More watching for NCB Financial

NCB Financial Group still in strong demand.

Investors continued to push both the stocks higher in the main and Junior markets this past week as results for a number of companies encouraged increased buying.
Last week IC Insider posited that NCB Financial seems to have broken through resistance at the $150 level. The $165 region where the stock trades is also a resistance area but the strong buying at this price point, suggests it is poised to move higher, with $190 being the next point of resistance. Investors pushed the price to an all-time high of $184.85 on Thursday before it pulled back to $169 and closed the week at $170.02. A lot of focus is on this stock with the closing bid and offer suggest it is one to continuing watching. One stock that should be on every one’s watch list is Scotia Group that will release second quarter results to April this week.
Barita Investments continues to enjoy strong buying interest as the price firms up around the $45 level and could yet move higher in coming days or weeks. Eppley seems to have demand that should push the price higher during the week as the company is getting set to launch an IPO for the Eppley Property Fund. The announcement that Sygnus Credit Investments borrowed $600 million and plan on raising more, coupled with good third quarter results is driving new interest into the stock.

Wisynco hit a new high last week as supply of the stock dried up.

Wisynco Group posted a new high of $16.50 on Friday as supply dried up. Some selling came in towards the close, but this one is heading higher over the next few weeks as investors start to focus on the more than $1.50 earnings per share expected for the new-year that starts in July.
Elite Diagnostic is finding interest now at $4 with the take out of supply below after March quarter results send positive message about future profits. While the current year that ends in June should realize earnings of 25 cents, it is the promise of more than 60 cents for the next fiscal year that is likely to be the catalyst for more interest in the stock. During the past week, Fosrich jumped to a record high of $6.50 but pulled by the close on Friday to end at $5.20, but with an offer to sell 32,166 shares at $4.98. Lasco Financial has seen buying coming in that drove the price over $5, and could move higher this week with the promise of increased profit for the current 2020 fiscal year. Lasco Manufacturing posted strong full year results with impressive fourth quarter numbers. The company’s profit performance encouraged more buying during the past week, with 6.75 million shares trading on Friday. Investors still wanted more, with the bid closing at $3.98 versus the last traded price of $3.91. Investors may find the $8 price for the Medical Disposables stocks on offer, pricey, but the full year’s results telegraphed a powerful message about profits to come that makes the stock still attractive at this price level. Expect demand to pick up in the future for this stock as the company continues to grow attractively.

Paramont trading could surprise.

Paramount Trading stock has been on the back foot for more than a year, with the start of the new financial year, the prospects for vastly improved profit, that IC preliminarily places at 15 cents per share, will start to influence the stock price. At the close on Friday, the stock that traded at $2.29 has a bid of $2.10 with the offer at $2.50 and may be signaling that selling is mostly exhausted at these levels. Demand for Stationery and Office is not aggressive currently, but then supply is very short, suggesting it is only a matter of time before the price moves higher.
Investors should continue to keep eyes on Jamaica Producers, Sagicor Group and Honey Bun.

10 records in 10 days for JSE main market

The Jamaica Stock Exchange chalked up its 10th consecutive session at record high as JMMB Group traded at a new high of $42.50, up from $39.61 at the close on Wednesday and NCB Financial Group trading at a record $184.50.
At 11.17 am, the JSE All Jamaican Composite Index jumped 2,642.74 points to a record high of 483,354.79 and the JSE Index climbed 2,674.49 points to another record 440,231.57. The Junior Market rose 20.71 points to 3,128.48. The market moved on to higher levels as NCB traded at a new all-time high of $184.85 as the JSE All Jamaican Composite Index raced 6,813.16 points to a record high of 487,225.21 and the JSE Index surged 6,191.68 to 443,748.76 at mid-day.
If the market hold on to the gains, it would have broken through resistance at 480,000 points on the All Jamaica index and should be heading for the next level of resistance at 520,000 points.

Sunshine Palace opens June

Palace Amusement is expanding with the re-entry into the rapidly growing Portmore community with the new cinema Sunshine Palace expected to open around mid-June.
The newest cinema house when complete, will bring the number of movie houses operated by Palace to four. The new cinema has 4 auditoriums, providing seating for 674 persons. Patrons will be enjoy the best movie facilities in Jamaica with some seats equipped to recline for greater comfort and will enjoy digital screens for better quality viewing experience. The company in its 2018 annual report had stated then, “we are excited about the offerings of the four screens location to come” in Portmore. Reports reaching IC is that the resident of the area are eagerly awaiting the opening new facility that will be located at the new Portmore Sunshine Mall, next door to the Sovereign Village Portmore.

Recliner box seats exclusively for cinema 4.

The company also stated, “It is our hope, in short order, to introduce laser technology in our cinema projection–which will offer a superior light quality for films. Additionally, we will introduce disposable 3D glasses in some of our locations–in response to customer preference and requests.”
In 2004 fiscal year, the then Portmore cinema brought in just over $15 million in revenue, with segment profit of $1.2 million. In 2004, the population was around 160,000 persons and is now around 200,000, but the cinema can pull support from the wider environs including the parish capital, Spanish Town. IC estimates that the new cinema could generate revenues of more than $350 million per year, assuming that at least just one person on average from the area attends the cinema annually. The estimated revenue would be just ahead of that is generated in the Montego Bay. With Portmore so close to Kingston, it could result in a switch in some of the existing business to the new one.

The plaza that will house Palace latest movie house.

Palace reported it best year ever with the fiscal year to June 2018 with profit after tax of $152 million up from just $33 million in 2017 fiscal year and earnings per share of $96.58. Revenues climbed nicely by 17 percent to $1.67 billion flowing from a 25 percent rise in patronage income at Carib, 27 percent increase at Cineplex and just 11.5 percent in Montego Bay. The results for the nine months to March this year lagged far behind the 2018 out turn, for the similar period with revenues of $775 million versus $836 million for 2018 and a loss from operations of $1.5 million compared to a profit of $49 million. A capital distribution of nearly $47 million boosted profit for the nine months this year to $45 million.
Palace share last traded on the main market of the Jamaica Stock Exchange at $1,300.

Lasco Distributors profit disappoints

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Lasco Manufacturing dropped 40 cents to push Junior Market down.

Revenues rose by 11.44 percent to $18.1 billion from $16.3 billion at Lasco Distributors for the 2019 fiscal year to March, but the good news stop there.
Cost rose rapidly while other revenues declined. Administrative, marketing and sales expenses rose sharply by 20 percent to $2.98 billion from $2.49 billion resulting in pretax profit dropping sharply to $692 million from $1.08 billion.
Operating profit rose 11.9 percent to $3.55 billion from $3.17 billion. Taxes rose to $94 million from $75 in 2018 leaving net profit at $598 million and earnings per share at 17.5 cents versus $1 billion or 29 cents in 2018. The 2018 result, got a boost from inflows from a claim against Pfizer that resulted in other income of $395 million with 2019 generating just $139 million.
Gross cash flow brought in $880 million but the company ended with net cash outflows of $400 million. Cash and short term investments amounted to $1.5 billion down from $1.8 billion in 2018. Fixed assets grew to $1.8 million from $1.48 billion in 2018.

Lasco Distributors products.

At the end of the year, borrowed funds amounted to $540 million. Payables ended at $2.84 billion down from $3.6 billion in 2018. Current assets slipped to $6.6 billion from $5.9 billion. Shareholders’ equity grew to $5.2 billion from $4.57 billion.
Earnings per share for 2019 came out at 17.5 cents with IC projecting 30 cents for 2020.The stock traded at $3.70 at a PE Ratio of 13 times current year’s earnings.

Juniors drop 100 points AJI up 12,190 pts

With less than 15 minutes to the close of trading, the Junior Market index dropped 99.56 points 3,057.15 but the JSE All Jamaican Composite Index jumped 12,189.89 points to a record 470,855.28.

The JSE Index surged 11,077.42 points to a new record of 428,872.50 as Scotia Group traded at $53 and NCB Financial Group trades at $155 but was, up to $164 earlier in the day and PanJam Investment jumped $7.50 to $97.50.

Wigton Windfarm had less demand and traded 196 million shares and now trades at 69 cents.

Sweet profit baking at Honey Bun

Honey Bun doubles Q2 profit.

Profits before tax increased by solid 82 percent to $72 million for the Junior Market listed Honey Bun for the company’s second quarter to March. Profit after tax surged a much stronger 104 percent over the similar 2018 period to $71 million.
For the second quarter to March, revenues increased 15.5 percent over the correspondent quarter last year to $406 million from $352 million in 2018, with the growth bettering the 14.2 percent or $36 million revenues in the first quarter to December.
Revenues from export sales have increased by 16 percent over the prior period, sales growth is attributable to our meeting customer demand having invested in increasing our production capacity over the period,” the director informed shareholders in their report accompanying the quarterly results. For the six months period, revenues increased by 15 percent over the correspondent of last year to $775 million, up from $675 million in 2018 while profits before tax increased by 57 percent to $112 million and after tax profit grew 75 percent to $109 million. The financial performance was driven by improvements in productivity, process efficiencies and other cost savings initiatives. Administrative, Marketing and finance cost rose 13 percent in the second quart and 17 percent for the half year compared to the similar periods in 2018.

One Honey Bun’s Products.

Earnings per share for the six months period rose to 23 cents from 13 cents in 2018 and for the quarter from 7.4 cents to 15 cents. For the full year, IC forecast earnings of 45 cents per share with 2020 projected to reach 75 cents.
Total current assets less current liabilities amounted to $178 million, up from $115 million in 2018. The company’s cash as stood at $166 million with investments at $85 million while borrowed funds amount to just $26 million. Shareholders’ equity ended the period at $713 million.
The stock traded last on the Junior Market of the Jamaica Stock Exchange at $5.01 at a PE ratio of 11 times 2019 earnings, well below that of the majority of companies.

JSE wants to double share ownership

The JCSD now has 154,500 shareholders on its registry with the near 12,000 new ones this month.

There are nearly 155 thousand investors listed as shareholders in the Jamaica Central Security Deposit but the Jamaican Stock Exchange (JSE) is planning to double that number in five years.
The number of local share ownership got a big boost from the 11,772 new investors who applied for shares in Jamaica’s recent IPO, Wigton Windfarms recently.
The addition of new investors pulled in by the new stock offer, brings the total to 5.5 percent of the country’s population. According to Marlene Street Forrest, Managing Director of the JSE, “the number based on the adult population is 12 percent. The aim is to get to 20 to 25 percent of the adult population in five years.” The numbers may not sound great deal but Jamaica ranks pretty high globally.
Data gleaned by IC shows that just 12.3 percent of UK overall population own shares in public listed companies, stock ownership in India is not more than 2.5-3 percent of the total population. In 2011, Austria had 7 percent rate and Germany was around that of Jamaica at 5.6 percent while France was at 14.5 percent. The data is clearly saying that the world have not done a good job of educating the population about stock ownership.

NCB pulled in more shareholders in 1987 than any other listing on the JSE

The JSE will be using a variety of means to get the numbers up in Jamaica. Government’s divestments have the most telling impact in increasing the numbers of new investors. The major reason is the need for aggressive marketing of IPOs, of government entities, to get full take up of the shares.
According to an article written by Emma Simon of the British Telegraph newspaper, in April 2013,
“One of the lasting legacies of Margaret Thatcher’s administration was to enable and encourage millions of ordinary people to invest in the stock market. In 1979 just 3 million people owned shares, 7pc of the adult population. By the end of the Eighties one in four people – 12 million adults – owned shares. The boom was fuelled by a wave of privatisations in which many state-owned industries were sold to private investors.” The situation was similar in Jamaica, where the number of shareholders, estimated at around 10,000, but National Commercial Bank, Now known as NCB Financial Group, the first government divestment attracted more than 32,000 investors, more than tripling the number of shareholders.

10th record closing high for JSE

Wigton Windfarm traded 472.8 million shares to close at a record 83 cents and NCB Financial Group closed at $153 to help push the JSE main market to a tenth record close for the year.
At the close, the JSE All Jamaican Composite Index jumped 4,339.37 points to a record close of 458,665.39 and the JSE Index climbed 3,943.35 points to a new record of 417,795.08.
Wigton Windfarm shares were trading for the second day on the exchange after a successful Initial Public Offer and has gained just over 60 percent so far. The market closed with Wigton having 129 million shares on the bid to buy and 39.8 million units on offer of shares. The stock closed with 10.9 million units on the bid at 83 cents and 2.09 million units are on offer at 84 cents.
Meanwhile the Junior Market index traded with a gain of 10.21 points to close at 3,138.66.

Wigton pulls 11,772 new investors

Popular new stock issues have a way of electrifying stock markets and empower new stock market investors to increase their wealth.
It happen when National Commercial Bank went public in 1987 and again with the Wigton IPO.
“While the overall number of applications was 31,200, we are pleased to report that 11,772 or 38 percent are new investors to the market. This represents an increase in the number of account holders in the JCSD of 7.6 percent,” Marlene Street Forrest managing Director of the Jamaica Stock Exchange stated in addressing the observers at the listing ceremony of Wigton Windfarm listing on Wednesday.
Street Forrest went on to say, over 64 percent of those who invested were under 50 years of age with approximately 50 percent under 40 years old.” According to Street Forrest, females comprised 56 percent of the applicants for shares compared to 44 percent males. “The average spend for new investors was approximately $124,000 with the offer oversubscribed by 158.8 percent.”

Wigton stock could double soon.

Wigton is the largest IPO the list on the JSE since the listing of NCB, Telecommunication of Jamaica in the latter part of 1980s. In recent times, it is ahead of Wisynco Group with 7,769 applicants. “We have made tremendous strides as Wigton with total applications of 31,200 and four times the size of that offer has taken 21 days from the close of the offer to listing today” Street Fporrest stated that,
Andrew Holness, Prime Minister of Jamaica, stated that he wanted not only for Jamaicans to own assets but to share in the profitability of the company and this was achieved with the Wigton issue. He noted also that shares the company own in Jamaica Public Service and Jamaica Mortgage Bank will be divested in the short to medium term.
The stock closed with the price rising by a maximum of 30 percent at 65 cents trading 8,351,000 but ended with the bid at 66 cents which will allow it to trade as high as 85 cents on Friday.

Wigton opens at 65 cents

Wigton stock could double soon.

Shares of the latest public offer of Wigton Windfarm, will start trading today on the Jamaica Stock Exchange when the market opens at 9:30 at 65 cents.
Within minutes of opening more than 8 million shares were on the bid between 35 cents (just 1 bid) and 76 cents with sellers offering more than 12 million units to sell between 60 cents and $5
After a few minutes of trading just under 7 million shares traded at 65 cents. The shares will be restricted to a maximum price rise of 15 cents today or 30 percent of the IPO price, which is the maximum the stock exchange circuit breaker rule permits. If the bid closes at 84 cents at the close of trading then it can trade as high as $1.09 on Friday when the market reopens after the Labour day holiday.
The stock should be very liquid and that may constrain the price movement as speculators take profit early. The PE ratio of the stock is 8.5 times earnings but with many main market stocks priced in the 15 times region Wigton could get to that valuation and sell just under $1.
Mayberry Investments the main broker for the issue stated that the public sector pool was oversubscribed accordingly and all Public Sector workers who applied for less than 15 million shares were fully allocated while investors from the general public, were fully allocated up to 8.5 million shares.