200 passenger traffic in October 2023 to 4,216,400 with just two more months left in the year, data from Grupo Aeroportuario del Pacífico operators of the two major international airports in Jamaica reveal in their preliminary data release.

Remittance inflows jump in August

Remittance inflows to Jamaica climbed or 3.6 percent by US$10.4 million to US$299.6 million from US$289.2 million for the same period in 2023 and represent the third month of the year with an increase.
August is the month with the highest inflows for 2024 to date. Remittance inflows to Jamaica amounted to US$2.24 billion, a decline of 0.1 percent versus the January to August 2023 period with inflows of $2.241 billion.

CDs rates remain steady

Bank of Jamaica HQ.

Rates on 30 day certificate of deposit offered by Bank of Jamaica, rose marginally at the latest auction of $50 billion, with an average interest rate of 9.54 percent, up marginally from 9.47 percent last week, bringing the total amount of 30 days CD’s to $232 billion, down from $235 billion following last week’s auction.
A total of 451 bids were received by the central bank amounting to $60.8 billion of which 400 were successful. The highest interest rate payable was 9.85 percent of which 70.48 percent of the amount that was a part of the bid was satisfied.
Although CDs rates have fallen from the peak of nearly 12 percent in April they are still well off from the Bank of Jamaica’s Overnight rate of 7 percent.

 

RA Williams comes to market with error filled prospectus

The initial offering of 400 million shares in RA Williams opens today at 9 in the morning at $1 each and is scheduled to close on the 31st of July but is expected to close much earlier.
Unfortunately, the prospectus has errors relating to data on profitability in 2024, resulting in uncertainty as to what years some of the information relates with both captioned with 2024 as the financial years and error in the interim statement of financial position to January.
The company currently has 1.16 billion shares outstanding and will have 2 billion units issued at the end of what is expected to be a successful offer. The shares are to be listed on the Junior Market, bringing the total listing back to 48. A total of 190 million of the shares being offered are reserved, with just 210 million available for the general public.
with profit before tax of $133 million before tax for EPS of 83 and a PE of 12 times earnings as of April this year. With the market average PE close to 14, there is not much room for short-term growth other than the hype of initial investment in the IPO and the limited number of shares on offer.
R.A. Williams, a primarily pharmacist-owned and operated pharmaceutical distribution company, that started operations in Spanish Town, St. Catherine in 2012.
In commenting on the issue, the Chief Executive Officer, R A Williams states, “We have recently concluded negotiations with Fourrts (India) Laboratories Pvt Ltd and Mankind Pharma Limited, which will see us introducing new treatment options in areas that require treatment with anti-infectives and dermatological options. From this expanded product offering, we expect a boost in the company’s revenues.”
Willaims went on to state, “The Company is in a new cycle of its growth which will be underpinned by the utilisation of a higher proportion of equity to fund its future expansion. As a result, the proceeds from this Invitation will be mainly used to repay the Company’s debts. This debt reduction will have the immediate effect of reducing the Company’s financing costs, thereby increasing the Company’s profitability and the expected returns to shareholders.
They currently distribute over 130 products, serving more than 700 customers across the island.
Growth in Revenues has been strong since 2020, with an increase of 41.6 percent For the year ended April 2023, to $1.4 billion, above sales of $994 million in 2023, which increased by a sharp 54 percent from $647 million in 2021 and was up 29 percent over the $502 million in 2020 with 2020 seeing an increase of 19 percent.
While revenue growth has been impressive, the annual improvement in the bottom line is even more impressive up to 2023. In 2020 while revenues climbed attractively, profit declined 51 percent from $36 million in 2019 to $18 million but grew 133 percent to $42 million in 2021 and by 26 percent to $52 in 2022 and 88 percent in 2023 to $98 million.
Margins on sales have been impressive at 42 percent over the past two years and an average of 43.4 percent since 2019.
Revenues grew by just 6.3 percent for the year to April 2024 to $1.5 billion with profit falling before tax to $133 million from $161 million in 2023.
Shareholders equity stood at $386 million at the end of April this year. In January 2024, short term loan which is erroneously grouped under a caption headed current assets, amounts to $215 million and related party loans of $107 million.
Sagicor Investments are brokers for the issue.

Murders in Jamaica’s drop 15% in 2024

With just over half of the current year elapsing, murders in Jamaica fell 14.5 percent to July 6 compared with the same period last year, with 602 persons murdered committed, down from 704 last year for the same period, data from Jamaica Constabulary Force show.
Last year murders were down 12.5 percent to 655 compared with 749 for the same period in 2022. If the trend so far in 2024 continues murders could fall below 1,200 for the first time since 2015.
This is the second year of a steep decline in murders in Jamaica in recent times but the third year of decline as 2023 was marginally lower than the 1,508 murders in 2022. Last year murders fell from 1,498 to 1393, a 9.3 percent fall, a development that bodes well for the country and its economy. Continued economic growth in the country and reduction in unemployment will aid in the fall in murders in the future historical data suggest.
Some murder hotspots are seeing a turnaround in 2024 but others have moved in the opposite direction. For the year to date, murders skyrocketed 77 percent in St Andrew Central to 39, St Andrew South had an increase of 27 percent to 33, Kingston Eastern saw 13 percent more murders with 34 persons dying by unlawful means. St Elizabeth suffered a 39 percent increase with 18 murders and Trelawny had 13 persons murdered, an increase of 30 percent.
The hotspots for murders of St James and Westmoreland saw a reduction of 31 and 12 percent to 73 and 57 murders respectively, St Ann has a decrease of 24 percent from 42 murders last year to 32 this year, Clarendon had a 38 percent fall to 37 from 60 in 2023, while Kingston Western dropped 39 percent higher to 28. St Andrew South lost 20 percent of its residents with 51 persons losing their lives by murderers compared with 64 in 2023 to early July. St Catherine North had a 10 percent reduction in murders with 46 versus 51 in the same period in 2023 and the South saw 19 percent fewer persons falling to their death by unlawful means with 44 deaths, down from 54 in 2023.

Tourism growth flounders will hit GDP

The Jamaican economy is set to suffer a major setback in the second quarter with tourist traffic to the island falling according to preliminary data of visitor traffic through the country’s two international airports.
Passenger traffic through Sangster’s International Airport in Montego Bay in June slipped marginally from 448,500 last year to 447,400 which dragged the six months performance to an increase of just 3.2 percent to 2,742,400 from 2,656,800 in 2023, while Kingston Norman Manley dipped 2.2 percent to 144,400 from 147,700 in 2023, and declined 2.3 percent to 810,600 from 829,500.
While the critical arrivals grew attractively in the first quarter, data released by Grupo Aeroportuario Del Pacífico shows Montego Bay enjoying an 8 percent rise with Kingston flat, Montego Bay suffered a 4.2 percent fall in April and was effectively flat in May. Kingston was down7.7 percent in April and 1.1 percent in May. The decline affects the sector and will spill over into support industries such as transportation, agriculture, manufacturing and utilities and also affect communities that cater to the sector.

NCB at 11 year low is it a buy yet?

Investors buying into the public offer of NCB Financial Group stock at $65 each in May are hugging up an 18 percent loss on their investment since, with the stock hitting a 52 weeks’ low of $54.66 on Monday and ending at a closing low of $55 after more than 1.5 million shares were traded, following a sizable 3 million share trade on June 17, when the stock closed at $59.
Investors in the stock whether new or not are taking the beating following the public offer that came when the stock was trading at an eleven year low going back to February 2013. The question for investors is whether the price has reached a bottom and when will a consistent rebound commence. The accompanying chart will help in partially answering the questions.
NCB is a diversified financial group, providing services in general insurance, life insurance, banking and investments management. The group is also geographically diversified with operations in Trinidad, Bermuda and Jamaica. It has a solid base that it can use to produce increased revenues and profits in the future.
Currently, the stock trades at a PE ratio of just 6.5, at a steep discount to the Main Market with an average valuation of 14, but higher than Scotia Group at a mere 6.
The major issue is whether the stock price is at or near the bottom. The attached chart offers some clues, with the stock trading at the bottom of a downward sloping channel.

30 highest bids and offers for NCB shares mid morning on Wednesday.

30 highest bids and offers for NCB shares mid morning on Wednesday.

It may take some time for the added pressure brought on by the issue of the additional shares for which there was inadequate demand, to abate.
The price seems to have reached support at the channel bottom. The lower channel line goes back to July last year. The trend shown by the channel, between the green and the orange lines is negative, sloping downwards, suggesting that the price downturn could continue awhile longer. The stock will probably bounce off the low reached on Monday, but the demand shown by the order book is thin, suggesting the price could go lower. It would not be surprising to see the stock hitting $50 before bottoming out. If it rebounds from where it is now it’s likely to get back to $65 and probably resume its decline towards the $50 mark as buyers at $65 try to get out. Although undervalued, investors should be cautious in buying the stock around the recent price. They should probably await clearer signals that it is at the bottom.