The volume traded on the Jamaica Stock Exchange declined sharply on Tuesday to 8,102,862 units valued $101,385,351 compared to 3,063,437 units valued at $29,501,732 on Monday.
Market activities in the main and US dollar markets resulted in 27 securities trading including just 1 from the US dollar market. At the close, the prices of 11 stocks advanced, 8 declined and 8 closed unchanged, compared to 30 securities trading on Monday.
At the close of the market, the All Jamaican Composite Index rose 408.61 points to close at 334,056.93 while the JSE Index gained 372.29 points to 304,363.58.
Tuesday’s volume was led by Supreme Ventures with 5,042,760 units accounting for 62 percent of the day’s volume, followed by Jamaica Broilers with 658,515 units representing 8 percent of the volume traded and JMMB Group 7.50% preference share with 633,457 units or 7.8 percent of the day’s volume.
Stocks with major price changes are, Caribbean Cement rising $2.50 to close at $43.50 but only after trading at an all-time high of $45, Carreras regained 45 cents and closed at $10, Jamaica Broilers rose $1 to end at $24, NCB Financial rallied $1.70 to $97, Pulse Investments dropped 50 cents to close at $2, Wisynco Group rose 58 cents and ended at $9.80 and JMMB Group 7.25% preference share rose 34 cents to close at an all-time high of $2.45.
In the US dollar market, 250,500 units traded valued at $29,060 with Sygnus Credit being the only stock trading in the segment, with the price slipping 0.05 cent to end at 11.5 US cents. The JSE USD Equities Index slipped 0.33 points to 154.71.
Trading resulted in an average of 311,649 units valued at $3,899,437 for each security traded, in contrast to 122,537 units valued at an average of $1,180,069 on Monday. The average volume and value for the month to date amounts to 218,947 units valued at $2,566,413. June closed with an average of 250,168 shares with a value of $5,895,281, for each security traded.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading shows 5 stocks ended with bids higher than their last selling prices and 2 closing with lower offers.
JSE volume & prices rise – Tuesday
Motta for income & long term gain
The Musson Group is disposing of all their interest in Stanley Motta Limited in a scheduled sale of all the 757,818,862 ordinary shares currently owned.
Our source states that the business which is a solely a real estate venture is not part of Musson’s core business. If the shares are listed it would be the fifth company connected to the group to do so.
The offer has 227,348,547 shares reserved mostly for family members of the majority shareholders of the Musson group and 529,970,315 units for the General Public for purchase at $5.31 per share. All the net proceeds will be payable to selling Shareholders. Sources indicates that General Accident Insurance will make be taking up a large block of the shares that offered to the public.
The Company intends to apply to the Jamaica Stock Exchange for the listing on the Main Market of all the Shares and to make such application as soon as is conveniently possible following the close of the offer. The offer opens on July 6, with July 20 set as the closing date.
A business process outsourcing and technology park consisting of five buildings totalling over 200,000 square feet of rentable commercial office space at.
The company owns 58 Half Way Tree Road in Kingston, next door to the new Kingston, comprising 200,000 square feet of rentable space that is fully leased with the lease quoted in US dollar. Tenants are responsible for all expenses arising by reason of occupation, including insurance, property tax and maintenance expenses. The weighted average tenor and annual rent per square foot are 4.7 years and US$12.09, respectively.
The anchor tenant is Jamaica Agent Services Limited, the local subsidiary of Alorica Inc. Alorica is a US based global business process outsourcing firm and the third largest provider of customer experience solutions in the world. The company has over 100,000 employees and operates from 140 locations in 16 countries around the world in North America and the Caribbean, Latin America, Europe, China, the Philippines, and Japan. Alorica serves over 600 clients many of which are on the annual list of the 500 largest companies in the United States as compiled by Fortune magazine. Under the terms of Stanley Motta’s two leases with Alorica, who took possession of Units 2, 3 and 4 each as a “cold hard shell” and paid to complete the buildings at its own expense including all interior walls, ceilings and finishes.
The complex will be managed by Felton Property Management Services Limited, a subsidiary of Musson. Felton will be responsible for all day-to-day on-site property management, administration and accounting services.
The property is a designated Free Zone, accordingly, Stanley Motta is exempt from corporate income tax on the rental income of Free Zone property.
The Board expects to distribute approximately 90% as dividends subject change from time-to-time if circumstances dictate.
The Projected Valuation obtained from an independent appraiser, using the income capitalization approach, for Unit 4 at completion is US$21.3 million or approximately $2.63 billion using rates of exchange as at December 31, 2017 and $2.79 billion using the weighted average selling rate according to the Bank of Jamaica as of June 19.
The Company’s sole source of direct income is from the rental of units in the technology park. Its only other source of income is from dividends from Unity Capital, whose sole income is derived from the rental of office space in its building at 58 Half Way Tree Road. The lack of diversification means that the Company is particularly exposed to risks affecting the property market.
The Invitation is underwritten by the Underwriter up to a maximum of the equivalent of US$21 million.
The stock is not for all investors in the short term. Investors looking for relatively high return in US dollars with modest capital appreciation over time may find this an attractive offer. While most investors may view the income in US dollars as a big positive, they ought to be aware that continued devaluation of the local currency going forward is not guaranteed. Of note is that the rental income for a full year is likely to be in the order of US$2.5 million with most expenses picked up by tenants, it should net out around the same amount tax free. The yield on investment will translate to just under 7 percent. The property has room for some amount of expansion which is done could increase the revenues and profit. The new leases while priced at $12 per square foot is set to rise to $14 dollar at renewal in 5 years and should go higher on renewal thereafter.
With Jamaica, on target to lower the fiscal deficit to 60 percent of GDP and with government maintaining balanced fiscal operations inflation going forward is likely to remain low and should result in low interest rates, against this back drop ground, the income from this operation could see investors ultimately acquiring the stock as a good income play and then drive up the price over time.