Carreras climbs $2.29 pushes JSE
Carreras closed trading at $39.50 to end the day at a new 52 weeks’ high and Scotia Group after hitting $21.99 with 739,792 shares by mid-day, closed at $20.50 and were the main contributors to a strong increase in the main market indices on Friday. The gains were not adequate to stop the overall market from registering the third consecutive day of declining stocks out numbering advancing ones.
Activity on the overall Jamaican stock market, resulted in the prices of 6 stocks rising and 9 declining as 29 securities changed hands, ending in 5,019,576 units trading, valued at $36,430,375, in all market segments.
Main Market| The JSE Market Index gained 1,175.44 points to 77,828.04, the JSE All Jamaican Composite index rose 1,314.20 points to close at 85,733.67 and the JSE combined index gained 1,070.76 points to close at 79,654.74.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator shows 10 stocks with bids higher than their last selling prices and 3 with offers that were lower.
Firm| The stocks in the main market to close without a change in the last traded prices are, Berger Paints in trading 1,569 units ended at $1.55, Cable & Wireless closed with 31,881 shares changing hands at 50 cents. Ciboney ended with 10,000 shares trading at 7 cents, Desnoes & Geddes closed with 909,979 units trading to end at $4.80, Jamaica Broilers closed with 89,998 units traded at $4, Jamaica Stock Exchange finished with 10,000 units changing hands at $2. Kingston Wharves exchanged only 827 units at $5.60, Mayberry Investments traded at $2, in swapping ownership of 200,406 shares, Proven Investments traded 17,000 shares at 21 US cents, Radio Jamaica closed with 800 shares changing hands at $1.30 and Scotia Group ended up with 750,762 shares changing hands at $20.50.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Gleaner closing with 64,463 units trading as the price slipped 5 cents to 80 cents, for a new 52 weeks low, Grace Kennedy finished with 23,770 shares trading lower by 50 cents to $62.50, Kingston Properties closed with 29,925 shares changing hands to close lower by 50 cents at $7, National Commercial Bank closed with 50,453 units as the price slipped 19 cents to $19.31, Pan Jamaican Investment finished with 26,363 units trading, the price eased by 10 cents to $52, Radio Jamaica ended with 560 shares trading lower by 15 cents to $10.05 and Sagicor Group closed trading with 10,947 units as the price slipped 30 cents to $6.65.
Preference| Eppley 10% preference share traded 34,500 units at $6 and Jamaica Money Market Brokers 7.50% preference share ended with 1,773,100 units trading at $2.
Wipe out of Ja fiscal deficit seems likely
With two months out of the 2014/15 fiscal year reported on, the Peter Phillips led Ministry of Finance seems set to again report a wipe out of the fiscal deficit at the end of the fiscal year that ends in March 2015. The budget had suggested a deficit of just over $11 billion. So far there is a $5 billion improvement in the deficit to May with a $2.1 billion improvement in revenues and a $2.9 billion cut in expenditure with capital expenditure accounting for $1.5 billion of the expenditure reduction,but it would be the buoyancy of the revenues that would have been pleasing to the Minister. The country in the past has seen impressive performances in the early months of the financial year only to be face with cuts in expenditure later, as revenues failed to meet the targets set. It will not be clear if the current revenue trend continues, the next few months to come will paint a clearer picture of the likely outturn.
Total revenues which were projected at $52 billion ended at $54 billion and expenditure of $69.6 billion came in at $66.7 billion instead. $752 million less was spent on the wage bill and $676 on programs. Tax revenues brought in $1.87 billion more than projected. The deficit ended at $12.6 billion versus $17.6 billion projected.
Minority deserves better
SOS directors released June’s quarterly results even though the JSE rules require the first report to be relased for the September quarter.
The investing public seems not to be treated with the respect it deserves. It appears that many companies thing of investors last, not recognizing that they are shareholders just like the majority owners.
The last persons seen are the first to be remembered and is equivalent to out of sight out of mind. That seems to be the case with shareholders in the Caribbean. Newly listed Stationery & Office Supplies release of the June quarterly report although not required by the Jamaica Stock Exchange is an example of good corporate governance and is to be applauded.
In Trinidad for example, there is little liquidity in that market and the directors refuse to do anything about it. In Jamaica many companies tend to stick with the minimum regulations of the stock exchange, even when the recent examples in Jamaica say how important it is to ensure that there is adequate liquidity in the market.
The current regulation for listings in Jamaica, is for new listed companies to file their first quarterly report in the quarter ending after listing. The rule is inadequate to protect investors. Information is critical for the capital market to function properly, as such investors should not have to wait more than two quarters to get a quarterly report. In 2016, there was the very poor decision by Wentworth Graham the then head of the regulatory arm of the Jamaica Stock Exchange to permit 1834 Investments to wrongly withhold the December quarterly report from the public. This was based on improper interpretation of the rules relating to the release of financial information.
Main Event release their first report in June after their January IPO.
Earlier this year Main Event issued their IPO and included interim results to September 2016, with the year end of October. The IPO was in January but it was not until June that shareholders had information on the out turn of the operations for 2016 as well as for the first quarter this year. As it turned out, profit of $60 million at the 11 month period melted down to $56.5 million for the full year. The audited report was only signed on the June 5, more than 7 months after the year end while the first quarter results were never released but the second quarter to April was released within the deadline of June 15.
The management of Stationery & Office Supplies may have had a lot to shout about with pretax profit jumping 146 percent to $20.3 million for the June quarter this year and hence the release of the results to Jamaica Stock Exchange in less than a month of listing on the Junior Market.
Under the stock exchange rules it need not have put out the six months report having been listed in August. Some persons may see it as self interest in the release, but there is no evidence of that. The release provides the investing public with pertinent information in a timely manner, on which they can make their investment decisions. The hope is that the Jamaica Stock Exchange rules will be strengthened quickly to ensure that pertinent information is release on a timely basis to the public.