Feature Stories — Page 516

D&G, Carreras & C&WJ now Buy Rated

February 17, 2014 by IC Insider.com

IC Insider has added Desnoes & Geddes, Carreras and Cable & Wireless Jamaica to the Buy Rated list.

Desnoes & Geddes reported gains of 21 percent for the six months to December, earnings excluding one-off items and is poised to earn 80 cents for the full year ending in 2014. Forecasted earnings for the 2015 year is $1.10.

For Carreras the worse seems to be over with the last set of interim figures showing sales starting to recover from the impact caused by the price increase and the stock piling of cigarettes in the 2012 December and March 2013 quarters. IC Insider’s forecast is for earnings of around $5 per share for the year to March 2014.

Cable & Wireless’ sharp increase in cellular revenues and cost cutting will change the bottom-line markedly going forward.

Berger Paints Jamaica has been added to the market watch list flowing from a revival in earnings for the March 2014 year.

Image courtesy of suphakit73/FreeDigitalPhotos.net

Filed Under: Company News, Feature Stories, JSE Main Market, Stock Market, TTSE Market Tagged With: Berger Paints, C&WJ, Carreras, D&G, Jamaican Stock, TTSE

GOJ’s program for reduction & growth

January 26, 2014 by IC Insider.com

The principal objective of the Government of Jamaica’s programme is to reduce the national debt and raise the sustainable growth rate of our national output.

The governor of the Bank of Jamaica, Bryan Wynter, stated in a recent address at a JMA’s 2014 Economic Forum, that the Government has committed to implementing revenue, expenditure and debt management measures to ensure that the debt goes down in relation to GDP. This commitment entails the achievement of annual primary surpluses of 7.5% of GDP over the life of the programme. The governor went on to outline other measures that are to be put in place to achieve the main objectives.

“With this,” he stated, “the borrowing need of the Government has fallen sharply, which is leading to a steady reduction in the debt to GDP ratio to below 100% by 2020. Government intends to make the current fiscal responsibility framework stronger by developing binding fiscal rules. This will increase transparency, lock in the gains of fiscal consolidation and ensure that budgets will be sustainable even beyond the end of the four-year IMF agreement.

Image courtesy of arztsamui/FreeDigitalPhotos.net

“A central plank of the programme is the implementation of structural reforms aimed at creating an environment supportive of economic growth. One of the main structural reforms to which the Government has committed is the improvement of the tax system, including tax administration.

“Fiscal incentives legislation was also passed in December which overhauls and simplifies decades of tax law to the advantage of productive businesses.

“To kick-start growth, the government has started to implement catalytic, strategic, public-private investments. Already, the government has initiated production in six agro-parks, aimed at import substitution. The objective is to develop a total of nine such parks by the end of 2014.

“The GOJ is also committed to improving the competitiveness of the economy through legislative and administrative changes. Additionally, amendments to the Companies Act were passed which streamline the business registration process through the use of a multi-purpose registration instrument. A bill to modernise our bankruptcy rules, the Insolvency Bill, was also tabled in Parliament.

“The Government is in the process of establishing a Port Community System to electronically integrate and streamline export and import procedures. It is also moving to establish more flexible work arrangements and improve access to skills training. Furthermore, initiatives to achieve energy diversification and conservation are in progress.

“Supporting these reforms will be the preservation of a stable macroeconomic environment through sound monetary and fiscal policies. Inflation is expected to decline over the medium term towards our long-run objective. This decline in inflation, in conjunction with a more competitive exchange rate, will foster increased price competitiveness of Jamaica’s exports of goods and services.

“Lower inflation will also allow Jamaican businesses to finance investments at lower interest rates. The reduction in fiscal deficits and the public debt will make more resources available to the productive sector and will complement Bank of Jamaica’s thrust to maintain single-digit inflation.

“The Government also committed to undertaking reforms which will increase the efficiency and competitiveness of the financial system and credit market. You may have seen in the media recently, where we committed to a timetable for raising the cap on investments in foreign securities from 5% of assets to at least 25% by end-2015 and removing it by end-2016, unless extraordinary circumstances require a reassessment. The drafting of Jamaica’s Omnibus Banking statute, which includes regulations to give consumers increased protection and to underwrite the regulatory basis for agency banking, is far advanced.

“We are confident that we will be successful with the December test both with respect to the structural benchmarks and the quantitative performance criteria. More importantly, the Government is already looking ahead to the coming fiscal year with a view to crafting policies and commitments aimed at further improving the business climate in Jamaica and securing stronger growth.

“The economy began its recovery during the September quarter, registering growth of 0.5 per cent. We expect that growth of a little under 1.0 per cent will materialise for the fiscal year, in line with our projections.

“As the economy stabilises, the fiscal and external balances improve and the debt ratios are brought down towards sustainable levels, we should see the Government being able to address more effectively important social and developmental issues such as education and training and crime and social peace.”

Filed Under: Economy, Feature Stories Tagged With: BOJ, Economy, GOJ, IMF

First Citizens staff lose huge payday

January 5, 2014 by IC Insider.com

Several staff members of Trinidad’s First Citizens Bank lost out on the huge return investors got when the bank offered shares to the public and allocated shares to the staff in August 2013.

The shares, which were very attractively priced at $22 and at an attractive PE, exhibited all the signs of a big pay day. So attractive was the issue, that IC Insider immediately placed the stock on our Buy Rated list from the IPO opened. Surprisingly, information obtained from the Trinidad & Tobago Stock Exchange was that a large percentage of the bank’s staff never bought shares that were allocated to them. As such, the excess was made available to the public who clamoured for more shares. Employees of the bank bought only 3.78 million units accounting for 7.8 percent of the amount offered and just more than half of their entitlement.

The stock price has since hit $40.63, a gain of on 84.6 percent. In addition the bank declared a $1.09 per share final dividend that will be paid January 24, 2014 to shareholders on record as of December 31, 2013. The dividend is equivalent to a 12 percent rate of return on the IPO price. When the dividend is added to the return of the stock price, the result is a 96 percent gain on investment in just five months.

Based on the 2013 results, IC Insider returned the stock to the Buy Rated list and projects the stock price to exceed $50 per share during the course of 2014. Those are huge returns in a country where interest rates on money market instruments are below 5 percent.

The IPO was heavily subscribed as $3.3 billion chased $1 billion of shares that were on offer leading to a massive oversubscription for the 48 million First Citizens Bank shares. While the staff only picked up a portion, there were 12,435 applicants who got less shares than they wanted.