Treasury bill rates inched higher

Bids for Treasury bills for three offerings for the government of Jamaica that were auctioned on November 15 in the amounts of $700 million each resulted in modest increase in two and a slight decline in another.
The auction attracted $826,712,000 for the 91 days issue, $1,097,475,700 for the 182 days bill and $1.997 billion for the 283 issue. The bills attracted in less amounts than the previous auction in October by $895 million and $1.4 billion each for the other two issues.
Average Yield ended at 1.95181 percent for the 91 days instrument, up from 1.786 percent in October. The 182 days Treasury bill inched up to 1.98594 percent from 1.954 percent but the 283 instrument, slipped modestly, to 2.05676 percent from 2.064 percent.

Jamaican economy grew 2.2% in Q2

The Jamaican economy grew by 2.2 percent during the period April to June 2018, when compared to the similar quarter of 2017. This increase was attributed to improved performances in both the Goods Producing industries by 7.2 percent and the Services industries by 0.6 percent.
The growth in the second quarter brings to 1.8 percent growth for the calendar year to date with growth of 1.4 percent in the first quarter.
According to Statistical Institute of Jamaica, “the positive performance of the Goods Producing Industries was due to Agriculture, Forestry and Fishing that grew by 12.5 percent, Mining and Quarrying increasing by 31.6 percent, Construction by 2.9 percent and Manufacturing by 0.2 percent. The Agriculture, Forestry and Fishing industry’s performance was attributed to favourable weather conditions and assistance to farmers by the Ministry of Agriculture.

The mining sector boost GDP growth in 2018.

Growth in the Mining and Quarrying industry was due mainly to the resumption of production at the Alpart refinery and demand for crude bauxite from overseas refineries. Increased output of 2.5 percent from the Food, Beverages and Tobacco sub-industry was the main contributor to the growth in the manufacturing industry, due mainly to increases in meat and meat products, processing of fruits and vegetables, bakery products, beverages, sugar and molasses.
The Construction industry’s performance reflected increased activities in the building construction, civil engineering and building installation groups. All industries within the Services industries recorded higher levels of output with the exception of Producers of Government Services which remained relatively unchanged. Electricity and Water Supply grew 1 percent, Wholesale and Retail Trade; Repairs; Installation of Machinery and Equipment by 0.6 percent, Hotels and Restaurants by 0.4 percent, Transport, Storage and Communication by 1.6 percent, Finance and Insurance Services by 1.1 percent, Real Estate, Renting and Business Activities by 0.6 percent and Other Services by 0.3 percent. The economy grew by 1.6 per cent in the second quarter of 2018 when compared to the previous quarter. This was the result of a 2.7 per cent increase in the Goods Producing Industries and a 1.2 per cent increase in the Services Industries.
The results are preliminary and will be revised in the future when more information is obtained.

Honey Bun profit up modestly in Q3

Sales for the three months ended June 2018, rose 15 percent to $332 million over the 2017 out turn of $289 million at Honey Bun, but profit before tax was just $9 million, 5 percent higher than the $8.6 million earned in the corresponding prior year period.
Profit after tax rose to $9.7 million up from $7.55 million as a provision of $1 million in taxes in 2017 turned into $695,000 in 2018. Management stated in their release to shareholders that “this has been as a result of continued investment in production capacity and restructuring of distribution.”
Year to date, sales for the nine months, were $1 billion up 4 percent over the corresponding 2017 period’s income of $969 million, leading to profit before tax of $80 million, 17 percent lower than in the previous year. After taxation of $8.3 million for the nine months, profit declined to $72 million from $84.7 million in 2017, after taxation for $12 million.
Earnings per share for the quarter amounts to just 2 cents and for the nine months period year to date amounted to 15 cents. Honey Bun’s last quarter is not the most robust for the fiscal year so not much improvement is expected when the year ends in September.
Even as the net profit was disappointing, there were some good signs. Gross margin increased to 44.1 percent from 42.4 percent in 2017 for the June quarter and from 43.2 percent to 45.2 percent for the nine months. Gross profit rose 19 percent to $146 million for the quarter but was up 8 percent for the year to date period to $455 million.
Marketing and Distribution cost rose 32 percent in the quarter to $61 million and 37 percent to $164 million while Administrative Expenses rose 14 percent for the quarter to $63 million and was flat at $166 million for the nine months. Depreciation moved up by 9 percent to $12.3 million for the quarter and 11 percent to $36 million for the year to date.
“The Company’s asset base has grown as a result of the investment in the expanded facilities. This investment will allow the company to take advantage of the strong market demand for our products.

One Honey Bun’s Products.

In April of this year Honey Bun launched its new Buccaneer Jamaica pocket size rum cakes in 3 flavors at the Jamaica Expo. We have entered two new markets with further interest from other buyers in existing markets,” Michelle Chong Chief Executive Officer, informed shareholders.
Operations brought in $113 million in cash for the nine months of which $93 million was used as payment for fixed assets and $18.6 million in dividends resulting in $84 million in cash at the end of the period.
Shareholders’ Equity grew to $600 million at the end of June, current assets fell to $212 million and current liabilities fell to $84 million from $117 million in 2017. Fixed assets rose to $441 million from $368 million in 2017 and borrowed funds stood at just $31 million.

Collapse of the JSE US market

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Amazingly, while the JSE main market has been recording several record highs this year and the Junior market is up more than 10 percent for the year, the US dollar market has gone in the opposite direction.
The US dollar based market index is at its lowest level since February 2010 and also at levels not seen since mid-2016, with the index closing at 139.56 on Tuesday this week.
In February 2017, Margaritaville hit a high of 37 US cents and Proven Investments reached a high of 32 US cents, both have been sliding since, and hitting a 52 weeks’ low of 15 cents recently. Interestingly, Proven, the darling of many investors in the past, had very little buying interest in recent times. Margaritaville trades at 15 US cents and have lost 60 percent from the high and Proven has fallen 53 percent. Margaritaville suffered last year from dislocation that two hurricanes had on Turks and Caicos Islands and by extension on its operations while Proven picked up losses from the revaluation of the Jamaican dollar, but should recover from it, for the current year. In addition, the company raised capital by way of a rights issue that has not been put to work to avoid a dilution in returns on investment. With the fall in the price of Proven the stock is now IC Insider.com’ TOP 10 buy listed. At the same time, that the US issue has fallen the Proven Jamaica dollar listing still has a bid for 1,830 units at J$26.50 or almost 20 US cents.
Also dragging down the market is Sterling Investments US dollar listing that have fallen from 12 US cents to 8.55 US cents.
For the fiscal year to March, Proven reported US$5.68 million or 0.94 cents per share for shareholders versus $8.85 million in 2017. $8 million of the 2017 earnings was non-recurring, coming from gain on acquisition of a subsidiary. Importantly, the company suffered from the revaluation of the Jamaican dollar in the last half of the fiscal year, resulting in a loss of $444,000 but resulted in a $3.3 million turn from gains of $2.9 million in 2017. Even without the benefit of foreign exchange gains profit from ongoing operations was up nearly 100 percent from $6.6 million to $12.6 million for the year. The first quarter results that are expected to be released next week should show recovery from the FX losses. “All our segments are doing well and this year should be our best ever” Christopher Williams, President of the Company told IC Insider.com. “We await regulatory approval for the investment brokerage company in the Cayman Island,” Williams stated.
Margaritaville reported a loss of US$88.5 thousand in the February quarter, from revenues of US$1.8 million and US$4.06 million for the nine months period that delivered profit of $147,324 versus $339,122 in 2017.

Jam$ falls vs US rise with others- Wednesday

The Jamaica dollar slipped moderately in value at the close of foreign currency trading on Wednesday against the US dollar but gained against the others.
Inflows of all currencies amounted to the equivalent US$30.57 million compared to US$37.57 million bought on Tuesday and sold US$42.74 million compared to US$42.54 million sold on Tuesday.
At the close of foreign currency trading, dealers sold US$41.45 million, 5 cents more than on Tuesday with the US dollar selling rate closing at J$125.42, compared to J$125.37 in the sale of US$40.38 million on Tuesday. Purchases of the US currency by dealers, amounted to US$28.57 million, with the average rate adding 4 cents to end $124.04, compared to US$35.51 million, with the average rate of $124 on Tuesday.
At mid-day on Wednesday dealers purchased US$13.07 million at an average rate of J$124.36 and sold $14.19 million at an average of J$125.26. At mid-day on the previous trading day, dealers purchased US$ US$13.07 million at an average rate of J$124.36 and sold $14.19 million at an average of J$125.26.
The Jamaican dollar closed trading, with the selling rate for the Canadian dollar, falling to J$97.43 from J$100.50 at the close on Tuesday. The selling rate for the British Pound declined to J$167 from J$171.54 previously and the euro declined versus the Jamaican dollar to J$151.76 to buy the European common currency, versus the prior selling rate of J$152.19.

Jamaican$ falls in value – Tuesday

The Jamaica dollar slipped moderately in value at the close of foreign currency trading on Tuesday against all the main currencies it mostly trade against, except the pound.
Inflows of all currencies amounted to the equivalent US$37.57 million compared to US$63.21 million bought on Monday and sold US$42.54 million compared to US$63.48 million sold on Monday.
At the close of foreign currency trading, dealers sold US$40.38 million, 5 cents more than on Monday with the US dollar selling rate closing at J$125.37, compared to J$125.32 in the sale of US$46.64 million on Monday. Purchases of the US currency by dealers, amounted to US$35.51 million, with the average rate falling 33 cents to $124, compared to US$58.09 million, with the average rate of $124.33 on Monday.
At mid-day on Tuesday dealers purchased US$13.07 million at an average rate of J$124.36 and sold $14.19 million at an average of J$125.26. At mid-day on the previous trading day, dealers purchased US$25.27 million at an average rate of J$124.58 and sold $19.78 million at an average of J$125.24.
The Jamaican dollar closed trading, with the selling rate for the Canadian dollar, rising to J$100.50 from J$98.23 at the close on Monday. The selling rate for the British Pound declined to J$171.54 from J$172.28 previously and the euro rose versus the Jamaican dollar to J$152.19 to buy the European common currency, versus the prior selling rate of J$151.70.

Jamaican$ gains against all – Monday

The Jamaican dollar gained further ground at the close of foreign currency trading on Monday against all the four main currency it mostly trade against daily.
Inflows of all currencies amounted to the equivalent US$63.21 million compared to US$35.26 million bought on Friday and sold US$63.48 million compared to US$37.86 million sold on Friday.
At the close of foreign currency trading, dealers sold US$46.64 million, 21 cents less than on Friday with the US dollar selling rate closing at J$125.32, compared to J$125.53 in the sale of US$29.69 million on Friday. Purchases of the US currency by dealers, amounted to US$58.09 million, with the average rate rising 58 cents to $124.33, compared to US$29.47 million, with the average rate of $123.75 on Friday.
At mid-day on Monday dealers purchased US$25.27 million at an average rate of J$124.58 and sold $19.78 million at an average of J$125.24. At mid-day on the previous trading day, dealers purchased US$8.2 million at an average rate of J$124.37 and sold $7.46 million at an average of J$125.44.
The Jamaican dollar closed trading, with the selling rate for the Canadian dollar, declining to J$98.23 from J$100.96 at the close on Friday. The selling rate for the British Pound declined to J$172.28 from J$174.70 previously and the euro fell versus the Jamaican dollar to J$151.70 to buy the European common currency, versus the prior selling rate of J$152.09.

More recovery for Jamaican$ – Friday

The Jamaica dollar gained further ground at the close of foreign currency trading on Friday against the US and the Canadian dollars and the euro as volumes increased over the previous week.
Dealers bought US$201 million in all currencies, up from US$191 million bought in the previous week and sold US$217 million, compared to US$210 million in the prior week. Actual US dollar purchases by dealers amounted to US$178 million from US$166 million in the prior week and sold US$190 million including US$15 sold to Bank of Jamaica in the BFXITT auction, compared to US$184 million previously.
Inflows of all currencies amounted to the equivalent US$35.26 million compared to US$34.79 million bought on Thursday and sold US$37.86 million compared to US$31.28 million sold on Thursday.
At the close of foreign currency trading, dealers sold US$29.69 million, 4 cents less than on Thursday with the US dollar selling rate closing at J$125.53, compared to J$125.57 in the sale of US$27.16 million on Thursday. Purchases of the US currency by dealers, amounted to US$29.47 million, with the average rate dropping 55 cents to $123.75, compared to US$32.90 million, with the average rate of $124.30 on Thursday.
At mid-day on Friday dealers purchased US$8.2 million at an average rate of J$124.37 and sold $7.46 million at an average of J$125.44. At mid-day on the previous trading day, dealers purchased US$12.17 million at an average rate of J$124.70 and sold $7.66 million at an average of J$125.49.
The Jamaican dollar closed trading, with the selling rate for the Canadian dollar, declining to J$100.96 from J$101.70 at the close on Thursday. The selling rate for the British Pound rose to J$174.7 from J$173.57 previously and the euro fell versus the Jamaican dollar to J$152.09 to buy the European common currency, versus the prior selling rate of J$152.63.

Jamaican$ recovers from B-Fxitt effect – Thursday

The Jamaica dollar recovered on Thursday from some of the losses suffered when dealers sold US dollars to Bank of Jamaica in the B-FXITT auction that helped to push up the selling rate on Wednesday.
Inflows of all currencies amounted to the equivalent US$34.79 million compared to US$38.04 million on Wednesday and sold US$31.28 million compared to US$55.58 million, including the amount sold to Bank of Jamaica on Wednesday.
At the close of foreign currency trading, dealers sold US$27.16 million, for 16 cents less than on Wednesday with the US dollar selling rate closing at J$125.57, compared to J$125.73 in the sale of US$52.03 million on Wednesday. Purchases of the US currency by dealers, amounted to US$32.90 million, with the average rate climbing 26 cents to $124.30, compared to US$32.44 million, with the average rate of $123.94 on Wednesday.
At mid-day on Thursday dealers purchased US$12.17 million at an average rate of J$124.70 and sold $7.66 million at an average of J$125.49. At mid-day on the previous trading day, dealers purchased US$14 million at an average rate of J$124.51 and sold $18.42 million at an average of J$125.38.
The Jamaican dollar closed trading, with the selling rate for the Canadian dollar, jumped to J$101.70 from J$97.54 at the close on Wednesday. The selling rate for the British Pound declined to J$173.57 from J$174.67 previously and the euro fell versus the Jamaican dollar to J$152.63 to buy the European common currency, versus the prior selling rate of J$154.27.

Forex volume up with B-Fxitt trade – Wednesday

Bank of Jamaica bought US$15 million in the B-FXITT auction on Wednesday, with the average rates against the US dollar for accepted offer ending at $126.29. A total of 31 bids were received to sell US$21.85 million up to a rate of $128 and a low of $124.70
Dealers enjoyed inflows of all currencies amounting to the equivalent US$38.04 million compared to US$43.20 million bought on Tuesday and sold US$55.58 million, including the amount sold to Bank of Jamaica. US$44.03 million was sold on Tuesday.
At the close of foreign currency trading, dealers sold US$52.03 million, including the BOJ sales, at 37 cents more than on Tuesday with the US dollar selling rate closing at J$125.73, compared to J$125.36 in the sale of US$39.23 million on Tuesday. Purchases of the US currency by dealers, amounted to US$32.44 million, with the average rate declining 23 cents to $123.94, compared to US$40.56 million, with the average rate of $124.17 on Tuesday.
At mid-day on Wednesday dealers purchased US$14 million at an average rate of J$124.51 and sold $18.42 million at an average of J$125.38. At mid-day on the previous trading day, dealers purchased US$14 million at an average rate of J$124.51 and sold $18.42 million at an average of J$125.38.
The Jamaican dollar closed trading, with the selling rate for the Canadian dollar, dropped to J$97.54 from J$101.34 at the close on Tuesday. The selling rate for the British Pound declined to J$174.67 from J$176.07 previously and the euro fell versus the Jamaican dollar to J$154.27 to buy the European common currency, versus the prior selling rate of J$154.99.