6M Berger shares taken up?

Trading in Berger Paints shares are now trading after trading was suspended two Thursdays ago.

Trading has resumed in Berger Paints after it was suspended ahead of the closing date for the offer by Ansa Coatings to acquire the minority shares at $10.88.
Trading took place between $11 and $11.50 with 213,774 units changing hands. So far the company has not released information on the number of shares that were offered as a result of the offer. IC Insider.com gathers that the take up is around 6 million units, if so it would represent around 3 percent of the issued capital of the company.
this would be in keeping with some of the to minority shareholders coming out publicly against the offer price and with more than 31 percent of the holdings held by entities that were not in support of the offer.

Increased cost squeezes Kremi’s profit

Caribbean Cream delivered better results in the August quarter than in May period with an increase in revenues of 18 percent versus a 1 percent increase in the first quarter.
Profit declined in the latest quarter but by 23 percent, to $35.6 million versus a 40 percent fall in for the six months to $70 million, down from $117.6 million. Cash generated from operations came in at $98 million but Kremi spent $102 million on acquisition of fixed assets.
Gross profit declined by just 4 percent in August quarter versus 14 percent in the May quarter as increase of direct cost outpaced the rise in revenues. In the end revenues came in at $354 million in the August quarter up from $319 million in the May quarter and $300 million in yin 2016 and for the six months $673 million from $615 million in 2016.
Administrative, selling and distribution expenses increased moderately from $71 million to $76 million in the quarter and form $136 million to $147 million for the half year.
At the end of August cash and equivalent amounted to $175 million and borrowed funds $90 million. Shareholders’ equity stands at $662 million.
Earnings per share for the half year is 19 cents and 9 cents for the August quarter. IC Insider.com is forecasting earnings of 50 cents for the full year to February 2018 and 75 cents for 2019. The stock last traded at $6.70 for a PE of 13.4 which is in line with the Junior Market valuation.

Stinking Berger behaviour

There are some strange and shocking developments regarding the offer by Ansa Coatings International to purchase the minority shares in Berger Paints Jamaica.
First the directors in recommending that shareholders accept the offer made critical claims that are not back up by facts and they offer no information to support same. Secondly, the shares have been suspended in questionable manner and without adequate reasons.
The directors in recommending that shareholders accept the offer said,” in your directors view, it is highly likely that acceptance of the offer will take the aggregate holdings of ACI beyond 80 percent. Under the rules of the Jamaica Stock Exchange, where one shareholder either individually or collectively with concert parties holds more than 80 percent of the listed shares of a company, the stock exchange has the right to de-list such company. In fact the offeror has made it clear its intention to delist the Berger Shares.” The directors’ recommendation goes on to quote ACI statement that they will seek delisting if they acquire an additional 29 percent of the shares. “It is therefore clear that Berger Jamaica shares will in all probability be delisted from the JSE,” the directors’ statement concluded.
According to the directors, Ansa Coatings International controls 51.01 percent of the issued Berger Jamaica’s shares and as a result of this Offer, its holding will most likely exceed 75 percent.
It seems that for the recommendation to shareholders to be substantially based on the “highly likely that acceptance” taking the holdings of ACI beyond 80 percent and most likely exceed 75 percent, is highly flawed. Where did the directors get that information from and why did they not disclose the source in the recommendation. Why they did not think it appropriate to disclose the interim results figures up to August in the report?
At $10.88 per share, Berger is priced at 5 times the current years’ earnings against more than 13 for the main market, on what basis could it be regarded as a fair price?
The situation gets more curious and raises a huge question, is someone is trying to manipulate shareholders in giving away their shares at less than a fair price? That is the only conclusion to be arrived at, when without notice, the shares of Berger were without notice, suspended by the Jamaica Stock Exchange on Thursday, October 5, 2017 and is to remain suspended to Friday, October 13, 2017. According to a release late on Thursday, “this is to facilitate the processing of the transaction in respect to shareholders of the Company who have agreed to sell their shares to Asna Coating, as a part of their Takeover Bid of Berger.” That of course is a load of crap. Trading shares of Desnoes and Geddes a much bigger company was never suspended when Heineken acquired the minority shares in 2016, Hardware and Lumber shares were never suspended either, nor was Scotia Investments’ in Scotia Group’s recent acquisition of the minority shares. Why is there a need to prevent Berger shareholders who want to trade the shares if they so desire? Worse why is there need to suspend it beyond Monday?
The capital market cannot prosper as well as it should if the above abuses continue to take place without corrective action being taken. The Jamaica Stock Exchange and the Financial Services Commission should have intervened when the directors’ recommendation included information that was not backed up by facts and should have intervened and prevented the unwarranted suspension of trading in the company’s shares.

Berger shares suddenly suspended

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Trading in Berger Paints shares surprisingly suspended on Thursday

Trading in shares of Berger Paints Jamaica has been suspended effective with the opening of the market on Thursday, October 5, apparently based on a request from the company on Wednesday and to the surprised of investors.
Information gleaned is that the request if for the shares to be suspended up to and including Friday, October 13. The request is very strange and unusual, with the buyout offer set to expire on Monday October 9. IC Insider.com gathers that, Rule 411b of the Stock Exchange states that a listed company may make application in writing and accompanied by certified copy of the resolution of the board requesting the suspension stating in writing the reasons for the suspension.
It unclear, to what extent the above rule was complied with. IC Insider.com gathers that the regulatory arm of the exchange had several calls on the matter and are seeking clarification on the matter.
With most shares kept in an electronic form the need for suspending trading is not warranted and worse for the request to go beyond Monday is unnecessary. Persons making the request are not taking in consideration investors and the need to keep trading in the share open for their convenience. The suspension request is raising concerns that there are persons who want to unduly influence investors to dispose of their shares to Ansa Coatings, even when there is no evidence that the shares will be well accepted and lead to delisting of the company.
The offer to buy the minority shares of Berger followed Ansa Coatings gaining majority shares when they acquired to parent company and resulting in a mandatory offer for the rest. The price offered is $10.88 per share but the stock has consistently traded above this level since March this year.

Trinidadian set for biggest share in SVL

Supreme Ventures set to be controlled by Trinidadian company.

Zodiac International Investments and Holdings Limited, a Trinidad & Tobago based corporation is making plans to take controlling interest in Supreme Ventures, IC Insider.com has gleaned from a reliable source.
Zodiac International indirectly owns half of the 49.90 percent of Supreme Ventures shares controlled by Intralot Caribbean Ventures. Zodiac International is seeking to acquire the remainder of the shares it does not already owns, making them the largest single shareholder if they succeed with the acquisition.
This publication understands that the company has engaged a leading local investment house to raise privately US$40 million to fund the acquisition. There are no indications that Zodiac intends to move the holdings beyond 50 percent and they may well sell of a portion to take it lower.
Supreme Ventures traded at $11 on the Jamaica Stock Exchange on Tuesday putting the value at $29 billion or about US$220 million.
Profit for Supreme Ventures surged 41 percent from $649 million to $918 million after tax, with second quarter profit jumping by a lesser 34 percent to $502 million from $374 million in 2016. Caymanas Park conducts live horse racing in Jamaica and was acquired earlier in the year by Supreme Ventures and is yet to start contributing to profits of the group.

Berger buyout offer extended

Berger Paints is worth more than $20 per share.

Ansa Coatings International, the major shareholder in Berger Paints Jamaica, announced an extension of their offer to acquire minority shares in the company to October 9.
No other change has been made to the offer and no reasons have been given for the extension.
It may be that the circular containing the recommendation of the directors having just been released at the end of last week would not have given enough time for some shareholders to respond to the recommendations. It is also an indication that the majority of the shareholders are not buying into the price being offered. If they were it would be expected that the extension notice would have mentioned a high level of acceptance and so encourage others to do likewise.
Berger’s minority shareholders are being offered $10.88 for each share, but the price has been consistently above this price for most of 2017 while the value based on earnings and market valuation being in the $20 range.

Volume jumps 54% for JSE – Friday

Trading volume on the Jamaica Stock Exchange rose 54 percent above Thursday’s level but the market indices fell as advancing stocks just edged out those falling. Four securities traded in excess of 900,000 units each, accounting for 59 percent or 3.9 million units of the volume traded.
At the close the All Jamaica Composite Index declined 1,854.36 points to close at 291,332.10, the JSE Market Index declined 1,689.53 points to 265,436.52 and the JSE US dollar market index slipped 0.75 points to 186.39.
At the close of trading, 27 securities changed hands in the main market with 2 trading in the US dollar market, leading to 10 stocks advancing and 9 declining. The main market ended with 6,670,620 units valued at $121,164,271 changing hands compared to 4,327,138 units valued at $83,944,827 at the close on Thursday. Trading in the US dollar market accounted for 12,162 units valued at US$2,997 bringing the total of all trades to J$121,553,893.
IC bid-offer Indicator| At the end of trading in the main and US dollar markets, the Investor’s Choice bid-offer indicator reading shows 8 stocks with bids higher than their last selling prices and 2 with lower offers.
The main market ended trading with an average of 247,060 units valued at $4,487,566 for each security traded compared to an average of 173,086 units valued at $3,357,793. The average volume and value for the month to date ended at 185,774 units with an average value of $3,116,747 compared with an average of 173,517 units with an average value of $3,465,932 on the previous trading day. The average volume and value for August ended at 184,094 units with an average value of $4,336,090.

New record for JSE main market

The main market of the Jamaica Stock Exchange surged to a new high at 11 am on Friday with the all Jamaica Composite index jumping 4,315.47 points to a record 284,872.86 while the main market index rose 3,931.88 points to a record 259,551.43.
The Combined Index climbed 3,602.38 points to a record 272,379.47 as market sentiments suggest that the market may be at an early stage of a major bull run. The Junior Market slipped 1.95 points to 3,096.95 while the US dollar market index is unchanged at 182.58.
Sagicor Group traded 242,800 units valued $8 million and Lasco Distributors had 214,992 units trading valued at $1,68 million and Salada Foods had 100,000 units changing hands with a gain of 50 cents to $8.50.

NCB’s eye-popping $1,200 in 5 years

$100,000 invested in NCB would be worth $1.3 million in 5 years if price rose to $1,200 per share.

“Unless something changes, NCB Financial Group is the best buy on the Jamaica Stock Exchange and will be for the next 5 years. My exit price? $1,200!” That is a recent quote from a seasoned financial analyst.
That is astounding, for a stock that traded on the Jamaica Stock Exchange just below $90 this past week and around $95 on the Trinidad market and was selling at $19 at the start of 2015. To reach $1,200 in 5 years, would require growth in profits averaging close to 30 percent per annum and the PE ratio rising to match that growth rate. If that were to  happen it would mean that $100,000 invested now in the stock, would be worth $1,348,314 in 5 years.
How possible is that? First with interest rates receding to lower levels than they have been recently and seems poised to fall some more, PE ratios for stocks will increase. Not only will they increase but demand will increase for good quality stocks that are enjoying robust growth.
NCB delivered net profit of $14.7 billion for the nine months to June, this year, an increase of 48 percent over the prior year’s nine months profit of $9.9 billion. In the June quarter, profit grew 33 percent over 2016. Loans, the major fuel for growth in profits, increased a very strong 18 percent, year over year, in an economy that is probably growing around 2 percent in real terms.

Sagicor should be watched for strong gains over the next 5 years.

If growth were to pick up, and that seems likely, with several major projects on the drawing board to commence sooner than later, with some already started, then lending could picked up even more, boosting profit in the process.
In this regard, investors should not ignore Sagicor Group that reported profit jumping 31 percent to $5.65 billion, for the six months to June this year over 2016, with a 5 percent rise in revenues to $30.36 billion and was negatively affected by realized losses on securities that were sold. In the June quarter revenues slipped to $15.1 billion from $15.29 billion in 2016, as net investment income dropped from $5.55 billion to $4.24 billion, but net profit increased from $2.4 billion to $3.06 billion. While growth in insurance premium is important to fuel continued gains in profit, it is the ability to manage the investment funds effectively that will generate the growth that will make the stock price move.
Sagicor not only has the life assurance arm, but a commercial bank as well, health insurance and manages pension and other funds and a property development and management division.
Interestingly, these two companies are heavy dividend payers, investors stand to gain from sharply higher dividend income if the profit continue to grow close to current levels.

12 Junior stocks rose as 6 fall

Trading on the Junior Market of the Jamaica Stock Exchange closed on Tuesday with 20 securities changing hands, 12 advanced, 6 declined and 3 traded firm with 2,495,496 units valued at $13,050,346 compared to 4,968,253 units valued at $16,371,552 on Monday.
The Junior Trading ended with an average of 124,775 units for an average of $652, 517 in contrast to 225,830 units for an average of $744,161 on Monday. The average volume and value for the month to date amounts to 301,663 units valued at $1,553,127 compared to 315,269 units valued at $1,622,404 previously. In contrast, July closed with average of 536,395 units at $1,905,441 for each security traded.
Trading ended with the market sentiments looking mixed for Wednesday’s activity, as 4 stocks ended with bids higher than their last selling prices and 4 with lower offers.
At the close of the market, stocks trading and their last traded prices are: Access Financial closed 5 cents higher and finished at $46.25 with 12,437 shares, AMG Packaging climbed 50 cents and ended at $4 with 70,000 shares, Blue Power climbed $1.50 and settled at $41.50 with 30,840 shares, Caribbean Cream rose 70 cents to $6.70 with 50,972 shares, Consolidated Bakeries traded at $2.15 with 106,223 shares, C2W Music gained 5 cents and closed at 43 cents with 10,000 shares, Dolphin Cove added 9 cents and ended at $17.50 with 4,303 shares, Express Catering with a loss of 15 cents, finished at $5.10 with 167,140 shares, General Accident closed at $2.60 with 53,470 shares, Jamaican Teas settled 15 cents higher at $5.15 with 1,753 shares, Jetcon Corporation with a loss of 29 cents, closed at $5.41 with 3,007 shares, KLE Group ended 5 cents higher at $2.50 with 12,450 shares, Knutsford Express inched 2 cents higher to finish at $14.99 with 5,102 shares, Lasco Distributors lost 20 cents and concluded trading at $6.80 with 98,840 shares, Lasco Financial moved 5 cents higher to $4 with 210,222 shares, Lasco Manufacturing ended 17 cents higher to close at $4.50 with 1,025,000 shares, Main Event with a loss of 17 cents, finished at $4.91 with 11,664 shares, Stationery and Office trimmed 20 cents and finished at $4 with 411,573 shares as some investors move for the exit after a successful public issue and strong gains in the price after listing, tTech jumped $1.44 higher to $7.44 with 190,000 shares and Derrimon Trading preference share, lost 10 cents in traded 20,500 shares at $2.10.