JSE jumps 14,819 points to record close – Thursday

The main market of the Jamaica Stock Exchange, surged 14,819.23 points on Thursday, the biggest single one day ever, bettering the increase of 12,549.67 points rise on Wednesday.
Thursday move led the All Jamaica Index to close at a record high of 433,307.22, beating the record close on Wednesday of 418,487.99 and the JSE Index rose 10,027.28 points to close at a record high 381,289.90.
Strong gains in NCB Financial Group up $10.01 to end at a record close of $160, PanJam Investment and Sagicor Group were the main contributor to the market’s record move, on a day when five stocks closed at record highs.
Market activity ended with 5 securities closing at record highs as 35 securities in the main and US dollar markets changed hands, compared to a 27 on Wednesday. At the end, prices of 13 stocks rose, 11 declined and 11 remained unchanged.
The main market ended with 9,092,070 units valued at over $158,769,688 changing hands, compared with 62,089,588 units valued at over $136,855,615 exchanged, on Wednesday.
The main market ended with Supreme Ventures leading with 3,003,893 units, accounting for 33 percent of the day’s trades, followed by Mayberry Jamaica Equities with 1,516,695 units or 16.7 percent of the day’s volume and JMMB Group with 1,064,094 units with 11.7 percent of the day’s trades.
IC bid-offer Indicator|The Investor’s Choice bid-offer indicator reading shows 8 stocks ending with bids higher than the last selling prices and 3 closing with lower offers.
Trading resulted in an average of 284,127 units valued at over $4,961,553, in contrast to 2,299,614 shares valued at $5,068,726 on Wednesday. The average volume and value for the month to date, amounts to 403,611 valued at $7,228,391, compared to 410,125 valued at $7,009,413. October closed, with an average of 290,851 shares, valued $5,213,901, for each security traded.
In main market activity, Barita Investments rose $1.01 to a record close of $24.01, trading 1,000 shares, Carreras gained 45 cents and concluded trading of 60,911 units at $9.50, Grace Kennedy declined $3 in trading of 37,477 shares at $55, Jamaica Broilers gained $1, trading 116,853 stock units at $30, Kingston Wharves dropped $2.21 in trading 799 shares to end at $75.79.  NCB Financial Group jumped $10.01 to end trading  at record close of $160 with 103,510 shares, Palace Amusement jumped $300 to finish trading 100 shares at $1,300.00, PanJam Investment jumped $1.50 to $71.50, with an exchange of 38,300 stock units, Sagicor Group rose $4.99 trading 398,452 shares at $50, Sagicor Real Estate Fund fell 40 cents to settle at $11.50, exchanging 11,315 shares. Salada Foods climbed $3.50 to end trading of 1,000 stock units at record high of $29.00, Scotia Group traded 41,371 shares and shed $1 to close at $58, Seprod added 50 cents trading of 27,408 shares, to close at $32.50, Sterling Investments rose 60 cents and closed at $4.70, with 200 shares changing hands and Supreme Ventures fell $1.39 to end at $15.60, with an exchange of 3,003,893 shares.
Trading in the US dollar market amounted to 65,958 units valued at $15,630 as JMMB Group 6% preference share close trading with 1,000 units to close at US$1.05 and Proven Investments rose 1 cent and ended trading of 20,758 shares at 20 U$ cents and Sygnus Credit Investments US dollar based ordinary share dropped 2 cents in trading 44,200 units at 11 US cents. The JSE USD Equities Index closed with a rise of 6.77 to close  at 166.21.


Where is NCB heading $150 or $165?

NCB Financial has been scaling record highs after record and closed on the Jamaica Stock Exchange at $139.99 on Monday as well as a new record high close on the Trinidad and Tobago Stock exchange.
The chart shows the stock moving side ways from November last year after reaching $110, until June this year before it started its climb. The move higher was spurred by record profit for 2018 and later by the announcement that they would be going after another 22 percent of Guardian Holdings’ shares. Last week directors and executives bought $650 million of NCB shares which including the sale of a lesser amount by one insider.
The chart shows short term resistance at $150 with the trendline going back to 2015, there after if and when it breaks the $150 level, then it should move on to $165. Going forward, with pick up in growth in Jamaica’s economy, NCB should have good long-term prospects of growth, ahead of it. The company should earn around $12.50 for the 2019 fiscal year and that should put the price at $190 or more in 2019.
Since July 13 last year NCB has gained 48 percent in rising from $94.50 to Monday’s close of $139.99 on the Jamaica Stock Exchange.

Profit jumps 40% at Caribbean Flavours

Caribbean Flavours traded on the Junior Market at $20.

Profit at Caribbean Flavours climbed 40 percent in the quarter to September this year to $25 million from a rise of 21 percent in sales to $120 million, up from $100 million in 2017 and an increase of 137 percent in other revenues to $5 million.
Improvement in profit margin in the in the quarter to 37 percent from 36 percent in the 2017 is also a contributing factor in the improved profit. The effect, gross operating profit rose 23 percent in the quarter to $45 million from $36 million.
Other operating and administrative expenses rose 22 percent to $24 million from $19.4 million in 2017.
Earnings per share came out at 28 cents, for the 2018 fiscal year earnings per share was 97 cents. The company should end the fiscal year to June 2019 around $1.50.
Growth in profit has not been always robust even though it has been positive. Profit before Taxation grew a mere 1.59 percent in 2014, 12.75 percent in 2015, a more respectful 28.34 percent in 2016, a reduced rate of 11.89 percent in 2017 and even less growth of 5.22 percent in 2018.
“The company expects that there will be improvement in our performance in the next period as we

Caribbean Flavours’ produce inputs.

expect sales of Flarorfit, our sugar reduction solution to gain traction,” Chairman of the board Howard Mitchell, stated in his report accompanying the quarterly.
Gross cash flow brought in $26 million. Addition to fixed assets used up $3.5 million and $19 million was used to pay dividends. Cash and invested funds amount to $220 million. At the end of the quarter, shareholders’ equity stands at $424 million with borrowings at just $9 million. Net current assets ended the period at $309 million well over Payables of just $30 million.
The stock traded at $20 on the Junior Market of the Jamaica Stock Exchange with a PE ratio of 13 times 2019 earnings. The stock is ripe for at least a 5 for 1 stock split, with limited supply and just 90 million units issued.

Unilever still pressured by T&T economy

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The collapse of Unilever share price.

Profit surged sharply for the troubled Trinidad Stock Exchange listed Unilever Caribbean. The improvement was not coming from normal operations but mostly from sale of assets.
The company reported profit after tax of $167 million for the September quarter, up from just $170,000 for the 2017 period and $252 million up from $112 million for the nine months to September 2017.
The company sold off the spread business line and realised a gain of $161 million, it also sold fixed assets that realised gains of $3.5 million in the quarter. Excluding these gains, profit would be just $2 million for the quarter but a big improvement over the amount earned in 2017.

Unilever products – Unilever Caribbean continues to trade at new highs virtually each time it trades

For the nine months profitswould amount to $12 million or 46 cents per shares, up from $7 million in 2017 or 27 cents per share.
Sale revenues dropped 28 percent for the quarter, to $79 million from $109 billion in 2017 as the sales of the spread business took effect plus continued pressure being experienced in the eastern Caribbean market, that is a big part of the area they cover. Revenues fell 16 percent for the year to date, to $294 million from $350 million in 2017.
Gross profit margin improved from 33 percent in the 2017 September quarter to 34 percent in 2018 but is down to 35 percent for the nine months from 36 percent in 2017, resulting gross profit of $27 million for the September 2018 quarter, from $36 million in 2017 and for the nine months period, it moved from $126 million down to $104 million.

Profit of Unilever Caribbean has almost evaporated in 2017.

Administrative expenses were flat at $5.6 million for the quarter and fell 19 percent in the nine months to $18 million. Marketing and sales expenses declined by 37 percent to $19 million in the quarter and 21 percent to $74 million for the nine months.
Revenues reached a high of $588 million in 2014, dipped to $549 million in 2015, recovered a bit in 2016 to $566 million before falling sharply in 2017. Profit peaked at $70 million in 2013 dropped sharply in 2014 to just over $47 million in 2015 and $42.5 in 2016 and declined to $10.5 million in 2017.
Operational gross cash flow brought in just $316,000. At the end of September, shareholders’ equity stood at $388 billion with no borrowed funds used to finance the operations. Net current assets ended the period at $243 million inclusive of trade and other receivables of $84 million, cash and bank balances of $61 million and $202 million due from related parties. Current liabilities stood at $164 million inclusive of $54 due from related parties.
The stock traded at $23 on the Trinidad and Tobago Stock Exchange with a PE ratio around 40 times 2018 earnings. The company paid a dividend of $2 in the period. Net asset value is TT$14.80 with the stock selling at 1.55 book value.

Seprod stock allocation fowl up to cost JSE

Seprod’s shareholders did not get full allocation of shares.

There is a big fowl up in the allocation of shares to Seprod’s shareholders who applied for shares in the recent offer of the share by the Musson Group.
On Monday November 12, NCB Capital Market announced that all applicants for reserved shares were fully allocated but that has so far turned out to be incorrect. Information gleaned by this publication is that applicants in the general pool apparently got more shares than they should, apparently at the expense of shares reserved for shareholder’s of Seprod as of the end of August, the cut off date for the purposes of allocating the shares.
IC Insider.com gathers that several of the applications for the Seprod reserved shares did not get their full allocation as they were placed in the general pool. IC Insider.com can confirm that around ten applications that should have been placed in the shareholders poll did not get the full allocation.
The problem, IC Insider.com gathers stems from a glitch in the system at the Jamaica Central Depository, a subsidiary of the Jamaica Stock Exchange. The staff of the JCSD have been working to determine the extent of the error but our sources indicates that up Thursday the matter was still be worked on a suggestion that the extent of the error is wide spread.

The Jamaica Stock Exchange subsidiary

Shareholders who should have received their full allocation will in fact get them subject to funds being provided by the to complete the purchase. From all indications, the stock exchange seems poised to absorb the loss that is likely to be incurred to obtain the shares required to satisfy those shareholders who affected.
A total of 92 million shares were publicly offered for sale with 55 million reserved. A total of 15 million units were reserved for existing shareholders of Seprod. Since the close of the issue that offered the shares at $24 each, the stock now trades at $32 a difference of $8, with the price seeming set to rise.

Trading leads to slippage of TTSE indices

The Trinidad & Tobago Stock Exchange ended trading after 13 securities changed hands, compared to 16 on Tuesday, 3 advanced, 2 declined and 8 remained unchanged, with the market indices slipping lower at the close, on Thursday.
The Composite Index fell 2.31 points to 1,238.50. The All T&T Index declined 3.07 points to 1,697.76, while the Cross Listed Index lost 0.21 points to close at 104.88.
Market activity ended with 165,192 units valued at $2,186,571 trading, down from 858,620 units valued at $14,226,508 changing hands on Wednesday.
 IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading closed with 3 stocks ending with higher bids than the last selling prices and just 5 with lower offers.
Stocks closing with gains| Clico Investments rose 15 cents and completed trading at $20.15, with 48,900 stock units changing hands, First Citizens stock price increased 25 cents to close at $33, after exchanging 373 shares and Trinidad & Tobago NGL rose 1 cent and concluded an exchange of 2,600 shares at $29.31.
Stocks closing with losses|National Enterprises lost 20 cents and completed trading at $7.80, with 500 stock units changing hands and Sagicor Financial ended trading 5 cents lower at $7, with 600 stock units changing hands.
Stocks trading with no price change| Calypso Macro Index Fund  closed trading of 480 shares to close at $15.85,  Guardian Holdings settled at $18, while trading 28,500 units, JMMB Group ended trading at $1.75, after exchanging 56,500 shares, Massy Holdings ended at $46.80, trading 67 shares, NCB Financial Group concluded with an exchange of 22,155 shares at $6.55, Republic Financial Holdings ended market activity at $107.27, after exchanging 800 shares, Unilever Caribbean completed trading of 1,412 stock units at $23 and West Indian Tobacco settled at $95, with 2,305 units changing hands.

Prices of securities trading for the day are those at which the last trade took place.


NCB Insiders sending $650m message?

NCB had a good 2018 fiscal year with strong profit gains.

Insiders buying shares in companies they oversee is worthy of note and investors should pay keen attention to the coded message it may be sending.
It would appear that some directors and executives at NCB Financial Group, see big things ahead to have put down J$650 million in buying a block of the stock close to the highest piece it has traded at in recent times. According to the Jamaica Stock Exchange, NCB Financial Group advised that two directors and six executive officers purchased a total of 4,793,610 NCBFG shares on November 20, 2018. The only issue with the announcement is that the stock exchange report for the November 20 shows only 4.2 million NCB’s shares traded on that day.
The acquisition took place after an announcement that NCB was now cleared to acquire an additional 22 percent of Guardian Holding shares at TT$18 each. For the nine months to September, profit attributable to equity holders of the Guardian jumped to TT$371 million for the nine months to September, from $254 million in 2017 and rose to $156 million in the quarter from just $60 million in the 2017 period. Guardian reported audited profit of TT$407 million in 2017.
Earnings per share ended at $1.60 for the 2018 nine months period compared to $1.75 in the twelve months of 2017. At $18 per share NCB is getting a bargain with the stock selling around 9 nine 018 earnings while NCB is selling locally at 14 times earnings. Guardian’s shares closed trading at TT$18 on the Trinidad and Tobago Stock Exchange today while NCB traded 211,790 shares with the last price at a record $137.
NCB closed with buying interest in just over 417,000 units between $125 and $136.01, with selling of 215,000 units between $137 to $169.80.

Trinidad gets first junior listing

Cinemaone Limited is the latest listing on the Trinidad and Tobago Stock Exchange. The company was listed today and is the first company to list on the SME section of the exchange.
There was no trading in the company’s shares and none were offered for sale and there were no bids to buy the stock at the close. a total of 6.4 million shares are issued and the opening price was placed at $10.
Trinidad and Tobago Stock Exchange established a market for Small and Medium Enterprises, the SME Market after the government of Trinidad and Tobago announced in 2012 special tax concession for companies listing on this exchange.
The company operates cinemas in Trinidad and Tobago and had revenues of TT$15.2 million for the year ending September 2018 and $12.7 million in the previous year, with profits after tax of $867,000 in 2017 versus $1.5 million in 2016 after making $1.5 million before tax in 2017 versus $1.1 million in 2017.

Profit jumps 83% for tTech

Profit at junior market listed tTech, rose 83 percent in the September quarter, to $12.2 million from $7 million in 2017 and for the nine months to September, profit climbed 59 percent to $29 million from $18 million in 2017.
Sale revenues grew 25 percent for the quarter, to $70 from $56 million but was up 31 percent for the year to date, to $215 million, from $164 million in 2017. Investment income brought $12 million for the nine months and $7 million for the quarter
The company is overcoming a period when profit retreated from the high level generated when it went public back in 2015, as the build out of staffing ahead of increased business sapped profits. The company seems to believe that the work they have put out to attract customers is now bearing fruit, with more to come going forward.
Profit having risen to peak at $39 million in 2016, on rising sales revenues, in 2017 both revenues and profit declined, with the profit declining below that earned in 2015 as it hit $19 million down sharply from the 2016 out turn.
Gross profit margin in the first 3 quarters of this year, is up just 14 percent to $161 million compared to revenues that grew 31 percent and it rose by 9 percent in the September quarter to $51 million, just a bit below the growth rate in sales.
Other operating expenses increased 52 percent to $20 million for the nine months but grew 29 percent to $7 million in the quarter. Administrative expenses rose 12 percent to $42 million in the quarter and increased just 8 percent in the nine months period, to $125 million.
Earnings per share came out at 12 cents for the quarter and 27 cents for the nine months and should end the fiscal year ending to December, around 40 cents. IC Insider.com is forecasting 80 cents per share for  a PE of  8 times 2019 earnings
“We have had a good third quarter and our business development team continues to leverage the momentum by closing opportunities presented to us. we expect continued growth and performance as we provide guidance and support for digital transformation,” the chief Executive Officer, Christopher Reckord stated in his commentary on the third quarter results.
Gross cash flow brought in $25 million but addition to fixed assets and investments resulted in a net buildup of funds for the year to date. At the end of September, shareholders’ equity stood at $207 million with no borrowings to support the operations. Net current assets ended the period at $164 million inclusive of trade and other receivables of $151 million, cash and investment balances of $152 million. In addition, the company has $31 million in non-current investments. Current liabilities stood at just $57 million.
The stock traded at $6.50 on the Junior Market of the Jamaica Stock Exchange with a PE ratio of 15 times 2018 earnings. Net asset value per share s $1.95 with the stock selling at 3.3 book value.

General Accident nearly doubles profit

General Accident stock is undervalued.

Profit at General Accident Insurance rose 88 percent to $144 million, in the nine months September from $77 million in the similar period in 2017 even as profit for the quarter to September 2018 slipped 29 percent from $68 million to $49 million.
Earnings per share amounted to just 5 cents in the September quarter and 14 for the year to September and IC Insider.com estimates 40 cents for the full year and possible 80 cents for 2019. The stock last traded at $4, just less than twice net book value of $2.05. Annualized return on average equity of 9.45 percent up from 5.2 percent in 2017.
Gross premium for the year to September, grew 20 percent to $7.4 billion, while growth for the quarter was up an extremely strong 69 percent to $2.75 billion over the same periods last year. The company that is also looking to branch out to other parts of the region, also earned 51 percent more commission that the year before with nine months’ earnings rising to $495 million and it grew 104 percent for the quarter to $159 million but commissions paid grew 32 percent for the nine months to $212 million and by 44 percent for the quarter to $96 million. Net earned premiums grew 24 percent, for both the nine months to $1.20 billion for year to date and $531 for the quarter. Investment income including of foreign exchange gains is up 158 percent for the quarter to $144 million and 56 percent for the first nine months to $228 million.
Net claims grew by just 10 percent to $866 million for the nine months but jumped 42 percent for the quarter to $353 million. “Administrative expenses increased by 19 percent compared to the same period prior year, due to new hires to drive the strategic plan” management stated. Management expenses rose 35 percent to $554 million in the nine months and by 47 percent for the quarter to $201 million.
“General Accident ended the third quarter with a book value of $2.05 billion and generated annualized return on average equity for shareholders of 9.45 percent. Despite, low interest rates and increased competition in a very challenging operating environment. For the first nine months of the year, we were able to improve on our performance when compared to the similar period for 2017. The board and management team are committed to ensuring that General Accident’s financial performance continues to improve for the remainder of the year,” Paul Scott, Chairman and Sharon Donaldson, Managing Director said in their report to shareholders that accompanied the quarterly results.
The company ended the period with equity capital of $2 billion with $4 billion in insurance reserves. Assets total $6.7 billion and comprise liquid funds of $3 billion with amounts due from re-insurers and co-insurers of $1.5 billion representing a big jump from $875 million in 2017.