Cable & Wireless up 56% in January
JSE: 4% gain for month
Friday, 31 January 2014 | The Jamaica stock market closed the first month of the year up 4 percent measured by the All Jamaica and the junior market indices. The market closed out the week on a high, continuing the strong gains recorded on Wednesday and Thursday.
The overall market recorded 11,559,237 shares changing hands for a value $99,774,593.75. The advance decline ratio changed from Thursday with only 7 prices closing with gains versus 9 that fell, even as the main market indices rose strongly with gains from Scotia Group and Desnoes and Geddes. Three stocks closed at 52 weeks high, Desnoes & Geddes, Knutsford Express and Cargo handlers.
The JSE Market Index gained 1,072.34 points to end at 82,387.81 and the JSE All Jamaican Composite advanced by 1,626.66 points to close at 85,382.43.
Main market gains | The number of stocks that rose were less than on Thursday as the following recorded gains; Desnoes & Geddes with 42,800 units as it hit a new 52 weeks high of $5.50 as the price rose by 50 cents; Caribbean Cement with 153,200 units close 10 cents higher at $4.75; Jamaica Money Market Brokers 8.75% preference share traded 159,671 units at 5 cents higher at $3.05; Sagicor Real Estate X Fund 91,192 units at $6.75 for a 25 cents gain and Scotia Group having 1,569,595 units trading to close up $1.43 at $21.94.
Firm Trades | Cable & Wireless traded firm with 1,584,941 shares at 25 cents; Hardware & Lumber 1,000 shares at $8.08; Jamaica Broilers Group 10,000 units at $4.75; Jamaica Producers Group 2,370 shares at $18.75; Jamaica Stock Exchange 888 shares at $2.10; Kingston Wharves 23,466 shares at $6.06; National Commercial Bank 63,871 units at $18; Radio Jamaica 1,312 shares $1.60; Sagicor Group 165,098 shares at $10 and Sagicor Investments Jamaica just 1,286 units at $20.
Losers | Proven Investments ordinary share with 236,350 units to close at US16 cents as the price slipped; Gleaner 3,000 shares at $1.10, a 2 cents fall; Jamaica Money Market Brokers 6,902,685 shares at $7.40 valued at $51,637,516 as the price slipped by 9 cents; Berger Paints 10,000 units at $1.75, down 10 cents; Carreras with 86,604 units to close at $33.50 down 49 cents; Pan Jamaican Investment 5,139 shares as the price slipped by 49 cents to $48.50 and Grace Kennedy 7,177 units at $55.50 off by 50 cents.
The JSE Junior Market Index inched up 2.69 points to close at 784.48 as more shares gained than lost.
Junior market gains | There were 3 stocks recording gains in the junior market as Cargo Handlers exchanged 5,292 shares as the price gained 43 cents to close at a new all-time high of $14.03; Lasco Distributors traded 50,000 units to close up 3 cents at $1.45; and Knutsford Express 1,690 units at $5.17 for a cent increase to a new all-time high.
Firm trades | Blue Power Group 5,000 shares at $9.80; Caribbean Cream 400units at 85 cents; Medical Disposables 69,267 shares at $2.10.
Losers | There were few losing stocks in the junior market as Lasco Financial traded 265,000 shares to close at $1.39 losing a cent and Lasco Manufacturing traded 39,500 units for 2 cents fall to $1.31.
IC bid-offer Indicator | At the end of trading the Investor’s Choice bid-offer indicator had 9 stocks with bids higher than the last selling prices and only 1 stock with a offer lower.
JSE: Sagicor Companies dominate trading
Thursday, 30 January 2014 | Sagicor Group of companies were the dominant trades in the Jamaica stock market as investors responded to the news of the takeover of RBC Jamaican operations by trading 1,365,319 shares of Sagicor Group for $13,747,021 pushing the price up by a $1 to close at $10 and the also drove up Sagicor Investments price as it closed up by $1.50 at $20 but with only 6,279 share trading.
The stock market continued where it left off on Wednesday the more stocks recording gains than those that fell as the overall market recorded 7,033,415 shares changing hands for a value $33,797,672. Knutsford Express traded at a new 52 weeks high of $5.16. The advance decline ratio changed from Wednesday with only 11 prices closing with gains versus 7 that fell compared with 21 to 10 on Wednesday.
The JSE Market Index gained 774.99 points to end at 81,315.47 and the JSE All Jamaican Composite advanced by 1,175.59 points to close at 83,755.77.
Main market gainers | Kingston Wharves 3,000 units to close up by 6 cents at $6.06; Scotia Group with 78,163 units closed up 11 cents at $20.51; Scotia Investments traded just 9,425 units but closing up 25 cents at $26.50; and Supreme Ventures 23,550 units to close up 13 cents at $2.43.
Losers | Berger Paints with 365,424 units closing at $1.85 and was off by a cent; Caribbean Cement with 23,000 units, closing down 35 cents to $4.65; Desnoes & Geddes 10,000 shares at $5.00 as the price eased by 15 cents; Grace Kennedy 32,000 shares to close at $56.00, down by 30 cents; Jamaica Broilers 31,531 units at $4.75 for a 25 cents fall; Jamaica Producers 480 units to close at $18.75, off by $1.05; and Pan Jamaican Investment Trust with only 554 shares to close down $1.01 at $48.99,
Firm traders | Cable & Wireless with 337,583 units at 25 cents; Carreras 55,258 units at $33.99; Jamaica Money Market Brokers with 3,900 ordinary shares at $7.49; Jamaica Money Market Brokers 8.75% preference share with 3,214,000 units at $3 and the 7.50% preference share with 260,400 units at $2; Mayberry Investments 6,797 shares at $2; Sagicor Real Estate X Fund 3,000 shares at $6.50; Salada Foods 8,950 shares at $9 and National Commercial Bank 59,462 units at $18.
The JSE Junior Market Index declined by 1.20 points to close at 781.79 with no stock recording a loss.
Junior market gainers | Lasco Financial 100,000 shares $1.40, up by 10 cents; 1,690 shares of Knutsford Express closing at $5.16, up 4 cents for a record high; Lasco Distributors 790,200 units at $1.42 for a cent gain and Lasco Manufacturing gained a cent to close at $1.33 with 61,905 units.
Firm trades | Blue Power 5,000 units at $9.80; Caribbean Producers at $2.75 with 171,045 shares and KLE Group with 4,900 at $1.
IC bid-offer Indicator | At the end of trading the Investor’s Choice bid-offer indicator had 5 stocks with bids higher than the last selling prices and 3 stocks with offers that were lower.
RBC acquisition confirmed
Sagicor Group confirmed the acquisition of RBC Royal Bank Jamaica’s operations for a price of $9.5 billion. Most of RBC operations would be absorbed into Sagicor Bank but the banking entity will be a direct subsidiary of the group.
The book value was of the order of $10.5 billion but as the operation has been bleeding at around $500 million per quarter the book value would be just under $10 billion at the time the agreement was signed. Loans on the book of around $32 billion reflect good loans as the bad ones were already provided for.
Pooling Sagicor Investments with that of RBC on the surface would create a combined banking group with assets of nearly $150 billion with loans of $40 billion and revenues around $12 billion. However, that is unlikely as the bank will be a totally separate entity going forward. Sagicor Group confirmed that there will be cuts and branch closures where branches overlap. This will results in significant cost savings.
This will not be the first time that Sagicor Bank would have entered in merger arrangements having absorbed Manufacturers Merchant bank and Trafalgar Development Bank some years ago.
For the twelve months to September last year, the RBC lost $1.7 billion and $456 million between July and September according to central bank’s data. For the year ending October 2012, RBC reported a loss of $2 billion before tax which was down from $3 billion in 2011. In 2012, loan losses contributed $650 million to the loss and income was inadequate to cover housekeeping expenses. Most likely the NDX in 2013 that cut interest rates would have negatively affected them, thus reducing the net interest margin.
The bank’s problem apart from heavy loan losses is the fixed operating cost that the income generated cannot match. It would require major loan growth to deliver the required income and that has not been growing fast enough having reached $32 billion in 2013 from $30.5 billion in October 2012.
Trading picks up | In Wednesday’s trading on the Jamaica Stock Exchange, Sagicor Group and Sagicor Investments climbed ahead of the news of the RBC takeover. The order book for Sagicor Group shows only six offers; two are at $10.50 to sell 25,400 units, one for 3,000 units at $10.95 and three at $11 for 255,000.
On the buy side there are bids as high as $10.50 for 25,000 units then $9.80 with only 1,185 units and 128,265 units on the bid between $9.75 and $9.79 and of course, there are bids below these levels.
Sagicor Investments had 7 bids and 7 offers with the highest bids being $18 for 1,000 units; 14,926 units for $16.50 and 100,000 at $15. On the sell side, there are only 1,565 units at $19; 7,235 shares at $21.50; 30,000 units at $22; 20,000 at $26.71 and 1.34 million units at $30.
Related post | A bigger Sagicor Bank?
JSE: Big day with 21 stocks gaining
Wednesday, 29th January 2014 | Nearly a third of the stocks listed recorded gains on Jamaica stock market as investors woke up to the news that Sagicor Group were to acquire RBC Royal Bank‘s Jamaica operations. It was, however, not a big day for volume or the value of stocks traded as 6,325,652 shares changed hands at a value of $46,429,845. Trading resulted in the indices gaining across the board.
The main market had one of its best days for some time with advancing stocks out numbering declining stocks by a good margin. Activity seems to have been stirred by the announcement of the takeover of RBC Jamaican operations leading to the JSE Market Index advancing by 972.98 points to 80,540.48 and the JSE All Jamaican Composite moving up by 1,475.93 points to close at 82,580.18.
Main market gains | The main market recorded the bulk of the stocks to record gains with Berger Paints posting 6,088 shares to close at $1.86 for a cent increase; Barita Investments 17,000 shares to close at $2.60, up 10 cents; Cable & Wireless 2,126,000 for a gain of 3 cents to close at a new 52 weeks high of 25 cents; Desnoes & Geddes 20,180 units as the price put on 15 cents to close at $5.15; Gleaner Company 58,932 units to close 2 cents up at $1.12; Jamaica Broilers 334,018 shares as the price closed up 24 cents at $5; Jamaica Money Market Brokers had only 600 units but the price closed at $7.49 put on 9 cents; Jamaica Producers 9,000 at $19.80 up $1.05; Kingston Wharves 49,000 units as the price gained 44 cents to end at $6; Mayberry Investments 100,000 as the price moved up by 17 cents at $2.
National Commercial Bank 326,899 units to close 20 cents up at $18; Pan Jamaican Investment Trust 169,554 shares gaining $1.80 to close at $50; Sagicor Investments with 186,619 shares to close at $18.5 for $1.83 gain; Proven Investments ordinary shares traded 8,236 and reached an all-time high of US18 cents for a 2 cent increase; Radio Jamaica 15,000 shares at $1.6 to close up by 8 cents. Sagicor Group 12,900 shares as the price gained 90 cents to close at $9 pushed by the news of RBC takeover; the bid at the close was at $9.80. Scotia Investments traded 200,100 and gained $1.25 to end at $26.25; Seprod with 12,500 shares closed at $10.90 up by 10 cents; Supreme Ventures 10,000 units closing at $$2.30 for 10 cents gain.
Losers | The losers were few with Caribbean Cement trading 578,900 shares and lost a cent to end at $5; Scotia Group 420,404 units to close at $20.40 down 10 cents; Grace Kennedy with 77,523 shares to close at $56.30, a fall of 70 cents.
The JSE Junior Market Index advanced by 8.54 points to close at 782.99 but only two stocks recorded gains for the day.
Junior market gains | Stocks to record gains are Caribbean Producers Jamaica 343,300 at a new 52 weeks high of $2.75, up by 5 cents; Access Financial 10,000 units at $11, a gain of $1.
Losers | The junior market suffered more declining than rising prices as AMG Packaging traded 5,854 units to close at $3.45 down 3 cents; Consolidated Bakeries 3,000 shares at $1.15 down 2 cents; Dolphin Cove 20,000 shares to close at $8.90, a loss of 10 cents; General Accident 22,670 shares at $1.80 for a decline of 5 cents; Lasco Distributors 128,800 shares closing at $1.41, off by a cent; Lasco Financial 480,544 units at $1.30 down by 5 cents; Lasco Manufacturing 128,000 shares down a cent at $1.32.
Firm trades | Derrimon Trading was the only stock to trade firm in the junior market with 2,000 units at $2.35.
IC bid-offer Indicator | At the end of trading the Investor’s Choice bid-offer indicator had only 7 stocks with bids higher than the last selling prices and 2 stocks with offers that were lower.
Lasco Financial’s marketing investment
The latest quarterly report to December 2013, shows that Lasco Finance Services pumped in funds to nearly double its promotional cost to push for a greater share of the remittance business, resulting in heightened marketing and selling cost from $111 in 2012 million to $204 million in 2013.
In the December quarter the cost was pushed to $87 million compared to just $36 million in 2012. The increase spend in this area kept profits down to $46 million versus $55 million in the December 2012 quarter and for the nine months period $136 million or 20.6 percent above the 2012 results for the similar period. Administrative cost rose by a strong 26 percent for the year to September but by the end of 2013, the rate of increase fell to 22 percent as the December quarter increased by only 15 percent to reach $47.5 million and for the nine months $144 million versus $118 million.
With the reduced spend on promotion that should flow with the completion of the World Cup promo, profit should end the year around $220 million and that would be up from $164 million in 2013 or earnings of 18 cents per share.
“In pursuit of our strategic objective to increase our market share in the remittance industry, towards the end of the 2nd Quarter, we launched our Brazil 2014 promotion which lasted until December 31, 2013. This investment contributed to the more than 100% increase in selling and promotional expenses. We anticipate that the resulting rise in transactions from this awareness campaign will continue into the future periods,” management stated in release accompanying the results.
As the promotion ended, the March quarter figures should reflect much lower cost in this area and with that increased profit. Trading income in the quarter rose by a strong 42 percent to reach $176 million and for the nine months period the growth was 42.6 percent taking it to $469 million.
The financials remain strong with equity of $610 million, liabilities of only $95 million and cash of $302 million.
Lasco Financial is an IC Insider Buy Rated Stock. To view the full list, click here.
Related posts | Buy Rated stocks coming in | Lasco Financial profit rise
A bigger Sagicor Bank?
Reports are circulating that Sagicor Group is in talks to acquire the RBC Royal Bank Jamaica’s operations. IC Insider understands that an official announcement could be made to the Jamaica Stock Exchange by the end of Wednesday.
From all indications, RBC operations would be absorbed into Sagicor Bank. IC Insider gathers that the deal has not yet been inked, but talks are in fact taking place that will most likely to lead to a deal.
As is the case with the acquisition of this nature, the deal would be subject regulatory approval and due diligence. No purchase price has been revealed but Sagicor will most likely acquire it for a figure that will be lower than book value that is currently around $10.5 billion as the bank’s Jamaica operations has been bleeding for some time at close to $2 billion per year based on 2013 numbers.
How much will Sagicor spend? | For the twelve months to September last year, the RBC lost $1.7 billion and $456 million between July and September according to BOJ’s data. The continued losses suggest a price around $5 billion. For the year ending October 2012, RBC reported a loss of $2 billion before tax, which was down from $3 billion in 2011. In 2012, loan losses contributed $650 million to the loss and income was inadequate to cover housekeeping expenses. Most likely the NDX in 2013, that cut interest rates, would have negatively affected the bank thus reducing the net interest margin. The bank’s biggest problem, apart from heavy loan losses, is the fixed operating cost that the income generated cannot match. It would require major loan growth to deliver the required income and that has not been growing fast enough having reached $32 billion in 2013 from $30.5 billion in October 2012.
If the deal goes through, it would create a combined banking group with assets of nearly $150 billion, loans of $40 billion and revenues around $12 billion.
Sagicor would enjoy significant cost savings from a merger of both entities as some of the branches overlap and should lead to closure of some and expansion of others. Head office operations would result in major cost savings as well, once the two are fully integrated. This would not be the first time that Sagicor Bank have entered in merger arrangements having absorbed Manufacturers Merchant Bank and Trafalgar Development Bank some years ago.
Sagicor Jamaica is a IC Insider Buy Rated Stock. To view the full list, click here.
Related posts | Buy Rated stocks coming in | Marked changes for Buy Rated stocks | Sagicor cuts dividends
JSE: Declines over power gains
Tuesday, 28th January 2014 | The Jamaica stock market saw a sharp reversal to Monday’s positive advance decline ratio with 14 stocks falling in price compared to only 5 that went up of the 29 securities that traded. Trading resulted in 5,570,700 shares changing hands valued at $8,124,125.54. Carreras and Caribbean Creams traded at 52 weeks low and Proven Investments traded at an all-time high.
The JSE Market Index dropped 286.54 points to 79,567.50 and the JSE All Jamaican Composite dipped 434.65 points to 81,104.25.
Main market winners | On a day when winners were hard to find, the main market had 3 of the stocks that recorded gains with the US dollar market having one. Berger Paints traded just 2,749 units but gained 5 cents to end at $1.85; Grace Kennedy exchanged only 1,800 units as the price closed at $57 for a $2 gain; Hardware & Lumber with 5,000 gaining 8 cents to close at $8.08; Proven Investments US dollar ordinary shares gained a cent to close at a new all-time high of US$0.16.
Losers | Stocks trading down include Caribbean Cement with 83,478 units closing 24 cents down at $5.01; Carreras with 49,567 shares closing down a cent at $33.99; Jamaica Money Market Brokers 10,000 shares at $7.40, down by 9 cents; Kingston Wharves with 8,600 units to close down 54 cents at $5.56; National Commercial Bank 93,182 units closing down 20 cents at $17.80; Radio Jamaica 11,330 shares to close down by 38 cents at $1.52; Scotia Group lost 10 cents to end at $20.50 as it traded 47,270 units; Supreme Ventures had 3,204,847 units changing hands at $2.20, down by 10 cents.
Firm traders | Stocks trading unchanged include Cable & Wireless 290,000 units closing at 22 cents; Desnoes & Geddes 8,175 units at $5; Sagicor Group 37,200 shares at $8.50; Sagicor Real Estate X Fund 9,265 units at $6.50; Scotia Investments with 60,000 shares at $25.
Trading of preference shares saw Jamaica Money Market Brokers 7.50% exchanging 100,000 units at $2 and the 8.75% traded just 10,000 shares at $3 while Proven Investments 8% swapped 16,204 units at $5.10.
The JSE Junior Market Index declined by 0.89 points to close at 774.45 as the majority of securities that traded declined with only one advancing.
Junior market winners | Medical Disposables, the sole security to close on the junior market with a gain had 227,616 units trading to close at $2.10, up 5 cents.
Losers | Caribbean Cream traded 610,000 to close at 85 cents but lost 8 cents; General Accident Insurance 27,000 shares but closed down 3 cents at $1.85; Lasco Distributors exchanged 171,160 units to close a cent down at $1.42; Lasco Financial Services had 83,750 units changing hands and shed 4 cents to close at $1.35 and Lasco Manufacturing exchanged 363,000 units, down 1 cent at $1.33.
Firm traders | Caribbean Producers Jamaica traded 10,000 to close unchanged at $2.70. Eppley was the other stock to close unchanged but with a miniscule volume.
IC bid-offer Indicator | At the end of trading the Investor’s Choice bid-offer indicator had only 8 stocks with bids that were higher than the last selling prices and 2 stocks with offers lower.
39% hike for NCB dividend
The Board of Directors of National Commercial Bank (NCB) announced a 39 percent hike in the latest dividend that has been declared. The banking group will be paying the interim dividend of 32 cents per ordinary stock unit on February 20, 2014 to stockholders on record as at February 7, 2014. Last year, NCB’s first dividend for the year was 23 cents that was paid in March and on May 24, 16 cents per share.
NCB also reported earnings for the first quarter to December indicating that operations are back to normal coming out of 2013 when profits were negatively impacted by the government debt swap. Profit after tax came out at $2.856 billion versus profits of $2.786 billion and for the September 2013 and $1.778 billion after writing off some large one-time expenses. Earnings per share amounted to $1.16 and should reached around $5 for the year, barring any major negative developments.
Total revenues climbed by 15 percent to $13.75 billion compared to $11.967 billion.
While net revenues grew from $9.16 billion to $10.47 billion, expenses grew from $5.78 billion to $7.34 billion resulting in reduced operating profit of $300 million. A $301 million gain from on acquisition of a subsidiary counter balanced the reduced operating profit. Bad loan provision was down from $563 million to $390 million, but policy holders cost climbed by a billion dollars with the acquisition of Advantage General Insurance Company.
Looking forward, loans grew 27 percent or $31.8 billion to $148 billion from December 2012 and deposits were up 10 percent to $194 billion.
Related posts | NCB ill-fated IPO cost $680m | NCB cuts dividend 75% | NCB recovers from NDX hit
JSE: Advances more than declines
Monday, 27th January 2014 | The prices of 10 stocks gained and 5 declined as 27 securities traded on the Jamaica stock market resulting in 4,095,869 units changing hands valued at just $8,124,126.
Three stocks closed at 52 weeks high at the end of trading. The improved gain to loss ratio was visible in the main market indices moving up as JSE Market Index gained by 217.41 points to close at 79,854.04 and the JSE All Jamaican Composite advanced by 329.79 points to 81,538.90. The JSE Junior Market Index, however, declined by 4.47 points to close at 775.34.
Main market advancers | Stocks advancing include Cable & Wireless with 1,940,868 units to close up 2 cents at 22 cents, a new 52 weeks high; Caribbean Cement also closed at a new 52 weeks high with 7,583 to end at $5.25 up by 65 cents; Jamaica Broilers 55,518 units, the price gained 3 cents to end at $4.77; Sagicor Investments 4,700 shares at $16.67, up by $1.06; Sagicor Real Estate X Fund 32,735 units at $6.50, up 20 cents; Scotia Group 100,768 units to close at $20.60, for a 10 cents gain; Seprod gained 20 cents to close at $10.80 with 2,000 shares.
Proven Investments US dollar ordinary shares traded 15,500 units at a new 52 weeks high of US$0.15 as it gained 1.7 US cents.
Firm traders | The main stocks with the last traded price remaining unchanged include Carreras with 11,978 units at $34; Kingston Wharves 8,575 units at $6.10; National Commercial Bank 8,930 units at $18; Supreme Ventures 1,008,700 units at $2.30.
In the preference section, Jamaica Money Market Brokers 7.50% had 292,000 units at $2 and 8.75% with 40,000 units at $3 and Proven Investments 8%, 35,200 shares at $5.10.
Decliners | Scotia Investments trading only 3,340 units to close at $25, for a decline of a $1.50.
Junior market advancers | Lasco Financial Services 289,314 shares at 1.39 up 2 cents and Lasco Manufacturing 132,120 shares to close at $1.34 up 8 cents.
Firm traders | Only one stock, Caribbean Flavours was unchanged with 38,243 shares, the price closed at $2.50.
Decliners | Three stocks declined including Medical Disposables with 21,000 shares, closing at $2.05, off by 5 cents; Lasco Distributors 31,790 shares at $1.43, down 2 cents and Paramount Trading 2,000 units with the price slipping 35 cents to $3.20.
IC bid-offer Indicator | At the end of trading the Investor’s Choice bid-offer indicator had 8 stocks with bids higher than the last selling prices and 4 stocks with offers that were lower.