The Jamaica Stock Exchange continues to march forward and ended trading on Monday, at the 40th record close for the year to date as prices of some stocks moved sharply.
The market, closed with the JSE All Jamaican Composite Index jumping 7,542.15 points to end at a record close of 584,674.51, the JSE Index climbed 6,853.83 points to finish at another closing high of 532,304.33 and the JSE Financial Index advanced by 3.31 points to close at 143.86.
Market activity, resulted in 39 securities trading in the main and US dollar markets, leading to 13 securities advancing, 17 declining and 9 trading firm, compared to 37 securities trading on Friday. Trading ended with 19,470,666 units valued $144,572,102, compared to 83,800,065 units valued at $247,863,696 changing hands on Friday.
Fours stock close of trading at a 52 weeks’ record high while Supreme Ventures traded at an intraday high of $34.32. Closing at 52 weeks’ highs are Jamaica Broilers at $37.80 after trading up to $40.53, Radio Jamaica at $1.50, Sagicor Group at $73 and Stanley Motta at $5.56.
Wigton Windfarm led trading with 13 million units for 67 percent of total volume, Victoria Mutual Investments followed with 2.7 million shares for 14 percent of the day’s volume and Carreras with 575,039 shares for 3 percent of total main market volume.
The market closed with average of 556,305 units valued $4,130,631 for each security traded, in contrast to 2,464,708 units for an average of $7,290,109 on Friday. The average volume and value for the month to date amounts to 1,496,677 units at $5,687,475. July closed with an average of 1,297,718 shares valued at $17,985,644 for each security traded.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading shows 9 stocks ending with bids higher than the last selling price and just 4 with lower offers.
In the main market activity, Barita Investments traded 25,430 shares and lost $1.50 to close at $90, Caribbean Cement lost $1.14 trading 78,260 units at $78.80, Grace Kennedy fell $1.99 trading of 26,999 units to close at $70, Jamaica Broilers exchanged 46,586 shares and rose $1.80 to close at $37.80. Jamaica Producers gained $1.50 trading 5,960 units to close at $ 28.50, Jamaica Stock Exchange climbed $3 trading 127,271 shares to end at $28, JMMB Group lost $2 trading 53,627 shares to close at $51, Kingston Wharves declined $2.76 while trading 18,738 shares to end at $65.84, Mayberry Jamaican Equities lost 40 cents to close at $12 in trading 71,575 shares. NCB Financial lost $5 in exchanging 174,222 units to close $208, Palace Amusement added $1 in trading 200 shares at $1,301, Pulse Investments exchanged 158,700 shares after falling 46 cents to close at $3.50, Sagicor Group jumped $8 in trading 33,657 shares to close at a record high of $73. Salada Foods traded 454 shares and gained 95 cents to close at $34, Scotia Group dipped $1.58 to close at $54 trading 377,500 shares, Sygnus Credit Investments gained 50 cents in trading 89,821 shares at $22.50 and Wisynco Group dropped $1.78 in trading 298,304 and to close at $26.
Trading in the US securities market resulted in 474,402 units valued $82,012 changing hands as, JMMB Group 5.75% preference share finished at US$2 with 816 shares traded, JMMB Group 6% preference share gained 2 cents and settled at $1.02 with 9,486 stock units trading, Proven Investments shed 1 cent to close at 25 US cents with an exchange of 140,900 shares and Sygnus Credit Investments traded 323,200 shares at 11 US cents. The JSE USD Equities Index declined by 3.78 points to close at 187.37.
Market watch remains on Junior Market
Focus on the entire Junior Market was the advised investors got last week, as the market remained severely undervalued with technical indicators pointing to a breakout.
The advice remains for the second week as investors switch their focus decidedly on the market that lagged the main market for most of 2019 to date. The market reversed the near 10 percent loss in the first half of the year and moved solidly into the black with a rise of 9 percent to the end of last week. Technical indicators suggest a huge rise in the market as it moves to close the valuation gap with the main market.
In the process, the market rose 152.80 points during the week and ended at a record close of 3,537.21 after breaking the old mark of 3,436.54 points set in September last year.
The main market also contributed its fair share of excitement with a new record close and a number of stocks hitting new highs. A number of main market stocks could be coming to a short-term peak as is evident in the pullback of NCB Financial and Caribbean Cement during the past week with the latest quarterly results not lending much fuel to the stock prices.
It will be interesting to see how investors react to announced terms of the rights issue for Barita Investments with the offer of 11 for every 100 units at $45 each.
Jamaica Broilers has just 2 offers to sell, suggesting that the price has a far way to go. Some buying came for Radio Jamaica in the past week but with the price closing at $1.35 on Friday. It is worth noting that supply is drying up with only four offers totaling 115,000 shares posted at the close on Friday.
Sygnus Credit Investments is coming into its own with a limited supply of the stock for sale, the price closed at a record high at the close of the past week and may move higher this week. Jamaica Stock Exchange stock could fall some more with the stock facing increased selling and reduced buying.
Some selling came into the market for Blue Power but buying interest remains at the close on Friday with buying interest around the $12 but with some selling just above. Caribbean Flavours has a limited supply of stocks for sale and is worth watching. Elite Diagnostic with rising demand and virtually no supplies could bounce again this week following last weeks’ rise. General Accident moved away from the $4.50 level to close at $4.95 on Friday against declining supplies for sale with just two offers posted on Friday. Jamaican Teas hit new records during the week with investors trying to buy at $8.40, a level over the 30 percent limitation set by the market. The stock last traded at $7.26. Lasco Financial price bounced above $5 last week. The stock remains undervalued and should see increased buying interest, with the release of June quarter results, due out shortly. Lasco Manufacturing released first-quarter numbers at the close of the week with net profit rising 19 percent to $282 million, enough to move the price higher. Lasco Distributors should release quarterly results this week and could move prices of the stocks higher. Limners and Bards climbed to a record high of $3.99 but closed at $3.75 on Friday. Buying interest remains strong but some investors are taking profits, it will be interesting to see which has the upper hand, this week. Medical Disposables looks poised to move higher with the first-quarter numbers, set to play an important role in further gains. Investors await the second-quarter results for Stationery and Office Supplies to determine if higher prices are on the cards anytime soon, but the supply of the stock remains low with only 43,000 units offered for sale at the close on Friday.
Carib Cement 2019 profit mixed
Caribbean Cement revenues climbed 5.6 percent in the June quarter to $4.68 billion and 4 percent year to June, with $9.13 billion booked.
The company reported lower profit the June quarter than in 2018, due mainly to $485 million incurred as foreign currency losses and ended up with profit after tax at $368 million versus $674 million in 2018. Or the half-year profit after tax grew 48.6 percent to $15 billion. The company reported earnings per share of 43 cents versus 79 cents in the similar quarter in 2018 and $1.76 compared to $1.18 in the 2018 six months period.
Expenses excluding depreciation and finance grew 2.7 percent for the quarter to $2.94 billion and fell 21 percent for the half-year to $5.47 billion. The sharp reduction in cost results from the termination of an equipment lease agreement with the parent company and the purchase of those assets. The acquisition of the assets drove depreciation charge for the quarter to $405 million from $340 million in 2018 and $796 million from $467 million for the six months periods. Finance cost including foreign exchange losses rose to $688 million from $412 million for the quarter and $856 million versus $386 million for the half-year.
The results boosted shareholders’ equity to $7.9 billion from $6.4 billion at the end of December last year as the company wiped out accumulated losses of $994 million at the end of 2018 leaving a surplus of $493 million. Borrowing amounts to $9.8 billion while cash funds amount to $394 million and net current assets stood at negative $759 million.
The stock trades at $80 on the Jamaica Stock Exchange main market. IC Insider.com projects earnings for the full year to December at $5 per share that would place the PE ratio at 16, just around the markets PE of 17. With the economy doing well and increased construction activities, investors should have their eyes focused on increased future earnings.
Market watch spotlight on Junior Market
The focus this week is the entire Junior Market that remains severely undervalued, notwithstanding that it made up much-lost grounds in the past week. The Lab is the first stock to watch from this sector.
NCB Financial third-quarter results were far from inspiring with operating profit being lower in the quarter than for the prior year’s results, at the close on Friday there was good selling on offer that seems likely to keep a lid on the price for a while. NCB reported Operating profit of $6.46 billion in the June 2019 quarter, down from $8.14 billion in 2018. A $700 million net gain in associated company results eased the difference somewhat.
Barita Investments is back at the record high of $83 it closed at the close on Friday, up from $72 at the end of the previous week. Importantly, supply has mostly dried up except for a block of 1 million units offered by Barita at $98 per share. Shareholders passed the resolution at last week’s extraordinary general meeting for a rights issue that will see 106 million shares or around one for every 15 shares of shares owned offered to shareholders, at an expected price in the $40 region.
Results for Caribbean Cement are out by but reports indicate that the company reported increased sales for the June quarter but lower profit than in 2018, due mainly to $485 million incurred as foreign currency losses. The company reported 43 cents per share versus 79 cents in the similar quarter in 2018. For the half-year, Carib Cement reported earnings of $1,79 compared to $1.18 in 2018. The company looks like earning $5 per share for the full year with increased second-half sales. Do not look for the price of the stock to move up any time soon, with these results
Jamaica Broilers and Jamaica Producers may not break out just now but there is very limited selling and good news could push them higher at any time. Investors who thought that the sky was the limit for Wigton Windfarm may be having second thoughts with the company posting their full-year results, with earnings excluding foreign exchange gains or losses working out at 5 cents per share going forward. The stock seems poised to remain under $1 for a long time. More selling came for Radio Jamaica in the past week but with first-quarter results due mid-August, the stage could be set for a break beyond the $1.40 price level.
Sygnus Credit Investments is coming into its own with a limited supply of the stock for sale, the price closed at a record high at the close of the past week and may and could move higher this week. investors should continue to watch it. Wisynco Group traded close to $30 in the past week pushing the PE up considerably. It could settle just below the $30 range for a while.
The Junior Market finally found its footing in moving solidly higher during the past week to within less than 100 points from the previous record high in 2018. With the entire market severely undervalued, just about all stocks are to be watched. Some are more attractive than others and should enjoy a greater focus.
Blue Power closed on Friday with strong buying interest that suggests higher price ahead arising from a proposed split-up of the company into two separate ones. Caribbean Flavours has a limited supply of stocks for sale and is worth watching. Fontana pulled out of the fall to $7.41, in the previous week as demand pushed the price over $8. The branch in Kingston could influence investors to add the stock to their portfolio. Elite Diagnostic with rising demand and slowing supplies could bounce, having traded at $5. The company’s new Drax Hall branch in St Ann is set to open in August and will add to revenues and profit at a later stage. Elite has more than 387,000 units on offer at $5 and that could constrain upward price movement for some time. Jamaican Teas reported nine months results of 32 cents per share compared with 20 cents last year. Investors reacted positively to the results pushing the stock up to $5, but supply on sale is limited and could encourage more price movement this week. Lasco Financial price bounces around $4.50. The stock is undervalued and should see increased buying interest, with release of June quarter results, due out shortly. In 2018, first-quarter results were released on the 17 of July. Lasco Manufacturing released first-quarter numbers on the 31 of July last year and Lasco Distributors released theirs on the 19. The results could move the price of the stocks higher. Limners and Bards climbed 30 cents to settle at a record high of $1.30 with just 100 shares changing hands on the first day of trading, the stock closed with the bid at $1.65 and looks poised to hit $2, the stock was on offer at $2.95 at the close on Friday. Medical Disposables looks poised to move higher and first-quarter numbers will play an important role in further gains and Stationery and Office Supplies hit a record of $12 during the past week and should move higher with little supply offered for sale.