The Jamaica Stock Exchange Main Market regained some of the grounds lost on Monday with the market index rising after an exchange of 33 percent more shares than on Monday, despite more stocks falling than rising and values down marginally.
At the close, the All Jamaican Composite Index climbed 1,991.05 points to 429,520.28, the Main Index advanced by 1,803.16 points to 391,895.69 and the JSE Financial Index gained 0.90 points to settle at 102.67.
Trading ended with 46 securities changing hands similar to that on Monday and closed with the prices of 16 stocks rising, 21 declining and nine remaining unchanged. The average PE Ratio ended at 16.2 based on ICInsider.com’s forecast of 2020-21 earnings.
Investors traded 28,767,472 shares for $57,416,333 compared to 21,659,826 units at $60,805,085 on Monday. QWI Investments led trading with 70.7 percent of total volume, after exchanging 20.33 million shares followed by Sagicor Select Financial Fund with 8.7 percent for 2.51 million units. Transjamaican Highway with 6.7 percent market share for 1.93 million units changing hands and JMMB Group 7.5% with 4 percent for 1.07 million units.
Trading for the day averaged 625,380 units at $1,248,181 for each security, compared to an average of 470,866 shares at $1,321,850 on Monday. The average month to date trade is 380,065 units at $5,624,586 , in contrast to 327,822 units at $6,556,598. November averaged 623,120 units at $6,686,047.
Investor’s Choice bid-offer indicator reading has seven stocks ending with bids higher than their last selling prices and five with lower offers.
At the close of the market, Barita Investments shed $1.10 to end at $86.90, with investors switching ownership of 17,820 shares, Berger Paints advanced $1 to $14 after exchanging 374 units, Caribbean Cement declined by $3.01 to $53.99, in trading 18,651 stock units. Eppley rose $1 to close at $21, with 1,530 units passing through the market, Eppley Caribbean Property Fund fell by $3.50 to $40.50, in exchanging 2,385 shares, First Rock Capital rose $1 to end at $12, after exchanging 30,794 stock units. Grace Kennedy gained 99 cents to settle at $63.99, in clearing the market with 47,206 stocks, Jamaica Broilers closed 50 cents higher at $28.50, with an exchange of 190,927 units, Jamaica Producers rose $1.24 in closing at $21.74, after trading 43,847 shares. Jamaica Stock Exchange lost 50 cents to finish at $19.50 after 4,456 stock units passed through the market, JMMB Group dropped $2 to close at $33.01, in exchanging 46,056 shares, Kingston Wharves fell $1.45 to $46.55, with 4,744 units changing hands. Palace Amusement declined by $105 to $1,300 after trading 12 units, Pan Jam Investment advanced $6 to $68, with 19,919 stock units crossing the exchange, Portland JSX fell by $2 to $7, in exchanging 6,606 shares. Sagicor Group rose $2.98 to $49.50 after owners switched 8,268 units, Sagicor Real Estate Fund shed $1.48 to settle at $6.01 trading 22,100 stock units, Salada Foods ended at $27.01, with a loss of $1.97 exchanging 200 shares. Scotia Group declined $4.37 to $43.12, in clearing the market with 19,042 stock units, Supreme Ventures gained 40 cents to settle at $18, with 55,133 shares crossing the market and Sygnus Credit Investments closed 57 cents higher at $16.57, in exchanging 28,814 stock units.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated.
IC TOP 10 buffeted by market consolidation
Both the Junior and Main Market continue to consolidate ahead of a bullish period to come, as trading activities were calmer during the past week on the Jamaican Stock Exchange after a surge in prices towards the end of November. There were no major price movements this past week, but the price of Grace Kennedy pulled back from $67 to close at $64 at the end of the week while JMMB Group moved up to $35 from $34 last week.
Fontana closed trading $5.35 and that was enough to move it out of the IC TOP 10. Honey Bun, with its earnings now based on the fiscal year ending September 2021 replaced Fontana. Stanley Motta is out of the Main Market TOP 10, with the stock rising to $5.35 and replaced by Wisynco Group, in at tenth position.
Profit after tax at Honey Bun, rose a healthy 76 percent to $54 million from $31 million in the fourth quarter over the similar period in 2019, bettering the 21 percent rise in the June quarter, to $20.4 million from $16.7 million. For the year to September, profit increased just 6.6 percent to $167 million from $156 million in 2019, from sale revenues that rose 15.5 percent for the quarter, to $432 million from $374 million but rose 8.5 percent for the year, to $1.675 billion from $1.544 billion in 2019. Earnings projection for the 2021 fiscal year is 55 cents, up from 35 cents for 2020 giving the stock a PE of 10.
Wisynco Group’s performance was on a roll, with revenues up 27.5 percent in the nine months to March this year, and 24 percent in the March quarter, but gross profit margin slipped in the March quarter while rising Administration and other expenses squeezed profits even more. Sales dipped slightly in the June and September quarters, but the September 2019 quarter, includes sales of $503 million from a discontinued operation, leaving flat sales from ongoing operations. Net Profits Attributable to Stockholders from continuing operations was $851 million or 23 cents per stock unit compared to $932 million or 25 cents per stock unit for the corresponding period of the prior year. Revenues for the quarter from continuing operations of $8.1 billion fell 6.1 percent from $8.6 billion in the 2019 quarter. The company expects to have lower energy costs with the successfully commissioning of the Cogeneration plant in July 2020, with the company seeing a positive contribution from the implementation through reduced energy costs.
The top three stocks in the Junior Market with the potential to gain between 239 to 400 percent by March 2021 are Caribbean Producers, followed by Elite Diagnostic and Limber Depot. With expected gains of 147 to 252 percent, the top three Main Market stocks are, Berger Paints followed by Radio Jamaica, Carreras and Sygnus Credit Investments tied for the third position.
The local stock market’s targeted average PE ratio is 20 based on profits of companies reporting full year’s results, from now to the second quarter in 2021. The Junior and Main markets are currently trading well below the market average, indicating the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 16.1 and the Junior Market 13.1, based on ICInsider.com’s projected 2020-21 earnings. The PE ratio for the Junior Market Top 10 stocks average a mere 6.9 at just 53 percent of the market average. The Main Market TOP 10 stocks trade at a PE of 9 or 56 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 210 percent and 133 percent for the JSE Main Market, based on 2020-21 earnings. IC TOP 10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on likely gain for each company, taking into account the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in movements in and out of the lists weekly. Revisions to earnings per share are ongoing, based on receipt of new information.
Persons who compiled this report may have an interest in securities commented on in this report.
Big gains for some IC TOP 10 stocks
During the past week, Grace Kennedy was the top 10 best performer rising 16 percent to 67 percent, followed by Caribbean Producers 12 percent gain to close the week at $2.63, during a period when stocks continue their climb higher to their highest level since early-April on the Jamaican Stock Exchange Main Market in the past week.
The Junior Market continues to fight in continuing to build on the gains in recent weeks, with moves in both markets confirming the bullish signal technical indicators been flashing.
The movement in the markets resulted in Stanley Motta coming into the Main Market IC TOP 10, replacing Jamaica Producers. The Junior Market Top 10 remained without any new movement in and out, but Jamaican Teas started trading ex split on Friday and closed at $2.05, down from last weeks’ adjusted closing price of $2.23.
This week’s focus: 2020 is now drawing to a close and should lead investors to start the focus on 2021 and some companies that could deliver superior returns. Many of the companies that suffered badly from reduced sales could be some that should be on the investors’ list. Access Financial, Caribbean Producers, Express Catering, Elite Diagnostic, Lasco Financial, NCB Financial are some that could enjoy above-average recovery and then there are entities such as Grace Kennedy, Carib Cement, Berger Paints and Lumber Depot that should get added push from continued buoyancy in the construction sector.
The top three stocks in the Junior Market with the potential to gain between 231 to 394 percent by March 2021 are Caribbean Producers, followed by Elite Diagnostic and Limber Depot. With expected gains of 149 to 260 percent, the top three Main Market stocks are, Berger Paints followed by Radio Jamaica and Carreras in the third position.
The local stock market’s targeted average PE ratio is 20based on profits of companies reporting full year’s results, from now to the second quarter in 2021. The Junior and Main markets are currently trading well below the market average, indicating the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 15.5, The Junior Market 13.3, based on ICInsider.com’s projected 2020-21 earnings. The PE ratio for the Junior Market Top 10 stocks average a mere 7.2 at just 54 percent to the average of the Junior Market. The Main Market TOP 10 stocks trade at a PE of 9 or 58 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 201 percent and 132 percent down from140 percent last week for the JSE Main Market, based on 2020-21 earnings, indicating greater likely gains for Junior Market stocks than the Main Market.
IC TOP 10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on likely gain for each company, taking into account the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in movements in and out of the lists weekly. Revisions to earnings per share are ongoing, based on receipt of new information.
Persons who compiled this report may have an interest in securities commented on in this report.