The year-end rally, continued on the Jamaica Stock Exchange on Thursday, as Kingston Properties hits a new high having gained 87.5 percent for the December. Trading in the overall market resulted in the prices of 10 stocks rising and only 3 declining as 25 securities changed hands, ending in 3,028,876 units trading, valued at $10,239,236, in all market segments.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator showed 10 stocks with bids higher than their last selling prices and only 1 stock with the offer lower a clear sign of rising prices ahead.
Main Market| The JSE Market Index gained 196.62 points to 75,757.06, the JSE All Jamaican Composite index rose 219.83 points to close at 83,418.22 and the JSE combined index climbed 261.34 points to close at 77,656.27.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Cable & Wireless with 1,710,367 shares changing hands, to close 3 cents higher, at 50 cents. Carreras ended with 3,452 shares and gained 30 cents to $36.50, Grace Kennedy closed trading with 1,700 shares changing hands with a 50 cents rise, to $61. Hardware & Lumber traded 3,000 shares with the price rising 49 cents to $8. Kingston Properties closed at a new all-time high of$7.50, with a 60 cents rise with 403,000 units trading. National Commercial Bank finished with only 100 shares changing hands to close 1 cent up to $18.51, Salada Foods concluded trading with 268,045 shares, 19 cents higher at $8 and Seprod ended trading with 8,600 shares changing hands to close with a 25 cents gain at $12.50.
Firm| The stocks in the main market to close without a change in the last traded prices are, Gleaner trading just 879 units to close at 95 cents. Jamaica Broilers ended trading with 39,136 units at $4.10, Jamaica Money Market Brokers closed with 1,640 ordinary shares and finished trading at $7, Jamaica Producers ended with 6,100 shares trading, at $17.50, Mayberry Investments ended with 12,883 shares changing hands at $1.52 and Proven Investments closed with 12,385 shares at 19 US cents.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Sagicor Group with 80,500 shares trading lost 3 cents to end at $9.97 and 92,753 Scotia Group shares changed hands 1 cent lower at $20.
Preference| Jamaica Money Market Brokers 7.50% preference share finished with 903 shares trading at $2 and Proven Investments 8% preference share finished with 150 units to close trading at $5.50.
Kingston Properties up 88% in December
Strong price gains ahead on JSE
Activity on the Jamaica Stock Exchange was low, resulting in the prices of 5 stocks rising and 7 declining as 18 securities changed hands, ending in 3,633,602 units trading, valued at $6,595,479, in all market segments.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator was reflecting a very strong signal, showing 13 stocks with bids higher than their last selling prices and only 1 stock with the offer lower.
Main Market| The JSE Market Index lost 552.75 points to 75,560.44, the JSE All Jamaican Composite index fell 618.05 points to close at 83,198.39 and the JSE combined index declined by 406.69 points to close at 77,394.93.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Caribbean Cement ended trading with 1,650 shares 10 cents higher to $2.50, Kingston Properties reached a new 52 weeks’ high in trading 8,300 shares to close 92 cents up at $6.90, at the close there was a bid to buy 191,700 units at $6.90 and an order to purchase 914,000 units at $6. Mayberry Investments ended trading with 187,117 units 7 cent higher to $1.52.
Firm| The stocks in the main market to close without a change in the last traded prices are, Jamaica Money Market Brokers ending trading with 3,002 ordinary shares at $7. Jamaica Producers closed trading with 5,718 shares at $17.50, Kingston Wharves finished with 65,667 units at $6 and Pan Jamaican Investment ended trading with 34,067 shares changing hands at $60.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Cable & Wireless closing with 2,927,292 units trading with the price slipping 3 cents, to 47 cents. Carreras finished with 4,936 shares trading lower by $1.05 at $36.20. Grace Kennedy ended trading with 3,098 shares changing hands to close down $2.50, at $60.50, Sagicor Group closed with 9,000 shares, 9 cents lower at $10, Salada Foods had 131,000 units trading, with the price slipping 19 cents to $7.81 and Scotia Group traded 26,480 shares and the price closed lower by 49 cents to $20.01.
Kingston Properties gains 49.5%
Monday’s activity on the Jamaica Stock Exchange, resulted in the prices of 7 stocks rising and 5 declining as 19 securities changed hands with Kingston Properties closing 49.5 percent higher to a new high of $6. The stock ended with the bid at $5.85 on Friday which would have allowed it to trade as high as 30 percent higher at $7.60 under the new circuit breaker that came into effect recently. Trading ended with activity in 1,926,843 units, valued at $29,060,020, in all market segments.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had 8 stocks with bids higher than their last selling prices and only 2 stocks with offers that were lower.
Main Market| The JSE Market Index gained 611.01 points to 75,923.15, the JSE All Jamaican Composite index rose 683.19 points to close at 83,603.94 and the JSE combined index gained 545.66 points to close at 77,608.89.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Desnoes & Geddes ending with 33,866 changing hands to end 1 cent higher at $4.71, Grace Kennedy ended trading with 90,314 shares with the price rising 2 cents to $63, Jamaica Broilers had trading in 5,500 shares with the price rising 1 cent to $4.06. Kingston Properties finished trading with 106,000 units and put on $1.98 to hit a new high of $5.98, <a href="http://icinsider.com/pan-jam-profit-up-29-for-q2/” title=”Pan Jam profit up 29% for Q2″>Pan Jamaican Investment contributed just 100 shares in rising $3.90 to $60, new 52 weeks’ high and Scotia Group ended trading with 1,060,362 units, and put on 49 cents to $20.50.
Firm| The stocks in the main market to close without a change in the last traded prices are, Cable & Wireless ending with 453,837 shares at 50 cents. Jamaica Producers finished with 8,343 shares to close at $17.50, Mayberry Investments ended with 29,000 units at $1.45 and Proven Investments ended trading 610 ordinary shares to end at 19 US cents.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, National Commercial Bank ended with 4,742 shares trading at 10 cents lower at $18.40 and Sagicor Group lost 4 cents in closing at $9.96 with 6,000 shares changing hands.
Preference| Proven Investments 8% preference share ended with 5,600 units trading to end at $5.50.
4 stocks up 5 down on JSE
Tuesday’s activity on the Jamaica Stock Exchange, resulted in the prices of 4 stocks rising and 5 declining as 21 securities changed hands, ending in 6,081,391 units trading, valued at $20,841,759, in all market segments.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had 10 stocks with bids higher than their last selling prices and 5 stocks with lower offers.
Main Market| The JSE Market Index gained 534.49 points to 72,446.11, the JSE All Jamaican Composite index rose 597.64 points to 79,716.11 and the JSE combined index gained 462.27 points to close at 74,179.00.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Carreras had 2,492 shares changing hands and gained 10 cents to $34.60, Jamaica Broilers with 9,318 units closed 5 cents higher at $4.20, Kingston Properties climbed 15 cents to $4 with 10,000 shares trading and Sagicor Real Estate Fund close trading with 30,000 units while gaining 10 cents to end at $6.75.
Firm| The stocks in the main market to close without a change in the last traded prices are, Cable & Wireless in trading 4,005,306 units to close at 28 cents, Desnoes & Geddes with 42,400 shares to end at $4.95, Jamaica Money Market Brokers with 2,865 ordinary shares trading to close at $7, Margaritaville with 44,200 shares traded to end at 11 us cents, National Commercial Bank had 5,893 units changing hands to close at $17, Pan Jamaican Investment with just 200 shares trading ended at $49.05, Proven Investments with 27,540 units closed at 18 US cents and Sagicor Group exchanged 20,100 shares to close at $9.65.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Grace Kennedy with 7,000 shares to close $1 down at$ 58, Radio Jamaica had 10,516 units changing hands to close with a loss of 2 cents at $1.18, Scotia Group traded with 725,272 shares to end 35 cents lower to end at $19.25 after trading as high as $20.49 and Scotia Investments closed with 1,700 units trading to close with a loss of 60 cents at $21.40.
Preference| Trading picked up in the preference share segment with Jamaica Money Market Brokers 8.75% preference share trading 300,000 units at $3, the Jamaica Money Market Brokers 7.50% preference share trading 576,700 units to close at $2 and Proven Investments 8% preference share trading 172,594 units to end at $5.
Moderate price changes on JSE stocks
Tuesday’s activity on day on the Jamaica Stock Exchange, resulted in the prices of 3 stocks rising and 4 declining as 22 securities changed hands, culminating in 755,690 units trading, valued at just $5,210,508, in all market segments.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had 4 stocks with bids higher than their last selling prices and 8 stocks with offers that were lower.
Main Market| The JSE Market Index lost 76.73 points to 72,135.13 and the JSE All Jamaican Composite index fell 85.80 points to close at 79,368.39.
Gains| Stocks gaining and last traded prices, at the end of trading in the main market are, Caribbean Cement with 500 shares, closed at a cent higher at $2.12, Mayberry Investments traded 16,900 units, to gain 5 cents to $1.55 and Scotia Group with only 168 units ended with a cent gain at $19.05.
Firm| The stocks in the main market to close without a change in the last traded prices are, Cable & Wireless with 10,000 units to close at 29 cents, Carreras closed at $34.65 with 5,210 shares trading, Desnoes & Geddes with 650 shares closed at $4.79, Grace Kennedy with 2,685 shares ended at $59, Jamaica Broilers 13,226 units traded at $4, Kingston Properties closed at $3.85 with 10,000 shares, Kingston Wharves had only 230 shares changing hands to end at $6.50, National Commercial Bank 52,881 shares, closed at $17.80, Sagicor Group with 10,170 shares closed at $9.55, Sagicor Real Estate Fund traded 8,900 shares at $7 and Supreme Ventures closed at $1.80 with 18,077 shares changing hands.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Jamaica Money Market Brokers with 5,730 ordinary shares, lost a cent to end at $7 and Proven Investments traded 108,000 units at 0.50 cent less to 17 US cents.
Preference| Jamaica Money Market Brokers 8.75% preference share traded 194,415 units at $3 and lost 2 cents and Proven Investments 8% preference share traded 144,893 units at $5.
Share buy back for Kingston Properties
Kingston Properties advises that the Board of Directors authorized a buy-back of up to one percent (1%) of the company’s shares in issue for up to one year following the expiry of 21 days from the date of notice to the Stock Exchange. The repurchase of the shares will be conducted on an open market through the Company’s Stockbrokers. The Company’s cash flows will be the source of funds for the purchase of shares. Kingston Properties will advise its shareholders of the details of the purchase within 30 days of the repurchase of the shares. The total number of shares issued amounts to 68,800,102 units. One percent of the issued shares amounts 688,000 units. The stock last traded at $4 after it had fallen to $3.50 a few trading days before but the net asset value of the shares is around $12.
Little price movements on Wednesday
In Wednesday’s trading on the Jamaica Stock Exchange the prices of 4 stocks rose and 3 declined as only 20 securities traded resulting in 7,422,171 shares changing hands valued at $29,572,563.
Main Market| On a day when few stocks recorded price changes, only 3 companies in the main market advanced and 3 declined as the indices moved down marginally with the JSE Market Index slipping by 40.55 points to 72,978.93 and the JSE All Jamaican Composite index easing 45.34 points to close at 80,311.88.
Gains| Stocks recording gains at the end of trading in the main market are National Commercial Bank with 6,320 shares to close with a gain of 25 cents at $18, Pan Jamaican Investment had 35,274 changing hands to close up by 14 cents to end at $48.20 and Sagicor Real Estate Fund with 20,100 units, closed with a 10 cents gain at $6.60.
Firm| 11 stocks in the main market closed without a change in price as Berger Paints traded 55,000 shares in closing at $1.67, Cable & Wireless traded 640,000 units and closed at 30 cents, Caribbean Cement 42,175 units to close at $3.50, Carreras 79,670 shares to end at $34.75, Desnoes & Geddes 400 shares to close at $4.40. Jamaica Money Market Brokers 7.50% preference share, 700,000 units at $2 and the 8.75% preference share traded 1,839,490 units at $3.03, Sagicor Group 798,136 units to close at $9.35, Scotia Group with 45,660 shares to close at $19.70, Scotia Investments 5,010 shares at $24.50 and Supreme Ventures 2,789,233 units to close at $2.10.
Declines| The stocks that declined in the main market are Jamaica Money Market Brokers with 7,382 units while losing 5 cents to end at $7.35, Kingston Properties with 13,500 shares to close with a 10 cents loss at $4 and Kingston Wharves with 80,504 shares as the price closed at $5 with a fall of 75 cents.
Junior Market| The JSE Junior Market Index declined by 0.34 points to close at 732.85 as only 3 stocks traded with 1 advancing and none declining.
Gains| Caribbean Producers was the only stock gaining at the end of trading in the junior market as 54,733 units traded to close at $3, up a cent.
Firm Trades| The stocks in the junior market that traded to close at the same price as the trading day before are Access Financial with 207,002 units at $11.50 and Dolphin Cove that closed at $8.10 with 2,582 units changing hands.
Declines| There were no stocks declining in the junior market at the end of trading on Wednesday.
IC bid-offer Indicator| At the close of the market the Investor’s Choice bid-offer indicator had 8 stocks with the bid higher than the last selling price and 6 stocks with offers that were lower.
KPREIT a medium term investment
Funding an operation with low interest rate foreign currency loans while the home based currency is weak can prove costly, and the way the accounting profession treats the changes in currency movement can mean profit or loss at least in the short term. That is what’s happening to Kingston Properties Real Estate Investment Trust (KPREIT) in the latest results to March this year. Revenue was up 13 percent but profit plummeted to a loss, thanks to a foreign exchange loss of $14.5 million incurred in the quarter. The company recorded a net loss of $7.2 million after a tax credit of $3.56 million, but total group comprehensive income was $15.2 million, an increase of 144.8% versus $6.2 million reported for the quarter ended March, 2012.
Revenues | Revenues climbed to $23.5 million in the 2013 quarter up from $20.8 million in 2012. This reflects primarily rental increase for existing tenants and a stronger rental market for new tenants especially at the Loft II in Miami, the company’s management reported.
Group operating expenses, consisting of direct property expenses and administrative costs, were $14.8 million, versus $10.3 million for the similar period a year ago. Direct property expenses include insurance, property taxes, homeowners’ association (HOA) fees, broker fees and repairs & maintenance. These represented 60.4% of operating expenses for the March 2013 quarter versus 58.4% for the similar period last year. Increase in direct property expenses accounted for approximately $2.9 million of the $4.5 million increase in overall operating expenses. The major contributors were repairs & maintenance, HOA fees and property taxes.
Group finance costs were $19.6 million for the quarter compared with $7.4 million for the similar period in 2012. These amounts include unrealized losses of $14.3 million and $2.5 million respectively, due to foreign currency translation losses resulting from the devaluation of the Jamaican dollar.
Balance Sheet | Significant balance sheet assets are Investment Properties of $850 million at the end of the quarter versus $641.4 million at March, 2012 and cash & cash equivalent of $195 million compared with $185.3 million for the similar period last year.
The primary drivers of the increase in the investment properties were fair value gains of $166.3 million on the Red Hills Road property and positive currency impact of $30.3 million on the Miami residential condominiums. Included in cash and cash equivalent is restricted amounts of $168.1 million.
Total group liabilities were $350.3 million at March, 2013 versus $331.5 million at March 31, 2012. These amounts include current and non-current loans payable at the end of the quarter of $325.1 million and $305.2 respectively. The liabilities are primarily mortgage loans. The devaluation of the Jamaican dollar resulted in an increase in the loans which are quoted in the United States dollar and amounted to US$3.4 million at end of March 2013 versus US$3.6 million at end of March 2012.
Cash flow | Net cash provided by operations was $23.9 million for the quarter versus $22.7 million for the similar period last year. A dividend was paid in the March 2013 quarter amounting to $9.9 million, a 63.1% increase over the $6.1 million paid in the March 2012 quarter.
Long term pay-off | Real estate investment is not a good cash generator at least not in the early stage of the investment. By its very nature, the level of income to be made in the short term will be limited. One strategy the company has is the investment in the apartments in Florida that could be disposed of when that market fully recovers and therefore provide cash flow for distribution or capital for expansion. Investors in the stock are likely to have to wait for a while for a big pay day. Nevertheless the stock provides a option to diversify ones investments.
FX rate change hits Kingston Profits
Kingston Properties is reporting lower profits in the March quarter this year compared to last year. Not only are profits lower, there was a significant hit from financing costs, caused by foreign exchange losses on loans denominated in US dollars due to slippage of the Jamaican dollar during the quarter. The company reported a loss of $10.8 million before foreign exchange loss and after a tax credit, the loss was down to $7.2 million. In the similar quarter last year the company reported a profit of $3.2 million before tax and $2.45 million after tax. Other Comprehensive amounting to $22.5 million resulting from translation gain on the operations resulted in a positive picture at the end of the day ,with Comprehensive Income being $15.44 million. In 2012, the company reported Comprehensive Income of $6.2 million.
Income | Rental revenue for the quarter was $21.86 million, a 14 percent move from $19.1 million in 2012 but operating expenses climbed by 44 percent, much faster than income to $14.8 million. Management states that indirect property expenses accounted for approximately $2.9 million of the $4.5 million increase in overall operating expenses, with the major contributors being repairs and maintenance, home owners’ association fees and property taxes.
Group finance costs were $19.6 million for the quarter compared with $7.4 Million for the similar period in 2012.These amounts include unrealized losses of $14.3 million and $2.5 million respectively, due to foreign currency translation losses resulting from the devaluation of the Jamaican dollar.
At the end of the quarter, Investment Properties were $850 million, an increase of $641.4 million over the 2012 first quarter. Fair value gains of $166.3 million on the Red Hills Road property and positive currency impact of $30.3 million on the Miami residential condominiums, accounted for the increase in property values.
Cash and equivalent amounted to $200 million of which $168.1 million is restricted amounts.
Assets & Loans Concerns | Group liabilities were $350.3 million at the end of March, including current and long term loans payable of $325 million of which $186 million in payable within twelve months. Although the company has enough cash to meet this year’s pay out, the real concern is that the amounts to be paid over the life of all the loans is, in the short run, not being supported by cash flow. The quarterly report did not address this issue.
Funding options | In its annual report to shareholders, the company stated that they have a number of options to raise funds, these include:
- Convertible bond, with incentives for holders to convert to equity
- Secured bond with first claim on the property
- Equity capital; preferred, common
- Other types of instruments based on investor preferences and objectives
Property holdings | Kingston Properties holds a portfolio of 89,957 square feet of property consisting of a fully tenanted office/warehouse building of approximately 26,000 square feet located on Hagley Park Road in Kingston, Jamaica and 19 condominium apartments in downtown Miami.
The company discloses that it has been evaluating doing transactions in the affordable segment of the local residential market with the goal of providing a housing solution for the large group of buyers with steady income who are looking for units priced below $7 million. Finished homes will be in the range of 800 square feet at a minimum, allowing most home buyers a comfortable unit size without the immediate desire for expansion.
