A likely 6 percent growth in Jamaica’s economy in 2022 helped several Main Market stocks to overcome a sharp rise in interest rates to record gains between two and 82 percent after the Jamaica Stock Exchange started 2022 tentatively, 
with the market index gaining just two percent at its peak in mid-May after which the JSE Main Index dropped 10.2 percent for the year as Bank of Jamaica pushed interest rates higher during the year.
The first real sign of change in the market was after investors pushed Treasury bills rates to peak in April, seven months before the country’s central did. Stock prices started to slip in May, sending the market into reverse from then until year end, except for the last two weeks when there was a near 6 percent rebound.
Although the market declined for the year, the market ended the year with gains in 22 stocks, compared with 25 losers that fell from 3 percent to 40 percent, with Salada Foods being the worst performer, following a 38 percent fall in 
NCB Financial despite profit jumping sharply over that of 2021. The group recorded huge unrealised investment losses net of gains that wiped out the traditionally reported profit of $40 billion and left a deficit of $7.6 billion for the fiscal year that reduced shareholders’ equity from $161.5 billion to $149.5 billion, and resulted in continued dividend suspension, that may have encouraged more pressure on the stock than usual. Massy Holdings and VM Investments both declined by 35 percent for the year. 1834 Investments was the top stock resulting from its acquisition by Radio Jamaica, productive Business Solutions delivered gains of 64 percent, followed by Supreme Ventures, with 62 percent, both flowing from solid increases in profit for the period to September last year.
Mayberry Jamaica shed 50m Lumber shares
Lumber Depot dominated trading with
Lumber Depot, the 2019 spinoff of the Junior Market listed Blue Power, reported record first quarter results to July, with profit of $72 million, up from $30 million in 2020, with earnings per share of 10 cents and attracted increased buying in the stock as the results hit the exchange on September 8.
Mayberry Jamaican Equities (MJE) pounced on the renewed buying interest and sold just under 50 million units in the market up to October 20.MJE slashed their holdings of 181,538,726 shares, with 25.7 percent of total issued capital at the end of July to 132,468,464, but they remained the largest shareholder at 18.76 percent.
Over the same period, Blue Power Group, the second largest shareholder, reduced their 101,989,250 holdings to 14.4412 percent to 98,989,250 or 14.02 percent. Blue power in January held 113,989,250 shares, with a 16.14 percent holding. Kenneth Benjamin, a director of Blue Power, holdings in January of 49.95 million rose to 59,954,650 units or 8.4893 percent but slipped to 58.4 million in October.
Since October 20, the average daily trade in the stock has been 773,546 units, with the lowest trade, 522,227, on the 21 of the month.
QWI best performing listed fund
As of Friday, the worst-performing equity-based listed fund has the highest valuation relative to net asset value (NAV). The best performing fund is currently beating the performance of local stocks by a huge margin, following outperforming the market in 2019, but has the highest discount to NAV currently.
Since the start of the year, QWI Investments NAV outperformed the local stocks with the NAV down 16.5 percent while local stocks are down on average 31 percent, with investors marking the price down more than other equity funds. Mayberry Jamaican Equities NAV is down 38 percent from the start of the year, to underperform the market, but the stock is selling now selling at a moderate to the NAV. The NAV for Sagicor Select Funds – Financial is down 28 percent for the year so far, while the Manufacturing & Distribution fund is down 23 percent but the discount to NAV is far lower than QWI.
The disparities in valuing the stocks in the sector is a reminder that making money in stocks is not as difficult as many think, sometimes it requires observance, patience and a bit of logic and here history can be an excellent teacher.
Commodities such as stocks, currencies and other traded assets form patterns over time, persons following these patterns well can profit from them above the average.
When there are major variations from normal patterns, prices will move in one direction or the other and this is one way to make big gains for the keen observer. This is the situation now evident in the stocks of listed funds. When coupled with positive bullish technical signals for the Junior and Main Market, persons investing in some of these funds could do very well in the new few months. The same applies to equity-linked unit trust that declined in value, with the fall of local stock prices earlier this year.
Stocks trading at a valuation below the market or below the historical valuation usually indicate undervaluation and are candidates for gains. The reverse is also true, suggesting that investors should consider selling these if the situation exists.
The patterns shown by local listed funds makes for interesting reading suggesting there is money to be made by investing in some of them.
Mayberry Jamaican Equities is the worse performing listed fund in 2020,
QWI Investments announced its NAV per share as of November 20, at $1.06, a gain of 2 cents for the past week. At the same time, the stock closed at 72 cents, a discount of 32 percent to the net asset value. While the NAV increased, the stock price has fallen to stretch the already overly deep discount. A return of the stock price to NAV would provide a return of 41 percent on the current stock price.
Sagicor Select Funds – Financial NAV this week is 83.8 cents, with the stock at 64 cents on Friday, for a discount of 23.6 percent. At the end of September, the NAV was 83 cents and the stock price 60 cents for a discount of 28 percent. The NAV is at a discount of 12 percent for the Manufacturing & Distribution fund with NAV of 79.7 cents with the stock price on Friday closing at 70 cents, at the end of September, the stock traded at 70 cents with the NAV at 79 cents, with a discount of 12.4 percent.
Mayberry Jamaican Equities discount to NAV at November 18 is 12.8 percent with the NAV at $8.80 and the stock priced at $7.80, at the end of September the NAV was $8.30 and priced at par with the last traded price of $8.30.
The discount to net asset value for QWI narrowed in June, widened again in August but narrowed again in September and has now widened again, with the value rising and the price dropping. The average discount from the start in October 2019 is 21 percent with a low of 5 percent on March 27 and a high of 33 percent in July. The average discount from the start of trading is 18 percent up to the end of June, which is closer to the discount of the others.
Many more stocks to watch now
NCB had a good 2018 fiscal year with strong profit gains that boosted interest in the stock.
Jamaica’s largest financial institution, advised the Jamaica Stock Exchange that a connected party sold 2,768,165 of the group’s shares and three directors and a senior manager purchased a total of 2,836,672 shares between November 23 and 26. This development is the clearest signs that the immediate future is extremely bright for the group.
The local stock market is showing major shift in sentiment with the news that Scotia Group is selling off of its insurance arm to Sagicor Group. The announcement drove up the prices of Scotia Group, Sagicor Group and Pan Jamaican that traded at a new high on Wednesday. But NCB continued to scale new highs on each day for the week. NCB has little supply coming onto the market as demand continues to climb.
All the above stocks are now the watch list, but investors must keep watch on Barita Investments that has shot up to a record high of $23 with a bid at $24.01. There is some amount of public chatter about the performance of the company that has encouraged more interest in the stock. The company will benefit from several developments in the financial market, including the impact of the change in
accounting policy that will result in gains or losses in investments whether realized or not going straight to the profit and loss account. With growth in the stock market Barita should benefit in two ways, increased value of the portfolio, for example, 48 million JSE shares owned increasing around $100 million in the December quarter so far but Barita is said to also own shares in NCB that has risen sharply in price for the quarter. The equity linked unit trust will garner more fee income based purely on the fact that the portfolio would have grown based on gains in stock price. The other financial stock to be watched is Key Insurance that has traded over 21 million shares so far with the stock having a bid of $4 to buy over 911,000 shares. The movement in the Key shares seems like the start of an aggressive stance an investor, watch developments in this one keenly. Seprod also seems poised to rise with early selling from the public offer now appearing to be abating.Mayberry Jamaican Equities is yet another to watch as the local stock market moves higher over the next several weeks and it could drag it mother company Mayberry Investments with it.
Barita could spike higher this week
Barita last traded on the JSE as high as $20 on Friday.
The main market of the stock exchange ended the week at another record close with a number of individual stocks hitting new highs but this coming week could well be more challenging, investors have to bear in mind that the supplies for several stocks are very limited and could result in big price movements as happened last week.
Technical chart shows NCB Financial heading to $155 but it traded at new high of $134 during the past week which is not very far from the target of potential resistance. Whether it goes higher during the coming days is anyone’s guess but it is worth watching. Caribbean Cream moved up to $7.90 from $6.16 at the end of the previous week. The company posted better profit results in the August quarter but with less gains than in the first, as administrative cost rose to negate some of the top line growth. Those results may be unlikely to move the stock forward in the short term.
The Junior Market continues to inch forward as it appears that investors are waiting on results. They got Caribbean Cream and Paramount Trading at the end of week, but no major upward price movement is expected.
Caribbean Cream sales & profit slowed in Q2.
The indicators point to continued increased interest in the main market stocks with a number of them are high on the list to watch for this week with less indications that Junior Market stocks will move upwards in droves anytime soon. Stocks of interest this week are Grace Kennedy, Barita Investments with limited supply and technical indicators pointing to a price of $22.50 initially before going on to $27.50. Berger Paints, Jamaica Producers has very little stock offered for sale and that could result in a sharp spike in price at any time, Mayberry Jamaican Equities (MJE), Mayberry Investments that will benefit from increased profit of MJE, NCB Financial, Wisynco Group that has gone back above the $10 price level, CAC2000 that is very scarce, Main Event and Stationery and Office Supplies that seem to have exhausted selling at $09.50 with $10 being the possible next level. A number of these have limited supplies for sale.
With the average PE of the market now at a comfortable 16 times 2018 earnings, stocks valued less than the market average could see increased interest as investors look for bargains.
Grace Kennedy seems ready to break out of the $60 range as there is no big supply on offer now and during the past
Caribbean Cement price is stuck in the mud for now.
week, it traded as high as $75. Caribbean Cement keeps trading between $46 and $50, but there appears no real desire to move the price forward, this one could be negatively affected by foreign exchange losses in the September quarter. Kingston Wharves has always had limited supply, so it could move higher going forward, even the valuation is rich. Supply of JMMB Group has dried up and that could create the environment for the price to continue to move higher, it is also one of the lower valued stock in the main market. Investors need to bear in mind that the price is currently at a resistance level at $37, so it may move sideways with an upward bias for a while, unless strong buying pushes over this level.
An overall view of stocks indicates that the main market continues to be steered higher by an upward sloping support line as well the 45 and 125 day moving averages, lending support just below. The Junior Market is being guided by an upward rising long-term support line and a golden cross. The golden cross is a very strong bullish long-term signal, but market needs fuel of rising profits.
Watch NCB & Kremi this week
NCB Financial could be a winner this week.
The main market of the stock exchange closed the week with two of the highest daily increases in the market index ever, a clear sign that investors want stocks to buy and the supply remains very limited and putting the bulls in control.
The moves last week in the main market and since the start of August has set the stage for several stocks to be on the move this week.
The Junior Market continues to inch forward as it appears that investors are waiting on results. They should get Caribbean Cream this week and that should be a strong set of results as the company benefits from lower raw material cost compared to the first quarter when profits jumped 59 percent.
The indicators point to continued increased interest in the main market stocks with a number of them are high on the list to watch for this week. Stocks of interest this week are Grace Kennedy, Barita Investments, Berger Paints, Mayberry Jamaican Equities, NCB Financial, Wisynco, Caribbean Cream, CAC 2000, Main Event and Stationery and Office Supplies, many of these have limited supplies for sale.
With the average PE of the market now approaching a comfortable 16 times 2018 earnings, stocks valued less than the market average could see increased interest as investors look for bargains.
NCB Financial went sideways for around two weeks but bids started building close to the closing prices last week and that could help it move higher this week. Barita had a relatively strong day on Friday with 261,000 shares trading, leaving only a minute amount of 6,200 units on offer at $25.
Caribbean Cream should post big gains in profit in Q2 this week.
An overall view of stocks indicates that the main market continues to be steered higher by an upward sloping support line as well the 45 and 125 day moving averages, lending support just below. The Junior Market that traded recently at an all-time high, is being guided by an upward rising long-term support line and a golden cross. The golden cross is a very strong bullish long-term signal.
All Jamaica claims 411,546 – Thursday
The main market of the Jamaica Stock Exchange broke through 410,000 mark based on movement of the All Jamaica Composite Index in early trading on Wednesday and moved higher by 3,093.31 points to a record 411,545.91.
The JSE Index that jumped to a record 374,251.61 in early trading moved on to 374,964.90 with gains of 2,818.36, The Junior Market rose 19.93 points to 3,401.72. Grace Kennedy raced to an all-time high of $75, NCB Financial moved up to a record of $131, Supreme Ventures climbed to $21.70, JMMB Group jumped to $35 and Mayberry Jamaican Equities traded at $12.
The main market broke through all resistance points, with the last being 400,000 points with the next big one being 510,000 points region. If it got there in 2018, would represent a gain of 24 percent from current levels and lift the gains for the year to 60 percent.
Barita is stock to watch this week
The main stock of interest this week is Barita Investments that came into buying interest this past week leading the price to move to $12.95, this one seems headed higher in the short term as the supply that is on the market has been taken out with few stocks on offer now.
Bulls pushed the Jamaican stock market, to new heights last week, with the main market having 11 straight days of record highs and the Junior Market cleared the historical high reached in 2017, in the past week as well.
NCB Financial that was in the spotlight for the past two weeks, still has buying interest but seems to be having most bids around the $120 mark and may find it tough to break over the $130 mark where it traded during the past week.
While the stock is trading close the $130 mark in Jamaica, it is trading in Trinidad around J$115 and that may hold back the price from moving much higher locally until the price in the twin island state picks up. Scotia Group reported profit that showed gains, some of it was non-recurring income and exceptional foreign exchange gains that seems unlikely to repeat anytime soon.
While the supply of several of the main market stocks being scarce, the main market is just under 15,000 points from a major resistance level at 400,000 points and that could stymie much more movement in the short term, with some prices having moved quite a bit recently. There are several stocks priced well below the market’s average and that could encourage buying interest in them.
NCB stock closed at $129 on Friday.
Investors should keep their eyes on a number of stocks this week. NCB Financial that closed on $115, should move higher this week as demand continues to build and with limited supply on offer.
Grace Kennedy may not be ready to break out of the $60 range as yet but it’s a stock to keep an eye on. Caribbean Cement keeps trading between $46 to $50, but there appears no real desire to move the price forward. Kingston Wharves traded at a record high of $75 on limited volume in the past week but pulled back slightly to $72 at the close with a PE ratio of 46 is compared to a market average of 14.6. Supply of the stocks remain low, but some investors keep on buying. Sygnus Credit Investments picked up last week and moved back within a cent of the IPO price, buoyed by full year results of US$1.4 million. The PE ratio is 11.4, well below the market average of 14.6, that will encourage more interest in the stock. Jamaica Producers has very limited volume on offer and that could help buying at higher prices in spite of a PE of 28, twice the market average. Stanley Motta with a PE of 11 based on 2019 earnings has been recovering for the recent decline and is one to watch.
In the Junior Market, Indies Pharma, came in for continued buying that pushed the price to a record high of $4.10 on Friday against very limited supply. Some selling came into the market on Friday to ease the buying pressure on the price which could stick around the current level of $4 for a while. Bulls came in and bought out a big parcel of Access Financial that was on offer for weeks but the $50 level seems a barrier in the short term. Demand is building for Elite Diagnostic while supply has waned.
Jamaica Producers stock in demand in spite of high price.
General Accident could move higher as more demand comes in for it with limited selling, but investors may not want to be more aggressive with this stock at this time. If the company were to announce expansion into the Eastern Caribbean it may well make a difference.
Stocks with scarce supplies that could spring surprises include, Grace Kennedy, NCB Financial, Berger Paints, Caribbean Cement, Kingston Wharves, PanJam Investment, Sagicor Group, Salada Foods, Seprod and Scotia Group.
The Junior Market supplies continue to be limited for many of the listings. The list includes, Caribbean Flavours, Cargo Handlers, Derrimon Trading, Express Catering, General Accident, ISP Finance and Medical Disposables.
An overall view of stocks indicates that the main market continues to be steered higher by an upward sloping support line as well the 45 and 125 day moving averages, lending support just below, but the 400,000 points resistance could likely stall the rally in the main market for a while. The Junior Market now at an all-time high, is being steared by an upward rising long-term support line and a golden cross. The golden cross is a very strong bullish long-term signal.
JSE stocks retreat from Thursday’s record
Mayberry Jamaican Equities traded 1M shares & the price hits a new high of $10 but retreated by Friday’s close.
The All Jamaican Composite Index of the Jamaica Stock Exchange and the JSE index fell more than 2,000 points as main market stocks retreated from Thursday’s record close as the market set its sight on breaking through the 350,000 mark this coming week.
At the close, the All Jamaican Composite Index dropped 2,312.28 points to 346,726.53 and the JSE Index dived 2,106.75 points to 315,907.02. Market activities resulted in 31 securities trading including 3 in the US dollar market compared to 27 securities trading on Thursday.
At the end of trading, the prices of 12 stocks rose, 12 declined and 7 traded unchanged. Trading in the main market ended with 12,389,267 units valued $54,066,117, compared to 7,549,926 units valued at $378,631,059 on Thursday.
The day’s volume was led by, JMMB Group 7.5% preference share concluded trading at $1.03, with 8,590,090 shares with 69.3 percent of the traded volume, followed by Mayberry Equities that closed at $9 in trading 1,046,000 shares, 
for just 8.4 percent of the day’s volume after trading at an intraday high of $10 and Supreme Ventures with 604,043 units and 4.9 percent of the main market volume.
Stocks with major price changes| Caribbean Cement jumped $2.50 and finished at $47.50, trading 73,872 shares, Grace Kennedy rose 85 cents and ended trading at $59.50, with 41,775 shares, JMMB Group lost $1 and ended at $29, exchanging 120,176 shares, Mayberry Investments gained 39 cents to settle at $7.89, with 10,100 units, PanJam Investment fell 80 cents and concluded trading 42,221 shares and closed at $51.60, Portland JSX lost 50 cents and ended at $8 trading 2,700 units, Sagicor Real Estate Fund dived $2.90 to $12, with 11,200 shares, Salada Foods shed $1 to close at $17, in exchanging 48,271 units, Scotia Group rose 50 cents in traded 113,232 shares to close at $53, Seprod finished trading 4,500 shares, and gained 59 cents to close at $36.10, ended at $15, with 21,164 shares after losing 30 cents, 
Victoria Mutual Investments lost 42 cents in concluding trading at $3.51, with 604,043 stock units and Wisynco Group fell 25 cents and finished trading 105,450 shares to end at $9.05.
Trading in the US dollar market closed with Margaritaville traded 9,700 shares and ended at 18 US cents Proven Investments trading 44,500 shares, falling 0.09 cent and closed at 19.01 US cents and Sygnus Credit Investments traded 9,000 shares and rose 0.03 cent to 10 US cents. The JSE USD Equities Index slipped 0.12 points to end at 159.24.
Trading resulted in an average of 492,474 units valued at over $1,930,933, in contrast to 290,382 shares valued at $14,562,733 on Thursday. For the month to date an average of 231,530 shares valued at an average of $4,665,985 versus 211,092 shares valued at an average of $4,956,066 on Thursday. July closed with an average of 169,022 units valued at $3,514,756, for each security traded.
IC bid-offer Indicator| At the end of trading, the Choice bid-offer indicator reading shows 5 stocks ended with bids higher than their last selling prices and 4 closing with lower offers.
More records for JSE main market
Mayberry Jamaican Equities traded for the first time after a successful IPO at $9.82 and NCB Financial traded at $102, for a gain of $1.48 to help to main market to new record high in early trading on Tuesday.
The Mayberry Jamaican Equities trade was for 1,000 units and resulted in a gain of $2.26 or 29.89 percent gain on the IPO price of $7.56. NCB traded just 35,991 shares.
With just 45 minutes of trading elapsing, the All Jamaican Composite Index advanced by 1,476.90 points to a record high of 342,356.79 and the JSE Index gained 1,345.62 points to close at 311,925.68. The Junior market was down by 17.75 points to 3,088.81.
