The Junior Market of the Jamaica Stock Exchange index advanced by 17.52 points to close at 2,863.43 on Monday. 23 securities changing hands, compared to 25 changing hands on Friday.
Market activity resulted in the prices of 10 securities advanced, 8 declined and 5 remained unchanged from an exchange of 2,509,141 units valued at $11,095,172 versus an exchange of 1,770,268 units valued at $6,952,112 on Friday.
Trading ended with an average of 109,093 units for an average of $482,399 compared to an average of 70,811 units for an average of $278,084 on Friday. The average volume and value for the month to date amounts to 106,129 units at $429,494, compared to an average of 104,792 units at $405,635 on the previous trading day. February closed with an average of 338,697 units at an average value of $1,495,774 for each security traded.
IC bid-offer Indicator|At the end of trading, the Investor’s Choice bid-offer indicator reading shows 5 stocks ending with the bid higher than the last selling price and 3 with lower offers.
At the close of the market AMG Packaging ended with a loss of 15 cents at $2.05, with 104,354 stock units trading, Blue Power concluded trading with a loss of $1.99 at $33.01, with 10,000 units, CAC 2000 finished with a loss of 30 cents at $8.70, trading 1,000 shares, Caribbean Cream ended trading 22 cents higher at $6.50, with just 2,000 shares, Caribbean Producers rose by 1 cent to end at $4.11, with 962,877 units. Derrimon Trading concluded trading at $7.48, with 57,908 shares, Dolphin Cove finished with a loss of 90 cents at $16.10, exchanging 750 stock units, Elite Diagnostic settled with a loss of 8 cents at $2.77, with 381,025 units, Eppley ordinary share ended trading at $10, with 15,000 shares. Express Catering traded with a loss of 4 cents at $4.30, with 51,030 shares, FosRich Group finished trading at $2.50, with 33,614 shares, General Accident closed 8 cents higher at $3.04, with 169,615 stock units, GWest Corporation ended at $2.90, with 6,040 units changing hands. Honey Bun concluded trading 10 cents higher at $4.30, with 20,800 shares, Jamaican Teas rose 10 cents to close at $5, with 32,000 stock units, Jetcon Corporation traded with a loss of 40 cents at $4.50, swapping 210,424 units, Knutsford Express ended 4 cents higher at $15, with 66,427 shares. Lasco Distributors concluded trading 10 cents higher at $4.10, with 308,000 stock units, Lasco Financial finished 10 cents higher at $4.60, with 4,514 units, Lasco Manufacturing settled 34 cents higher at $4.09, with 24,200 shares, Main Event ended trading at $6, with 6,152 shares. Medical Disposables traded 5 cents higher at $4.85, with 311 shares and Stationery and Office closed with a loss of 38 cents at $5.10, with 41,100 units changing hands.
Prices of securities trading for the day are those at which the last trade took place.
CrediScotia costs Lasco Financial $1.5B
The acquisition of company operating CrediScotia, renamed LASCO Microfinance Limited cost Lasco Financial around $1.5 billion, data disclosed in the company’s December quarterly report shows.
The acquisition was funded primarily from related party advances which stands on the books at $1.27 billion. The amount will be repaid in full from a long term instrument being arranged to raise $1.5 billion at an interest rate of 9.5% and also to provide working capital to allow for expansion of the loan portfolio.
The acquisition was the main contributor for a $1.5 billion surge in the assets of the enlarged Group, taking it to $3.26 billion at the end of December.
Scotia Jamaica Microfinance Company, name was changed, effective at the start of December, following the acquisition by LASCO Financial Services in November 2017.
LASCO Microfinance now, a wholly owned subsidiary of Lasco Financial, is the ”fourth largest contender in the local microfinance market behind Jamaica National Small Business Loans, Access Financial Services and Worldnet Investment,” a release from Lasco disclosed.
The group “aims to continue a seamless transition to merge its networks, systems and processes over the next few months to effectively organize its operations under two main business lines – money services and loans through the
At the end of March 2017 loans advanced to borrowers on the books was $282 million and seemed to have climbed to approximately $650 million by September last year. The acquisition has increased the group’s loan portfolio to $1.3 billion, Managing Director of Lasco, Jacinth Hall-Tracey confirms. The merger has also almost tripled the loan team to just under 90 persons, spread over 13 loan offices island-wide.
Interestingly, while the acquisition of CrediScotia took place in November, the results for Lasco show no increase in income for the December quarter. For the September quarter total revenues reached $396 million up from $272 million in 2016, but the December quarterly, reports trading income of $407 million compared to the revenue in September, but it was well ahead of the $298 million generated in the December quarter of 2016. The December quarter is usually the period of highest revenues exceeding all other quarters by a good margin. “There was reduced fX spread compared with September quarter which impacted income; it also led to a revaluation loss,” Hall-Tracey informed IC Insider.com. Profit fell in the quarter to $55 million from $100 million in September an unusual development as profit would normally be greater than the amount reported in the September quarter, after recognizing some direct expenses for the acquisition and normal seasonal operational increases,” Hall-Tracey stated. There was short term debt which attracted legal & professional fees for the short term loan and there was finance cost as well as transaction fees for the short term borrowings to settle the sale price on Hall-Tracey informed IC Insider.com.
Adjusted for the above one off cost and set back earnings from ongoing operation is well ahead of the $55 million reported for the period in 2017 and augurs well for improved results for the March 2019 results.
Junior Market volume slides – Monday
The market closed on Monday with 23 securities changing hands, up from 21 on Friday, resulting in an exchange of 1,526,211 units valued at $4,615,508, compared to 5,241,602 units valued at $19,221,963, on Friday.
The Junior Market index fell 11.94 points to close at 2,916.34 as the prices of 8 securities advanced, 9 declined and 6 remained unchanged.
Trading ended with an average of 66,357 units for an average of $200,674 compared to an average of 249,600 units for an average of $915,332 on Friday. An average of 274,310 units at an average value of $1,538,475 traded, and previously 288,936 units at an average value of $1,632,571. In contrast, January closed with an average of 122,386 shares, valued at $489,704 for each security traded.
IC bid-offer Indicator|At the end of trading, the Investor’s Choice bid-offer indicator reading shows 4 stocks ending with the bid higher than the last selling price and 3 with lower offers.
At the close of the market, AMG Packaging ended with a loss of 1 cent at $2.44, with 3,500 stock units, Caribbean Cream ended trading with a loss of $1.32to $6.20, with 7,900 shares, Caribbean Flavours traded 1 cent higher at $10.90, with 9,725 stock units, Caribbean Producers finished trading with a loss of 40 cents at $4, with 12,490 units, Consolidated Bakeries closed 12 cents higher at $1.90, with 8,059 shares. Derrimon Trading concluded trading with a loss of 15 cents at $7, with 1,707 shares, Elite Diagnostic settled with a loss of 23 cents at $2.67, with 1,231,455 units, Express Catering traded with a loss of 40 cents at $4.30, with 17,778 shares, FosRich Group finished trading at $2.70, with 103,300 shares. General Accident closed at $2.80, with 6,012 stock units, GWest Corporation ended 10 cents higher at $2.60, with 12,653 units, Honey Bun concluded trading 2 cents higher at $5.15, with 500 shares, Iron Rock finished at $3, with 10,000 shares. ISP Finance settled $1.05 higher at $11.05, with 2,500 shares, Jamaican Teas ended trading with a loss of 3 cents at $4.75, with 12,045 stock units, Jetcon Corporation traded at $4.60, with 11,050 units, Knutsford Express ended at $15, with 1,627 shares. Lasco Distributors concluded trading 3 cents higher at $4.40, with 19,647 stock units, Lasco Financial finished with a loss of 15 cents at $4.85, with 24,372 units, Lasco Manufacturing settled at $4.43, with 6,000 shares, Main Event ended trading 3 cents higher at $6.03, with 3,000 shares, Stationery and Office closed 2 cents higher at $5.02, with 18,059 units and tTech concluded trading with a loss of 40 cents at $5, with 2,832 shares changing hands.
Prices of securities trading for the day are those at which the last trade took place.
tTech, LasFin & Blue Power in TOP 10
The Junior Market is up 7.5 percent for the year to date, helped considerably by three new listings since late December and recovery in the prices of three Lasco companies and a few others.
Investors pushed Treasury bill rates sharply down by 22 percent from 4.63 in December to 3.593 percent in February, while the central bank cut their overnight rates in sympathy to 2.75 percent. On the other hand profit results of companies have been mixed with some showing strong gains and others no so strong. So far stocks prices have yet to move to factor in the lower interest rates.
One company that had good 2017 results was ISP Finance but increased bad debt provisioning curtailed the growth in profits to just one percent after tax, but 20 percent ahead of the net 2016 profits with a 25 percent rise in revenues. The results for 2017 resulted in earnings per share being reduced to $1.20 for 2018 and with a rise in the stock price to $11.05 it is no longer in the TOP stocks. Also going out are, Access Financial and Paramount Trading. Access earnings have been reduced following their third quarter 2017 results.
Entering the TOP 10 Junior Market list are tTech, Lasco Financial and Blue Power. While Lasco Financial had lower profit in the December 2017 quarter than in 2016 that was due to added cost associated with the acquisition of Credi Scotia. The company will see a big jump in profit as a result of the acquisition. tTech is said to be seeing strong growth in clientele following a few years of soliciting new clients business. General Accident had a temporary setback in profit in 2017 due to a major claim but rising premium income margin should help boost profit in 2018 barring any major catastrophic claims. Key Insurance despite incurring cost associated with staff separation amounting to close to $50 million reported improved results for 2017 over 2016 and should go on to record the highest levels of profit in 2018 with expected better margin on insurance underwriting barring any unusually large claims. Stationery and Office had a record 2018 performance and is expected to show improve results in 2018 that will move the price upwards.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6.3 compared to an average PE for the overall main market is 10 based on 2018 estimated earnings.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 39 percent to the average for the Junior Market Top stocks but its less than 50 percent of what the average PE for the year is likely to be, of 15 to 20 times earnings.