Trading in more JSE USD companies

Market activity on Thursday led to the trading of shares in more companies on the US dollar market of the Jamaica Stock Exchange than Wednesday, but the market declined after the total volume fell 70 percent from the previous day.
At the close of the market, six securities changed hands compared to four on Wednesday and closed with the prices of two stocks rising, two declining and two remaining unchanged.
The JSE USD Equities Index declined by 0.99 points to settle at 194.57. The average PE Ratio ended at 13.8 based on ICInsider.com’s forecast of 2020-21 earnings.
Trading resulted in an exchange of 206,695 shares for US$18,236 compared to 700,105 units at US$38,808 on Wednesday. The average trade amounts to 34,449 units at US$3,039, in contrast to an average of 175,026 shares at US$9,702 on Wednesday. Trading ended with an average of 49,514 units for the month to date at US$5,468, in contrast to 51,128 units at  US$5,728 on Wednesday. By comparison, October ended with an average of 697,808 units for US$17,320.
At the end of trading, the Investor’s Choice bid-offer indicator reading shows three stocks ending with bids higher than their last selling prices and two with lower offers.
At the close of the market, Margaritaville traded 100 shares at 13 US cents, MPC Caribbean Clean Energy settled at US$1.15, in exchanging 52 units. Proven Investments lost 0.09 of a cent and ended at 25.99 US cents trading 16,244 stocks, Sygnus Credit Investments shed 1.01 US cents to close at  15.99 US cents, with 90,118 units changing hands and Transjamaican Highway gained 0.04 of a cent to end at 0.89 of a US cent after exchanging 100,000 shares.
In the preference segmentEppley 5% preference share lost 1 US cent to end at US$1.02, with the trading of 181 units.

Prices of securities trading are those for the last transaction of each stock unless otherwise stated.

 

More funds exchanged on TTSE stocks

The Trinidad and Tobago Stock Exchange ended trading on Tuesday, with the market rising after investors exchanged 31 percent fewer shares with a 150 percent higher value than on Monday, resulting in more stocks falling than rising.
The market closed with sixteen securities trading with the prices of four stocks advancing, six declining and six remaining unchanged. The volume of stocks passing through the market amounted to 339,427 shares valued at $13,649,889 compared to 490,995 shares for $5,458,075 from 17 securities on Monday.
The average trade on Tuesday amounted to 21,214 units at $853,118 versus an average of 28,882 stock units for $321,063 for each security. Month to date the average traded amounts to 12,082 units at $169,359 each compared with 11,535 shares at $128,385 of August closed with an average of 15,631 shares for $367,803.
The T&T Composite Index added 2.57 points to end at 1,317.47, the All T&T Index advanced by 1.78 points to 1,795.16, while the Cross Listed Index gained 0.46 points to close at 113.41.
IC bid-offer Indicator The Investors Choice bid-offer indicator ended with the bids of two stocks higher than their last selling price and two with lower offers.
Stocks rising Grace Kennedy added 2 cents to close at $3.52, with 440 units crossing the market, NCB Financial Group advanced to $7.75, having gained 5 cents and transferring 5,505 stock units, Unilever Caribbean gained 3 cents to end at $17, in exchanging 21,423 shares and West Indian Tobacco rose 45 cents to $35.50 trading 905 units.
Stocks declining Clico Investments finished 35 cents lower at $25.15, with an exchange of 10,472 stock units, JMMB Group lost 1 cent trading 30,309 shares to settle at $1.70, One Caribbean Media slipped 10 cents to $5.10, after transferring 30,189 shares. Prestige Holdings lost 5 cents to end at $7.50, in exchanging 500 units, Republic Financial Holdings closed at $142, with a loss of 2 cents and 2,460 stock units changing hands and Trinidad and Tobago NGL dipped 5 cents to $15.90, in transferring 3,309 stock units.
Stocks trading firmFirst Caribbean International Bank exchanged 125 units at $7.07, First Citizens Bank ended at $46.10, trading 6,640 stock units, Guardian Holdings transferred 14,850 shares at $19.50. Massy Holdings closed at $58, with 1,200 units changing hands, MPC Caribbean traded 1,000 shares at US$1 and Scotiabank exchanged 210,100 shares at $55.50.

Prices of securities trading are those for the last transaction of each stock unless otherwise stated.

MPC Clean Energy rights open Wednesday

Wigton closed at anew high of $1MPC Caribbean Clean Energy (MPCL) stock traded at a record $275 on the Jamaica Stock Exchange last week, as investors positioned to buy into 22,848,320 class B shares offered to shareholders by way of rights.
The Offer entitles shareholders to buy two new shares for each one they own and will open November 13 and will close December 16.
The shares are currently listed on stock exchanges in Jamaica and Trinidad and were priced at J$130 or US$1 when it came to the market in late 2018. The new shares are renounceable and priced at J$140 to Jamaican shareholders and US$1 per share for shareholders in Trinidad and Tobago on record on November 8. The Company seeks to raise the equivalent of US$22,848,320 to facilitate expansion into new renewable energy projects.
The company went to the market in November 2018 to sell up to 50 million shares, the take-up fell well short with the capital with just 11.25 million units with Jamaican taking up over 77 percent of the issue and Caribbean Clean Energy Feeder Ltd taking up 18.4 percent.
MPCL has 34.4 percent interest in the Paradise Park project that comprises a 50 MWP solar plant in Westmoreland, Jamaica, with a total investment of US$64 million.
The second asset, Tilawind is a 21 MW onshore wind farm based in Costa Rica in which MPC effectively holds 50 percent with the other half owned by ANSA McAL, a Trinidad and Tobago group. The total investment in that operation is approximately US$50 million. The wind park has been in operation since March 2015.
According to the company, a further 14 projects have been prioritized and form the indicative deal pipeline for the Investment Company. These require a total investment estimated at US$499 million to deliver up to 314 MW of new renewable energy capacity. The listed company invests in MPC Caribbean Clean Energy LLC, the company that invests in the operating projects directly.
The company posted earnings for the nine months to September that reverses the positives number in the June Quarter. The results released are confusing, lacks transparency and will not help the company in raising the desired capital.
The company does not invest directly in the operating entities but directing into a management company that invests directly. Effectively, the company accounts for its investments as shares of profits in associates and books their share of profit in accordance with international accounting standards. MPC has investments indirectly in two power-generating operations. The results for the September quarter reflects the share of results from activities of the wind farm in Costa Rican and that of Paradise Park.
According to the company, the Tilawind “wind farm generation is mainly dictated by the trade winds, presenting a clear high wind season, with a high tariff from January to May, and a low wind season, with a low tariff from June to December.” The impact of on profit in the second half of the year is telling, with around 20 percent of the year’s energy production. The situation is made worse by the wind farm machinery undergoing repairs in the period and resulting in losses. Paradise Park generation in the quarter that started in June was affected by lower than expected sunlight levels resulting from poor weather conditions generated by hurricane Durian in late August-early September.
The net effect is that the company profit share dropped to $56,788, down from $145 million generated in the June quarter. The management report states that production at the Costa Rican operation generated 9.4 percent more energy than in the prior year. The company reported total profit share of $205,858 and a loss of $45,749 for the nine months period, the results from operations look vastly worse. The company reported a loss of $109,523 for the September quarter but advertising cost of $87,020 was the major cause of the big loss along with the fall in revenues mentioned above.
The projections in the prospectus were for revenues of US$1.39 million and profit of $1.25 million for 2019 and projected revenues of US$2.94 million in 2020 with a profit of US$2.76 million. They seem set to meet the revenues forecast but will be off from the profit as a result of not investing in the Costa Rican operation from the start of 2019 to have benefitted from the higher revenue period from January to March.

MPC Clean Energy hits $275

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MPC Caribbean Clean Energy (MPCL) stock traded at a record $275 on the Jamaica Stock Exchange on Monday as investors position to take advantage of a rights issue of 22,848,320 class B shares to be offered by the company.
The listed shares were priced at J$130 or US$1 when it came to the market in late 2018. The proposed new shares will be by way of a renounceable issue at J$140 to Jamaican shareholders and US$1 per share for shareholders in Trinidad and Tobago with a record date of November 8 as the Company seeks to raise the equivalent of US$22,848,320 from its shareholders.
The company went to the market in November 2018 to sell up to 50 million shares but the take up fell well short with the capital with just 11.25 million units with Jamaican taking up over 77 percent of the issue and Caribbean Clean Energy Feeder Ltd taking up 18.4 percent.
MPCL has 34.4 percent interest in the Paradise Park project that comprises a 50 MWP solar PV plant in Westmoreland in Jamaica that comprises a total investment of approximately US$64 million.
The second seed asset Tilawind is a 21 MW onshore wind farm based in Costa Rica in which MPC effectively holds 50 percent with the other half owned by ANSA McAL Group a Trinidad and Tobago group the total investment in that operation is approximately US$50 million. The wind park has been in operation since March 2015.
According to the company, a further 14 projects have been prioritized and form the indicative deal pipeline for the Investment Company. These require a total investment estimated at US$499 million to deliver up to 314 MW of new renewable energy capacity. The listed company invests in MPC Caribbean Clean Energy LLC who in turn invest directly the operating projects.
The company posted earnings for the nine months to September that reverses the positives number in the June Quarter. The results released are confusing, lacks transparency and will not help the company in raising the desired capital.
According to management, they have investments in two power-generating operations, with both in operation for the September quarter and generated share in profits of associated companies of $56,788. With just one-quarter of operation before from one location, they enjoyed a share in the profit of associate of $145 million in that quarter. The management report states that production at the Costa Rican operation generated 9.4 percent more energy than in the prior year. The numbers just do not seem to add up and management did not provide an explanation as to the reason why in their quarterly report. While the company is reporting total share of profit of $205,858 and a loss of $45,749 for the nine months period, the results from operations look vastly worse. The company reported a loss of $109,523 for the September quarter but advertising cost of $87,020 was the major cause of the big loss.
Regardless of what has been achieved to date, the performance is well off from the projections in the prospectus with a projected income of US$1.39 million and profit of $1.25 million for 2019 and projected revenues of US$2.94 million in 2020 with a profit of US$2.76 million.

JSE main market decline continues

The more than 11,000 points sharp decline of the Jamaica Stock Exchange main market indices last week continued on Monday, as volume and value dropped compared to that on Friday.
The JSE All Jamaican Composite Index ended with a fall of 2,448.77 points to close at 537,510.00, the JSE Index declined by 2,178.75 points to 489,438.87 and the JSE Financial Index lost 0.24 points to close at 133.95.
At the close of trading, 38 securities changed hands in the main and US dollar markets with 14 advancing, 14 declining and 6 trading firm. Main market activity ended with 35 securities trading 48,237,597 units valued at $136,439,498, in contrast to 64,041,525 units valued at $1,348,335,010 on Friday with 33 securities trading.
Wigton Windfarm dominated trading with 41.85 million shares for 87 percent of total volume, followed by Sagicor Select Funds with 3.46 million units accounting for 7 percent of the day’s trade and Scotia Group with 590,136 shares for 1 percent of the market’s trade.
The market closed with an average of 1,378,217 units valued at an average of $3,898,271 for each security traded, in contrast to 1,960,652 units valued at an average of $40,858,637 on Friday. The average volume and value for the month to date amounts to 961,280 units valued at $13,958,606 and previously an average of 946,164 units valued at $14,531,873 for each security traded. The market closed out September with an average of 1,585,081 units valued at $14,071,562 for each security traded.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading shows 10 stocks ended with bids higher than their last selling prices and none with lower offers. The PE ratio of the market ended at 16.1 with the main market ending at 16.7 times 2019 current year’s earnings.
In main market activity, Barita Investments lost 60 cents to close at $73.50 while 4,852 shares were traded, Caribbean Cement jumped $5.51 to close at $77.50 with 166,784 shares changing hands after the company posted third quarter results showing lower revenues than for the same quarter in 2018. Net profit was just $77 million or 9 cents per share for the quarter and $1.85 for the nine months period versus $1.34 per share in 2018. Eppley Caribbean Property Fund traded 3,000 shares and dropped $4.49 to end at $35.01, Eppley ended at $15, after losing $1.85 trading a mere 630 shares, Jamaica Broilers swapped 24,699 shares, closing $2.90 lower at $33.10. Jamaica Producers gained 50 cents, after exchanging just 100 shares to settle at $22.50, JMMB Group rose $2.30 to close at $41.80, with 9,182 shares changing hands. Kingston Wharves dived $2.59 to $57.41, after trading 2,412 shares, MPC Caribbean Clean Energy jumped $19.99 in trading 100 shares to end at a record high of $220, Portland JSX climbed 50 cents to $8.50, in swapping 4,500 shares. Proven Investments traded 1,564 shares, gaining $1.40 to end at $42.40, Sagicor Group closed 25 cents higher at $66.25 with an exchange of 160,664 shares, Salada Foods advanced by $3.25 to close at $29.30 with 2,550 shares changing hands. Scotia Group lost 42.10 to close at $53 while trading 590,136 shares, Seprod lost $2 to settle at $50.50 with 936 units crossing the exchange, Sygnus Credit Investments lost 60 cents, in ending at $21.40 with an exchange of 104,628 shares and VM Investments lost 24 cents and  closed $7.75, after trading 199,482 shares.
Trading in the US dollar market ended with 197,701 units valued at over US$33,784 with the market index gaining 1.47 points to close at 194.82. In trading, JMMB Group gained 2 cents settled at US$2.02 with 3,769 shares, Proven Investments closed with 9,664 units changing hands at 26 US cents and Sygnus Credit Investments exchanged 134,268 shares and gained 2 US cents to end at 13.99 US cents.

JSE majors steady on low volume

The Jamaica Stock Exchange main market inched higher on higher volume but lower value than on Wednesday with the market appearing to find support at current levels after falling more than 6 percent from the peak in the first week in August.
At the close the JSE All Jamaican Composite Index added just 104.29 points to close at 548,200.49, the JSE Index gained 189.56 points to 499,194.62 and the JSE Financial Index rose 0.15 points to 135.75.
Trading ended with 39 securities changing hands in the main and US dollar markets with 12 stocks advancing, 15 declining and 12 trading firm. Main market activity ended with 38 securities trading, resulting in 22,536,647 units valued at a mere $48,207,025, in contrast to 13,077,566 units valued at $68,716,819 from 37 securities trading on Wednesday.
Wigton Windfarm led trading with 10.6 million units for 47 percent of total volume, followed by Sagicor Select Funds with 10.2 million shares for 45 percent of the market’s trade and QWI Investments with 656,908 accounting for 3 percent of the day’s trade.
The market closed with an average of 593,070 units valued at $1,268,606 for each security traded, in contrast to 353,448 units for an average of $1,857,211 on Wednesday. The average volume and value for the month to date amounts to 924,365 shares at a value of $15,990,179 for each security traded and previously 951,792 shares at $17,309,566 for each stock traded. The market closed September with an average of 1,585,081 units valued at $14,071,562 for each security traded.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer reading shows 5 securities ended with bids higher than their last selling prices and 2 with lower offers. The PE ratio of the market ended at 16.6 with the main market ending at 17.3 times 2019 current year’s earnings.
In main market activity, Eppley rose 75 cents to close at $16.85 with a mere 220 shares changing hands, Grace Kennedy added $2.80 to close at $69.60 trading 8,315 shares, Jamaica Producers lost 67 cents with 5,209 shares changing hands in closing at $24.70, JMMB Group gained $1.89 to end at $42.99 in swapping 40,735 shares. Kingston Wharves dropped 99 cents to settle at $60 in trading 2,756 shares, Mayberry Investments lost 37 cents to close at $8.33 with 12,292 shares changing hands, Mayberry Jamaican Equities closed 35 cents lower at $10.80 with 7,244 shares crossing the exchange. MPC Caribbean Clean Energy traded just 100 shares, in gaining $36.94 to close at a record high of $190, NCB Financial advanced $3.93 with an exchange of 14,302 shares to close at $203.99, PanJam Investment declined by $1 and closed at $100 after trading 3,608 shares, Sagicor Group added 50 cents, after 35,923 shares changed hands to settle at $67.50.Scotia Group closed $3.50 lower at $56, after swapping 27,482 shares, Seprod lost 40 cents to settle at $50.60 trading 14,505 shares and Stanley Motta closed 40 cents lower to $5.60 with 126,539 shares changing hands.
Trading in the US dollar market ended with Proven Investments being the sole stock trading 9,717 units valued at $2,622 to close at 26.98 US cents with the market index gaining 0.08 points to 196.74.

 

IC TOP 10 MPC hits new record high

Prices pulled back during the past week but the new IC TOP 10 BUY RATED main market stocks MPC Caribbean Energy surged to an all-time high of $153.06 and is still in the TOP 10 and seems poised to move higher with no sellers in sight.
Seprod returns and Scotia Group moved out to be the only changes to the main market list. Jetcon Corporation, Caribbean Cream and Caribbean Flavours return to the Junior Market TOP 10 replacing CAC 2000, Dolphin Cove and Jamaican Teas.
The three most attractive Junior Market stocks are Iron Rock with projected gains of 257 percent, followed by Caribbean Producers with likely gains of 237 percent and tTech with projected gains of 208 percent.
Radio Jamaica closed the week with projected gains of 138 percent as the leading main market stock followed by Berger Paints with projected gains of 132 and Carreras with projected gains of 112 percent.
The main market, closed the week with the overall PE of 17.7 down from 18.3 the previous week and the Junior Market is down to 11.6 from 12.1 based on current year’s earnings. The PE ratio for Junior Market Top 10 stocks averages 7.7 compared to 8.4 the previous week and the main market PE is now 10.5. These levels of PE ratios point to big upside for TOP 10 stocks.
The TOP 10 stocks now trade at an average discount of 33 percent to the average for the Junior Market Top stocks and main market stocks trade at a discount of 41 percent to the overall market.
TOP 10 stocks are likely to deliver the best returns to March next year. Projected earnings, for each company’s current fiscal year, are used in determining, the selected stocks. The PE for and projected earnings for each stock are computed to show potential gains for the year, which are ranked in descending order. Potential values will change as stock prices fluctuate and will result in movements of the selection in and out of the lists for most weeks. Earnings per share are revised on an ongoing basis as new information is received that can result in changes in and out of the list.

This report is compiled by persons who may have an interest in the securities commented on.

JSE main market drops again – Tuesday

The Jamaica Stock Exchange main market dropped again on Tuesday, following declines on Monday with falling stocks just edging out advancing stocks, by one.
The market ended, with 39 securities trading in the main and US dollar markets, leading to 15 securities advancing, 16 declining and 8 trading firm, compared to 38 securities trading on Monday.
At the close, the All Jamaican Composite Index dropped 1,796.97 points to close at 573,936.41, the JSE Index fell 1,629.91 to 522,536.94 and the JSE Financial Index edged low by 0.21 point to end at 142.71.
Market activity ended with, 26,222,630 units valued at $112,910,151 in contrast to 30,106,418 units valued at $132,142,235 crossing the main market on Monday.
Sagicor Select Fund was the leading traded stock with 12.8 million shares accounting for 49 percent of total volume, Wigton Windfarm followed with 9.2 million units accounting for 35 percent of the day’s trade and JMMB Group 7.5% preference share with 1.2 million shares for 5 percent of the main market’s volume.
Trading closed with an average 690,069 units valued at an average of $2,971,320 for each security traded. In contrast to 813,687 units for an average of $3,571,412 on Monday. The average volume and value for the month to date amounts to 1,910,982 units valued at $10,894,008 and previously 1,987,289 units valued at$11,420,340 for each security traded. July closed with an average of 1,297,718 shares at $17,985,644 for each security traded.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading shows 8  stocks ending with bids higher than their last selling prices and 5 with lower offers.
In the main market activity, Barita Investments declined 75 cents in trading 11,303 units at $74, Caribbean Cement dipped $4.99 trading of 6,577 units to close at $85, Carreras climbed 65 cents in exchanging 19,796 shares to end at $8.75, Eppley closed trading of 650 units and gained 55 cents to end at $16.95. Grace Kennedy lost 25 cents trading 410,712 units to close at $69.75, Jamaica Broilers shed 85 cents in trading 127,245 shares to close at $34.15, JMMB Group declined 50 cents in trading of 130,430 units to settle at $51.50. Jamaica Producers closed with a loss of $2 at $24, after swapping 39,956 shares, Kingston Wharves ended market activity exchanging 10,795 shares to close at $63 after falling $6. Mayberry Investments climbed 38 cents and exchanged 182,339 shares to close at $9.40, MPC Caribbean gained $1 to end at $127 with 240 stock units changing hands, NCB Financial declined by $1.99 to settle at $215, in trading of 67,548 units, PanJam Investment lost $2.10 in trading 36,278 shares to end at $103. Portland JSX dipped 50 cents in trading of 15,000 units to settle at $7, Proven Investments gained $2.99 to end at $39.99 trading 2,933 shares. Pulse Investments climbed 34 cents and exchanged 5,604 shares to end at $3.59, Radio Jamaica closed 21 cents higher to close at a 52 weeks’ high of $1.90 with 260,019 stock units trading, Sagicor Real closed trading of 18,700 units and gained 35 cents to end at $11.50. Scotia Group gained $1 to end at $56, trading 17,018 shares, Supreme Ventures fell 95 cents in trading of 75,094 units to settle at $26, Sygnus Credit ended trading with 68,531 shares, after rising 77 cents to end at $23.85 and Wisynco Group closed trading of 268,339 units and gained 65 cents to end at $24.50.
Trading in the US securities market resulted in 20,663 units valued at US$5,288 changing hands with Proven Investments concluding trading of 20,663 shares to settle at 26 US cents leading the JSE USD Equities Index to lose 1.55 points to close at 190.56.

JSE major index jumps – Friday

The ongoing see saw trading pattern of the Jamaica Stock Exchange continued on Friday with the market indices making sizable gains after a big falls on Thursday.
At the close, the main and US markets had 32 securities traded, compared to 33 on Thursday leading to 14 advancing, 7 declining and 12 closing unchanged. The market closed with the All Jamaican Composite Index 3,765.48 points to 425,884.16 and the JSE Index advanced by 3,419.95 points to 388,005.75.
Market activity on the main market ended with 4,427,445 units valued $384,592,987 changing hands, compared to 17,912,213 units valued $156,798,185 units trading on Thursday.
MPC Caribbean Clean Energy led trading with 2.69 million shares, accounting for 61 percent of total main market volume, followed by Carreras with 817,258 units and 18.5 percent of the day’s trades and Wisynco Group with 264,825 units for 6 percent of volume traded.
Market activity ended with an average of 147,582 units valued at $12,819,766, in contrast to 597,074 shares valued at $5,226,606 on Thursday. The average volume and value for the month to date amounts to 158,599 shares at $3,037,176 for each security, compared to 159,231 shares at $2,439,461 previously. Trading for March resulted in an average of 438,501 shares at $9,851,307, for each security traded.
IC bid-offer Indicator|The Investor’s Choice bid-offer indicator ended with the reading showing 9 stocks ending with bids higher than their last selling prices and just 4 closing with lower offers.
In main market activity, Barita Investments fell 90 cents to close at $42, with an exchange of 5,700 shares, Caribbean Cement rose 61 cents to $64.12 with 17,700 shares changing hands, Jamaica Broilers climbed $2 in exchanging 22,080 units to end at $32, Jamaica Producers declined 50 cents to close at $21.50, after trading 38,562 stock units. Jamaica Stock Exchange gained 30 cents and ended at $17.50, trading 97,043 shares, Kingston Wharves jumped $3 to settle at $71, trading 6,989 units, Mayberry Equities rose 60 cents to end trading of 43,242 shares at $9.80, Palace Amusement  climbed $50 to close at $1,300 with 100 stock units changing hands. Sagicor Group jumped $4.03 to end at $44 in an exchange of 13,544 shares, Sagicor Real Estate Fund  added 44 cents to end at $9.10, trading just 60,018 shares, Seprod rose $1.45 and closed at $43.45, trading 6,934 shares and Stanley Motta gained 33 cents and ended at $4.55, with an exchange of 10,448 shares.
Trading in the US dollar market ended with 83,732 shares trading with a value of US$10,226. Proven Investments  closed at 23 US cents, with an exchange of 13,000 shares and Sygnus Credit Investments ended trading of 70,732 units at 10 US cents. The JSE USD Equities Index fell 1.87 points to close at 177.64.

Equityline the latest JSE IPO

Equityline Mortgage Investment Corporation a Canadian company is the latest company offering shares to the public to take up. MPC Caribbean Clean Energy IPO to raise US$50 million is currently opened with a price per share of J$130 or US$1 in the Trinidad market.
Equityline is issuing up to 5 million Series A preferred shares to raise US$10 million at a price of US$2 per share. With the opening of the issue set from December 10, 2018 and scheduled to close on December 31.
If the Invitation is successful in raising at the minimum capital of 2,500,000 shares is met, the shares will be listed on the Jamaica stock exchange. If fully subscribed to, US$9.4 million of the proceeds will be used to acquire a portfolio of mortgages.
The Corporation has specifically targeted investments in mortgages where the yield and other fees generated will enable it to pay out a cumulative monthly dividend at a rate of 8% per annum on the shares. For each fiscal year ending December, the Corporation intends to pay a surplus special dividend equal to the taxable income for that fiscal year and capital gains dividends equal to the Corporation’s taxable capital gains for that fiscal year, less dividends previously paid.
The Corporation was incorporated in January 2018 under the Business Corporations Act (Ontario) with the intention of qualifying as a mortgage investment corporation under the Income Tax Act (Canada). The Corporation has not undertaken any commercial activity since incorporation.
The principals behind the Corporation have a history of operating in the mortgage lending business in Ontario. The Manager believes that it has a specialized skill set in this sector of the mortgage lending market, and therefore has established the Corporation for the purpose of bringing those business skills to the public. The Corporation focuses its investments primarily in urban markets and their surrounding areas, which the Corporation believes are typically more liquid and provide less volatile security for mortgage loans. The Corporation focuses its investment in Ontario, however, the Corporation’s Asset Allocation Model permits the Corporation to invest in mortgages across Canada if the Manager deems it to be advisable. The Corporation intends to further grow its portfolio by periodically raising capital through equity offerings and using the proceeds of such offerings to fund additional mortgages generated through the Manager or other sources. As a MIC, when calculating its income tax payable in Canada, the Corporation may deduct dividends that are paid from income to reduce corporate income tax. The Corporation intends to pay out all of its net income and net realized capital gains as dividends with the result that the Corporation will not pay any income tax. To reduce its tax owing to zero, the Corporation may pay surplus dividends, after payment of all dividends on any Preferred Shares, at the end of the fiscal year. Taxable dividends, other than capital gains dividends, are treated as interest income to Shareholders for Canadian tax purposes.
Both IPO offers are more aligned with persons looking for income than for capital appreciation, the same could also be true for other energy based entities to come that have no expansion plans that will be funded by internally generated or borrowed funds.