2020 IPOs offer opportunities but

Investors can look forward to 20 new listings for the Jamaica Stock Exchange in 2020, split equally between Junior and Main Market stocks, information from the Jamaica Stock Exchange indicates.
The final number could be more, or it could end being less than the above number. Over the past two years, offers of new shares on the market affected demand for stocks already listed on the exchange at the time of the offering, as some investors disposed of exiting stocks to raise funds to invest in the new offerings. Switching stocks had more impact in the Junior Market than the Main Market. Investors can expect more volatility this year if the new offers come close to the number mentioned above. The sell-off of existing stocks offers investor opportunities to pick up some good quality stocks at bargain prices.
First Rock is the first issue to come to the market to take up a large sum to expand its operation with more real estate acquisitions. Government-owned Trans-Jamaican Highway comes to market and could pull $14 billion from the market, and could add several thousand new investors to the market as the publicity associated with the issue attracts new investors. Caribbean Assurance Brokers is the third for 2020 and as they seek $100 million in new capital. Alliance Financial Services’ initial public offer is scheduled to come in February or early March, with the broker being JMMB Securities.
Others that expressed an interest in 2019, to list include, Tropical Battery, AJAS, Marathon Insurance Brokers, ARC Manufacturing, Express Fitness. Government of Jamaica’s ownership in the Jamaica Public Service Company, Jamaica Mortgage Bank, Factories Corporation, while UDC should have some entities that should go as well.
Grace Kennedy Capital Market
has five issues working on to come to market during the year; one is said to be in the food flavouring business.

Wigton Windfarm IPO out very soon

Report reaching IC Insider.com is that the long awaited prospectus for Wigton Windfarm is due this week. The stock is set to come to the market at 50 cents each.
According to the government’s public bodies accounting records, “the divestment will be by way of listing PCJ’s 100 percent shareholding in WWFL on the Jamaica Stock Exchange.” The company is expected to report profit of $587 million to the end of March this year, down from $826 million earned in 2018. The 2018 earnings were helped by other income of $637 million versus just $52 million in 2018.
The company generated sales revenue of $2.5 billion in 2019 and $2.36 billion in 2018. Depreciation charge is high at nearly $700 million, this will result in a healthy cash flow per annum, allowing to either pay down debt or fund expansion from internally generated resourses and provide a basis of growing profits going forward.
The annual growth in profit before finance cost is minimal, growing just over 11 percent in 2015 and 2016 and a much slower 7 percent in 2017 and 2018, with a 6 percent decline in 2019.
The company is heavily indebted with $7 billion of borrowed funds, $1.4 billion in cash funds on hand and equity of $2.4 billion. Current assets exclusive of cash and payables are minimal. Borrowed funds were mostly in US dollars and resulted in annual swings in net profit, as the exchange rate of the Jamaican dollar moved up and down against the United States dollar. Loans that were previously denominated in US dollars, were swapped for Jamaican dollar funds, in preparation for the initial public offer.
The company’s generating capacity is 63 mega-watts with the output contracted to Jamiaca Public Seervice Company. Assuming a PE ratio of 10, the company would be valued at just under $6 billion.

100th listing coming for JSE

The Jamaica Stock Exchange is set to continue to grow with an increase in listings continuing with more than 100 listings being achieved in 2018 for the very first time.
More trading activity is expected in the future as a result of new listings, and the impact of the fall in interest rates will have, on trading activities. The exchange now has 92 listings, with a few duplicated ones, in the main market and US dollar market will see and there could be four on the exchange suggest before the year ends with three of them regarded as definite. Brokers say they are working on 8 new ones for 2018 currently, Marlene Street Forrest, Managing Director of the Jamaica Stock Exchange advised IC Insider.com.
The three are expected to be GWest, a medical complex out of Montego Bay, that is expected to raise over $400 million, the company’s income will come from a combination of rent, from the major part of the complex and fees from operating a small short term medical facility. The complex currently has a number of blue chip clients as tenants. Wisynco Group is looking to raise for itself $1 billion but some of its current shareholders wanting to cash out. Information suggests that shares are to be offered to a wide array of persons including the 700 staff members as well as a large number of customers hence the shares from the IPO could be pretty scarce. FosRich Group of Companies. Caribbean Insurance Brokers that is being handled by Mayberry Investments, is the fourth possible 2017 listings. Mayberry Investments has been working on Neveast Supplies but this seems to be a 2018 listing.

GWest complex in Montego Bay, its IPO is expected soon.

Others that should see their ordinary shares listed on the Jamaica Stock Exchange include, Jamaica Plumbing and Supplies, the government’s owned Wighton Wind Farms, Jamaica Public Service Company, with the government wanting to dispose of its share in the power company, KIW International that has taken the decision to have the shares relisted, in preparation for this the company approved at its recently held annual general meeting, a 15 for 1 stock bonus to bring the issued ordinary share capital to just over $50 million. UCC Online, a segment of University College of the Caribbean was expected to have gone to the market this year but have been ironing out issues to facilitate the initial public offering, they could be ready in 2018 and Sygnus Capital Investments should list in the first quarter of 2018, probably by February, on the main market of the stock exchange. Sygnus is a relatively new company, established to undertake loans or make medium term investments in medium size businesses. The company which is registered in St Lucia will be managed by Sygnus Capital Management, a Cayman Island based corporation. The company raised US$15 million in capital and is aiming for another $5 million when they come to market, which could be as early as January next year. According to our source they have so far lent out US$11 million and generated a higher rate of return that originally expected. The company has a good stream of potential users of its funds.

JSE main market slips on Thursday

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JPS 9.5% preference sharejumped $23.50 to $1,300on Thursday.

Trading in the main market of the Jamaica Stock Exchange closed on Thursday with 24 securities changing hands with 1 trading in the US dollar market. At the close, 10 stocks advanced and 6 declined.
Trading levels in the main market ended at 7,307,280 units valued at $263,394,539 compared to 2,673,775 units valued at $51,217,614 at the close on Wednesday. Trading in the US dollar market accounted for 6,100 units valued at US$1,830.
The All Jamaica Composite Index declined 942.67 points to close at 246,949.65 the JSE Market Index fell 858.88 points to finish at 224,999.11 and the JSE US dollar market index remained at 219 points.
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 17 stocks with bids higher than their last selling prices and 2 with lower offers.
The main market ended trading with an average of 122,740 units valued at $10,974,772 per security that traded, compared to an average of 53,047 units valued at $2,048,705 on Wednesday. The average volume for the month to date ended at 382,330 units with an average value of $5,264,239 versus at 398,555 units with an average value of $4,907,331 on the prior trading day. The average volume and value for March ended at 549,909 units and $1,379,459.
In market activity, Barita Investments closed at $7 exchanging 22,700 shares, Berger Paints closed 48 cents higher at $14 trading 4,900 shares, after trading at an intraday high of $15.50, Cable and Wireless closed at $1.31, with 508,000 shares changing hands, Caribbean Cement traded 50 cents lower at $30 with trades of 5,600 units. Carreras closed at $75 exchanging 8,770 shares, the stock traded during the day at an intraday high of $77.50, Grace Kennedy gained 90 cents to close at $43.90 trading 4,692,199 units, Jamaica Broilers closed at $16.49, losing 41 cents with an exchange of 924,823 shares, Jamaica Producers closed 50 cents higher at $16, exchanging 87,300 shares, Jamaica Stock Exchange closed 97 cents lower at $7.03, with trades of 6,500 shares. JMMB Group closed at $22.50, gaining $2.28 trading 25,788 units, Kingston Wharves closed at $31, with gains of $1.60 exchanging 15,650 units, NCB Financial Group lost $1.25 to end at $63.75, with 93,122 shares changing hands, 1834 Investments gained 10 cents to close at $1.80, with an exchange of 41,856 shares, 138 Student Living closed at S4.49 with 40,000 shares changing hands, PanJam Investment closed 5 cents lower to $34.15 with trades of 30,466 shares. Pulse Investments gained 1 cent to close at $8.05 trading 5,000 units, Sagicor Group closed at $33.51, with gains of $1.51, trading 63,150 shares, Scotia Group closed at $40.50, losing 50 cents with 234,146 units changing owners, Seprod closed at $36 trading 2,900 shares, Sterling Investments closed at $17.15 with an exchange of 6,020 units, Supreme Ventures closed at $6.30 exchanging 700 shares. Proven Investments closed at 30 US cents with trades of 6,100 ordinary shares, JMMB 7.5% preference share gained 10 cents to close at $1.98 exchanging 11,000 units, Jamaica Public Service Company 9.5% preference share traded $23.50 higher at $1,300 with 14,000 units changing hands and JMMB Group 7.5% preference share closed at $1.05 trading 462,690 units.