News, Views & Advice from Investors's Choice
IC Insider will be keeping a close watch on these stocks for movement during the week of 17th to 21st June 2013.
JSE Junior Market
JSE Main Market
T&TSE
Friday, 14th June 2013 | The evidence is building to confirm than its not normal demand that is driving the rate of exchange for the Jamaican dollar. During the week ending Friday, authorised dealers bought the equivalent of US$14 more than they sold, with only Thursday’s trade when they bought US$200,000 more than they sold reflecting more demand than the amounts bought. Nevertheless, the rate of exchange climbed for all three major currencies during the week.
In Friday’s trading, US dollar buying by authorised dealers translated to US$2.2 million more than the amount sold but the average rate for buying and selling rose by 3 cents for buys and 30 cents selling. C$727,000 was purchased and C$570,000 sold as the average buying rate declined by 71 cents and selling rose by 15 cents. The Pound sterling rose $1.31 for buying and selling cost an average of $1.13 more than on Thursday. Overall, the equivalent of US$5 million more was purchased than the amount sold. Buying amounted to $25.54 million and selling $20.6 million.
Highest & lowest | On Friday, the highest rates climbed for all currencies with the US dollar rising by 50 cents but selling rates had no change over Thursday’s, the Canadian dollar rose $1.35 and the selling rate was up 16 cents and the Pound rose 95 cents and fell $2.99 on selling. The lowest rates saw no change in the US dollar while the Canadian rose 54 cent for buying and 60 cents for selling and the pound rose 17 cents buying and $3.30 selling.
Friday, 14th June 2013 | Scotia Investments bought 4.18 million units and Mayberry bought 1 million shares of Jamaica Money Market Brokers (JMMB) in today’s trading as the stock remains the dominant trader for a few days as it traded 5.22 million shares between $8.85 and $9 before closing at $8.85 up 25 cents for the day. So dominant was the JMMB trade that Carreras with 70,000 shares cost $4.07 million was the closet to it. Scotia Investments who bought some for in house purposes has been buying for the unit trust portfolio managed by them, IC Insider has been reliably informed.
Index Climbs | The all Jamaica Index closed up 324.39 points and ended at 91,534.15points. The main market index closed up 209.73 points and closed at 88,849.67. The Investor’s Choice bid-offer market sentiment indicator, points to more market gains ahead.
Carreras closed at $58 having lost $1 and so did NCB which lost $1 to close at $21 with 917 shares trading. Scotia Group lost 44 cents to close at $21.56 while trading 100,703 shares. It was 75 cents up on Grace trading 13,000 shares as the stock closed at $59 and $2 up for Scotia Investments which closed at $28 with just 1,100 shares trading and Pan Jamaican Trust put on $1.50 to $57 with 16,350 shares changing hands.
Juniors down | The junior market index slipped again in Friday’s trading by 3.43 points to close at 729.38 even as only one stock traded down in price with 5 stock advancing in this segment of the market but Lasco Manufacturing’s 73 drop cents did the damage. Lasco Manufacturing close at $12.77 with 135,136 units. Lasco Distributors moved up by 44 cents to close at $12.51 while trading 222,412 shares. Lasco Financial Services traded 370,079 units between $9.50 and closing price of $9.90.
Advances positive | The advance decline ratio was even more positive today than yesterday with 17 stocks advancing and 4 declining on a day when 7.2 million shares changed hands with a value of $65.8 million.
IC sentiment indicator | At the end of trading, the Investor’s Choice bid-offer market sentiment indicator says ‘bullish’ with bids for 5 stocks were higher and 2 stocks had offers that were lower than their last selling price.
Friday, 14th Jun 2013 | Republic Bank of Trinidad may not have been the volume leader today but it more than made up by attracting more than $10 million of the $11 million traded for the day. West Indian Tobacco made a new high on the day, the only stock to reach a new high, trading as the stock moved up to $112.52 up 2 cents as 972 shares traded.
Main Market | The main market at the Trinidad & Tobago Stock exchange had a volume of 398,576 shares crossing the floor with a value of $11,072,781 much better than yesterday’s $1,652,262. Trinidad Cement was again the volume leader as was the case on Thursday with 281,871 shares changing hands for a value of $267,777. Republic Bank was the dominant traded stock, accounting for the bulk of the funds that were invested in the market as 94,140 shares traded for $10,355,400. Scotiabank traded 2,389 shares valued at $167,230 and closed at $70, up 29 cents for the day.
Clico Investment Fund gained 66 cents to end the day at $22.27; the fund saw trading in 170,598 shares valued at $3,799,892. In yesterdays trading, the stock gained 20 cents to end at $21.61.
Advances positive | The advance decline ratio remains positive with 5 stocks advancing and 1 declining, on a day 12 stocks traded.
IC sentiment indicator | At the end of trading, the Investor’s Choice bid-offer sentiment indicator is just mildly bullish with bids for 2 stocks higher and 3 stocks with offers lower than their last selling price.
Over the last three weeks there has been more buying of foreign exchange by authorised dealers than selling, yet the Jamaican dollar has slipped in value. This is not the case of market forces determining the value of the currency, it is manipulation by the central bank to achieve a rate they are happy with. Take the case this week. So far, every day the buying of foreign exchange is more than the amount sold, yet the rates have slipped.
According to The Gleaner, the Governor of the central bank of Jamaica, Brian Wynter, while addressing journalists at a Jamaica House press briefing yesterday, said he understood the consternation of sections of the populace as the dollar eased past the J$100 to US$1 mark, but suggested that the dollar was finding its true value in a market-determined environment.
“We in Jamaica are operating a flexible exchange rate regime that is determined by the market and that is based on the principle that is determined by the market,” Wynter stressed.
Wynter signaled that he was unruffled as the movement of the local currency was consistent with the expectations of the Central Bank, operating under a flexible exchange rate regime, to which the Central Bank is committed. “The exchange falls within the boundary of the BOJ‘s forecast,” asserted Wynter.
We understand that the central bank can’t give an indication of what is its intention with regards the rate of the Jamaican dollar, but to say that the rate is being market determined seems like a big joke when one examines what is taking place.
To be fair, the Governor did give a clear indication. As reported in the Jamaica Observer, the Governor said, “If you have a strong exchange rate that benefits the consumer that is going to make it progressively harder for exporters to compete in overseas markets. If you go the other route and have a too weak dollar you will reverse that picture but also have too much inflation in the domestic economy,” he said. “We have to find the right balance and the programme we are operating within at the moment is built on a balance that will best provide the conditions for export-led growth,” he added.
In short, it is our conclusive opinion that the central bank is the one intervening to move the rate — not normal market forces.
Yes, it is supply and demand that’s driving the rate. But the demand is one that is based on the BOJ encouraging the rate to move up by buying the banks surplus funds at higher and higher rates.
Talk back | Do you agree that the BOJ is influencing the demand side of the equation?
Thursday, 13th June 2013 | The Jamaican dollar reached a new low in all currencies today as dealers sold the US dollar for 32 cents more than they did on Wednesday as they bought it for an average of 45 cents more. The Canadian dollar was bought by dealers at just 6 cents more and sold it for 86 cents more, than on Wednesday and for the pound it was selling 73 cents more but 96 cents less when they purchased.
The amount of the US currency actually purchased was slight more than the amount sold US$22.45 bought and US$21.95 sold. C$1.2 million was purchased and C$944,000 sold and for the pound sterling purchases amounted to £1 million and selling £1.4 million.
Closing selling rates were US dollar, J$100.782, Canadian dollar J$99.343 and pound sterling J$157.76.
Thursday, 13th June 2013 | Mayberry bought 2,475 million shares of Jamaica Money Market Brokers (JMMB) for clients and Scotia Investment bought 1 million units for in house purposes today as 3.7 million units of JMMB changed hands valuing $31.8 million. The selling broker was JMMB mostly on behalf of clients. Carreras recorded a big trade worth $11.58 million as the stock traded 199,246 units and closed down at $59. NCB jumped to $22 at the close, up $2.50 with 242,000 shares trading at a value of $5.18 million. Grace Kennedy fell $0.75 to close at $58.25.
Index Climbs | The all Jamaica Index closed up 1,277.32 points and ended at 91,209.76 points, this means that the market is at its highest since the first week of January this year and has recovered all of the negative impact that the NDX did to the market index in February. The main market index closed up 725.54 points and closed at 88,639.94.
The Investor’s Choice bid-offer market sentiment indicator, points to more market gains ahead and this is backed up by technical indicators which suggest that the main market seems to be on track heading to 103,000 on the all Jamaica Index. The market seems to have broken out decisively from the 85,000 level. The 103,000 mark is the next major point of resistance followed thereafter by 115,000.
Juniors Down| Buy before results and sell after has been a pattern of the junior market from inception and it seems to be following that role again as prices of some stocks seem to have stalled or fallen back a bit as some profit taking takes place. The Junior Market index fell nearly 17 points to close at 732.81.
In today’s trading NCB, which climbed $2.50, would have had a telling impact on the index movement. However, this impact was tempered by a fall in Scotia Investments, off $1.
Advances positive | The advance decline ratio remains positive with 14 stocks advancing and 7 declining, on a day when 8 million shares changed hands with a value of $55 million. At the end of trading, the Investor’s Choice bid-offer market sentiment indicator shows that bids for 11 stocks were higher with 4 stocks having offers that were lower than their last selling price.
Thursday, 13th June 2013 | The West Indian Tobacco Company enjoyed the day’s largest gain, increasing $0.49 to end the day at $112.50, yet another all time high as the stock trades at a high PE ratio of 26 times earnings. The stock is still attractive from an income point of view with a yield of 3.4 percent compared with Treasury Bill rates in Trinidad of less than a percent. All indications are that this stock is still going higher. Scotiabank fell 29 cents to end the day at $69.71 as only 820 shares traded.
Main Market | The main market at the Trinidad & Tobago Stock exchange had a volume of 281,761 shares crossing the floor with a value of $1,652,262. Trinidad Cement saw 154,500 shares changing hands for a value of $147,975. Angostura Holdings traded a volume of 78,009 shares for $702,081. Sagicor Financial Corporation contributed 26,245 shares valued at $165,868. An infrequent trader, the Barbados headquartered First Caribbean International Bank accounted for 9,247 shares valued at $73,051.
Clico Investment Fund posted a volume of 105,940 shares valued at $2,289,349.44 with the price advancing by $0.20 to end at $21.61
Advances positive | The advance decline ratio remains positive with 5 stocks advancing and 1 declining, on a day 14 stocks traded. At the end of trading, the Investor’s Choice bid-offer sentiment indicator shows that bids for 4 stocks were higher with 2 stocks that had offers that were lower than their last selling price which is just mildly bullish.
Wednesday 12th June 2013 | The lowest selling rate for the US dollar jumped $15.33 to $97 in today’s trading. The highest buying rate also climbed but by a smaller $1.05. the highest rate for the pound climbed by 90 cents today and the lowest buying rates moved up $1.12 for the pound while the British currency was sold at the highest rate of $1.08 more than yesterdays $159.12 but the currency was sold at it lowest of $2 less than on Tuesday.
Once again, the amount of funds purchased exceeded the amounts sold as a total of $29.69 million US equivalent was purchased while selling amounted to US$28.3 million as all the rates moved up with the buying rates climbing the most for the Pound Sterling and Canadian Dollar by $1.02 and $1.58 respectively.
The selling rate for the US dollar inched up another 16 cents the same as yesterday and the Canadian 15 cents and the Pound 60 cents.
Wednesday, 12th June 2013 | While there were only 5 stocks traded on the junior market yesterday, today’s activity resulted in 11 stocks traded. With the exception of Blue Power that traded at an all time high of $8.65, up 64 cents for the day, as 52,315 units traded, price movement in the junior market was generally moderate. The overall stock market seems to have lost some of the recent sparkle as investors seem to have priced in a fair bit of the improved results of companies or adjusted for the undervaluation of others. The market may just be consolidating for awhile before moving in a major way again. This is worth watching.
Dolphin Cove traded 800,000 units to be the largest trade in the junior market and second largest trade for the day for the overall stock exchange. The stock closed at $8.45, a 52 weeks high. Sagicor Life traded 2,011,745 units as the stock closed at $9.01, having traded between $8.80 and $9.01.
Grace Kennedy traded up $1 to at $59 while trading 23,167 units. Lasco Distributors closed at $13.50 up 50 cents with a volume of 19,297 units trading. Lasco Financial Services lost 29 cents to close at $9.70 on small volume. Carib Cement traded as high as $1 in early trading but closed at $0.90. Consolidated Bakeries traded 58,750 shares at $1.15, in continuation of recovery from the sharp sell off when the company released poor full year results earlier this year. Lasco Manufacturing traded firm at $14.10 with 101,610 units changing hands.
The various market indices inched up a bit except the cross listed and US dollar indices where there was no traded stock. The advance decline ratio remains positive with 11 stocks advancing and 6 declining, on a day when 4.1 million shares changed hands with a value of $34.7 million.
At the end of trading, bids for 8 stocks were higher and no stock had an offer that was lower than their last selling price.
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