Financiers bullish on Carib tourism

Entities eyeing the Caribbean region and in need of financing should be encouraged by findings by top accounting firm KPMG included in their annual survey on financing for the sector amongst banks and non-banks.
“Confidence levels of banks increased yet again for an amazing ninth year in a row,” the survey stated and went on to indicate that “confidence levels of non-banks also increased.” “Overall non-banks remain more confident than banks registering 7.43 out of 10 in terms of their level of confidence versus 7.11 out of 10 for banks. For both banks and non-banks to exhibit these high levels of confidence would be very positive at any time but for them to do so following what can only be described as a catastrophic 2017 hurricane season for the region, represents very welcome, positive news,” the KPMG report stated.
“Canadian headquartered banks have for many years been the primary financiers of developments in the region’s tourism industry. However, it is now firmly established that the landscape has changed, although the Canadian banks remain very much part of that new landscape. The consensus view appears to be that they are “back in the market but more selective than before”. Other “players” are predominantly local banks who are increasingly participating in syndicated deals, U.S. funds, pension funds and insurance companies and development banks who are also active in the marketplace,” the survey finding went ion to say.

$9.20 offered for 75% of Barita shares

Barita last traded on the JSE on Wednesday at $9.

The long awaited formal offer to acquire majority shares in Barita Investments has been released.
Cornerstone Investments Holdings is offering $9.20 per share for 334.4 million Barita shares to acquire no more and no less than 75 percent of the company. The intention is for the company to remain listed on the Jamaica Stock Exchange
The offer opens on July 26 will cost $3 billion. The company signed a lock up agreement with Rita Humphries-Lewin and Karl Lewin who have 77.5 percent of the shares to sell amounts to allow for the 75 percent acquisition as such the offer is all but done.
The company has 445.877 million shares issued contributing to shareholders’ equity of $2.86 billion or $6.40 per share.
For the March quarter comprehensive income was $165 million and $492 million for the half year or just over $1 per share and puts the purchase price at about 5 times earnings. But the acquisition is even more attractive to the buyers. Both Humphries will cease being executives that will result in cost savings. The new link up could see a more aggressive stance taken in increasing business and profit within a relatively short time frame from existing offerings as well as new ones. The Unit Trust business is a potential storehouse of huge income down the road while more can be eked out of the portfolio of investments. Investors who hold on to their shares will benefit from a promised 80 percent pay out of profit going forward.

10 to 1 stock split for Derrimon

Staff at Derrimon Trading.

Investors continue to be poorly served in a number of cases in the Jamaica Stock Market with inconsistent observance of rules and regulation.
Under the Jamaica Stock Exchange rules a listed company is to report to the JSE ahead of a meeting to consider a divined or changes to the share capital structure and to report within 48 hours of the meeting, the decision reached.
Derrimon Trading directors are recommending to shareholders a stock split but there has been no notice on the JSE website about the consideration at a board meeting or the results of the meeting. Yet in the annual report the company places a resolution to effect a split of the stock.
According to the annual report the company proposes to increase of authorised share capital from 800,400,000 shares to 8,200,400,000 shares by the creation of an additional 7.4 billion ordinary shares and to sub-divide the issued share capital of the Company into 10 ordinary shares with effect from the close of business on August 22, resulting in the total issued shares being increased from 273,336,067 to 2,733,360,670 ordinary shares. The company last traded at $16 with the bid closing at $18.40 on Tuesday.
Derrimon reported strong first quarter results gains from $35 million to $52 million or 21 cents per share to March this year.

10 to 1 stock split for Blue Power

Add your HTML code here...

Blue Power 10 for 1 stock split coming.

Shareholders of Junior Market listed Blue Power, are set to see much more liquidity in the shares as the board is recommending a 10 to 1 stock split to be voted on at the upcoming general meeting in August.
Approval of shareholders will be sought, for the board’s recommendation to be put to the Annual General Meeting to be held on August 14, to increase the authorised share capital of the company from 90 million units to 900 million shares of no par value and to split each existing share of the company into 10 shares of no par value, thus increasing the issued share capital to 564,990,000 shares.

Blue Power Group will pay a dividend of 19 cents per share on July 30, to shareholders on record at July 16. The stock will start trading ex-dividend on July 13.

Godfather of ETFs for Destination Experience

Reggie Browne

Destination Experience announced the participation of Reggie Brown, Senior Managing Director at Cantor Fitzgerald for the May 17-19 summit in Kingston.
Brown is widely considered the Godfather of Exchange Traded Funds by global authorities including Forbes and Bloomberg because of his influence in listing over 25 percent of the ETFs traded in the US.
Brown has over three decades experience and presides over one of the most complicated operations on Wall Street. The Exchange Traded Funds business at Cantor facilitates about one trillion dollars in trades annually for global pension funds, asset managers, wealth managers and broker dealers.
Cantor Fitzgerald is a financial services firm operating in 20 countries specializes in institutional equity, fixed income sales and trading, is expected to bring great value to the financial services sector in the Caribbean.
Jamaica financial services sector and participants in the local market have much to benefit from Brown’s experience, wisdom and vision as he shares his words on ETFs and asset allocation in the modern economy.

John Burbank for Destination Experience

John Burbank

Hedge Fund Investor, John Burbank for is slated to be one of the presenters Destination Experience annual Jamaica conference.
Destination Experience announced speaker, John Burbank, Founder and Chief Investment Officer of Passport Capital for their upcoming Visionaries’ Summit, May 17-19 2018 in Kingston. Burbank founded Passport in 2000 with less than $1 million and shot to fame based on his lucrative bet against subprime mortgages in 2006 ahead of the global financial crisis. His fund made 220 percent the following year, as global markets were in their slow drift towards collapse. Passport Capital’s assets hit a peak of about $5 billion before a globally challenging period for hedge funds in 2017. As the Wall Street Journal describes him, “he made his name buying up credit default swaps ahead of the financial crisis, resulting in a more-than 200% gain for his main fund in 2007. That year, he made $370 million personally, Forbes estimated.”
They have now shifted their primary focus to cryptocurrencies while also operating their Special Opportunities Fund. Burbank is very bullish on cryptocurrencies in the future, and has taken a substantial position in Overstock.com (NASDAQ:OSTK) and counterpart tZero, which raised US$100 million in presale for its US$250 million ICO this year. Overstock has vociferously embraced cryptocurrency in recent times and is run by Dr. Patrick Byrne, its Founder and Chairman. Byrne attended The Destination Experience Visionaries’ Summit in 2017 and predicted a boom in cryptocurrencies that ensued that year in his presentation. Those who bought into his vision made tremendous returns. Burbank is also a strong advocate of the potential embedded within crypto-assets and anticipates that Blockchain technology is going to drive rapid change in every macro sector in the world.
Burbank’s wealth of experience in macroeconomic analysis and quantitative tools, as well as his experiences in exploring crypto-assets stand to offer significant value to our financial services sector.

Cement signs buy back agreement

Caribbean Cement paid $1.3 billion as initial payment on the buy back of kiln.

Caribbean Cement is reporting that they signed an agreement with our parent company Trinidad Cement Limited (TCL), for the acquisition of Kiln 5 and Mill 5 thereby terminating the lease agreement.
The company reported that they made the initial payment of $1.3 billion towards the acquisition representing a significant investment in plant and equipment, improving the company’s asset base.
In March, Caribbean Cement announced that it signed a memorandum of understanding agreeing to the termination of the operating lease and the purchase by CCC of the assets covered under the Lease.
Agreement is for approximately USD$118 million to be paid to TCL and redemption of an aggregate number of 52 million preference shares held by TCL for approximately USD$40.5 million to be paid over a nine-year period, starting in 2018 and sourced from at least one third of CCC’s profits available for distribution from the previous year. CCC will also seek financing to fund the Asset Acquisition and the Redemption.
The agreement flows from concerns of minority shareholders who at the company’s last annual General meeting, at which shareholders were given the commitment by management that the best structure would be identified to acquire ownership of the assets.
The company paid $3.3 billion in 2017 for the lease of the assets that was installed to facilitate expansion of the plant.

100 listings for Jamaica Stocks Exchange

The Jamaica Stock Exchange (JSE) with the listing of four preference share issues on the Main Market by JMMB Group on April 19, achieved its hundredth listing of securities on the Exchange.
JMMB Group listed its US dollar Cumulative Redeemable 5.5% and 5.75% Preference shares on the US dollar market while the Jamaican dollar Cumulative Redeemable 7.25% and 7% Variable rate Preference Shares were listed by JMMB on the main market. JMMB raised over $9 billion from the market with these instruments. Since coming to market in 2007, JMMB has raised over $23 billion from the capital markets through its listings of 16 securities over the period. Currently, with 11 securities listed on the markets, JMMB has the record of having the most securities listed by any company.

Kino Williamson (l), Head of Finance, Cable Bahamas Ltd. points to the USD label while Scotia Investment CEO, Lissant Mitchell points to the JMD label. Also sharing the moment (from left) are Marlene Street Forrest, Managing Director Jamaica Stock Exchange, John Gomez, COO Cable Bahamas and Dylan Coke, VP Originations & Capital Markets, Scotia Investments

Speaking at the event, Marlene Street Forrest, Managing Director of the JSE, stated, “JMMB has used the power of the market and their record of accomplishment most effectively. Since inception, they have raised capital via IPO and have listed ordinary shares, restructured their company, made acquisition and have raised capital through issuance of preference shares. JMMB is a testament of what can be achieved by other companies by using the Exchange as a medium for business expansion and wealth creation. We are seeing where investors, companies and our government are beginning to understand the importance of the stock market in creating wealth sector-by-sector, individual-by-individual and company by company. It is non-discriminatory, non-partisan and is fixed in its pursuit, that is, to create wealth for everyone. We facilitate the listing of different products, classes of shares, government or corporate bonds. This is complemented by our Depository and Trustee Services offerings.”

Keith Duncan, Group Chief Executive Officer of JMMB.

Keith Duncan, Group CEO of JMMB Group congratulated the JSE on its 100th listing and told the audience that “JMMB Group could not have achieved the success it has without the Stock Exchange, which provided a great avenue for companies such as ours to access capital for growth and development. I appeal to all companies to look at the Stock Exchange as a medium to raise capital and do business as the economic climate is right for companies to access capital, with a low interest rate regime, debt to GDP reducing and the Government not in the market crowding out the private sector in respect to funding, this is an opportune time for companies to come to market and raise capital and grow their businesses. JMMB has done it successfully and others can do it too.”

FCIB 2nd Caribbean bank to abort US listing

 

FirstCaribbean aborts IPO for NYSE listing.

Firstcaribbean International Bank (FCI) announced that they have withdrawn their planned initial public offering ahead of its plan to list on the New York Stock Exchange.
The Trinidad and Tobago Stock Exchange advised today, that they received notice from FCI advising of the withdrawal of the US registered public offering and listing of its shares on the NYSE in view of market conditions at this juncture. FCI had filed a registration statement in December 2017 relating to this public offering and proposed listing on the NYSE under the symbol “FCI”.
The company is the second Caribbean based banking group to have moved forward with plans to list on that stock exchange. The first was NCB Group in 2013, incurring a $680 million hit from the costs relating to aborted Initial Public Offering (IPO) in the 2013 fiscal year to September, according to the company’s audited financial statements.
The banking group was attempting to raise fresh capital in the international market, during the turbulent period ahead of the country reaching an agreement with the International Monetary Fund (IMF). The amount involved was written off against income thus helping to depress profits for the year.

NCB lost $700M in its aborted NYSE IPO plans in 2013.

Since then NCB has gone on to report record profits in 2017 with a 28 percent increase in the first quarter to December last year. At the same time FCIB that struggled for several years as it was battered by Caribbean countries in deep recession only saw a rebound in fortunes in recent years.
In 2013, the FCIB group adjusted profit was just US$35 million rising to $83 million in 2014 and onto $123 million the following year then $143 million in 2016 and $151 million last year, but revenues have just barely grown as loans have stagnated with US$6.36 billion in 2017 from US$6.3 billion in 2013.

SOS writing book manufacturing starts May

Stationary and Office Supplies – Montego Bay offices.

Stationery and Office Supplies (SOS) purchase of equipment used to manufacture various types of writing books as well as the brand name SEEK.
“This purchase will allow SOS to enter the manufacturing industry in Jamaica starting with books and a plan to continue to manufacture other stationery products in the future”, SOS states.
Machinery purchased includes the following: Ruling machines, Guillotines, Gluing Machines, Stapling Machines and Book Presses.
The total value of the purchase is $60 million and is being financed through a bond with Jamaica National amounting to $80 million at an interest rate of 8 percent, and a duration for repayment of 7 years. The company expects that the total investment including machinery, raw materials and renovations will exceed $80 million. The Company said with this expansion, SOS initially be employing an additional 25 persons with production expected to start during the first week of May 2018. Prior to the acquisition a compliment of 40 persons were employed with a mixture of full time and part timers.  Revenues expected in the first twelve months is estimated at $130 million but could rise beyond this, as the business maintains most of the customers for books and SOS leverage their existing customers base and others for  more business. According to Allan McDaniel, Deputy Managing Director & Director of Warehousing and Logistics, the previous owner operated for about six months per year, but SOS will be able to operate full time and at less cost. The operation will be housed in the adjoining building they acquired last year and effectively fills out the space with their expanded inventories occupying about half. Profit margin is attractive and will almost ensure that the company will profit from it, this year, with growth estimated by them to likely be in the 30 percent region coming from both local and export sales. The new operation could deliver around $40 million to profit in 2018 and around $70 million in 2019, IC Insider.com estimates.  Speaking about SOS operations, McDaniel would only say they are happy with the first quarter, that was helped by an increased inventory, now around $170 million compared to $117 million in March last year, just ahead of the public share offer. McDaniel said that while some of the fellow businesspersons are talking about a weak first quarter, SOS expects to report continued growth.

The company’s stock ended at a record close of $6 on the Junior Market of the Jamaica Stock Exchange on Tuesday gaining 200 percent since it was listed in August last year.

.