Trading on the Junior Market Index declined sharply from Tuesday, with an exchange of 1,022,183 units valued at $3,868,338.79, down from 5,405,843 shares valued at $23,297,183.
Market activities closed with the index falling 24.65 points to close at 2,951.97 after 25 securities changed hands from 18 trading on Tuesday. Trading resulted in 5 stocks rising, 11 declining and 9 remaining unchanged.
Market activity ended with an average of 40,887 units for an average of $154,734 in contrast to 300,325 units for an average of $1,294,288 on Tuesday. The average volume and value for the month to date amounts to units 149,489 valued at $631,756. April closed with an average of 121,622 units at $506,803, for each security traded.
IC bid-offer Indicator|At the end of trading, the Investor’s Choice bid-offer indicator reading shows 3 stocks ending with bids higher than their last selling prices and 2 with lower offers.
At the close of the market, Access Financial closed 10 cents higher at $47.20, with 120 shares, AMG Packaging ended at $1.93, with 95,740 stock units changing hands, Blue Power concluded trading at $36.85, with 1,000 units, Caribbean Cream ended trading with a loss of 40 cents at $4.60, with 16,669 shares, Caribbean Producers finished trading with a loss of 10 cents at $5.30, with 17,323 units. Consolidated Bakeries closed at $1.90, with 15,000 shares, Derrimon Trading concluded trading at $10, with 2,120 shares, Elite Diagnostic settled 1 cent higher at $3.21, with 58,033 units, Eppley ended trading at $9.65, with 19,559 shares. Express Catering traded with a loss of 4 cents at $5.95, with 2,100 shares, FosRich Group finished trading 7 cents higher at $2.45, with 35,748 shares, General Accident closed with a loss of 1 cent at $3.01, with 2,750 stock units, GWest Corporation ended at $2.40, with 51,127 units.Honey Bun concluded trading at $4.80, with 3,000 shares, Jamaican Teas ended trading with a loss of 40 cents at $4.60, with 11,892 stock units, Jetcon Corporation traded with a loss of 10 cents at $4.15, with 6,133 units, Key Insurance finished trading 10 cents higher at $3.60, with 13,837 shares. Knutsford Express ended with a loss of 5 cents at $13.95, with 1,157 shares, Lasco Distributors concluded trading with a loss of 5 cents at $4.25, with 14,352 stock units, Lasco Financial finished with a loss of 12 cents at $5.50, with 24,698 units, Lasco Manufacturing settled with a loss of 36 cents at $3.73, with 566,919 shares. Main Event ended trading 25 cents higher at $7.25, with 5,000 shares, Medical Disposables traded at $5, with 12,130 shares, Paramount Trading finished trading at $3.10, with 11,281 stock units and tTech concluded trading with a loss of 25 cents at $5.75, with 34,495 shares changing hands.
Prices of securities trading for the day are those at which the last trade took place.
All Jamaica crosses 330,000 level
The main market of the Jamaica Stock Exchange that closed at record high on Monday and went on to close higher on Tuesday, at yet another record, is again trading in record territory at the start of trading on Wednesday.
With just 25 minutes of trading the JSE All Jamaican Composite Index climbed by 1,043.56 points to a record close of 330,011 and the JSE Index gained 950.80 points to record 300,677.31.
Trading was light so far but NCB Financial climbed to $98 to be the only stock with a rise in price of note.
Sygnus Credit priced for a bounce
Sygnus Credit Investments is offering 90,909,091 ordinary shares in two classes in the the company at J$13.72 for shares denominated in Jamaican dollar and 11 US cents for the US dollar ordinary shares.
The issues are to be partially underwritten up to the equivalent of US$5 million by Sagicor Investments. If all shares are taken up in the IPO there will be 250,178,614 ordinary shares issued. The prospectus list the current yield on the portfolio of invested funds at 10.3 percent. In the event that of oversubscriptions, the issuer has the right to upsize the amount to be accepted.
Subscription list opens 9 am on May 2 and is scheduled to close on May 16 if not closed earlier.
The capital structure of the company and the choice of investing funds will tend to result in a return closer to fixed interest levels, but likely higher than some bank lending rates, in the short to medium term as such investors should be looking for steady growth but relatively high dividend payments in the medium term. The falling interest rates on Jamaican dollar money market instrument will make the dividend payment very attractive source of income.
Sygnus Credit Investments is a specialty private credit investment company, dedicated to providing non-traditional financing to medium-sized firms across the wider Caribbean region. These companies typically have revenues between US$5 million and US$25 million.
The investment objective of the Company is to generate attractive risk adjusted returns with an emphasis on principal protection, by generating current income, and to a lesser extent capital appreciation, through investments primarily in Portfolio Companies using private credit instruments.
In 2017, the Company raised US$16 million in equity from 44 investors, with more than half the capital raised from institutional investors. The top 5 largest institutional holders invested $8.5 million and owns 52.9 percent of the Issued Shares. The fund raised was used to capitalize the company and invest in Portfolio Companies. The targeted investment types include bilateral notes and bonds, preference shares, asset backed debt, mezzanine debt, convertible debt and other forms of structured private credit instruments. These types of financing are typically more aligned with the growth and expansion plans of Portfolio Companies.
The company intends to pay out up to 85 percent of its net income as dividends to shareholders, payable on a quarterly basis. The target dividend yield is over 7 percent on the IPO price.
At December 2017, SCI had US$16.7 million in assets and generated net profits of US$660,855. The value of investment in Portfolio Companies was US$11.6 million, generating a yield of 10.3 percent.
Sygnus Capital Management, the Investment Manager, seeded SCI with US$540,000 and owns 3.4 percent of the issued shares. In total, Sygnus Capital Management and Sygnus related parties invested US$1.04 million and owns 6.5 percent of the Issued Shares.
Earnings for 2019 fiscal year could be around J$1-1.2 per share and that could send the stock to between $15 and $20 within twelve months. Returns could be greater if they use borrowed funds to meet some of the demand they have for funding. According to Jason Morris they intend to use borrowed funds once they have used up the equity now being raised. Book Value per Share was 10.5 US cents at the end of 2017.
Thirty-eight-point-nine percent of the fair value of the Company’s investment in Portfolio Companies was denominated in Jamaican dollars. For the period ending December 31, 2017, appreciation of the Jamaican dollar versus the US dollar resulted in Net Foreign Exchange Gains of US$247,705, this gain which flows through the income statement, may be reversed in future periods, and may affect Net Profit.
The Company currently has a robust pipeline of US$31.4 million in deals to finance, of which US$3.2 million has been approved, US$12.3 million has been mandated and US$15.9 million are at various stages of prospecting.