FIFA incredible ranking system left wanting

World cup tropheyThe world cup finals are making a mockery out of FIFA ranking system for its members. For years FIFA has been using a system of moving nations up and down the ranking ladder based on results of games played. Unless there are regular interchange of teams globally so that there is a good comparison that can be done internationally, the ranking system is likely to be flawed which is exactly what the June rankings and the world cup outcomes indicate. Commentators have been caught out as well as they have in many cases limited information to compare one team with another. The results many have been confounded by the results of world cup 2014.
FIFA number 1 team Spain won just one match but only after they were eliminated from this year’s world cup finals, the number 10 team England never even won a match, their no 9 ranked team managed just one win and bowed out of the tournament at the end of the preliminary round. The number 4th ranked team Portugal is in with a chance of staying in the top 16 but may well not make it.
The 28th team Costa Rica won all their matches against the 7th, 9th and 10th ranked teams, the team that was ranked at 44 is in the top 16. Korea Republic that was ranked at 57 did better than many ranked above them and so is the case with Iran that was ranked at 43, Ghana was ranked at 37 and is close to being in the top 16.
Something must be terrible wrong with a system that gets the ranking so wrong. FIFA needs to revisit this system if it to have credibility as the present system has little. But this is not the only thing that FIFA a body of mostly well aged men control. Cricket has moved to let technology help in determining the accuracy of developments during a cricket match, tennis has done so for years but FIFA has refused to move into the modern era except belated for goal post technology. The present series and past ones have had so many bad calls that the time has long gone for football to move fully into the modern world and let technology assists the referees on the field.

Inflation jumps 1% in May

UpIncreasegraphInflation jumps 1 percent in May, the Statistical Institute of Jamaica (Statin) stated in a release today, compared to the index for April. An increase of 0.7 percent in ‘Food and Non-Alcoholic Beverages’ and 3.6 percent increase in the index for the division ’Housing, Water, Electricity, Gas and other Fuels’ were the major reasons for the sharp climb. The movement in the index for May 2014 resulted in a calendar year-to-date inflation rate of 2.4 percent. Inflation declined in April by 0.7 percent compared to March this year.
According to Statin, the division ‘Food and Non-Alcoholic Beverages’ was impacted by increases of 1.9 percent and 1.6 percent in ‘Bread and Cereals’ and ‘Milk, Cheese and Eggs’ respectively. There were declines of 0.4 percent and 0.3 percent for the classes ‘Fruit’ and ‘Vegetables and Starchy Foods’ respectively. Within the division ‘Housing Water, Electricity, Gas and Other Fuels’ the advance in the index for ‘Electricity, Gas and Other Fuels’ of 7.3 percent was moderated by the fall of 3.4 percent in the index for ‘Water Supply and Miscellaneous Services Related to Dwelling’
The other divisions that recorded increases in the All Jamaica ‘All Divisions’ index were: ‘Alcoholic Beverages and Tobacco’ 0.5 percent, ‘Clothing and Footwear’ 0.2 percent, ‘Furnishings, Household Equipment and Routine Household Maintenance’ 0.5 percent, ‘Health’ 0.2 percent, ‘Transport’ 0.4 percent, ‘Recreation and Culture’ 0.1 percent, ‘Restaurants and Accommodation Services’ 0.5 percent, and ‘Miscellaneous Goods and Services’ 0.5 percent.

Holland demolishes Spain 5-1

world cup 2014 ballThe Spanish team came in as favourites for their world cup match up with the Dutchmen, but the Dutch have demolished the last world cup winner in a second half display that few people saw. With 10 minutes of the second haft left to be played, Holland has torn up the scrip and surged ahead 5 goals to 1 and now seem very unlikely to lose this match.

Jamaica’s inflation falls

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bOJ building #4

A fall in the price of electricity lead to a 0.3 percent drop in the inflation rate for April this year, according to data released by the Statistical Institute of Jamaica, on the Consumer Price Index. Statin says “this was the lowest inflation rate recorded since July 2012, when the rate fell by 0.3 percent”.

This decrease was as a result of a decline in electricity rate, represented by a fall of 7.5 percent in the index for the group ‘Electricity, Gas and Other Fuels’ but was moderated by the 4.0 percent increase in the index for the group ‘Water Supply and Miscellaneous Services Related to the Dwelling’ as a result of a the rise in water and sewage rates for the period. The division, ‘Food and Non-Alcoholic Beverages’ recorded an increase of 0.3 percent.

The calendar year-to-date inflation rate for April 2014 was 1.4 percent, the point-to-point 7.6 percent.  The other divisions that recorded increases in the All Jamaica ‘All Divisions’ index were: ‘Alcoholic Beverages and Tobacco’ 0.2 percent, ‘Clothing and Footwear’ 0.1 percent, ‘Furnishings, Household Equipment and Routine Household Maintenance’ 0.3 percent, ‘Health’ 0.5 percent, ‘Transport’ 0.4 percent, ‘Recreation and Culture’ 0.3 percent, ‘Restaurants and Accommodation Services’ 0.4 percent, and ‘Miscellaneous Goods and Services’ 0.2 percent.

GOJ revenues up in April

Image courtesy of cooldesign/FreeDigitalPhotos.net

Image courtesy of cooldesign/FreeDigitalPhotos.net


 The GOJ enjoyed slightly higher revenues in the first month of the fiscal year with total inflows of $24.7 billion versus $24.4 billion budgeted.
The increase came from non-tax revenues. Expenditure was slightly less than planned and came in at $33.9 billion only $31 million less than budget, resulting in an reduced fiscal deficit than originally projected coming in at $9.16 billion compared to $9.53 billion budgeted.
The government however, borrowed $1.4 billion less that they projected to borrow in the month.

Remittance growth continues

FX_USPoundNet remittances rose US$11 million or 7.8 percent in February this year over the similar period in 2013, ending at US$152 million. The growth in net remittance inflows reflected an increase in inflows and a contraction of outflows.
Gross inflows for the month amounted to US$168 million, an increase of US$8 million or 5.1 percent versus the corresponding month of 2013. The rise in total remittance inflows emanated from an increase of US$11 million in inflows through Remittance Companies. The increase in these flows was partly offset by a reduction of US$2.4 million in inflows from Other Remittances.
Net remittances for the two months to February this year was US$290 million, an increase of US$19 million or 7.0 per cent relative to 2013 and emanates from an increase in gross remittance inflows and a contraction in outflows.
For the review period, total remittance inflows amounted to US$327 million, an increase of US$12 million or 3.9 percent.

BOJ intervention squeezes buying

bOJ building #4Trading on the forex market did not match or come close to the levels of funds traded in the market on Thursday last week, the last day of the holiday shortened week. For Monday, dealers bought the equivalent of US$25,375,062 compared to US$72,581,952 on Thursday and sold the equivalent of only US$22,862,624 versus US$71,142,957 last week Thursday. In spite of the lower purchases all the spot rates fell against the local currency except for a one cent rise in the selling rate for the Canadian dollar.  “Bank of Jamaica intervened in the market last week Thursday selling dealers all the forex funds they needed” IC Insider source indicated as to the reason for the big increase in trading on that day. The big amount bought on Thursday may be the reason why buying on Monday after the holiday was so low. The purchase on Monday was in contrast to nearly US$45 million bought on the previous Monday as well as the week before.

Dealers bought US$20,649,053 compared to US$68,621,498 bought on Thursday as the buying rate for the US dollar declined by 76 cents to $110.15 and sold US$19,573,771 versus US$67,344,895 on Thursday with the rate closing 2 cents lower to $111.17. The Canadian dollar buying rate fell 2 cents to end at $100.40 with dealers buying C$1,928,329 and selling C$1,600,232 with the rate rising by a cent to end at $101.97. The Pound closed at $184.25 for the purchase of £1,651,343 with the rate declining by 91 cents while £908,165 was sold with the rate declining by 87 cents to $186.96. Other currencies bought amounted to the equivalent of US$206,180 while selling accounted for the equivalent of $293,819.

Highs & Lows| The highest and the lowest buying rates for the US dollar and the highest selling rate remained unchanged at $111.70, $90.18 and $115.56 respectively but the lowest selling rate fell by $2.14 to $90.18.

The highest buying rate for the Canadian dollar lost 30 cents to $102.30, the lowest buying rate was unchanged at $80.43. The highest selling rate rose by 50 cents to $104.29 and the lowest selling rate fell $2.10 to $96.90.

The highest buying rate for the Pound fell 10 cents to $187.40 while the lowest buying rate rose by 29 cents to $149.44. The highest selling rate declined by 27 cents to $192.65 while the lowest selling rate fell $3.20 to $180.05.

Dolphin Cove added to Buy Rated list

Dolphin Cove is now added to the Buy rated list hiving produced a healthy 26 percent jump in earnings for the March quarter with indications that earnings could hit $1.20 for this year at just over $8 the price could jump in the months ahead.
Trinidad’s National Flour is added to the watch list and AMG Packing was moved earlier from Buy Rated to the Watch list. Access Financial which had been put back into the Buy Rated list when the price fell back to $8 has risen in price but remains on the Watch list until the directors’ dispute is resolved.
Caribbean Cement remains in the buy list but the price could pull back some more with the unimpressive March quarter results. Investors should await the pull back to buy. One Caribbean Media has climbed in price and is losing some of its attractiveness as such, investors should be careful with this one unless their objective is for a longer term investment.
Some of the Junior market listings have not had a great first quarter in reporting profits but prices have pulled back and have helped to make them attractive buys with the hope that profit will improve going forward. The reality is that in the March quarter government operated at a surplus and this would have pulled funds out of the system and squeezed purchasing power from consumers thus affecting the smaller companies.
A number of the main market companies in Jamaica reported strong first quarter growth in profits that points to the possibility of overall growth in 2014 profits for them. Outstanding results were reported by Hardware and Lumber with IC Insider 2014 forecasted earnings put at $5.40 which means strong increase can be expected in the stock price. Grace reported 21 percent increase in March quarter results but some of this comes from losses incurred in 2013 from the debt exchange and restructuring of the general insurance arm with no such losses in 2014 rather than from totally ongoing improvement in its operations. Pan Jam also reported strong increases in profit both from continuing improvement in operations as well as recovery form one off losses in 2013.

2013 Remittance inflows top $2B

Total remittance inflows into Jamaica for 2013 hit a record of US$2.07 billion, US$23 million more than the amount received in 2012, which was the previous record year at US$2.043 billion according to data from the Bank of Jamaica. Net remittances for January to December 2013 were US$1.82 billion, an increase of US$49 million compared to 2012.

The out-turn for December reflected an increase in gross remittance inflows and a contraction in outflows with net remittances for the month reaching US$176 million, an increase of US$2.2 million over the similar period of 2012. Gross remittance inflows for the month were US$195 million, a decrease of US$1.7 million relative to December 2012.

Image courtesy of Boaz Yiftach/FreeDigitalPhotos.net

Image courtesy of Boaz Yiftach/FreeDigitalPhotos.net

For the fourth quarter of 2013, net remittances were US$476 million, an increase of US$27 million or 6.0 per cent relative to the corresponding quarter of the previous year resulting from an increase in gross remittance inflows and a contraction in remittance outflows.

Total remittance inflows for the December quarter were US$533 million, representing an increase of US$16 million or 3.0 per cent relative to the corresponding quarter of the previous year.

Related posts | Remittance inflows continues up | October remittances up

Margaritaville, down the road with risk

Come Monday March 3, the Margaritaville Turks IPO opens to the public with 21,156,555 ordinary shares on offer at a price of 10 US cents per share payable in US dollars. The IPO aims to raise US$2 million through the issuing of 5,260,740 new shares with the company pocketing the net proceeds. The remainder are existing shares being sold by the parent company Margaritaville Caribbean.

If the issue is successful in selling the minimum amount of 13.5 million shares, they will be listed on the main market of the Jamaica Stock Exchange. The company, incorporated in the Turks & Caicos Islands, now has 62,239,259 issued Ordinary Shares to Margaritaville Caribbean. After the issue, it is expected that the issued shares will climb to 67.5 million units and the ownership of the parent will fall 69 percent. The company is a small one with equity of US$3 million but the only debt are amounts due to creditors of $725,000 and current assets of only $841,000.

Value | For the six months to November 2013, revenues climbed by a strong 38 percent to hit $2.74 million with profit more than doubling to $442,000 and should be approximately US$900,000 for the full year to May 2014. For the year ending May 2013, revenues fell to $4.5 million from $4.79 million in 2012 with profits of $598,000 down from $880,000 in 2012.

Revenues were $4.86 million in 2011, $4.3 million in 2010 and $3.55 million in 2009. Profits during this period have not grown in line with revenues, with profit of $842,000 in 2011, $943,000 in 2010 and $1 million in 2009. No doubt the global downturn had a negative impact on the operations. The worsening profit out turn is tied to slipping margins, which was mostly in the 170 percent range between 2010 and 2011 but fell to 143 percent in 2012 and 105 percent in the 2013 fiscal year, and a recovery to 156 percent in the latest six month period as at November 2013. The level in the November quarter slipped to 149 percent.

margaritaville_entranceThe six month earnings to November 2013 work out at 14 cents per share with the PE ratio at 7 times earnings, a bit rich for main market companies. This is like a junior market listing. As such, the valuation is in keeping with those smaller companies.

US$ earnings | As the earnings are in US dollars, many investors may see much more in the IPO than the real numbers suggest. The shares are priced at 2 times book value, which is not out of line with many companies of similar size on the market. In fact, the net book value valuation is below several junior market companies and is selling at roughly one times sales, which seems to be on the high side compared with the majority of listed companies. The above suggests that investors may have to wait sometime for a rich payoff.

There is added risk | For one, the company has managed to cut cost of sales by what it says is “renegotiated price from suppliers” but this cannot go on forever. A positive is that revenues are up in 2013. Income is highly dependent on one location in a small territory, the Turks & Caicos, and continuity is subject to lease arrangements with Carnival Cruise Lines, the only cruise line doing stopovers at that location. The success of the business is highly dependent on visitors coming to the island by cruise ship and the facility is only open on those days that ships are in. In other words, absent the ships, absent the business.

The company appears to have business interruption insurance coverage for a major catastrophe, but it’s unlikely to cover any downturn flowing from less customers going on cruises. This doesn’t seem to be a problem in the short run with the increased revenues generated to date and the promise of increased visitors in 2014, but could occur at any time.

The Directors are planning to roll out a new Margaritaville menu early in calendar year 2014, which aims to increase average consumption per customer. The Directors also anticipate growth in the Company’s revenues in future, given the following factors:

  1. A continued increase in the number of ship calls to the Grand Turk Cruise Centre destination.
  2. Increase in the number of passengers visiting the Cruise Centre. Data received from the Carnival Corporation show an estimated 750,000 passengers sailed to Grand Turk and the number is expected to reach 1 million in calendar year 2014 based on pre-bookings.
  3. The addition of 4 new bars, and the upgrading of existing bar outlets, the addition of a new revenue centre with introduction of the new casual “Grab N Go” convenience dining concept, the opening of the South Beach Bar and Grill, which the directors anticipate will provide an alternative option for passengers who prefer a more sedate dining environment to that of the Company’s main restaurant, Margaritaville.
  4. The expected improvement of the Company’s average customer spend resulting from upgrading of remote point of sale (POS) system introduced in calendar year 2013, that facilitate the order process for customers’ convenience.

The Company is a part of the Margaritaville Caribbean Group and a wholly owned subsidiary of Margaritaville Caribbean. The Group operates the Margaritaville chain of restaurants in various Caribbean destinations, inclusive of the flagship restaurant in Montego Bay. The IPO listing will only offer shares in the Grand Turks-based cruise pier operation.

The stock may not take off big time in the short run, but it provides a means for investors to diversify their portfolios if they are prepared to accept what appears to be higher risk.