Falling stock prices outnumbered rising ones by a big margin, leading the Main Market indices of the Jamaica Stock Exchange to slip moderately on Friday as the value of stocks trading surged nearly four times Thursday’s level.
At the close, JSE All Jamaican Composite Index declined by 556.70 points to 551,796.09, the JSE Market Index lost 504.45 points to close at 502,418.76 and the JSE Financial Index inched 0.06 points higher to 135.93.
The market closed with 39 securities changing hands in the main and US dollar markets with 9 advancing, 17 declining and the prices of 13 stocks closed unchanged. JSE Main Market activity ended with 37 securities accounting for 59,610,460 units for $774,571,962, in contrast to 9,942,249 units valued $213,225,571 on Thursday, from 36 securities.
Wigton Windfarm dominated trading with 33 million shares and 60 percent of volumes traded, followed by Wisynco Group with 12 million shares for 32 percent of the day’s trade and JMMB Group with 2.3 million shares for 4 percent market share.
The market closed with an average of 1,528,704 units valued at an average of $21,515,888 for each security traded, in contrast to 284,064 units valued at $6,092,159 on Thursday. 
The average volume and value for the month to date amounts to 457,043 units for $7,086,604 and previously, an average of 351,921 units for $5,507,716 for each security changing hands. The market closed out November with an average of 653,621 units valued at $8,699,916 for each security traded.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading shows 12 stocks ending with bids higher than their last selling prices and none closed with lower offers. The PE ratio of the market ended at 19.3, with the Main Market ending at 19.1 times the current year’s earnings.
In the premier market, Caribbean Cement lost $2 to end at $74.50, with 397,460 units changing hands, Eppley climbed $1 to settle at $15, with an exchange of 100 shares, Jamaica Producers lost $1.29 in trading 31,289 stock units to end at $23.50, Kingston Wharves shed $2 to settle at $61, in trading 4,558 units. Mayberry Investments fell 69 cents to close at $8.21, after transferring 4,080 shares, Mayberry Jamaican Equities declined by 95 cents to end at $12, with 17,049 units changing hands, NCB Financial Group gained $1.10 to close at $201.10, in swapping 499,603 shares. 
138 Student Living added $1.13 to end at $4.93, with 31,950 shares crossing the exchange, PanJam Investment gained $2.49 to close at $101.99, swapping 1,068,431 shares. Pulse Investments rose 39 cents to $4.69, with 100 units changing hands, Sagicor Real Estate Fund exchanged 5,100 and lost 51 cents to end at $10, Scotia Group dropped $2 to settle at $55.50, in transferring 62,328 shares. Seprod shed 25 cents in trading 10,720 stock units to close at $50.25, Supreme Ventures lost 22 cents to close at $25.28 with 119,205 units crossing the market and Sygnus Credit Investments drifted 80 cents down to $21.20 while exchanging 20,476 shares.
Trading in the US dollar market closed with 1,042,954 units valued at US$326,173 with the market index adding 3.51 points to close at 217.42. Proven Investments traded 977,693 to close with a gain of 0.5 cents at 32 US cents and Sygnus Credit Investments lost 1 cent in exchanging 65,261shares at 13 US cents.
69M Access shares offered at $32 each
Proven Investments is offering 68.6 million or 25 percent of the shares it currently owns in Access Financial Services for sale, at $32 per share starting today with the issue not expected to be open beyond today.
The prospectus suggests that the offer could be upsized if deemed appropriate but information obtained by IC Insider.com indicates that it will not be. Proven bought the block of shares mainly from Mayberry Investments on December 30, 2014, at $9 each, to become the largest shareholder. On several occasions in the past, the CEO Christopher Williams maintained the view that they had no intention of selling the shares, but that was before they bought 20 percent of JMMB Group from NCB Group in December 2018, costing $9 billion and financed by debt. With JMMB Group going back to the market to issue new shares, Proven will need to have funds to buy enough shares to maintain their 20 percent holdings if they intend to account for profits on an equity basis.
At $32, the stock is an attractive buy for investors looking for a value play investment. It is priced under 10 times current year’s earnings and could double within a year.
Access is one of the most rewarding investment for shareholders over the years, with an outstanding record of increased profits high return on equity and good and consistent dividend payments. Return on equity slipped in the past two years as interest rates and new accounting standards took effect but the company continues to grow. In recent years, growth was boosted by acquisitions of other micro-lending companies. Last year the company acquired Embassy Loans located in the Florida area in the United States.
The company realized Net Operating Income for the quarter ending June 2019 of $539 million of which the new US subsidiary Embassy Loans contributed $151 million. Interest income from loans increased by $8 million or 2 percent to $408 million while net fees and commission for the period was $153m. For the period, Embassy Loans contributed $44 million and $103 million respectively to the group’s Interest and fee income.
Christopher Williams, Proven Investments CEO.
Operating expenses for the quarter, increased by 90 percent or $179 million compared to the corresponding period ended June 2018, resulting from an increase in allowances for credit losses, based on the implementation of the IFRS 9 provisioning methodology and the inclusion of Embassy’s operating expenses for the quarter amounting to $110 million.
Net profit after tax for the quarter ended June 2019 declined 24 percent to $165 million compared to the 2018 period and resulted in earnings per share of 60 cents. Annualised earnings work out at $2.40, at a PE of 15, the value would be $36.
Access will generate cash flow from profits monthly and increase the amount available for lending, as such, earnings per share should be in the $3 region for the current year putting the likely value around $45.
The stock tends to be scarce and the potential for long term growth remains positive if a bit diminished in recent times with pressures on interest margins. Consolidation in the industry locally is to be expected and Access should be able to take over more of the smaller players going forward. It is most likely that Access will move most of the administrative functions to Jamaica with the lower cost than in Florida and therefore cut the cost of the US operations.
Wigton shares list today
Wigton stock could double soon.
The shares that saw more than 31,000 investors the 11 million units that were on offer was heavily oversubscribed and persons within the financial market expects that it will trade at a premium to the 50 cents offer price. 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 movements 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.
Wigton star attraction to watch
Wigton stock could double soon.
Wigton Windfarm is will be on a large group of local investors this week as the stock makes trading debut on the Jamaica Stock Exchange on Wednesday.
While the new main market listing will most likely be the star attraction, investors who left Junior Market stocks to languish while they drove main market to several new highs as they waited for Junior Market company, 2019 first quarter results are again looking for gains in the Junior Market.
A number of the Junior Market results were strong, in fact very strong and some prices were driven up, in response. More gains are expected in the coming weeks as investors pile funds into a number of companies with limited supply of stocks for sale.
Good numbers for the 2019 first quarter came from, Derrimon Trading with revenues rising 63 percent to $3.15 billion and profit jumping 33 percent to $69 million. Elite Diagnostic with strong growth in profits for the March quarter that more than doubled the $6.7 million reported in 2018 March quarter to $16 million. Fontana grew pretax profit by 51 percent to $30 million with earnings per share of just 2 cents will not provide the fire for much more price gains for a while.
Honey Bun doubles Q2 profit.
Caribbean Cement has fallen in price below $70 making it extremely attractive. The company’s managing director, speaks at Mayberry’s monthly forum on Wednesday and that could provide more information to fuel increased demand for the stock.
Wigton shares now fully allocated
Wigton IPO prospectus is out.
Mayberry Investments (MIL) the main broker for the issue announced the allocation of shares. In a release on the allocation, MIL stated that the public sector pool was oversubscribed accordingly, all Public Sector workers who applied for less than 15 million shares were fully allocated. The remaining Reserved shares are allocated sequentially, in tranches of 10,000 units until the Reserved Pool was exhausted. Members of the general public who applied for less than 8.5 million shares, received full allocation, the remaining shares were allocated sequentially in tranches of 10,000 units.
Refunds to applicants who are clients of Mayberry, will be credited to their accounts, by end of today, 15 May, refunds for non-Mayberry clients will be made available to the selling agent or location where the application was first received by 16 May.
All Applicants will receive a formal letter from the Jamaica Central Securities Deposit advising them of their respective allotment of Shares in the Company in due course.
Wigton attracts over 30,000 applicants
Wigton IPO prospectus is out.
IC Insider.com gathers that the number could reach as much as 32,000 applications and is more than 100 percent oversubscribed. The number of applicants, suggest that the level of oversubscriptions is most likely lead to the issue being twice oversubscribed. Based on the formula announced for allocation that will see smaller applications getting full allocation, the top bidders are likely to be disappointed with what they end up getting that could see their take coming for 10 percent or less, depending on the amount applied for.
According to a release from Mayberry Investments lead brokers, “all Applicants (large or small) up to the first 10,000 shares will be met. Applicants in excess of 10,000 will then be met in similar fashion in increments of 10,000 until all applications are met or all shares are allocated”.
The number of applications seem to be close to the issue of National Commercial Bank in 1987 that attracted over 30,000 applications, with the issue being oversubscribed by 175 percent.
The oversubscription should result in a healthy liquid market, when the stock starts trading in a few weeks time.
Wigton Windfarm’s profit upgraded
Wigton IPO propectus is out.
IC Insider.com now projects normalized earnings for the 2019 fiscal year between $600-700 million resulting in earnings per share of 6 cents. As earnings for the above periods, include foreign exchange gains and losses. Included in other income is $552 million to December 2018 of foreign exchange gains and in Finance cost, $748 million, in foreign exchange losses. With the company repaying the foreign currency loans, the main source of foreign exchange gains or losses no longer exits, hence the need to normalize results without them.
Based on the updated earnings, with the price of the stock at 50 cents each, the PE ratio is now
8.5, valuing the company at just $5.5 billion. The stock now sits at number 4 on IC Insider.com TOP 10 main market stocks, making it more attractive than the value based on the projection to March this year, included in the public bodies’ document.
“Wigton Windfarm IPO out very soon” an article published last week is running at the number one best read article on IC Insider.com and represents a clear sign of the popularity of the issue that opens on April 17.
IC Insider has now updated certain aspect of a second article, Wigton Windfarm IPO prospectus is out, carrying a more detailed look at the offer, and is proving to be quite popular but running well behind the first one currently.The lead broker for the IPO is Mayberry Investments.
Paramount goes to market for $300M
Paramount
Junior Market listed, Paramount Trading, goes to market to fetch $300 million at a rate that is set to exceed 12 percent per annum.
The company just issued a prospectus offering 150 million cumulative redeemable preference shares due 2021 priced at $2 each at fixed rate of 8.75% per annum. On the surface that seems a bit reasonable but with other costs, the annual rate will be approximately 12 percent. The prospectus indicates that the issue is to take advantage of opportunities for improvement and expansion of the business, to provide working capital and for general corporate purposes and to pay the expenses of the Invitation, which the Directors believe will not exceed $16.5 million. That cost adds approximately 2.75 percent per annum to the interest rate, bringing it to 11.5 percent. There will also be fees for listing on the Jamaica Stock Exchange, even more than the listing fees will be the monthly fees to be incurred, for making the monthly interest payments and providing annual reports to preference shareholders, for the two years. Mayberry Investments are the brokers to the issue.
Paramount’s profit peaked at $173 million in 2016, fell to $101 million in 2017 and then to $59 million in 2018. For the half year to November last year, profit slipped to $35 million compared to $58 million for the 2017 period. The company only had $62 million in borrowed funds but Inventories and payables climbed sharply over the previous year.
Market Watch on Scotia
The main market of the Jamaica Stock Exchange moved within less than 5,000 points of the record close in November last year as investors pushed the prices of some stocks higher during the past week.
Based on the date the first quarter results for Scotia Group was released in 2018, the 2019 results should be released on Thursday but so far the company has not posted the date of dividend consideration that is normally the date of announcing the results. Caribbean Cement closed at $55 and should move higher with limited supply on offer and an analysis of the audited 2018n results suggesting that cost should decline and revenues rise in the current year. IC Insider.com raised earnings to $6 for the year with the expensive $1 billion cement import last year not recurring this year and the benefit of a full year of removal of lease cost with added saving this year from the $2 billion annual savings from resulting from owning the kilns rather than leasing. Keep on watching this one for a break out in price.
Radio Jamaica pulled back to $1 late last week but there is buying at those levels and above.
The Junior Market is consolidating with a slight negative bias, even as this market seems far more undervalued than the main market, the release of quarterly profit results is not helping this market currently as investors wait to see what 2019 results will look like.
Last week, a number of results were released but they showed that investors may have pushed prices to their limit already. Jamaica Stock Exchange report big increase in profit for 2018 of $413 million versus $221 million in 2017 with earnings per share of 59 cents and thus pushing the PE ratio to a rich 30. Berger Paints profits were flat but the company had a blowout final quarter with revenues jumping 155 percent from the poor 2017 quarter and profits of $130 million versus just $30 million in 2017. Grace Kennedy reported improved results with earnings per share of $5, helped
Grace new HQ close to the end of construction in downtown Kingston
Fontana’s and Wisynco continues to trade around their current prices just below $4 and $12 respectively and seem poised to continue to move side wards for a while.
Elite Diagnostic moved up to $3.20 last week with good demand at that level continues to trade around $3.10 with a gap developing between the bids at $3.10 and sellers at $3.40. Will buyers move higher or will sellers come down where the majority of buyers are? Watch to see how this develops.
Buying for General Accident continues to trade around $4.50 level with no clear signs when it will the break out to a higher price level.
Lasco Financial remains stuck around $4.60 price level with some selling taking place at $4.60, but buying is not strong enough to move the price in the short term. Medical Disposables bounced last week but the price may bounce around for some time in the medium term.
Cement & RJR on watch alert
Carib Cement could earn $5.30 in 2019.
The action on the Jamaica Stock Exchange is focused on the main market currently as it continues to exhibit clear bullish signs, that propelled by a recent wedge formation and is also being steered upwards by a long term upward sloping support line, that goes
back to early 2016.
The main market is just 9,625.14 points away from the peak
reached of 433,307.22 points reached on 29-Nov-last on the All Jamaica Index. The Junior Market is consolidating with
a slight negative bias, even as this market seems far more undervalued than the main market.
This week investors will see a series of releases with some expected to move the prices of some of the companies. The stocks in this
category to watch keenly are Jamaica Stock Exchange that should report a doubling in profit for the 2018. Berger Paints, Grace Kennedy, Jamaica Producers, Mayberry Investments that should show the full impact of the new accounting standard that will book all investments gains or losses 
directly to regular profit and loss, Sagicor Group, PanJam Investment. Release of full year’s results for Caribbean Cement last week, provided fuel that drove the price up to $51.50. Supply of the stock is low, with profit prospects for 2019 looking good.
Last weeks’ release of Fontana’s half year results, were mixed, with slightly higher profit for the six months but lower profit for the December quarter, the latter from modest sales increase, halted the advance of the price of the stock. The stock is likely to trade around the $4 level for a while. Investors ought to be focusing on the expansion plans and what that will do to profit in fiscal 2020. Wisynco continues to trade around the $12 mark but could 
break out at any time demand existing to buy just below $12 and supply drastically reduced compared to the period before the company released six months results.
Demand remains high for Buy Rated Radio Jamaica but supply has virtually dried up and so the stage may be set for higher prices ahead. The price moved up to $1.40 during last week but pulled back afterwards to trade back at $1 on Friday before heading back to close at $1.25.
Elite Diagnostic continues to trade around $3.10 with a gap developing between the bids at $3.10 and sellers at $3.40. Will buyers move higher or will sellers come down where the majority of buyers are? Watch to see how this develops.
Buying for General Accident continues between $4 and $4.25, when will the break out takes place is unknown, but the valuation suggest that it could be sooner than later as the company is expected to build on the 2018 results of 29 cents per share in 2019.
The price of Lasco Financial rose during the past week but the price could inch higher this week but investors may not be ready push it much higher in the short term
Medical Disposables bid at the close on Friday was $5.50 with offer at $6.49, a wide gap that will close at some time. The company’s expansion into consumer products offers scope for a faster growth in profit going forward and that swill help the stock in the latter half of 2018. The latest results show, it is going take sometime for the expected growth to really take hold.