Caribbean Cream over by 1,177 shares

May 9, 2013 by

The latest IPO to hit the Jamaican market, Caribbean Cream producers of the Kremi brand of ice cream, was oversubscribed by 1,177 units at the close on May 1, 2013.

The application for listing on the stock exchange is now before them and a decision is expected by Monday after which listing should commence. No listing date as been determined as yet, the broker informed IC Insdier.com, but the view is that trading could commence in the stock towards the end of next week.

A total of 387 applications covering units valued J$75,714,000 were received and processed for this Initial Public Offering (IPO). Of this number, 386 applicants covering 72,713,623 units received 100% of the total allotment requested.

The offer was for the subscription of 75,713,623 ordinary shares at the price of $1.00 per share. Applications in the public pool of up to 2,500,000 shares, received 100% allotment and one applicant over 2,500,000 shares was allocated 2.5 million shares plus approximately 0 .998446% of the excess.

Stock outlook | Investor’s Choice analysts project earnings per share of 17 cents for the year ended February 2013 and 39 cents for the 2014 year. The stock is likely to struggle at the issue price for a while with the less than robust reception to the issue. The annual results should be out soon, which should help the stock price once more financial data is released to the public.

Filed Under: Company News, General Business News, Initial Public Offers Tagged With:

JSE: Wednesday, 8th May 2013

May 9, 2013 by

Low levels of trade

The total volume of shares trading today amounted to 1,445,101 units valued at over $9,519,690. Cable & Wireless was the volume leader with 711,901 units (53.12%) followed by Mayberry Investments with 119,220 units (8.90%) closing at a price of $2.05 and Barita Investments with 100,000 units (7.46%) as the stock closed at $3 having fallen 20 cents.

There were 12 advancing stocks compared to 7 which declined but the market indices shows otherwise as all indices that were affected by trading declined except for the junior market index which rose marginally. Unlike yesterday when no stocks in the junior market traded, the 5 that traded included General Accident with 91,580 units being the highest volume and Lasco Financial traded a higher amount in dollars that General Accident with the former trading $187,583 versus $153,791 for the latter.

The JSE Market Index declined by 440.13 points (0.52%) to close at 83,824.52. The JSE Select Index declined by 28.23 points (1.23%) to close at 2,263.66.  The JSE All Jamaican Composite declined by 774.85 points (0.93%) to close at 82,508.01. The JSE Junior Market Index advanced by 2.01 points (0.32%) to close at 622.76. The JSE Combined Index declined by 418.47 points (0.49%) to close at 85,288.11.

JSEINdicesMay8Grace lost 50 cents to close at $55 although the bid was at $56 at the close, having traded 24,645 shares. Pan Jam with 300 shares trading gained $2.70 to close at $53. Scotia group shed 77 cents to close at $21.21 with 21,564 units having traded. NCB lost 80 cents to close at $18 in trading 94,952 shares

5 stocks in the junior market and 5 in the main market closed with bids above the last sale price, which means higher prices ahead. In the junior market. Caribbean Producers bid is 2 cent higher than the last selling price of $2, Access is 15 Cents higher than the last price of $7, Honey bun is just a cent over the $4 the stock last traded at and Lasco Distributors is 5 cents more than the last sale price of $9.60.

In the main market, Ciboney, D&G, Grace and Jamaica Producers and Kingston Properties are all higher than the last sale price of their stocks.

Other Stocks to Watch |  Lasco manufacturing, General Accident, Carreras, Scotia Investments, Sagicor Life, Scotia Group, and Seprod.

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

Mayberry profit bleeds from NDX

May 9, 2013 by

Mayberry Investments

Containment in expenses and a slight boost in income helped Mayberry to record an operating profit of $158 million over the $104 generated in the first quarter of 2012.

But a one-off hit to the profit of $337.3 million arising from the NDX debt exchange, plunged the operations into a loss of $178 million before a tax credit of $87 million and share of associated profits of $24 million rescued it somewhat. However, not even those credits could save it from an overall loss of $67.7 million compared to a profit last year of $113 million. Revenues net of revaluation gains or losses came in at $473 million in the quarter up from $452 in 2012 which includes the above trading gains.

The company made increased profits from trading gains which rose to $117.9 million up from $36.4 in the similar quarter of 2012. During the quarter Mayberry sold 12,073,214 units of shares in Access Financial Services Limited, for a total of $69 million, which reduced their total shareholdings to 38%. The sale of Access would have contributed a large portion of the trading gains. Net foreign exchange gains helped in boosting the top line with an increase from $9 million to $40 million. So did dividend income which moved up from $15 million to $34 million while fees and commission fell from $70.6 million to $19.4 million this year. Gains on investments fell to a loss of $11 million from nearly $3 million gain the year before.

NDX continuing effects | Mayberry will feel the effects, for a quarter or two of the lower interest rates that the new government bonds carry. The net interest income for the first quarter reflects some of the interest income compression. Although, the big write-off of investment gains is not expected to repeat any time soon, if at all, the boost in income of the gain on sale in investment and the FX gains may not recur to the same degree. This applies to the FX gains as the local currency has been revaluing since mid-April. Mayberry’s fair value reserves at the end of the quarter amounted to negative $326 million up from the $142 million at the end of December last year. The company, in a release accompanying the quarterly report, stated that $230 million of the amount is due to the fall in stocks prices on the local exchange. Some of this would have been reversed as some prices have rebound since the end of the quarter.

Financial Position | The balance sheet shows contraction in assets, which are down from $23.7 billion at March 2012 and $20.77 billion in December to $19.5 billion at the end of the 2013 quarter. A decline in the investment portfolio of $5.5 billion countered by a decline of $5 billion on the liability side for securities sold under repurchase agreements accounted for the bulk of the change since March 2012.

Mayberry stock traded last at $2.05 per share after the release of the results as investors seem to be focusing on the results excluding the impact of the one off NDX charge.

This one needs watching | The performance of the local stock market could change their fortune considerably both from a fee income and capital gains standpoint.

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

Economy pressuring Berger

May 8, 2013 by
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Berger Paints is reporting slightly higher profits for the year to March 2013. As it usually is the case, the final quarter profits are the lowest and in recent years the company makes a loss in the quarter. The loss made in the final quarter of the fiscal year was down on the same period in 2012, while profit before tax was actually up 8 percent at $14.9 million compared to $16.3 million, due purely to a cut in finance cost from $1.574 million to just $27,000 for the quarter. Revenues in the quarter fell 4 percent to $320 million. In 2012 revenues for the same quarter was $332 million. Uncertainty within the economy as Jamaicans awaited the outcome of the negotiation between the government and the IMF could have been a factor in the lower sales.

Revenues for the year climbed to $1.6 billion. However, the increase of 4.38 percent was not enough to offset cost. Profit before tax was down by $2.3 million as a result of the poor top line performance, while a lower tax bill resulted in profit after tax being up, but just about, with the company reporting $34.08 million versus $33.32 in 2012. The improvement was aided by a lower tax payment down from $16 million to $13 million and a boost by $9.8 million coming from a reduction in inventory obsolescence provision.

Stock outlook | Berger’s fortunes have declined considerably in the last 3 years. In the March 2011 financial year, revenues were $1.5 billion with profits of $67.8 million and it will take some doing to get sales up and get back to those profit levels. The price earnings ratio (PE) of the stock is high at 14 times earnings, even as return on equity, is paltry at 7 percent. The company would need to put in a very robust performance for the stock price to rally in light of the high valuation.

The financial position of the company is healthy, with working capital being more than twice current assets to current liabilities. The company recently announced a 13 cents dividend that is payable in July 9th this year.

Berger5yrSummary

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

Daily Trading 7th May 2013

May 8, 2013 by

JSE | Junior market sets a record with no trades

The junior market achieved a record today when no shares traded. This has never happened, except in the early days when Access Financial Services was the only listed stock on the junior market. Many investors and brokerage house personnel told ICInsider.com that investors were wondering what had happened, some thinking a computer glitch had occurred. In the end, we were told that brokers did not effect any trades since the bids and offers were quite far apart for some stocks and in some cases the volumes on either side, offer or buy, were small.

Five stocks in the junior market and 5 in the main market closed with bids above the last sale price, which means higher prices ahead.

JSEINdicesMay7Bullish days ahead? | The junior market is not the only place that is showing signs of improved investor’s sentiment. In the main market, Scotia Group has rebounded from the post NDX effect by trading in good volumes, NCB is well off the low it reach after the NDX announcement, Grace Kennedy and Carreras have been moving higher.  A number of stocks seem to have found a floor, with strong bids at their last selling price. At the same time, supply is drying up for some stocks. That may well be so, but the all signals are not yet in place for a grand rally.

Interestingly, the market is not reacting negatively to the write-off of unrealized investment gains that have knocked off huge profits for the March Quarter among the financial institutions. Investors seem to be looking beyond that, to recognize that even with those one-off charges, stock prices are still undervalued on the whole. Also, interest rates are likely to fall some more and with very low yields on money market instruments, stocks may be the main thing in town for a long time to come.

Scotia Bank with 1.8 million shares changing hands today valued at $39.1 million commanded the bulk of trading and the stock price moved up 31 cents. Interestingly, the bid to offer ratio on this stock is pitched in favour of buyers as they outnumber sellers. Volumes have generally been low for the sell side while demand is much higher. NCB  rose 19 cents and does not have much volume below $20 per share on the sell side, a sign that the price could rise some more.

Jamaica Broilers has strong buying interest and so does the Gleaner with more than 3 million on the bid at $1.20.

Market signs | The market is displaying signs of upward movements to come but it will have to close well over 87,000 points on the All Jamaica Index before we see signs of a sustainable rally. With the market closing today at 83,282, there are still some movements to go before realizing what could be a bull run.

The market traded $50,469,026.73 in local currency as well as US$9,577.70 in the US dollar market.

TTSE | WITCO jumps $7, market heading higher

West Indian Tobacco Company (WITCO) stock jumped $7.07 to end the day at a all time record of $107.07.

A volume of 1,314,293 shares traded on the main market valued at $5,530,257.06. Trinidad Cement accounted for 637,564 shares valued at $605,685.80, followed by Jamaica Money Market Brokers with a volume of 430,000 shares being traded for $215,000.  Angostura Holdings contributed 125,055 shares with a value of $1,125,495 and Neal & Massy Holdings added 40,177 shares valued at $2,370,443.

TTSEMay7Point Lisas Industrial Port Development Corporation suffered the day’s sole decline, falling $0.01 to end the day at $3.64 on a day when trading took place in 14 securities of which 6 advanced, 1 declined and 7 traded firm.

Clico Investment Fund was the only active security on the Mutual Fund Market, posting a volume of 230,253 shares valued at $4,854,228.71 while advancing 0.07 to end at $21.08.

Closing prices point to a higher market ahead | Clear signs of this can be seen from the number of stocks that have bids at the same level as the last traded price but more importantly there are 7 stocks where the bids are above the last traded price. The companies are Ansa Merchant Bank bid $38.51 last sale $38.50, Berger last sale $3.55 closing bid $3.58, Grace Kennedy, bid $3.31 last price $3.23, One Caribbean Media, $16.75 is the bid versus last price of $16.60, Scotia Investments last sale price $1.55 with the closing bid of $1.57, Scotia Bank which last sold at $69.27 now has a bid of $69.30  and West Indian tobacco which traded today at $107.07 with a closing bid of $110.

ForEx | J$ appreciation continues

In Tuesday’s foreign exchange trading, the value of the Jamaican dollar continued its appreciation as it took J$99.0056 to purchase a US dollar. At the end of Monday’s trade it took J$99.0276 to purchase one US dollar.

ForExSummaryMay7Sellers of the US dollar were better off on average than on Monday as they got J$98.53 for each US dollar they sold compared to $98.4189 on Monday. Sellers of Canadian dollars and Pound sterling were not as fortunate as they got 24 cents less for selling on Monday compared to Tuesday for the Canadian dollar and 15 cents less for selling the pound. It took just 4 cents less to purchase the Canadian dollars and 18 cents less for the Pound.

The equivalent of US$39.2 million, were purchased and US$39.97 million were sold, as increased liquidity continues to enter the market.

Market signals | Highest selling rate for the US was J$104 and the lowest J$83.26 while the highest buying rate for the US was J$99.2 and the lowest J$81.16. The selloff of foreign currency and appreciation of the local currency seems set to continue.

ForExDEtailsMay7

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

Daily Trading 6 May 2013

May 7, 2013 by

JSE Trading | Proven dominates again

Proven dominated trading again today as it did on Thursday last week. NCB Capital Market purchased nearly US$549,599 of the shares as 5,000,900 Proven’s ordinary shares changed hands, with the bulk of it, 5 million units, being sold by one of NCB Capital Market’s clients which they bought for their own account at US$0.1099 each. Proven also dominated in the preference share segment of the market with its 8% preference shares, trading 9,681,047 units valued at $48,708,793.93, as the stock slipped 6 cents, to close at $5.03. Data shows that NCBCM sold from their in-house portfolio to various clients.

Trading volume came in at 17,658,172 units with a value of $159,616,952.40.

JSEINdicesMay6Mayberry Investments sold 1.733 million Scotia Group shares from in-house plus 150,000 units on behalf of one of their clients in today’s trading as Scotia Group saw 2.411 million units trading with a value of $52.98 million. Jamaica Broilers saw trading in 266,098 units, with a value of $1.198 million. Sagicor Investments bought the bulk of the Scotia Bank shares apparently mostly for clients.

In contrast to Scotia, National Commercial Bank traded just 27,610 units at a value of $506,000 but Lasco Manufacturing traded 51,421 units valued at $555.4 million.

At the close the market, the All Jamaica Composite index gained 789.23 points closing at 83,274.18. The main market index, the JSE Index, closed up 448.64 at 84,259.73 points, the junior market index slipped 7.71 to 620.75 mainly due to 47 cent drop in Dolphin Cove shares to $7.92. Also contributing to the fall of this index was a 19 cents fall in Blue Power on 2,404 shares that traded and 10 cents off for Access Financial down to $7 and Consolidated Bakeries off 10 cents to $1.10.

Grace Kennedy gained 50 cents to close at $55.51 and Scotia Bank gained 69 cents to $21.99. Seven stocks closed the day with higher bids than the last selling price. These include Blue Power, Carreras, Ciboney, Dolphin Cove, Jamaica Producers, Kingston Properties and Scotia Investments.

Watch for further advances in the market in the trading days ahead is the message from the market.

TTSE Trading |  Republic Banks puts on $1

Republic Bank had the biggest day trading with an increase of $1.08 to end the day at $109.98.

In another moderate day of trading, 550,425 shares crossed the floor of the main market valued at $6,150,572.56. Angostura Holdings traded 430,897 shares (78 percent of shares trading) for a value of $3,878,073, followed by Point Lisas Industrial Port Development Corporation with 47,763 shares for $174,334.95. Sagicor Financial Corporation saw trading in 30,190 shares with a value of $208,317.70, while Neal & Massy Holdings added 24,164 shares valued at $1,425,676.00. Angostura Holdings suffered the day’s greatest decline, falling $0.50 to close at $9.00.

Clico Investment Fund traded 20,425 shares valued at $429,129.25 as the price declined by $0.11 to end at $21.01.

TTSEMay6Trading took place in 13 securities of which 2 advanced, 3 declined and 8 traded firm.  At the end of trading, there was only one stock with its bid above the last selling price. On Friday there were 5 stocks that closed above their last selling price.

ForEx Trading | FX sell off continues

Authorized dealers were selling the US dollar at JS$99.0276 on average on Monday, but they were paying $98.42 on average to purchase the funds from the public. The prices continued lower than the prior trading day, as was the case all of last week.

Purchases by the dealers amounted to US$41.2 million with sales exceeding purchases by over US$3 million when US$44.36 million were sold to the public. The imbalance between sales and purchases is unusual for Mondays which are normally days when purchases exceed sales. The out turn for Monday suggests that authorized dealers are selling off some of their portfolio. If so, rates could decline more on Tuesday as more sell off takes place.

ForExSummaryMay6Interestingly, while the averages are falling, that is not the case for the highest traded selling price which remains at $104.22 with the lowest settling at $82.66 according the daily Bank of Jamaica’s foreign exchange report. The highest buying rate came out at $99.30 and the low $81.16. Rates for the Canadian dollar also fell from Friday’s close while the Pound sterling rates were mixed, with selling being slightly higher than on Friday but the rate for purchasing was lower by $1.70.

ForExDEtailsMay6

Filed Under: Stock Market Tagged With: , , ,

Sagicor Investments get big NDX hit

May 4, 2013 by

The debt swap that Sagicor Investments participated in — the GOJ’s National Debt Exchange (NDX)  — was costly for the group, not only did they get a big hit resulting in a one-time trading loss of $423 million, they also suffered reduced interest income amounting to $71 million in the quarter to March and a reduction of gross interest income going forward of approximately $57 million per month.

For the three-month period, net Interest Income was $717 million compared to $752 million in the prior year. Income earning assets was $76.9 billion compared to $77.5 billion in the prior period. Net interest margin contracted to 3.73% versus 3.88% in 2012, largely due to NDX.

Non-interest income before NDX losses, was $249 million compared to $337 million in the prior period. This decline was due largely to reduced trading opportunities in quarter. The par value of JA$ securities exchanged was $31.9 Billion. The par value of US$ securities exchanged was US$77.4 million.

Asset management, credit and service fees, trust services and FX trading and translation gains recorded improved results compared with 2012. Fixed income trading, equity trading and stock brokerage posted lower revenues. Non-interest expense increased by 8% to $494 million compared to $457 million for the prior year. Depreciation and amortisation charges associated with branch relocations and technology improvements, rose by $10 million. The current period was also impacted by asset tax charge of $30 million while there was none in Q1, 2012.

Loan Quality | Non-performing loans and leases amounted $712 million representing 7.7% of the portfolio (BOJ December 2012 industry average is 6.8%) versus $548 Million or 5.7% of the portfolio at December 2012. Subsequent to the end of the quarter there was a reduction of $100 million in the Non-performing loans as revealed by the company in their quarterly financial report.

Balance Sheet & Capital | Total Assets were $88.6 billion, up $0.3 billion since December 2012. Securities portfolios increased by 2% to $72.0 billion while our credit portfolio declined to $8.9 billion, from $9.3 billion at December 2012. Interest bearing liabilities now stand at $75.2 billion, up $0.8 billion compared to $74.4 billion at December 2012.

Stock Outlook | We estimate that the company will earn around $2.50 per share for the year ending December and with a price of $15.57 there is still value in holding the stock for medium to long term growth as well as excellent dividend payment.

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

Sharp moves up at BNS Jamaica

May 4, 2013 by

Scotia Group Jamaica Limited (SGJ) has advised that Mrs. Jacqueline Sharp, former Senior Vice President and Chief Financial Officer, has been appointed to the position of Executive Vice President and Chief Financial Officer and Chief Administrative Officer of SGJ effective May 1, 2013.

She served as Financial Controller in the Insurance arm for a number of years before taking over the top financial position of the group in 2008.

JSharp+BNSPrior to joining the banking group Mrs Sharp worked for a number of years at Security Brokers, a former member of the Jamaica Stock Exchange. Between 1988-91, she attended University of the West Indies and hold a BSC in accounting and CFA certification.

Filed Under: Company News, General Business News Tagged With: ,

Debt swap for Caribbean Producers

May 3, 2013 by

CPJ is following the example of the Government of Jamaica in pursuing a debt swap. This one, unlike that of the government’s, will not result in any loss in capital for the holders of the debt. The board recently gave approval for the company to raise $500 million in floating rate secured promissory note. The proceeds will be used to retire loans they current have including related parties loans which climbed to US$12.3 million at the end of March.

But loan capital is not what the company needs, it needs more equity capital. At the end of March, loans and advances by related parties amounted to nearly US$24 million, equity is less than half of that at US$11.7 million. Cash flow is about US$5 million for this year most of which has already been utilized in long term capital expenditure.

Stock Outlook | The working capital on paper is well within accepted norms. The only problem is that liquid funds are not plentiful, with less than US$1 million dollars on the books. The directors are causing the company to skate on thin ice which is what is happening. Seeking a debt swap may save on the interest cost but will merely dent the poor debt to equity ratio, which is well out of line and prudence dictates should be put right fast, not later.

Filed Under: Company News, General Business News Tagged With: ,

Caribbean Producers Profit down

May 3, 2013 by

Caribbean Producers reported reduced profits for the March quarter and for the nine months to March. The company reported sales of US$50.148 million for the nine months versus US$49.8 million in 2012. The latest quarter revenues came in at US$19.4 million just ahead of US$19.2 garnered in 2012 even as they rolled items from their expanded portfolio of products. Profit after tax was US$1.26 million in the 2013 quarter and US$1.73 million in the same quarter of 2012. Year to date after tax profit is US$1.8 million versus US$2.56 million in 2012.

The company indicated in its quarterly report to shareholders that they were able to squeeze cost savings from the manufacturing operations resulting in a 14.6 percent improved gross profit amounting to US$14.5 million bettering 2012 by US$1.8 million. The gross margin moved from 25.5 percent to 29 percent for the nine months period. Selling and administrative expenses climbed 25 percent mainly due to the expansion and introduction of the meat processing plant which had to employ persons at the commencement phase. The factory was commissioned during the March quarter.

The company’s Lady Musgrave Road retail operations started in December last year and comprises a bar, super mart and a deli. Management states that the financial results are improving each month since opening.

Even as the company maintains the accounting and sales in US dollars, it seems clear that the devaluation of the Jamaican dollar over the past several months has had a negative effect on the results. The end result is that the devaluation cost is passed on to customers, which means that customers would switch to suppliers who price their goods in Jamaican dollars in their search for lower prices.

Stock Outlook | The company should go on to earn around 27-30 cents per share for the full year but should see a boost for the next year which starts in July as revenues from new operations start to come in and reduce the impact of overheads incurred.

The stock which is trading around $2 may remain anchored at these levels for a while, additionally, the company needs to seriously address the poor debt to equity and working capital ratio and not by extending the loans profile.

Caribbean Producers Jamaica Ltd | Importers of wines, liquors, and other products that are used primarily in the hotel sector. They also produce juices and now have a meat processing plant which is used for processing beef and pig’s meat. The company is listed on the junior market of the Jamaican Stock exchange.

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