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.
2 new entrants to TOP 10
“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 Bank of Jamaica cutting its overnight rate by 25 basis points.” That was part of last week’s opening statement for the TOP 10 stocks report by IC Insider.com.
During the week main market stocks surged to record levels on 3 days with Friday closing with the third highest daily gain in the market’s history. The main market sits just below the critical 290,000 point mark and seems headed to break through that level, based on the shortage of supply for Scotia Group shares on Friday with a closing bid of $52. The cut in BOJ’s bench mark rate would translate to the all Jamaica Composite Index climbing to 298,000 points.
At the close of last week, there were no changes to the TOP 10 Junior list but two new companies swapped places in the main market with Barita Investments returning, as investors cooled on the stock following a run up in the price following news out of the company that the directors were considering a bid to acquire majority shares. Based on the third quarter results showing unrealized investment gains more than doubling the level at the end of September last year to $1.1 billion at June, the company should see major gains going forward in this area, with falling interest rates and rising stock prices. 
Salada Foods fell in price to $8.50 and along with Barita pushed out Sagicor Group and Pan Jam Investment, both of which rose in price during the week.
The average PE ratio for the Junior Market Top stocks is at 7.3 and the PE for the main market TOP 10, ends the week at 6.9. The average PE for the overall main market trades at 13.4 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 45 percent to the average of the market for Junior Market Top stocks and it remains at 48 percent for the main market.
JSE surge to a new record on Wednesday
The main market of the Jamaica Stock Exchange claimed another record at the close of trading on Wednesday. The All Jamaica Composite Index advanced 1,319.06 points to a record close of 280,810.12 and the JSE Market Index gained 1,201.81 points to a record 255,849.82.
Trading in the US dollar market was moderate but the index rose 1.37 points to end at 178.89 as trading resulted in one security changing hands and accounted for 60,480 units valued at US$14,039.
The main market crossed over a resistance level at 273,000 points on the all Jamaica Composite index recently and have its eyes 
focused on 290,000, the next level to take out before the market enters open waters that seem to have no resistance level, going back to the late 1980s which suggest a major bull run ahead, supported by low interest rates, increasing profits and a growing economy.
At the close of trading on Wednesday, 23 securities changed hands in the main market and ended with 4,844,593 units valued at $284,429,479 changing hands compared to 3,871,868 units valued at $124,392,766 at the close on Tuesday. The total of all trades in both markets was to J$286,276,435 with NCB Financial Group trading over 3 million shares valued at $264 million. At the close market, leading to 7 stocks advancing and 10 declining in both markets.
IC bid-offer Indicator| At the end of trading in the main and US dollar markets, the Investor’s Choice bid-offer
NCB Financial Group traded 3m shares on Wednesday worth $264m.
indicator reading shows 2 stocks with bids higher than their last selling prices and 3 with lower offers.
The main market ended trading with an average of 210,634 units valued at $12,366,499 for each security traded compared to an average of 143,403 units valued at $4,607,139. The average volume and value for the month to date ended at $184,581 units with an average value of $4,435,127 compared with an average of 183,210 units with an average value of $4,017,686 on the previous trading day. The average volume and value for July ended at 160,668 units with an average value of $2,691,438.
Juniors inched higher on Monday
Trading on the Junior Market of the Jamaica Stock Exchange ended on Monday with 20 securities changing hands, 9 advanced, 9 declined and 2 traded firm as 1,303,888 units valued at $6,225,235 changed hands compared to 3,210,758 units valued at $13,020,965 on Friday.
Trading ended with an average of 65,194 units for an average of $311,262 in contrast to 145,944 units for an average of $591,862 on Friday. The average volume and value for the month to date amounts to 258,319 units valued at $1,591,093 compared to 269,679 units valued at $1,666,377 previously. In contrast, July closed with average of “NULL” units at “NULL” for each security traded.
Trading ended with the market sentiments looking mixed for Friday activity as 5 stocks ended with bids higher than their last selling prices and 2 with lower offers.
At the close of the market, stocks trading and their last traded price are:
Access Financial finished trading 75 cents higher at $47 with 25,302 shares, AMG Packaging concluded trading with a loss of 3 cents to $3.45 with 25,441 stock units, Caribbean Cream ended 60 cents higher at $6.50 with 15,100 shares, Caribbean Producers finished trading with a loss of 15 cents, at $3.65 with 35,300 shares, Consolidated Bakeries settled with a loss of 29 cents, at $2.01 with 750 stock units, Dolphin Cove closed 10 cents higher at $17.50 with 1,475 stocks, Express Catering finished trading with a loss of 49 cents, at $4 with 38,177 stock units, 
Honey Bun settled with a loss of 70 cents, at $4.80 with 2,000 shares, Jamaican Teas settled 10 cents higher at $5 with 20,000 units, Jetcon Corporation closed 21 cents higher at $5.21 with 50,890 shares, KLE Group settled 25 cents higher at $3 with 50,323 units, Knutsford Express finished trading with a loss of 44 cents, at $14.06 with 2,200 units, Lasco Distributors closed at $7 with 40,685 stocks, Lasco Financial completed trading with a loss of 20 cents, at $3.80 with 11,350 shares, Lasco Manufacturing traded 1 cents higher at $4.60 with 25,677 units, Main Event settled at $4.50 with 100,745 units, Medical Disposables settled 50 cents higher at $5.50 with 5,200 stocks, Stationery and Office settled 10 cents higher at $4.10 with 796,273 shares, tTech closed with a loss of 95 cents, at $6.05 with 7,000 stocks and Derrimon Trading closed with a loss of 10 cents, at $2 with 50,000 shares.
Watch impact of interest rate cut
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.
Two financial stocks return to TOP 10
Unlike last week when there were several changes to the TOP 10 lists, this past week had just two changes, with Lasco Financial returning to the junior market and Sagicor Group to the Main market lists.
CAC 2000 dropped out of the Junior Marketlisting, allowing for the return of Lasco Financial that dropped sharply in price, to close the week at $3.40. Mayberry Investments was edged out by Sagicor Group, dropping from $34.35 to $31.75 at the close of the past week.
Former TOP main market value stock, 
Barita Investments moved up from $9.40 during the previous week to close at $11.60 for a gain of more than 273 percent since September last year. The most recent Initial Public Offering, Stationery and Office Supplies that exited the TOP 10 after listing in the prior week, is fluctuating between $4 and just over $5, and should undergo some amount of wide price movements until demand and supply find some balance. JMMB Group climbed to $23 on Friday before closing back at $21.45, supply has dried up for this stock and it seems to be readying to make an early exit in the next few weeks.
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 7.2. The average PE for the overall main market trades at 13.3 and 13.2 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 42 percent to the average of the market for Junior Market Top stocks and it remains at 46 percent for the main market.
Major changes to TOP 10 stocks
Barita jumps TOP 10 with more than 200% gain since September 2016
Investors pushed the price of Barita Investments to $9.40 during the week and drove newly listed Stationery and Office Supplies to $5.10 after it was listed on Thursday moving both out of the top flight of stocks. In addition, four others changed places with new listings.
Barita entered the list when we started the TOP 5 back in September last year, at $3.11 and has gained more than 200 percent since then while SOS is up 154 percent from its IPO price. Both stocks have more room for growth.
tTech reported lower profit in the second quarter to June with lower revenues resulting in a lower earnings forecast for 2017 and dropped out of the top list. CAC 2000 having slipped out of the listing the prior week returned this past week and was joined by Dolphin Cove to replace the two that exited the listing.
Main market stock, Berger Paints fell during the week from $19 to trade at $16 and moved back into the listing. Moving in are Grace Kennedy, Mayberry Investments and PanJam Investment. Stocks graduating from the top flight are Seprod as the price rose during the week to $33.33 from $30, 
Sagicor Group moving from $31.50 to $34.35 and Salada Foods that closed at $9.50, up from $9.
The average PE ratio for the Junior Market Top stocks is at 7.6 and the PE for the main market TOP 10, ends the week at 7.2. The average PE for the overall main market trades at 13.2 and 12.9 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 46 percent for the main market.
Cable & Wireless leads stocks to watch
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.
