Falling interest rate was huge buy signal

Apartment complex in Kingston – Real estate values to benefit from low interest rates.

Declining interest rate is a huge buy signal for both stocks and real estate investments, if the fall is expected to last. Interest rates have fallen to the lowest levels on record, in Jamaica and while the low rate of 1.7 percent in treasury bills won’t last forever, it is expected that it will not go up too far from current levels any time soon.
In May this year, Bank of Jamaica cut the overnight policy rate, by 25 basis points to 2.5 percent that along with a further decline in short term Treasury bill rates on Wednesday.
IC Insider.com stated then, that the moves provided more ammunition for a big surge for Jamaican stocks. The piece went on to state that with a 15 percent fall in BOJ’s policy rate in 2018 so far, stocks are lagging behind, with an increase of just 6.6 percent for the Junior Market and 4 percent for the main market.
The fall in Treasury bill rates was far greater than the rise of the All Jamaica Composite Index, an indication of a lot more upside for stocks based on the downward movement of interest rates.
Investors seem to be focusing more on profits in valuing stocks than on interest rates so far. That will change. The fall in the overnight rate, translates to a 9 percent rise in stock market prices, but rates seem likely to decline some more before settling off, providing more ammunition for more gains in stock prices.
We stated that with the fall in interest rates, the PE of money is at the high end 40 times income and using corporate bond 12 times, but the PE ratio should be more tied to Treasury Bill rates and that PE is now in 30 range but stocks are mostly in the low teens and below. IC Insider.com further stated that most investors did not appear to be paying much attention to the tsunami that was on the way that will see prices move sharply higher.
Some were skeptical about the assertion that the fall in interest rates could drive stock prices. The record is clear as there are two main developments that drive stock prices – interest rates and profits. With just over five months passing, investors have not only warm to the fall in rates but many are not willing to part with their stocks. Late comers to the party will pay much higher prices than in May and June. Up to Friday the Junior Market is up 24 percent and the Main market is up 31.7 percent and rising. Technical reading of the market suggest that the Main market has another 25 percent run to make before probably cooling for a charge to 720,000 points on the All Jamaica Composite Index in 2019.
The fall in interest rates makes it cheaper to buy real estate with lower interest rates for each dollar borrowed. Additionally, investors will switch funds from fixed interest investments into stocks and real estate thus driving up their values.

All Jamaica jumps over 9,400

The Jamaica Stock Exchange, started the final quarter of the year in record territory with the all Jamaica Composite Index jumping more than 9,000 points over the 402,000 mark.
The market indices surged sharply with the All Jamaica Composite Index jumping 9,042 points to a record 402,319.29 at 10.58 minutes 5 minutes after 11 moved on to 402,706.63 and the JSE Index that surged 8,238.28 points to a record 366,558.39 at and went to higher to 366,911.31. The Junior Market rose 25 to 3,420.02.
In the main market NCB Financial traded at $127.98 but with only 130 shares trading and Jamaica Producers traded up to $28, Jamaica Broilers traded up to $30, PanJam Investment traded at $63, Scotia Group up to $61 while Supreme Ventures traded at $23.90. Sterling Investments traded at a new high of $23.

All Jamaica jump over 400,000

The Jamaica Stock Exchange, started the final quarter of the year in record territory and is within just 535 points of the critical 400,000 points milestone at 9.35 am and with just under 35 minutes of trading the market jumped over the 400,000 mark.
The market indices surged sharply with the All Jamaica Composite Index jumping 7,088.22 points to a record 400,365.51 and the JSE Index that surged 6,458.17 points to a record 364,778.28. The Junior Market rose 23.03 to 3,418.05.
In the main market NCB Financial traded at $127.98 but with only 130 shares trading and Jamaica Producers traded up to $27.80, Jamaica Broilers traded up to $30, Scotia Group up to $61 while Supreme Ventures traded at $23.90.

All Jamaica just 535 points from 400,000

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The Jamaica Stock Exchange, started the final quarter of the year in record territory and is within just 535 points of the critical 400,000 points milestone at 9.35 am.
The market indices surged sharply with the All Jamaica Composite Index jumping 6,187.64 points to a record 399,464.93 and the JSE Index jumped 5,637.64 points to a record 363,957.75. The Junior Market had slipped just 1.38 points at the opening but rose 23.03 to 3,418.05 at 18 minutes after opening.
In the main market NCB Financial traded at $127.98 but with only 130 shares trading and Jamaica Producers traded up to $27.80.

Junior Market index drops 121 points.

Express Catering traded more than 23 million with the price dropping from $8.02 at the close on Thursday to $6.40 in the morning session of trading on the Junior Market and along with Lasco Distributors that fell to $3.50 and Main Event that traded at $5.10 from $6.50 did immense damage to the market index on Friday.
The Junior market index which is now down by 109.10 to 3,327.21 covered from partially from a decline of 121 points at one stage.
The main market that was up strongly in early trading when NCB financial recovered to trade in the $120 level lost more than 1,000 points when NCB fell back to $110 but now trades at $124 with the main market off less than 140 points at 12.33 PM.

All Jamaica just 1,700 points from 400K

The Jamaica Stock Exchange climbed sharply within just a minute of the opening of trading on Thursday, with the All Jamaican Composite Index surging to just under 5,800 points to a new record high and pushing the index within 1,700 points of the critical 400,000 points mark.
The All Jamaican Composite Index surging 5,783.43 points to a record 398,386.05 points and JSE Index surged 5,269.36 points to a record 362,974.75. The Junior Market is down 7.14 points to 3,406.44.
The rise in the main market is due to jump in the prices of Scotia Group trading at $64 and NCB Financial that traded at $123.01 and Kingston Wharves at $73.

All Jamaica less than 8000 points from 400K

The Jamaica Stock Exchange climbed sharply with 17 minutes of trading left with the All Jamaican Composite Index surging to just under 7,600 points from big resistance point of 400,000.
The All Jamaican Composite Index surging 7,293.20 points to a record 392,437.50 points and JSE Index surged 6,644.93 points to a record 357,554.95. The Junior Market rose 8.77 points to a record 3,431.49 and if it closes around this level would represent a record closing high for the market of emerging companies.
The rise in the main market is due to jump in the prices of Scotia Group trading at $64 and NCB Financial that traded at $123.

All Jamaica less than 9000 points from 400K

The Jamaica Stock Exchange climbed more than 5,000 points after 25 minutes of opening with the All Jamaican Composite Index surging to just under 9,000 points from big resistance point of 400,000.
By just 4 minutes after 10 am, the All Jamaican Composite Index surging 5,502.66 points to a record 391,34026 points and JSE Index surged 5,013.54 points to a record 356,555.23. The Junior Market rose 2.53 points to a record 3,405.01.
The rise in the main market is due to large movement in Jamaica Broilers that traded at a new record of $33, NCB Financial that traded at $121, PanJam Investment trading at $57 and Scotia Group trading at $62.

Carib Producers returns to IC TOP 10

Caribbean Producers back in TOP 10

Caribbean Producers climbed back into the Junior market IC TOP 10 stock listing but there was no change to the main market list. Main Event dropped out of the top list having recovered from a big price fall in the previous week.
Caribbean Producers recently released full year results that were slightly lower than the year before but with a 10 percent rise in revenues. A lower profit margin by 2 percent and an increase of 10 percent in administrative and selling expenses resulted in lower profit but forecast suggest that earnings for 2019 should be up strongly to around 65 Jamaican cents. The company will have to report new results to see the likely increased earnings start to show up in the stock price.
During the past week, the main market of the Jamaica Stock Exchange, racked up 5 consecutive days of record close on Friday and 11 record close in a row, while the Junior market closed the week for with two record close, for the first time since May 2017.
The gains in the two markets is driving the PE ratio of the market higher with the overall PE for the Junior Market rising from to 13 and the main market from 13.7 last week to 13.7 and 14 respectively, this week. Recent movement in the PE suggest that average PE for the market will end 2018 around 18 and 20 by the end of January as conditions continue to favour stocks as the preferred investment of choice along with real estate.
The PE ratio for Junior Market Top 10 stocks average 8.9 up from 8.7 last week, as the market continues to revalue the multiple higher. The latest valuation compares to an average PE for the overall market of 14.3, based on 2018 estimated earnings. The main market PE is now 8.8 and is the up from 8.5 last week, for the top stocks, compared to a market average of 14.6.
The TOP 10 stocks now trade at an average discount of 38 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be of 20 times earnings and main market stocks traded at a discount of 40 percent to the market.
TOP 10 stocks are likely to deliver the best returns within a 12 months period. Stocks are selected based on projected earnings for each company’s current fiscal year. Based on an assumed PE for each, the likely gains are determined and then ranked, with the stocks with the highest potential gains ranked first followed by the rest, in descending order. Potential values will change as stock prices fluctuate and will result in movements of the selection in and out of the lists for most weeks. Earnings per share are revised on an ongoing basis based on new information received that can result in changes in and out of the list as well.

NCB pushes All Jamaica within touch of 380K

NCB stock jumped to $124 in early trading on Wednesday.

NCB Financial traded up to $124 from $120 on Tuesday and help push the All Jamaica Composite Index to just less than 55 points from 380,000, at 11:38 in the morning session of the Jamaica Stock Exchange.
The main market of the Jamaica Stock Exchange traded at a new record territory on Wednesday morning a mere 3 minutes of opening passing and went on to yet a higher level at 5 minutes later while passing other records along the way to the recent high.
The All Jamaica Composite Index rose 3,015.46 points to 379,946.02 and the JSE Index gained 2,747.43 points to a record 346,173.52.
The Junior Market that slipped 33.18 points in earlier trading is now down just 4.45 to 3,364.67.
Sagicor Real Estate Fund traded the most share of just under 8.7 million units at $11.75. NCB Financial now trades at $122 with the bid at the last sale price.