Capital market is alive!

September 10, 2013 by

Information gleaned by IC Insider has revealed that the capital market has been very active in Jamaica, despite the challenging economy.

Mystic Mountain, the visitor attraction located in Ocho Rios, offered $500 million of 10.50 percent preference shares in a private placement in July. The company intends to apply to the Jamaica Stock Exchange for the listing of all of the Preference Shares by way of introduction and such application will be made after the lapse of six months following the closing of the Offer. NCB Capital Markets were the brokers for the issue.

The original offer was for up to One Hundred Million ($100,000,000) at 9.75% 5 year Cumulative Redeemable Preference Shares at a price of Five Dollars in Jamaican currency (J$5.00) per share with an option to extend for a further two (2) years with interest rate of 10% in year six and 10.50% in year seven. This was later upped to $500 million at 10.50 percent for all years.

CAC2000 Ltd, an engineering company specializing in applied air conditioning systems, is said to have been in the market to raise $100 million in preference shares as well. Details of the offer and the terms are not yet known to IC Insider.

Facey Commodity, a subsidiary of the Mussons Group of Companies, has raised US$2 million at 9 percent commercial paper with a duration for just over a year. This is the third trange within a six week period. The instrument has option that investors can opt to get back 90 percent of the principal after six months by giving 30 days’ notice. Interest is payable monthly. Mayberry Invesrments is the broker handling the paper.

Jamaica Money Market Brokers (JMMB) went to the market to raise $750 million between 7.25-7.50 percent but collected $1.44 billion as JMMB clients gave the issues a ringing endorsement by pumping in $1.4 billion of the amount, while the general public offered to purchase only $39 million. The issue will be listed on the Jamaica Stock Exchange. What has been overlooked by investors in this issue is that JMMB presently has preference shares on the market with yields of 8.50 and 8.75 percent, which is a far better deal. Similarly is the Proven Investments instrument at 8 percent, also listed on the Jamaica Stock Exchange.

Jamaican Teas is another company in the process of tapping the market for a bond issue to raise funds.

Related posts | JMMB share offer taken up | JMMB to raise $750M

Filed Under: Initial Public Offers, JSE Main Market, Stock Market Tagged With: ,

JSE: Indices up, declining stocks up

September 9, 2013 by

Monday, 9th September 2013 | The stock market recorded positive moves in the three main indices on the first trading day of the week as Pan Caribbean Financial Services crossed 1,794,816 valued at $38,947,507 and 205,184 units valued at $4.45 million of Scotia Group Jamaica at $21.70 each in early trading. In the end, Scotia Group Jamaica traded 2,085,241 valued at $42.23 million, the price closed at $21.30 off 19 cents in a very slow day’s trading.

The Main Market Index closed at 85,010.18 up 169.49, the All Jamaica Index ended at 85,268.80 for an increase of 298.22 and the Junior Market Index seems to be closing in the 800 points level once more with a rise of 6.91 to end at 791.58. The market closed as 22 stocks traded with 3,350,127 units changing hands at a value of $50.4 million.

Jamaica Broilers gained 10 cents to $5.10 but with only 5,000 units, eyes will be out for this stock on Wednesday as the company is expected to release results for the first quarter of the new fiscal year on Tuesday. Based on the last quarter of the 2013 fiscal year when profits jumped by 114 percent, expectations are that this latest quarter to July should be up strongly primarily based on results from the ethanol operations.

Jamaica Money Market Brokers traded 332,375 units valued at $2.8 million as the price closed firm at $8.50 and Sagicor Life saw only 38,550 shares trading $8.51 for a 1 cent gain. Pan Jam Investments Trust lost 22 cents in a continued sea saw of price movements over several days. Scotia Investments which is back up at over J$32 in Trinidad today, lost 50 cents on the JSE to close at $27 but only 1,000 units traded.

JSEIndicesSept9Junior Market | The Junior Market seems to be holding out for a while as investors sense when the market will start to factor in the next set of interim results and starting buying ahead of the release of the results staring in late October. In today’s trading, Access Financial Services 99,250 units traded firm at $8.38; Blue Power Group 14,918 units closed at $9.4 an 11 cents increase; Caribbean Producers 58548 units closed at $2.10; Consolidated Bakeries 21,030 units traded firm at $1.40; Lasco Distributors 147,971 units closed at $1.49, down a cent; Lasco Financial Services 14,450 units closed at $1.40 up 10 cents and Lasco Manufacturing 83,288 units at $1.65 a 5 cents increase.

IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator has strengthened on Monday compared to Friday with bids for 10 stocks being higher with 5 stocks having offers lower than their last selling price.

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

CWJ: Making headway but slowly

September 9, 2013 by

Buying market share can be a costly and take years. Cable & Wireless (C&W) has found this this out the hard way. Once the only telecom operator in the Jamaican market, they have seen their dominance fade sharply to Digicel, the relatively new comer to the scene and it has spent hundreds of millions of dollars trying to win back market share.

Once highly profitable, C&W has suffered years of losses as they changed one CEO after another in search of the one that could stabilize and then grow the business. So far investors have not seen any returns for the patience. The early months of the last fiscal year looked as if it could be the turning point as the company aggressively went after new customers with a bold move of slashing mobile rates from $9 on prepaid calls to $2.99 per minute, just ahead of the Office of Utilities Regulation (OUR) forcing a cut of interconnection rates from $12 per minute to $5. At the end of the fiscal year to March, the company reported some success in boosting mobile revenues by 14 percent and mobile customers by 16 percent, but still reported a $5 billion loss, inclusive of redundancy payment to staff flowing from outsourcing of the maintenance area of its business as a part of a cost cutting strategy.

In the quarterly report for June this year, C&W reports continued growth in the mobile business but not for landline where it suffers from contraction, some of it, due to customers opting for mobile alone now that the rates are low.

cable-and-wireless-worldwide600x250C&W fight is on two fronts, one is cost cutting and the other is raising revenues. So far they seem to be making headways on both, albeit not fast enough. Revenues are down for the 2013 fiscal year partly as a result of reduction input payments for call termination which fell by $1.5 billion while revenues fell by $1.3 billion. The company also absorbed the additional telephone tax until March this year, estimated by IC Insider at approximately half a billion dollars.

June quarter | According to the company, active mobile subscribers are up 22 percent in the latest quarter and mobile revenues by 10 percent compared with June 2012 quarter. This revenue growth is remarkable when considered against the back drop of rates that were much higher for two months of the 2012 period and with last year’s June report showing a 21 percent jump in revenues. While growth in number of active subscribers is important as it will grow revenues, boosting the profit margin can be just as effective and may even be less costly. Here C&W is hoping that the reduction in termination rates will see most of its customers spending around the same as before thus boosting net income. The numbers from profit results since last year suggest that is happening, excluding land lines, but that could well be people using cellular as the cost differential is not all that great any more.

Legacy carriers | To be fair to C&W, legacy carriers worldwide have suffered severely from competition as the market has changed dramatically. Not only is mobile big, but the Internet has had a major impact on cross border communication, robbing telecom companies of high profit margin revenues.

The company’s focus on increased subscribers contributed to a 60 percent rise in acquisition cost for free hand sets. It’s costly but seems to be delivering results in growing the mobile business, which it badly needs since the land line business is mature.

Quarterly numbers | In spite of the much touted progress made in the mobile segment, results for the first fiscal quarter have not shown much of the benefits. Revenues are down from $4.8 billion to $4.35 billion some of which is due to the interconnection rate reduction as well as a cut in rates for prepaid customers ahead of the official start of the new termination rate from $5 to $1.10.

cable-and-wireless280x150Cost is up in some areas and the company speaks of a 25 percent jump in material spend to continuously improve the network. What is known is that administrative cost is up sharply both for the quarter as well as for the fiscal year which ended in March. The cost in this area is up to $1.77 billion from $1.5 billion in the last year June quarter and $5.8 billion for the full year. Labour cost is down due to reduction in staffing mid-way in the June quarter, so there is more to come for this item. The sudden jump in administrative and cost suggest that it is not permanent. In support of this, a look at the cash flow indicates what is happening. Two items amounting to $715 million accounted for the bulk of the increase, but these will not be ongoing; a $200 million in writing down a long term loan for loss on exchange and $515 million in provisioning for site restoration due to hurricane damage.

C&W reported a loss of $827 million in the June quarter, a big increase over the $430 million lost in 2012. For revenues alone to wipe this out would require a net 20 percent increase but a combination of a revenue increase and cost reduction could do the trick. Much is hinging on the reduced termination rates to pump more of the revenues to the bottom-line. The September quarter may be very revealing in pointing the way forward.

Of course, the C&W balance sheet is not looking pretty with negative equity of $20.5 billion and loans of $32 billion due to group companies and third parties. Current liabilities is at $10 billion while current assets are at $7.5 billion — not the kind of ratio that one would want to see under normal circumstances. But then, this is not your normal company.

Related posts | $2B slide in landline revenues sinks C&WJ | C&WJ announces $2.99 prepaid rate | C&W: Less jobs, more capital spend | D&G or C&WJ: to buy or not?

Filed Under: Company News, Company Results Tagged With: ,

JSE: Advances ahead of declines

September 6, 2013 by

Friday, 6th September 2013 | Advancing stocks outpaced declining ones for the 4th day running, but volumes remain low even as supplies continue to dwindle for many of the more popular issues. The main indices climbed at the end of trading with the all Jamaica index up 434.93 to 84,970.58 and the main market index up 247.20 to 84,840.69. While the main market indices closed at the second highest levels for the week, the junior market index slipped marginally by 1.74 to 784.67. Investors traded 5.76 million units valued at $30.73 million on a day when 24 stocks traded, 9 stocks advanced to 4 that declined in price.

Post Carreras’ annual general meeting, which was held on Wednesday, buying came in for the stock as it traded 112,924 units valued at $5,262,988 and closed at $47 up $1.50; Caribbean Cement commenced the rebound on Friday with 571,692 units valued at $1,257,722 trading up by 17 cents to close at $2.20; Grace Kennedy did not trade much with 29,204 units valued at $1,645,283 as the price remained firm, at $57; Jamaica Money Market Brokers was the day’s big trade with 2,017,957 units valued at $17,116,815 as the price closed up 49 cents, to close at $8.50. Kingston Wharves added 66,755 to the total and closed firm at $7, the stock seems to be under some selling pressure. Mayberry Investments, 88,385 units resulted in a 5 cents gain as it closed at $2.65. National Commercial Bank continues the fight to move forward as there is a decent gap between buyers and sellers with just 27,255 changing hands to close at $18.55. Sagicor Life chipped in with 59,727 units as the price closed at $8.50 up 23 cents; Scotia Group Jamaica participated in the low volume that traded with just 19,859 units as the price closed at $21.50 for a gain of 24 cents while its sub, Scotia Investments, exchanged a mere 14,494 units but closed up $1.30 at $27.50. Proven Investments 8% accounted for 834,650 trading firm at $5.09 as $4.25 million was invested in it.

JSEIndicesSept6Junior Market | The market had good participation from 7 stocks as 8 stocks traded on the final trading day of the week. Caribbean Cream exchanged 343,901 units as the price closed firm at $1.02; Caribbean Producers, fresh from recent full year results which showed a big jump in the last quarter’s earnings is gaining some traction resulting in 214,000 units trading with the price moving up 8 cents to $2.11 at the close; Consolidated Bakeries chipped in with 16,360 units to close firm at $1.40; General Accident 160,632 units resulted in a 2 cents fall in price at the end of trading to $1.75; Lasco Distributors 44,960 units traded but closed at $1.50 off by 10 cents while Lasco Financial Services had a busy day with 1,009,433 units trading as the price gave up 5 cents at the close $1.30 at the end. Lasco Manufacturing 69,386 units as the price gained 5 cents at $1.60 at the end.

IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator has weakened somewhat and shows that bids for 5 stocks were higher with 4 stocks having offers lower than their last selling price.

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

JSE: Advancers up but trading not strong

September 5, 2013 by

Thursday, 5th September 2013 | The main market indices fell on Thursday as the junior index moved up with 11 stock prices gaining to 6 that fell as 2,761,996 units traded valued at $16.1 million continuing a light period of trading for a number of days since August. The all Jamaica index fell 313.07 to 84,535.65, the Main index was down 177.94 to close at 84,593.49 and the junior market index gained 6.24 to close at 786.41.

Barita Investments seems to be attracting a little interest as it traded 18,156 at $2.50 while Caribbean Cement Company could have bottomed as it traded 121,158 units to close at $2.03 an increase of 3 cents; Gleaner Company logged 605,000 units at a firm price of $1.20; Jamaica Money Market Brokers kicked in with a strong 1,140,850 units as the price closed 1 cent up at $8;  Jamaica Stock Exchange 11,000 units resulted in a 5 cent drop to the IPO price of $2.85; Kingston Wharves traded 13,400 firm at $7; National Commercial Bank still struggling to move forward traded 117,295 shares at $18.55 up 5 cents; Pan Jamaican Investment Trust accounted for 13,415 units and closed at $51.42; Scotia Group Jamaica made good with 41,757 units and closed at $21.26 a gain of 6 cents while Seprod contributed 20,000 units at $13.

Access Financial Services had 100,000 shares being exchanged as the price closed at $8.38 up 18 cents; Consolidated Bakeries chipped in with 26,916 units to close at $1.40 down 5 cents; Cargo Handlers was up $1 to $14, a new all-time high.

JSEIndicesSept5General Accident Insurance traded 56,000 units at $1.77 for a 6 cents gain as Lasco Distributors 47,420 units traded firm at $1.50; Lasco Financial Services 109,450 units closed at $1.40 down 2 cents and Lasco Manufacturing 35,475 units with the price closing at $1.65 up 2 cents.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer indicator shows that bids for 6 stocks were higher with 2 stocks having offers lower than their last selling price.

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

JSE: Advancers ahead, indices down

September 4, 2013 by

Wednesday, 4th September 2013 | Trading activity on the Jamaica Stock Exchange was moderate notwithstanding the 4.667 million units which traded at a value of $25.7 million. Trading took place in only 25 stocks with 1 from the preference sector resulting in 8 stocks advancing to 4 declining. The index for the main market fell as the all Jamaica index being off the most by 1,041.87 to close at 84,848.72 and the main market index off 592.14 to end at 84,771.43. As indicated on Tuesday, this was expected to happen with that day’s movement in Scotia Group hitting $23.49 but closing at $22. Today, it closed at $21.20, giving back all the gains it had on Tuesday.

Caribbean Cement traded  38,155 units firm at $2; Grace traded 10,905 units at $56.60 up 10 cents; Jamaica Money Market Brokers exchanged 172,923 units and closed firm at $8; National Commercial Bank traded 87,412 units at $18.55 up 5 cents, while Sagicor Life enjoyed a big day with 865,150 units gained 44 cents to close at $8.60; Scotia Group traded 127,072 to closed down 80 cents at $21.20; Scotia Investments chipped in with 34,800 to close at $26.20 up 4 cents and Proven preference shares delivered 1,465,850 units firm at $5.09.

JSEIndicesSept4The junior market index slipped 2.20 to close at 780.17. Caribbean Creams traded 320,700 units to close at $1.02 a gain of 2 cents; Caribbean Producers exchanged 510,000 units firm at $2.03; General Accident chipped in with 66,000 units to close at $1.71 for a 1 cent gain; Jamaican Teas lost 20 cents to close at $4.20 as it traded 22,043 units; Lasco Financial Services traded 297,535 and closed at $1.42, down 2 cents, while Lasco manufacturing closed at $1.60 a 2 cents decline with 277,428 units and Paramount Trading 66,305 units firm at $3.30.

IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator shows that bids for 5 stocks were higher with 2 stocks having offers lower than their last selling price.

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

JSE: Advancing stocks hit decliners

September 3, 2013 by

Tuesday, 3rd September 2013 | Unlike Monday when trading levels were very moderate, trading picked up on Tuesday with 9 million units changing hands valued at $41.6 million.

Proven Preference shares traded 4 million units valued at $20.4 million as the stock closed firm at $5.09; Scotia Bank traded as high as $23.49 but closed down at $22. These movements were the main factors driving the two main indices up sharply at the close. Indications are that the price indices could fall quite a bit when trading closes on Wednesday unless a stock such as NCB picks up appreciably in price. The all Jamaica index which nose dived 1,051.58 jumped 1,621.05 today to end up at 85890.59, while the main market index that slipped 597.66 on Monday was up sharply by 921.32 to 84,363.57. The junior market index bucked the positive trend by falling 0.88 to close at 782.37. Trading resulted in 25 securities exchanging ownership of which 10 advanced, 3 declined and 13 traded firm.

Trades today with reasonable volumes were Carreras with 24,051 to close at $46.40, an increase of 40 cents; Jamaica Broilers Group accounted for 1,533,057 valued at $7.97 million to close 6 cents up at $5.20; Jamaica Producers 14,260 to close at $18.25; Kingston Wharves 15,014 units and closed at $7; Mayberry Investments contributed 33,386 was firm at $2.60. National Commercial Bank 278,547 units closed firm at $18.50 as it accounted for $5.15 million of the total value traded; Sagicor Investments 83,000 units at $16.55 at the close, down 5 cents; Sagicor Life Jamaica 17,201 closed firm at $8.16 and Scotia Group 7878,700 units traded resulting in the price rising 55 cents to end of trading at $22. Having traded as high as $23.49 for a value of $18.3 million, the bulk of buying was conducted by Scotia Investment for clients.

JSEIndicesSept3Junior market | Trading picked up on Tuesday with 8 stocks changing hands in this segment of the market. Jamaican Teas which traded a million shares at $4.40 exchanged another million units today with the price closing firm at $4.40 with a value of $4.4 million; Blue Power gained 6 cents to close at $9.28 with 11,124 units; Caribbean Producers put in 308,00 units while trading firm at $2.03.  Lasco Distributors traded 143,610 units up 5 cents to close at $1.50; Lasco Financial Services added 29,040 in trading at $1.44 for an increase of 4 cents; Lasco Manufacturing accounted for 415,241 firm at $1.62 up 6 cents and investors moved 256,036 units of Paramount Trading through the market as the price closed firm at $3.30.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer indicator shows that bids for 6 stocks were higher with 2 stocks having offers lower than their last selling price. This is the second day in a row that this indicator has been strong and could mean that the market is once more ready to move upwards.

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

JMMB share offer taken up

September 3, 2013 by

Jamaica Money Market Brokers advised that the offer to purchase two set of preference shares at 7.25 percent and 7.50 percent was oversubscribed and in accordance with the provisions of the Prospectus, JMMB will allot further Preference Share to all applicants in the amount that was subscribed. All Shares applied for will be allotted to applicants out of Preference Share currently held by JMMB.

JMMB advised that the Offers closed on the last day of work week (last Friday) and is oversubscribed. JMMB is currently encountering administrative constraints in the compilation and processing of the subscription applications in order to provide the information to the Jamaica Stock Exchange by close of business September 2, 2013.

Related posts | JMMB big bump in profits | Buy Rated stock list grows | JMMB to raise $750M |

Filed Under: Company News, General Business News, Initial Public Offers, JSE Main Market, Stock Market Tagged With: ,

D&G poor 4th quarter

September 3, 2013 by

Desnoes & Geddes, brewers of the world renown Red Stripe Beer, reported flat profits of $1.2 billion for the twelve months to June this year. Redundancy payments of $311 million, of which $160 million was in the last quarter, and an adjustment of $88 million relating to taxation booked in 2012, bit into net profits.

June quarter results came in at $161 million compared to $472 million in the same quarter last year. The poor last quarter results is not indicative of future earnings. D&G had telegraphed the lackluster numbers when it declared a dividend in June of only 10 cents per share, which brought the total payment to 30 cents for the year.

Sales for the fourth quarter was $2.682 billion, 5 percent lower than the similar period in 2012 and for the full year, $10.369 billion or 6 percent below last year’s figure. A change from exporting brewed product to the USA market in the latter part of the 2012 financial year to licensing a USA based brewery to produce and market the product, resulted in a reduction in export sales from $3.4 billion to $1.93 billion. Domestic sales on the other hand grew by 13 percent in the quarter and 11 percent for the full year.

RedstripebottleD&G100x150The company claimed that improved domestic performance was buoyed by new innovations in both the brewed portfolio and a stronger performing spirits portfolio. Cost of sales for the fourth quarter at $1.666 billion and full year of $6.118 billion decreased by 6 percent and 12 percent, respectively, versus the previous year. This would be partly due to the shift of production for the export US market. The shift in export strategy resulted in a big boost to profit in the export segment, which doubled from $405 million to $834 million but the domestic segment profit was flat at $2.49 billion. The domestic segment picked up more overhead cost than before when they were shared with the larger production level. D&G managed to improve the gross profit margin from 37 percent in 2012 to 40 percent in 2013 and gross profit after marketing cost to 32 percent from 26 percent excluding special consumption tax.

Profit before tax increased by 28.6 percent to reach $1.87 billion when compared to last year due to growth in domestic volumes and improved margin, dividend income which jumped by from $60 million to $184 million and royalties that moved from $342 million to $556 million.

Despite the higher pre-tax profit, result after tax was negatively impacted by a higher overall tax rate compared to 2012 when 25 percent was used compared with 30 percent in this year’s results.

CelebrationBrandsD&G150X83Regarding marketing, selling and administrative expenses, the company stated, “Marketing expenses of $190 million for the fourth quarter decreased by $42 million or 18 percent compared to last year mainly as a result of our new export model where expenditure to promote our US exports is provided by the licensee in America. General, selling and administrative expenses for the quarter were $29m (8 percent) above last year. The company’s joint venture with partner Pepsi Cola Jamaica, Celebrations Brands Ltd, began successful operations in most distribution hubs previously operated by Red Stripe and contributed a small profit to D&G’s results.”

The results helped boost cash from $973 million to $1.7 billion after dividend payment of $843 million and $880 million,  investment in fixed assets and the joint venture company and growth of $500 million in receivables offset by current liabilities that rose by $500 million as well. D&G ended the period with equity capital of more than $8 billion inclusive of deferred taxation.

Insider call | Keep an eye on this one for future developments.

Related posts | Major management changes at D&G | D&G will pay 10¢ dividend | Profits on the improve for D&G | D&G or C&WJ: to buy or not?

Filed Under: Company News, Company Results Tagged With: ,

JSE: Manipulation seems at play

September 2, 2013 by

Monday, 2nd September 2013 | Trading levels were very moderate on the first trading day of September with 1.7 million units changing hands valued at $11.4 million, making it one of the worse days for the market. The all Jamaica index dropped 1,051.58 to end down at 84,269.54 while the main market index slipped 597.66 to 84,442.25. The junior market index also fell by 9.17 to close at 783.25.

In today’s trading, 21 securities traded of which 4 advanced, 7 declined and 10 traded firm. The run up in the prices of some stocks on the last two trading days of August and the sharp fall on Monday suggest that some interested parties manipulated prices for portfolio purposes. With the objective achieved, prices have fallen back at the start of the new month.

Trades with reasonable volumes were Caribbean Cement with 269,030 to close at $2; National Commercial Bank 204,143 units at $18.5o, Sagicor Investments 83,382 to close at $16.60; Sagicor Life Jamaica 33,103 units closing at $8.16 and Scotia Group just 16,198 unit for the price rise to $21.45.

JSEIndicesSept2Junior market trading was light with only 4 stocks trading and with only Jamaican Teas recording any volume to speak of with a million shares trading at $4.40 up 38 cents. Dolphin Cove traded 10,161 units and dropped to $8 at the close down 30 cents.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer indicator shows that bids for 8 stocks were higher with 2 stocks having offers lower than their last selling price.

Filed Under: JSE Main Market, Stock Market Tagged With: , ,