Jamaica Stock Exchange (JSE).

Over 25 years of useless circuit breaker

October 20, 2020 by IC Insider.com

Frequent interruption to trading stocks on the Jamaica Stock Exchange caused by the Circuit Breaker rule that shuts down activity in a company’s stock for an hour is frustrating for investors once the price moves by 15 percent or more from the closing price of the previous trading session.
Introduced by the JSE in the 1990s based on some investors’ complaints about large swings in the price movements of some stocks, the circuit breaker has not been effective in safeguarding investors’ interest by allowing information to flow to investors as to the reasons for sharp price movements. In place for more than 25 years, the mechanism serves no useful purpose, hinders trading and have not resulted in the presentation of new information for stocks so halted to justify stopping in trading.

In the past, this publication made suggestions to modify the system as it operates currently, to simplify it and allow for fewer losses in trading time for stocks subjected to the circuit breaker rule. There is no move by the JSE to implement changes since the price limit increase to 30 percent. It appears that the JSE does not seem to get it. It is better to improve what currently exists to help boost business rather than seeking other businesses.
If the rule is retained, keep it simple that all involved in the market can easily understand.
For example, if the maximum daily price movement is 30 percent, let that be the figure so that anyone can compute what it will be. There is no logic to state that prices can move by 30 percent, which happens in some cases and not in others. There should be no difference to the daily maximum price, whether it gets there in one movement or more than one. Currently, a 15 percent price movement triggers a re-computation of the maximum price of less than 30 percent. If a stock’s reference price starts the day at $10, then the day’s maximum price would be $3. Every investor can compute this. There is no reason to adjust the maximum if it trades initially at $12, with the maximum price for the day dropping to $12.65?
The second modification to the circuit breaker rule is reducing the time that stocks are frozen. An hour break is far too long and prevents prices from moving above 15 percent within an hour of the market’s close.
If there is a need for the circuit breaker, why not break for 15 minutes instead of an hour so that trading can take place more freely. The Stock Exchange still has the power to halt trading in any stock or the market if they consider it prudent.
The Circuit Breaker rule. No stock should trade +/-15% from the close price or the effective close price at the market’s opening. The effective close price is determined whenever the closing bid is greater than the close price or whenever the closing ask is less than the close price. If the Circuit Breaker is triggered, the security will be halted for an hour to allow for the release, circulation and absorption of any relevant market news and a cool-down period while investors consider their options. After the hour, the security will be released for trading and the new reference price, which is a simple average of the trigger price and the close price, will be used to determine the trading range for the remainder of the day. The trade price that triggered the Circuit Breaker should not be +/-15% outside of the original prescribed price band. The stock will not be allowed to trade +/- 15% of the new reference price.

Filed Under: JSE Combined, Stock Market Tagged With: Circuit breaker, Jamaica Stock Exchange (JSE)., JSE

Carib Cement Q3 disappoints

October 29, 2019 by IC Insider.com

Caribbean Cement jumped $5.51 to close at $77.50 with 166,784 shares changing hands at the close of Monday’s trading after the company posted disappointing third-quarter results.
Revenues in the quarter to September fell from $4.46 billion to $4.38 billion representing a cut in volume sales, which the company stated was due mainly to the impact of heavy rains.
Compounding the drop in sales was increases in certain expenses that drove down profit in the quarter to just $77 million or 9 cents per share for the quarter compared to $255 million in 2018. Nine months results showed revenues slightly above 2018 at $13.5 billion versus $13.2 billion and profit of $1.57 billion versus $1.3 billion in 2018 for earnings of $1.85 per share $1.34 per share in 2018. The company suffered foreign exchange losses on the loan with its parent company that drove finance cost to $1.44 billion for the nine months from $1 billion in the 2018 period. Labour cost shot up 13 percent to $1.77 billion for the nine months and equipment hire jumped nearly 50 percent to $602 million.
IC insider.com projects 2019 full-year earnings at $3.50.

Filed Under: Company News, Company Results Tagged With: Carib Cement, Jamaica Stock Exchange (JSE).

Fantastic Year for Jetcon

June 16, 2017 by IC Insider.com

Jetcon Corporation at listing in March 2016.

“Fantastic” was how John Jackson, Chairman of Jetcon Corporation described the company’s 2016 financial year. He assured shareholders that 2017 is expected to be even better based on results to date.
The chairman was addressing Jetcon‘s first Annual General Meeting (AGM), since being listed on the Junior Market of Jamaica Stock Exchange. The Company’s 2016 Audited Financial Statement, which was discussed and approved at the AGM, highlighted Jetcon’s the progress achieved in 2016, with the company’s performance helping to push the stock price from its initial listing of $2.25 in 2016, to $14.88 on the day of the meeting, for a gain of 570 percent. The AGM which was held at the Knutsford Court Hotel on June 14, was attended by approximately 75 of the more than 500 members of Jetcon’s shareholders and representatives from the Jamaica Stock Exchange and the media.
“When we met in at the start of January of 2016 to discuss pros & cons of listing, I was not sure we would be here today”, Chairman John Jackson confessed in his opening remarks.
The company’s 2016 revenue growth which has far surpassed the initial internal forecast of 30 percent, ended with an overall increase of 64 percent. 2016 ended with earnings per share of 54 cents and a solid 49.4 per cent average rate of return on capital which moved up 2.8 percent ahead of 2015’s 46.6 percent.
With profits more than doubling in 2016, the 2017 revenues up 75 percent in May and the preliminary profit up approximately 150 percent, the company is actively seeking additional space to expand the business.
The chairman acknowledged the enjoyed shared benefits of Jetcon being listed on the Junior Market. He noted that the listing has contributed to the growth of the company’s public relation and publicity. “The advent of the Junior Market is God sent & will revolutionize corporate Jamaica and enrich many ordinary Jamaicans”, Jackson further urged the relevant authorities to educate Jamaicans about the opportunities and benefits investing in the stock market provides for the betterment of the Jamaican quality of life and thus making Jamaica, the place of choice to live, work, raise families, and do business.
Jetcon Corporation was founded in 1994 by Managing Director, Andrew B. Jackson and opened and closed its IPO on March 14, 2016 and hold the distinction of being the first pre-owned car dealership to be listed on the Jamaica Stock Exchange (JSE).