Trading activity on the Trinidad Stock Exchange saw 304,133 shares changing hands valued at $774,343 as 11 securities traded of which 2 advanced, 3 declined and 6 traded firm.
The Composite Index fell 1.92 points to close at 1,180.24, the All T&T Index declined by 3.82 points to 2,005.68 and the Cross Listed Index remained at 46.54.
Gains| Clico Investment Fund traded 10,444 shares valued at $226,889 and advanced by 5 cents to end at $21.72 and National Flour traded 10,000 shares valued at $11,700 as the price rose 2 cents to $1.17 a new 52 weeks high.
Firm trades| Stocks trading unchanged are Jamaica Money Market Brokers with 261,044 shares changing hands for a value of $117,470 as the price closed at 45 cents, Scotia Investments contributed 5,005 shares with a value of $7,958 as the price closed at $1.59, Prestige Holdings added 5,000 shares valued at $46,500 and closed at $9.30, Point Lisas Industrial Port Development 2,281 shares at $3.65, Neal & Massy 1,898 shares at $66.30 and First Caribbean International Bank 1,343 units at $5.75
Declines| First Citizens Bank traded 200 shares and lost 37 cents to close at $36.98, Guardian Holdings 4,918 units to end at $14.15, down 32 cents and Scotiabank 2,000 shares at $72.47, down 3 cents.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 3 stocks with the bid higher than the last selling price and 4 stocks with offers that were lower.
Low market activity on TTSE
First Citizens doubles in 5 months
When Trinidad’s First Citizens Bank stock price hit $41.54 on Friday 10th January, investors who bought shares at the initial public issue price and held until this week doubled their money in just over 5 months. The stock price gained 89 percent from the initial IPO price of $22 per shares in August. The bank declared a $1.09 per share final dividend to be paid January 24, to shareholders on record as of December 31, 2013, the Ex-dividend Date is December 27.
The dividend equivalent to a 12 percent rate of return on the IPO price, when added to the return of the stock price for persons, who got shares at the IPO price and held, have seen a 100 percent gain on their investment.
The dividend policy of the First Citizens Bank enunciated in the propectus is to distribute to its ordinary shareholders funds surplus to the operating capital and strategic requirements of the Group, as determined by the Directors, with an annual target dividend pay-out percentage range of 45 to 55 percent of net profit after-tax. The 2013 dividends translates to around $273 million versus $263 million paid for 2012.
The bank reported profits of $742 million before tax and $606.5 million after tax compared to 2012 pre-tax profit of $714 million and $446 million after tax but the big increase after tax is due to tax adjustment in 2012 that depressed the after-tax profit. Based on the 2013 results IC Insider return the stock to the BUY RATED list and project the stock price to exceed $50 per share during the course of 2014.
First Citizens Bank is an ICInsider Buy Rated stock. To view the full list, click here.
Related posts | First Citizens paying 12% dividend | First Citizens staff lose huge payday | First Citizens’ $1B IPO opens today
First Citizens staff lose huge payday
Several staff members of Trinidad’s First Citizens Bank lost out on the huge return investors got when the bank offered shares to the public and allocated shares to the staff in August 2013.
The shares, which were very attractively priced at $22 and at an attractive PE, exhibited all the signs of a big pay day. So attractive was the issue, that IC Insider immediately placed the stock on our Buy Rated list from the IPO opened. Surprisingly, information obtained from the Trinidad & Tobago Stock Exchange was that a large percentage of the bank’s staff never bought shares that were allocated to them. As such, the excess was made available to the public who clamoured for more shares. Employees of the bank bought only 3.78 million units accounting for 7.8 percent of the amount offered and just more than half of their entitlement.
The stock price has since hit $40.63, a gain of on 84.6 percent. In addition the bank declared a $1.09 per share final dividend that will be paid January 24, 2014 to shareholders on record as of December 31, 2013. The dividend is equivalent to a 12 percent rate of return on the IPO price. When the dividend is added to the return of the stock price, the result is a 96 percent gain on investment in just five months.
Based on the 2013 results, IC Insider returned the stock to the Buy Rated list and projects the stock price to exceed $50 per share during the course of 2014. Those are huge returns in a country where interest rates on money market instruments are below 5 percent.
The IPO was heavily subscribed as $3.3 billion chased $1 billion of shares that were on offer leading to a massive oversubscription for the 48 million First Citizens Bank shares. While the staff only picked up a portion, there were 12,435 applicants who got less shares than they wanted.
Related posts | First Citizens shares set to explode | T&T Citizens Bank IPO oversubscribed | First Citizens paying 12% dividend
First Citizens paying 12% dividend
Trinidad’s First Citizens Bank has declared a $1.09 per share final dividend that will be paid January 24, 2014 to shareholders on record as of December 31, 2013, the Ex-dividend Date is December 27.
The dividend is equivalent to a 12 percent rate of return on the initial IPO price of $22 per shares in August. That adds to the return of 78 percent on the stock price for those persons who were able to get shares at the IPO price and hold them till the XD date. The dividend policy of the First Citizens Bank is to distribute to its ordinary shareholders funds surplus to the operating capital and strategic requirements of the Group, as determined by the Directors, with an annual target dividend pay-out percentage range of 45 to 55 percent of net profit after-tax. The 2013 dividends translates to around $273 million versus $263 million paid for 2012.
The bank reported profits of $742 million before tax and $606.5 million after tax compared to 2012 pre-tax profit of $714 million and $446 million after tax but the big increase after tax is due to tax adjustment in 2012 that depressed the aftertax profit.
In the prospectus, management in commenting on a large jump in tax liability indicated, “In 2012, the Group recorded a taxation charge for the year of $267.8 million. This was due to management re-assessing its tax strategy in relation to the pursuit of tax benefits to be derived from derivative instruments. This change in strategy, which was done after careful evaluation of all relevant factors and in consultation with its tax advisors but prior to the filing of its 2011 corporation tax return, resulted in a difference between the tax liability as per the tax return for 2011 and the estimate of the tax provision recognised in the financial statements for the year ended September 30, 2011, as well as changes to the deferred income tax estimates. This change in estimate, amounting to an additional one-off tax charge of $128.3 million in 2012, was recognised in the income statement in 2012”.
The stock has been moved back into the IC Insider Buy Rated List with earnings per share of $2.45 and a target price of $55-60 in 2014.
Related posts | TTSE: First Citizens profit pushes price to new high | T&T Citizens Bank IPO oversubscribed | First Citizens shares set to explode
First Citizens off Buy Rated list
First Citizens Bank is now off the Buy Rated list as the price has shot up to $33.45 in Wednesday’s trading. However, the stock remains on the Watch List as it is poised to go higher with good bids to buy 1.2 million shares and none on offer at the close.
From here on, the stock becomes one that is more for the long term gains as the PE ratio has risen to 22.3 times this year’s earnings, just a fraction below Scotiabank and well above Republic’s 15 times PE. The price of the stock would have to retreat quite a bit in valuation for it to get back into the Buy Rated list.
Not much has changed elsewhere in the market except that Trinidad Cement and Guardian Holdings seems to have bottomed and are slowly recovering.
Image courtesy of Jeroen Van Oostrom/ FreeDigitalPhotos.net
TTSE: First Citizens triggers breaker
Monday, 16th September 2013 | First Citizens Bank stock hits $25.30, up 15 percent in early trading on the Trinidad & Tobago Stock Exchange as just 1,000 units traded. At the end of trading there were bids for 3,187,700 units at $25.30 and there were no stocks on offer, a clear sign of higher price in the days ahead.
The company that had a successful initial public offer of shares (IPO) between July and August when it was twice oversubscribed saw the stock price hitting the maximum it could trade a for the day based on the circuit breaker rule. At the current price, the PE of the stock is 17 times earnings based on the level of oversubscription and the value of other bank stocks IC Insider sees the prospects for the stock to reach $35 in this run up.
Other significant trading saw Jamaica Money Market Brokers exchanging 410,000 units firm at 50 cents for a value of $205,000 after the company announced that it has been cleared to acquire the remaining 50 percent of Intercommercial Bank to bring their shareholding to full 100% ownership.
Trinidad Cement traded 69,000 shares for $134,550 as the stock traded firm at $1.95; National Commercial Bank of Jamaica contributed 10,000 shares with a value of $11,500, while Republic Bank added 5,000 shares valued at $550,100.
Guardian Holdings closed up 48 cents at $14.50 but on only 100 units; National Flour traded 2,352 units and put on a cent to close at 76 cents, while Neal & Massy put in 3,103 units gaining 4 cents to close at $56.04. Clico Investment Fund, swapped 125,081 shares valued at $2,696,856 as the price remained at $21.56.
Trading activity on the First Tier Market registered a volume of 628,942 shares crossing the floor valued at $3,937,088 as there was trading in 14 securities of which 6 advanced, none declined and 8 traded firm.
At the end of trading, the Investor’s Choice bid-offer indicator was showing signs of a fluid market continuing with bids for 2 stocks being higher and 4 stocks having offers lower than their last selling price.
Related posts | First Citizens shares set to explode | T&T Citizens Bank IPO oversubscribed | Buy Rated stock list grows | JMMB grows assets $24B to $200B
TTSE: Angostura ends on a high
Friday, 13th September 2013 | There was trading in 13 securities on Friday, 5 advanced, 1 declined and 7 traded firm as 577,825 units traded at a value of $3,265,401.
Jamaica Money Market Brokers had 200,000 shares changing hands for a value of $100,000; Sagicor Financial Corporation exchanged a volume of 183,334 shares for $1,265,005; Angostura Holdings did the same with 77,088 shares with a value of $770,640 as the price put on 39 cents to end the day at a 52 weeks high of $10, while Trinidad Cement added 60,000 shares valued at $117,000.
Scotiabank Trinidad & Tobago declined by a cent end the day at $70.02 but with only 200 units trading.
Clico Investment Fund share price gained a cent to close at $21.56 with a volume of 19,565 shares valued at $421,821. Praetorian Property Mutual Fund traded 4,000 units and closed firm at $3.41.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator was showing signs of a fluid market with bids for 3 stocks being higher and 4 stocks having offers lower than their last selling price.
First Citizens| Next week should be rather interesting as on Monday, First Citizens Bank is scheduled to start trading. The stock cannot trade above $25.30 as the market is restricted by a circuit breaker, which limits the daily price movement to 15 percent. This means that based on the issue price of $22, the maximum allowed for Monday is $3.30.
Related posts | First Citizens shares set to explode
First Citizens shares set to explode
A whopping $3.3 billion chased $1 billion of shares that were on offer in the twin island state of Trinidad and Tobago between July and August leading to a massive oversubscription for the 48 million First Citizens Bank shares at a very attractive price of TT$22 each. The high level of oversubscription is bound to result in a massive jump in the stock price after it opens on Monday, September 16 as some of 12,435 applicants who got less shares than they wanted will enter the secondary market to snap up more shares before the price gets too high.
Employees of the bank got 3.78 million units accounting for 7.8 percent of the amount offered and just more than half of what they were entitled to based on the allocation noted in the prospectus. The public got 12,852,807 units or 25.5 percent, which is 10.5 percent more than the prospectus had assigned them. Pensions and other trust funds got 12.1 million units representing 25 percent; mutual funds and unit trusts, 10 million units or 20.7 percent; the National Insurance Fund 10 percent amounting to 4.85 million units and well as companies registered in Trinidad and Tobago and the Caribbean Investment Fund.
The prospectus had indicated that if the Offer is oversubscribed, consistent with the Government’s policy of promoting the widest possible participation in share ownership, priority to receive the allocation (as a percentage of the maximum Offer) shall be given as follows in descending order of priority:
- Employees of the Issuer 15%
- Individual investors who are nationals of Trinidad & Tobago 15%
- Registered pension and other trust funds, Credit Unions and Cooperatives 25%
- Registered mutual funds including The Trinidad & Tobago Unit Trust Corporation 25%
- National Insurance Board 10%
- Companies registered in Trinidad and Tobago and other investors such as the Commonwealth Development Corporation and the Caribbean Investment Fund 10%.
The stock went on the market at a PE of 14.67, which is well below BNSTT at 22.6, BCB Holdings of 25.78 and Ansa Merchant Bank at 19.30 but just below Republic Bank at 15. Heavy oversubscription usually mean that the price will rise sharply as investors try to get more shares to satisfy their thirst.
IC Insider has labelled the stock, Buy Rated and this remains intact.
Related posts | T&T Citizens Bank IPO oversubscribed | First Citizens’ $1B IPO opens today | First Citizens lousy investor’s relations | Buy Rated stock list grows
First Citizens lousy investor’s relations
It was once said that as a country, Trinidad wanted to be the financial capital of the Caribbean, but recent activity on the country’s capital market indicates that they have a far way to go in achieving such a goal — if that is possible.
First Citizens Bank launched the largest ever Initial Public Offering (IPO) of shares in the history of the T&T Stock Exchange with a market value of approximately TT$1.1 billion on Monday 15th July at an offer price of TT$22 per share for 48,495,665 shares. The bank said the IPO will assist in widening its capital base in order to facilitate future strategic expansion plans. The offer was slated to close on August 9 and was extended to Monday, August 12th 2013 as the 9th was a public holiday.
First Citizens Brokerage & Advisory Services, a subsidiary of First Citizens Investment Services, is the Lead Broker for the Offer for Sale. The handling of the entire issue is a classic demonstration of poor investor relations and that is not a good sign for investors.
Listing on September 16 | The T&T Stock Exchange has advised that First Citizens has applied to have its shares listed on the TTSE on September 16th 2013 subject to the approval of its application to list by the Board of the TTSE.
This is madness and is reflective of lack of sensitivity in their financial market. First off, the opening time for the issue was unnecessarily long so those who applied early had their funds tied up without any compensation. Even worse is after nearly a month of closing of the issue, investors are yet to know what is their allocation of shares. First Citizens said on their website that investors will find out between August 30 and September 6.
A check with the T&T Stock Exchange as to why it will take such a long time for the shares to be listed indicates that the problem is not with the Exchange, who are ready to list as soon the information is available and is approved by the Stock Exchange Council. A Stock Exchange source suggests that the delays maybe due to the broking community not being fully conversant with how to execute a timely IPO.
Oversubscription | Information obtained suggests that the issue was about two times oversubscribed with institutional investors probably being the main subscribers resulting in the high level of oversubscription.
While the management has made major missteps in dealing with this issue, IC Insider still rates the stock as Buy Rated based on the issue price and potential earnings. We believe there should be a steep appreciation in the stock’s value when it is compared with others within the financial sector.
Related Posts | First Citizens’ $1B IPO opens today | T&T Citizens Bank IPO oversubscribed | Buy Rated stock list grows
T&T Citizens Bank IPO oversubscribed
Word out of the Twin Island state of Trinidad & Tobago indicates that the Citizens Bank of Trinidad IPO, which went on sale July 15th and should have closed on Friday, August 9, is to be closed today. The new closing date is due to Friday being a public holiday in Trinidad.
The stock, which was priced at $22 per share for the IPO, is said by our sources to heavily oversubscribed from last week. The oversubscription is in line with comments heard by IC Insider out of Trinidad prior to the opening of the public offer suggesting that the shares will be avidly taken up. The stock, which has a PE of 11 times earnings at the IPO price, is expected to jump in price when listed later this month.
The government of Trinidad & Tobago is expected to benefit from the proceeds of $1.1 billion from the issue.
The take up of the issue is welcomed news for the Trinidad & Tobago stock exchange. Not only will the number of companies be increased but the new issue will generate additional revenue from annual listing fees as well as fees when the shares are traded.
The exchange is set to collect an annual listing fee of TT$130,000 plus TT$25,000 for the trading symbol and a fee for each trade amounting 0.30 percent of the consideration. The Central Depository will also garner fees for each trade as well.
Related Posts | First Citizens’ $1B IPO opens today
