NCB jumps TOP 10

October 22, 2017 by

NCB Financial Group closed at a record $107 on Friday.

 NCB Financial returned to the main market list last week, but with a jump of $16 to $107 during the week, it ii no longer in the top list.
Barita Investments traded up to $9 and is now out of the listing. Pulse Investments and Seprod replaced NCB and Barita as the main market of the Jamaica Stock Exchange closed at new record high on Friday, the third consecutive week of record close, driving the All Jamaica Composite Index 313,990.54.
While the main market is making new highs, with gains of 49 percent for 2017, the junior market with gains of just 12 percent at the end of the previous week is now up 17 percent as the market moved higher for the past week helped by strong results by Paramount Trading, Express Catering and increased buying of Stationery and Office Supplies that pushed the price to $5.50 to sit at 10th spot and could well be off the list by the end of the coming week.
The Junior Market list had no movement in or out in the past week. Trading in Berger Paints shares recommenced on Tuesday, after just 6.6 million units were sold by investors in response to the buyout offer by Ansa Coatings at $10.88 per share with the price closing at $14 on Friday and seemingly poised to rise further during the coming week as investors attempted to trade it at $17 which was outside the daily price limit of 30 percent above the last price. The stock has much room to climb, with the March 2018 full year’s earnings that should hit $2.30 per share.
The main market blast well clear of resistance around 300,000 points on the all Jamaica Index and heading much higher to the next major resistance at the 360,000 points range.
At the close of Friday, the average PE ratio for the Junior Market Top stocks is at 8.1 and a PE at 7.5 for the main market TOP 10. The average PE for the overall main market trades at 13.9 and 13.8 for Junior Market, based on 2017 estimated earnings.
At the close of the week, IC Insider.com’s TOP 10 stocks now trade at an average discount of 41 percent to the average of the market for Junior Market Top stocks and 45 percent for the main market.
Market Watch| Investors should keep a keen eye for NCB, Berger, Jamaica Broiler, General Accident, Paramount Trading and Stationery and Office.

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Access & NCB in TOP 10

October 16, 2017 by

NCB Financial Group enters TOP 10

The main market of the Jamaica Stock Exchange closed at new record high on Friday, the seond week in a row that it doing so and in the process the all Jamaica Composite Index broke the 300,000 mark for the first time.
While the main market is making new highs, with gains of 43 percent for 2017, the junior market with gains of 30 percent at its peak this year, is now up just 12 percent for the year to date. Access Financial returned to the Junior Market list and NCB Financial to the main market list even as the latter price moved back to $91 at the end of the week and with just 33,603 units being offered for sale.
Suspension of the trading in Berger Paints shares is expected lifted on Tuesday, October 17. At the time of this report, no information was available on the level of take up of the buyout offer for the minority of the company’s shares by Ansa Coatings. The stock that traded at $11.25 when trading was suspended, should climb with the March 2018 full year’s earnings should hit $2.30 per share.
Investors continue to switch attention from Junior Market, to main market stocks, with the latter having pierced resistance around 300,000 points on the all Jamaica Composite Index could now be heading much higher as it moves on to the next major resistance at 360,000 point range on or before the end of the year.
At the close of Friday, the average PE ratio for the Junior Market Top stocks is at 7.9 and a PE at 7.1 for the main market TOP 10. The average PE for the overall main market trades at 13.5 and 13.1 for Junior Market, based on 2017 estimated earnings.
At the close of the week, IC Insider.com’s TOP 10 stocks now trade at an average discount of 40 percent to the average of the market for Junior Market Top stocks and it remains at 47 percent for the main market.

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Jamaican stocks shooting for the stars

October 14, 2017 by

NCB could push JSE into breakout territory soon.

The JSE All Jamaican Composite Index raced to a record close of 300,363.16 on Friday, just around resistance level.
The market seems poised to break through the above level sooner than later.
This resistance is a short term one, going back to 2014, when the market started to move up within the channel shown in the accompanying chart. The market made a number of attempts to break out but was constrained by the upper resistance line. It is now making the second attempt to do so within a month and could finally do that, this coming week if NCB Financial makes its final attempt to really move higher in line with its fundamentals, with full year results that should at least reach $9 per share and the announcement of a big final dividend payment, just a few weeks away. Supporting the upward move is the shortage of the stock with only 33,603 units offered for sale at the close of the market on Friday. At the same time the stock trades in Trinidad at J$100.

Th all Jamaica Composite Index trades jsut at resistance and is itching to break out of the channel going back to 2014.

The market decisively broke through the long term resistance of 280,000 points, starting in Mid-September. The resistance line can be traced back to late 1994 and the then 2015 peak, signaling that a big move is ahead as there are no major resistance until the 360,000 market and then 505,000 depending on the pace of the market move.
The technical indicators point to a market that is clearly heading higher with the fundamentals lending support to the technical. The all Jamaica Composite Index has decisively broken through the long term resistance of 280,000 points, starting in Mid-September and heading to higher highs.
The fundamental factors include and growing economy, interest rates that are declining, low inflation, business and consumer confidence that are at record highs, employment on the rise, construction, tourism and the mining sectors growing and likely to have some direct impact on listed companies.

The market decisively broke through the long term resistance of 280,000 points, starting in Mid-September and now has no long term barrier to push much higher.

Bank leading is climbing well above the rate of inflation a good indicator for pickup in economic activities. Government fiscal operations are running with a surplus currently. The wayward Jamaica dollar seems to be tamed with the currency now at a slightly lower value than at the end of 2016. Importantly, there are few areas that can now compete well with the stock market.
Also supporting the rise higher is the fact that the average PE ratio of the main market is over 13, with the top half selling at 16.5, with more than half of the market priced 11 times and below, suggesting big gains ahead for underpriced stocks. The list includes big capitalized stocks such as Caribbean Cement, Grace Kennedy, Jamaica Broilers, JMMB Group, Sagicor Group, NCB Financial and Scotia Group.

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Big run for Jamaican stocks coming

October 8, 2017 by

JSE Main market showing next major resistance around the 360,000 point level on the al Jamaica Index

The current state of the Jamaican stock market in one of contrast with the main market hitting 5 days of record close and with gains of 40 percent for the year to date and Junior Market that was up 31 percent in May is now up just 14 percent.
With stability present in the forex market for the Jamaican dollar, lower interest rates being paid on money market funds and with business confidence at record high levels, funds are now moving into the main market stocks with less interest being shown in the Junior Market.
Prices in the US dollar market have come off, after the index was up 63 percent at 268.73 points in February, up from 164.50 at the start of the year, but it is only up 12 percent now with the index at 184.86 points at the close of trading on Friday.

Jamaica Main market stocks itching to break out of channel that stretches back to 2014

The Junior Market was driven up by excessive buying that drove a number of the stocks to excessive valuations which the market has been correcting for, resulting in the sharp pull back from the all-time high, even then there are some that are still overvalued based on the average valuation of other stocks. The market still has several undervalued stocks but the focus on the bigger and more liquid main market is sucking some energy from the junior ones.
Based on estimated 2017 earnings, the average PE of the junior and main markets are just over 13 times earnings. The main market has more than half of the market trading below this level. Included in the list are Berger Paints with a PE of just 5, Caribbean Cement at 6, Jamaica Broilers 7, JMMB Group at 8, Grace Kennedy, NCB Financial and Sagicor Group at 10. The market has Jamaica Producers selling at 32 times 2017 earnings and Kingston Wharves at 27 times earnings with Kingston Properties at a rich 36 times and are clearly overvalued currently. Jamaica Stock Exchange and 138 Student Living at 22 are well ahead of the market average.

Junior Market under pressure, testing support around 2,900 points.

In the Junior Market Medical Disposables is priced at 6 times earnings, General Accident 6, Caribbean Producers 7, Stationery and Office Supplies, Caribbean Cream and Main Event at 10. Just under half of Junior Market stocks are trading blow the market average with about 25 percent well above the average.
Technical reading| The main market broke through major resistance for the second time since September at 290,000 points, that has its genesis in 1992 and connecting in 2005. The market faces some short term resistance around 300,000 points which should be broken through before long ahead of moving to the next sort term resistance around 360,000 points with 505,000 on the all Jamaica Index, the next big stop. The market has been trading in a distinct upward sloping channel from mid-2014 until now and seems set to break out and move higher.
The Junior Market chart is a big contrast to that of the main market.

Wigton Wind farm should list on the JSE main market in early 2017 with a large capitalization

While the latter is clearly heading higher with new highs being created, the Junior Market index is flashing negative signals. The market has formed a head and shoulder pattern which is a negative signal and the short term 45 days moving average has broken through both the medium term 200 days moving average and longer term moving averages. The market has broken through the channel that it has been trading in since late 2015. There appear to be support around the 2,900 points level but it could go down to 2,800 points where the next support is and it will left to be seen 2,900 points will be the floor ahead of third quarter results that could change the course of the movement.
With just over 2 months for the year to end investors should start to have an eye open for major factors that could make big differences to earnings in 2018 when making investment assessment now. Some of these are, more reduction in interest rates, continued strong foreign exchange growth, low inflation, increased construction activity, increased activity in the tourism sector and of course the potential for several new listings to come to market between now and then. IC Insider.com is aware of 8 such potential listings. The list include, Wigton Wind Farm, Jamaica Public Service as a result of Government of Jamaica’s planned sale of its 20 percent share in the company, Neveast Stationery, KIW International, a relatively new business in Montego Bay and a large manufacturing business, operating out of St Catherine.

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Watch SOS this week

September 10, 2017 by

In the Junior Market activity last week, Stationery & Office Supplies moved back to $5 after the company released impressive results for the year to June. Buying also came in for Barita Investments and Berger Paints while during the week and Scotia Group raced to a record high.
For the coming week investors should continue to keep eyes on NCB Financial Group, Berger Paints, that is priced currently at a PE of 6 times 2018 earnings, Caribbean Producers and Stationery & Office Supplies that IC Insider.com upgraded earnings to 50 cents per share from 40 cents previously, with the initial public offer helping to drive more business subsequent to the June quarter, with reports of sales rising faster than the 25 percent levels experienced in the second quarter.
Caribbean Producers with improved 2017 results over 2016 with profit doubling, moved up to $4 during the week, before closing at $3.11 on Friday, after a big trade and should head back to the $4 range in the coming week.
Last week Insider.com stated, “with cut in BOJ benchmark interest rate by 25 basis and a fall in the August Treasury bill rates, the entire main market is on IC Insider.com’s watch list as the All Jamaica Composite Index could move to the 300,000 points mark before long.”
IC Insider.com also stated, “the most noted move in the Jamaica Stock Exchange last week was Scotia Group racing to a record high of $52 but ending the week without any stock being offered for sale. This stock has to head the stocks to watch list this week.”
The All Jamaica Composite Index rose to 296,779.53 points during the past week and by the end of the week closed at a 291,332.10 up from 289,247.13 at the end of the previous week and Scotia Group ended at a record high of $60.

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All Jamaica at 510,000 points in 2018

September 8, 2017 by

The main market of the Jamaica Stock Exchange broke through resistance at 290,000 points on the All Jamaica Composite Index this week thanks mostly to a big surge in the price of Scotia Group to a record $57.99.
The All Jamaica Composite Index closed on Thursday at 293,186.46 points having hit 296,779.53 early in the day and technical indicators point to much higher levels in the months ahead and should 510,000 points by the end of 2018 before a great deal of resistance.
The central bank cut interest rates by 25 basis points recently and that seems to be lending support to the market, but apart from the movement in Scotia, there are not much gains evident in most stocks, except for what appears to be some amount of increased trading. The accompanying chart shows the next two levels of resistance, around 370,000 points and 510,000 points on the All Jamaica Composite. Those levels seem some distant away but should be reached in 2018. The first level is 26 percent away and the other 74 percent away.
Stocks to watch as the market ride on, include Barita Investments, Berger Paints, Caribbean Cement, Grace Kennedy, Jamaica Broilers, Jamaica Stock Exchange, NCB Financial Group, JMMB Group, Sagicor Group, Scotia Group and Supreme Ventures.

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Keep an eye on Scotia Group

September 4, 2017 by

With cut in Bank of Jamaica benchmark interest rate by 25 basis points in the last week of August and fall in the August Treasury bill rates, new life was brought to the main market last week with a number of days of record high.
The entire main market is on IC Insider.com’s watch list as the all Jamaica Composite Index could move to the 300,000 points mark before long.
The most noted move in the Jamaica Stock Exchange last week was Scotia Group racing to a record high of $52 but ending the week without any stock being offered for sale. This stock has to head the stocks to watch list this week.
Others on the list are Barita Investments and Berger Paints two stocks that are subject of takeover offers, both stocks fell back sharply during the week, moves that appear unwarranted. Others on the list are, JMMB Group, NCB Financial Group with just 47,000 units on offer between $90 and $100, Sagicor Group and Supreme Ventures with a 41 percent rise in half year profit.
In the Junior Market, Caribbean Producers with improved 2017 results over 2016 with profit doubling, Jetcon Corporation that came under some selling pressure last week and fell to $4.50 and Stationery & Office Supplies complete the watch list.

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Watch impact of interest rate cut

August 28, 2017 by

Lower interest rates make real assets more valuable than before, as such the biggest change to stocks this coming week may well be guided by the recent cut in interest rates, with Treasury bill rates falling and the Bank of Jamaica cutting its overnight rate by 25 basis points.
At the close of last week, Caribbean Cream closed at $6.20 and helped to return it to the TOP 10 list, replacing Lasco Financial with its price rising to $4 from $3.40.
There were no other change to the two listings at the close of the week, even as the main market of the Jamaica Stock Exchange closed to week at record new high. For the coming week the cut in interest rates by Bank of Jamaica as well as a fall in the most recent Treasury rates could well positively impact prices.
The average PE ratio for the Junior Market Top stocks is at 7.5 and the PE for the main market TOP 10, ends the week at 7.3. The average PE for the overall main market trades at 13.6 and 13.3 for Junior Market, based on 2017 estimated earnings.
At the close of the week, IC Insider.com’s TOP 10 stocks now trade at an average discount of 44 percent to the average of the market for Junior Market Top stocks and it remains at 46 percent for the main market.

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JMMB could continue higher

August 20, 2017 by

JMMB Group traded at a 52 weeks’ closing high od $21.45.

Based on the trading activity for the past few days there seems to be increased interest in JMMB Group shares with a sharply declining supply being offered after the company released its first quarter results and announced that they have commenced commercial banking operations in Jamaica.
On Friday the price closed at $21.50 with 782,460 shares traded, after it traded at $23 in the morning session as supply totally dried up at one stage when only a small volume was on offer at $29, the first this has happened in a long time. At the close less than 240,000 units were offered for sales, with most quoted at $22.50. The group reported pretax profit rising to $995 million from $857 million in 2016 but profit after tax just inched up to $613 million from $590 in 2016.
Cable and Wireless came in for buying but sellers were just as interest in selling, in the end supply on the market has been shrinking. The stock could well see side-ways movement during the week, don’t be surprised if the price moves up as supplies around last week’s closing price recedes. NCB Financial Group has seen the price in Trinidad coming close to the Jamaican price on Friday, with demand still strong in that market and no stock on offer. The closing bid in TTSE suggests upward price movement can be expected. Supply in Jamaica is not great, it’s just that buyers are taking their time to acquire and could well be trying to hold out until close to the release of the full year’s results in early November. There was spirited buying of Barita Investments on Thursday gone, with 163,100 units being snapped up aggressively. There was no follow through of such aggression on Friday. It is anyone’s guess where this one will go, in the days ahead, but it is worth watching. Berger Paints pulled back to $14 during the week, with no announcement from its new parent company about the minority holdings. Ansa McAl announced that they would be making a submission about the 20 percent minority holdings in the Trinidad sister company, with no comments about the operations in Jamaica.

Consolidated Bakeries (Purity) stock could fall during coming week.

There is a fair bit of swing in the price of Stationery and Office Supplies with selling coming in during the week, but with buying more subdued than before. Investors can probably expect the price to swing between $4 and $5 for a while. The price could even falling into the $3 to $4 range depending on how fast sellers want to exit. At least that is what the bids and offers suggest, unless there are some increased buying in the week ahead.
Jamaican Teas after reporting nine months results with increased earnings per share over 2016, traded as high as $5.30 during the day but closed at $5 as increased interest was visible for the stock, suggesting that the price could rise further. Jetcon Corporation continues to attract buying interest after posting doubling of profits for the first six months of 2017 and traded as high as $5.70 before pulling back to $5.50 at the close on Friday, with bids to buy in line with the closing price. Paramount Trading came in for some buying with the price recovering from its fall to $2.50 recently after the company stated that they were I the process of constructing the Lubricant plant with operations to commence later this year. Currently supply below $4 is scanty.
Consolidated Bakeries reported a loss in its June quarter leading to a fall in the stock price. Selling continues with more than 660,000 units on offer at $2.15 and weak bids. Further decline is to be expected.

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Cable & Wireless leads stocks to watch

August 12, 2017 by

Cable & Wireless Head quarters.

Cable & Wireless is possibly the main stock to watch for the coming week with the company returning to profitability in the June quarter.
The company lost several billion dollars for many years but posted a profit of $222 million in the latest quarter on an 11 percent surge in revenues. Subsequent to the close of the quarter, Cable and Wireless increased rates on a series of services that should add to revenues and profits in the coming quarters. Profit for the full year to December should end positively, thus wiping out the $311 million loss for the first half of the year after tax and a lower pretax loss of just $199 million. The recent turn around in the fortune of the company is likely to be a big surprise to many investors and will help move the stock price much higher than the $1.07 it closed at, on Friday.
Other stocks that investors should keep an eye on this week include, Barita Investments with an announced take over offer on the table, JMMB Group, Stationery & Office Supplies that just listed and selling below potential, NCB Financial with limited supply, Jetcon Corporation with profit doubling for the half year leading to strong buying in the past week and recently listed Express Catering with demand to buy 765,925 shares at $5.50.

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