NCB Capital stock talk

September 20, 2017 by

NCB Capital Markets (NCBCM) recommends that investors maintain focus on stocks of companies with diversified revenue streams by operations, geography and currency in its latest recommendations on the Jamaican stock market.
According to the brokerage house, main market companies tend to have more mature operations, stronger fundamentals and are likely to pay more attractive dividends for investors heavily dependent on cash flows. This should form the core of a moderate investor’s equity portfolio. Investors with the appropriate risk appetite should also take a closer look at some Junior Market stocks given that the potential for growth is greater than their main market counterparts. More aggressive investors should also consider taking an active approach to stock market investing by crystalizing gains on stocks that are trading above their fair value estimates, with a view to re-enter at more favourable prices in the near term.

Jamaica Broilers is a recommended buy by NCBCM

Interestingly, there are only three stocks recommended as buys, with six stocks placed on the sell list.
NCBCM recommends investors buy Jamaica Broiler with a forward price of $24, JMMB Group with a forward price of $23.80 and PanJam Investment with a forward price of $43.63.
The brokerage house is recommending selling Caribbean Cement, based on their assessment that the fair value price for the cement producer is $29.92 which is below the current price of $29.99, also on the sell list is Honey Bun, that they are saying that the PE ratio and price to book multiples for Junior Market manufacturing companies were used to derive a fair value estimate of HONBUN with a forward price of $3.70. Jamaica Producers is on the sell list as well with a forward price of $12.99 based on a price to book valuation, Mayberry Investments’ forward price is put at $3.95 and therefore a sell NCBCM says. The fair value of Scotia Group is estimated at $46.48, which is below the current price. The projected dividend yield of 3.5% is not sufficient to offset expected capital loss the NCB Financial brokerage arm says.

Scotiabank is a recommended sell by NCBCM

Stocks that are recommended as holds are Carreras based on the justified P/E and Dividend Discount Model resulted in valuation for Carreras up to $113.91 per share. Kingston Wharves forward price is $29.24, close to existing market price and Sagicor Group with fair value estimate of $34.21.
Ratings Definitions| BUY: The company has sound or improving fundamentals that should allow it to outperform the broader market over the next 12 months. The risk factors to achieving price targets are minimal.
HOLD: We believe the stock is fairly valued at the current price. The company may have issues affecting fundamentals that could take some time to resolve. The risk factors to achieving price targets are moderate. Some volatility is expected.
SELL: The stock is overpriced relative to the soundness of the company’s fundamentals and long-term prospects or the stock is fully priced.

Filed Under: Company News, JSE Combined, Stock Market Tagged With: , , , , , , , , , , , , ,

Barita in takeover talks

August 4, 2017 by

Barita closed at $6.85 on Thursday.

Well known brokerage house, Barita Investments is currently in discussion for the sale of majority shareholdings in the Company.
A release from the company to the Jamaica Stock Exchange on Thursday advised that the Company has received an offer to acquire the majority shares and that the offer is under consideration by the Company’s Board of Directors and that discussions continue, pending the preparation and conclusion of definitive agreements.
The 76 percent majority shareholder with 339,975,664 shares and chairman, Rita Humphries-Lewin who started the company from the 1970s, is currently in her 80’s and close to retirement, making the offer opportune for her.
The offer comes at an interesting time just after Proven Investments closed their rights issue that raised US$16,547,873 (J$2.1 billion) resulting from the sale of an additional 68,949,472 ordinary shares. Barita could be a good fit for them as well as others within the sector, especially with an established Unit Trust portfolio. In the past investors were of the view that Barita could make a good fit for Mayberry Investments. Information glean suggest that they are not one of the arties showing an interest just now. Victoria Mutual Group has just started a Unit Trust schemes but the cost of a start up is high until it gets to a critical mass, Jamaica National has no unit trust portfolio and just started in the stockbrokerage business. Barita would make a great fit for them but it is unsure that their Chairman, Oliver Clarke would want to sanction that move at this time.

VMBS seems to be an interested party.

Barita has 445.877 million shares issued with a market capitalization of just over $3 billion, a simple majority holding would cost just over $1.5 billion at current price, assuming a price higher than the current one would result in a higher sum. The amount of capital raised by Proven would translate to $10 per share for a simple majority in Barita. IC Insider.com projects earnings for the current year at 90 cents. With the listed investments banks trading at PEs around 11 times, 2017 earnings, a reasonable value of $10 per share seems probable. With the company having unrealized gains not showing in the normal profit, a price around $10 should be attractive to both buyers and sellers at this time. An investor with cash would want to get as much of the shares of the majority owner, but with a mandatory offer having to be made to minority shareholders, they may want to go for a smaller amount initially with 65 to 70 percent looking viable. NCB Group have been on expansion run as well and the combination of NCB Capital Markets and Barita could create synergies. NCB group owns all of the investment arm making a merger with Barita down the road very viable.
Barita is primarily involved in stockbroking, Unit Trust management and repo business. The Unit Trust business that is poised to grow rapidly in a low interest rate environment, would be a big attraction for Proven who currently have no such business within their portfolio.

Filed Under: Breaking News, Feature Stories, Street News & Views Tagged With: , , , ,

Over US$5,500 shares for PBS investors

July 16, 2017 by

Investors in the recent public offer of Productive Business Solutions’ ordinary shares, will end up receiving the bulk of what they applied for, with the minimum of shares allocated worth the equivalent of J$700,000.
A release from the brokers for the issue, NCB Capital Markets, advised that the basis of allocation resulted in all the Reserve Shares allocated to Portland Private Equity Funds with full allotment up to US$15,000,000, the PBS Employees, will receive full allotment up to US$4,000,000 and subscribers from the general public will receive allotment up to US$5,500 and any amount in excess of this amount will be pro-rated. The release did not state the rate of pro-rating the balance.
The lowest amount allocated for full allocation is equivalents to 10,000 shares and would mean that applications from the general public would be over 450 applicants, coming from 4.55 million shares that were allocated to the general public. PBS therefore raised the full US$41.5 million offered from the issue of ordinary shares at 55 US cents each.
PBS reported revenues rose of US$42.45 million for the March 2017 quarter up from US$39.32 million in 2016, with profit rising to US$838,000 before taxation of US$389,000 from a loss the year before. According to the prospectus, the stock is slated to list on the Jamaica Stock Exchange main market and the Barbados Stock Exchange International market.

Filed Under: Initial Public Offers Tagged With: , , , ,

PBS & Express Catering over the top

July 12, 2017 by

NCB Capital Markets, brokers to the initial public offer of ordinary and preference shares for Productive Business Solutions which opened July 5, 2017 closed on Tuesday, July 11 for the Ordinary Shares at the price of US$0.55 per share.
The brokerage house, stated that the basis of allocation to be communicated later. The Invitation for subscription by the Company in respect of at a price of J$100 per share remains open and the public will be duly advised when same is closed. The original date for closure of both issues was set for July 26.
PBS issue was seeking to raise US$41.5 million by ordinary shares, with US$8.7 million of it to be used to International Finance Corporation. The IPO also includes 25,800,000 9.75% Redeemable Cumulative Preference Shares denominated in Jamaican dollars. The issue allocated 27,272,727 of the ordinary shares for Portland JSX, 7,272,727 units for staff with 4,545,455 shares for the General Public.
Part of the proceeds will be used to paid debt of US$17.45 million and working capital of US$13.85 million.

Ian Dear, Managing Director of Express Catering

For the year to December 2016, a loss of US$3.3 million was incurred down from a profit of $1.2 million in 2015. Revenues fell in both years to $171 million in 2016 from $194 million in 2015 and $202 million in 2014 when a small loss was incurred. Finance cost in 2016 increased by $2.6 million. The increase is attributed primarily to interest associated with the increase in debt of $998,000, FX loss of $920,000, and amortization of deferred expenses associated with the bond of $724,000. In the March 2017 quarter revenues rose to US$42.45 million from US$39.32 million with profit rising to US$838,000 before taxation of US$389,000 from a loss the year before.
PBS has borrowings of US$66 million with US$10 million due to related parties as at December 2016. The prospectus indicates that the shares are to be listed on the main market of the Jamaica Stock Exchange and on Barbados Stock Exchange’s International Securities Market, subsequent to listing in Jamaica.
Reports reaching IC Insider.com is that Express Catering was oversubscribed with the issue closing this morning as more than 1,000 applications were received by the broker for the issue, Mayberry Investments. The 100 percent Shareholder of Express Catering, Margaritaville St Lucia, offered 327,500,000 of existing shares for sale at $1.50 each, to raise approximately $490 million. Only 32.6 million shares were made available to the general public. The Stock is slated for listing on the Junior Market.

Filed Under: General News, Initial Public Offers Tagged With: , , , , , , ,

Scotia Equity Fund tops at 39%

June 26, 2017 by

Scotia Investments Capital growth Fund tops in last 12 months.

Getting the best out of one’s investment requires regular reviews and sometimes changes to what we may consider prime holdings. A look at some of the high flying Jamaica Stock Exchange listings this year, tells the story pretty well.
The prices of many rose to exceedingly high valuations, on the back of strong buying, only to see prices fall back later with selling exceeding buying, as investors who bought low, offloaded their holdings, booking profit in the process.
That many may go on to recover losses incurred as a result of buying close to or near the top. In a number of cases, it may take quite some time to recover fully, while other opportunities to profit may go by. The Jamaica Stock Exchange share traded at $13.50 but now trades at $7 or Cargo Handlers trading at a high of $30, and is now at $16 and could fall some more with the price still seeming to be about 50 percent too high. Getting back to the top for these two will be challenging in the short term.
What then is happening to securities that move in a more mild-mannered than stocks but better than money market instruments? Unit trusts are a pooled investment vehicle that are managed by experienced persons.
Many persons only want to know that their investment grow at a reasonable pace and not so much on the rate of return, that will not be good stewardship of their resources. Investors should review their portfolio at least once per year and make changes where needed.
A close look at the Unit Trust bi weekly report that are published in the Jamaica Observer and Jamaica’s Daily Gleaner is revealing. Not all stocks are alike so it is with the pooled Unit Trust investment funds.
The performance of the Unit Trust funds vary from one to another. The equity based growth funds varied from 39 percent growth in case of Scotia Investments Premium Growth Fund, to a low of 28.47 percent for Sagicor Sigma Equity Fund for the last 12 months to date. Coming second, is Barita Investments Capital Growth with 34.55 percent. For 2017 to June 22, NCB Capital Markets equity fund delivered 29 percent for the last 12 months, but is the leading equity linked Unit Trust funds with gains of 21 percent, Scotia Investments Premium Growth Fund, is just behind, at 20.4 percent, edging out Barita Investments with 19.7 percent. JMMB Fund Managers landed 31 percent for the last 12 months and 18.9 percent since January with their Income and Growth Fund.
Sagicor and VM Unit Trust lag in the equity category, while Barita Investments FX Growth Portfolio fell 10 percent for the last 12 months and 5.7 percent since 2017 and the real estate fund, slipped 3 percent for the last 12 months and 5.7 percent for 2017 to date.
Returns on money market funds have been much more competitive with returns mostly around 5 percent annualized.

Filed Under: Company News, General Business News, Investment Tips Tagged With: , , , , , , , ,

PBS IPO to launch end of June

June 22, 2017 by

Productive Business Solutions’ prospectus for its Initial Public Offer (IPO) is expected to be available to the public on June 29, when it will be posted on the Jamaica Stock Exchange website.
The company, a member of the Musson Group, is slated for listing on the US dollar market of the Jamaica Stock Exchange. The price will be $0.55 with the target is to raise US$41.5 million.
Revenues are said to be in the order of US$200 million with EBITA of US$20 million. The company is the largest dealer for Xerox equipment and generates 60 percent of revenues from the Central American region and 40 percent in the Caribbean with 5 percent in Jamaica. Other brands the company represents are Cisco, Oracle,GMC, Triplite and Engatel.
NCB Capital Markets are the brokers handling the deal IC Insider.com has been reliably informed. The shares will be the fourth listing of ordinary shares on the US$ market of the Stock Exchange.
According the company’s website, they are the largest IT and Technology Company in Central America and the Caribbean covering 22 countries and a US$202 million multinational company employing 1,300 employees. The Musson Group has Eppley, General Accident and Seprod that are listed on the Jamaica Stock Exchange.
The Musson Group is a diversified conglomerate operating most specifically as a distributor, logistics partner, manufacturer and sales and marketing company for many global brands, and some of its own branded products in 33 countries worldwide.
IC Insider.com has also understood that a major and popularly known group with a diverse product mix has recently taken a decision to list on the Jamaica Stock Exchange. Currently, it is not known the timing for the listing or the size of the amount to be raised. IC Insider.com will keep updated as soon as more information is available.

Filed Under: Initial Public Offers Tagged With: , , , ,

Stock stampede slows in Jamaica

January 31, 2017 by

NCB hits a new high of $63.20 on Tuesday in trading on the JSE.

Stock broker, NCB Capital Markets crossed 7,280,711 National Commercial Bank at $61.50, pushing the value of trading by nearly $448 million while Cable & Wireless chipped in with 4,711,717 shares valued at $5.6 million.
At the close, 15,833,084 units valued at $518,190,757 changed hands, compared to 12,789,852 units valued at $79,186,131 changing hands on Monday. Of the stocks traded, the junior market accounted for 1,610,629 units valued at $10,783,120.
At the close the all All Jamaica Composite Index rose 1,972.56 points to close at 232,026.62, the JSE Market Index rose 1,763.82 points to finish at 211,846.70 and the JSE combined index climbed 1,722.77 points, to close at 225,640.33.
The movement of the main market in the last 4 trading days, lifted the gains to 10 percent for January, after starting the year with moderate gains of 2.7 percent, up to Wednesday last week.
The market closed with 43 securities changing hands, with 18 stocks rising and 15 falling in the overall market, including 7 stocks rising and 9 falling, in the junior market. At the close 5 securities ended at new 52 weeks’ closing highs.
The average trade for the day in the main market ended at 592,602 shares compared to an average of 384,180 units traded on Monday. For the month to date, an average of 149,740 shares compared to an average of 111,605 units on the previous trading day. The average for the month of December ended at 549,379 units.
IC bid-offer Indicator| At the end of trading in the main and junior markets, the Investor’s Choice bid-offer indicator reading shows 16 stocks with bids higher than their last selling prices and 4 with lower offers.
In market activity, Barita closed at $6 with gains of 25 cents and 1,000 units changing hands, Berger Paints climbed higher by $1.04 to a 52 weeks’ closing high of $11.50, after trading 40,917 shares, Cable and Wireless lost 1 cent with 4,711,717 units being exchanged at $1.19, Caribbean Cement closed at $33.02, losing 49 cents as 46,128 units traded. Carreras closed at $66.75 with 291,409 units changing hands, 1834 Investments gained 16 cents to close at $1.50 after trading just 1,000 shares, Grace Kennedy had 34,709 units trading to close at $40.50, Jamaica Broilers gained 20 cents and closed at $15.40 with 16,118 shares changing hands. Jamaica Producers traded 309,026 shares, rising 44 cents to end at a 52 weeks’ closing high of $13.50, after trading as high as $15 in early trading, Jamaica Stock Exchange closed at $5.60 having traded 69,397 shares, JMMB Group closed at $16.90 with 129,575 units traded. Kingston Wharves advanced 99 cents, ending at $33.99 and trades of 45,268 units, Mayberry Investments traded 12,219 shares with gains of 15 cents to close at $5.15, National Commercial Bank rose to a 52 weeks’ closing high of $61.50, after gaining $1.50 after and swapping 7,498,281 shares, NCB traded as high as $63.20 in the morning session. Pan Jamaican gained $1 and closed at a 52 weeks’ closing high of $31 with 90,681 units being exchanged, Pulse Investments traded 8,000 units, losing 5 cents to close at $5.95, Radio Jamaica lost 5 cents, closing at $1.30 with 73,828 shares traded, Sagicor Group closed with 22,947 shares changing hands with a gain of 50 cents at $30.50. Sagicor Real Estate fund traded 49,769 units and closed at $10, Scotia Group ended trading at $38, losing $1 with 30,863 shares changing hands. Scotia Investments traded 3,849 units, gaining 2 cents to close at $33.02, Sterling Investments closed at $15.60 with trades of 23,000 units, Supreme Ventures lost 11 cents after trading 700,304 shares to close at $5.10 and Proven Investments traded 12,450 ordinary shares and closed at 23 US cents.

Filed Under: Feature Stories, JSE Main Market, Stock Market Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , ,

Whither local stocks – NCB Capital

August 29, 2016 by

stocksThe Jamaica Stock market enjoyed a great 2015 with stocks doubling in value, but the performance of the market in 2016, so far, has not been a spectacular as investors take a more cautious approach to the market that was revalued sharply last year, from a very low valuation.
At the end of August the local market had only record about a third of the gains made in 2015. Starting in October last year the market made a meteoritic rise.
Although, the market overall has not grown very much to date, several stocks have done well with the junior market having 15 stocks rising more than 30 percent, including 3 gaining more than 100 percent and one with more than 300 percent. Twelve main market stocks are up more than 30 percent to date.
One brokerage house just released a report on the market and a selection of stocks. Below is an extract of the report on the market. IC Insider is of the view that most of the comments below are on target, a few are off, but does not change the general thrust of what is said to be happening in the market. Comments by the brokerage house on individual stocks have glaring errors in some cases and forecast in others may be way off the mark, as such investors using the report would be well be advised to be cautious about buy or sell decisions based solely on the recommendations.

Honey Bun is one of the stocks recomended by NCBCM

Honey Bun is one of the stocks recomended by NCBCM

Stocks continued to trend upwards albeit at a much slower pace than last year since the start of the year, the report states. “The Combined, Main Market and All Jamaica Composite Indices have returned 7.9 percent, 5.7 percent and 5.8 percent respectively to August 26, 2016. This, however, represents a slowdown relative to the 28.8 percent, 28.5 percent and 29.1 percent increase recorded last year,” NCB Capital Market advised their clients in their latest investors’ newsletter.
The report went on to say, “Improvement in the outlook for corporate earnings and an increase in investor confidence continue to drive market activity despite the run up in prices. The Junior Market however continues to see robust growth registering a 24.7 percent increase to August 26th relative to 33.1 percent last year.”
“Positive earnings performances in key sectors such as the manufacturing and financial services assisted in renewing investor interest in the equities market. The Food, Beverages & Tobacco segment of the manufacturing sector experienced some expansion, thanks to a rebound in local and international demand for consumer products resulting in growth in both local and export revenues.
NCB hqtrLocal companies have been focusing extensively on expanding into international markets which provides income diversification and better prospects for growth. Meanwhile, financial companies have been weathering the low interest rate environment well, and have seen some benefit from larger loan portfolios as well as an increase in fees and commission income in light of active revenue diversification strategies. Lower inflation has also assisted in increasing efficiency and improved margins.”
“The stock market should continue to see modest activity helped by improving macroeconomic conditions, low interest rates and the restoration of Junior Market incentives. Of note, with the earnings growth recorded thus far, valuations have remained reasonable, with the average Main Market P/E declining to 9.3X in August from 10.6X in January. The Junior Market P/E also decreased to 13.7X from 18.7X earlier this year. Shares of financial and manufacturing companies are expected to be the star performers.

Caribbean Cream is one of NCBCM's recommendations

Caribbean Cream is one of NCBCM’s recommendations

The main risk to market activity however is an unfavourable turn in the business environment at the end of the IMF agreement next year. In addition, recent tax measures implemented could put upward pressure on inflation and impede the margin improvement being witnessed by companies.”
Strategy “In terms of identifying opportunities, we recommend that investors focus on stocks of companies with diversified revenue streams by type, geography and currency. Investors with the appropriate risk appetite should also take a closer look at some Junior Market stocks given that the potential for growth is greater than their main market counterparts. Companies such as Honey Bun and KREMI are expected to continue to do well. Another recommended strategy is for investors to take a more active approach to stock market investing by taking gains on stocks that are trading above their fair value estimates, with a view to re-enter at more favourable prices in the near term.”

Filed Under: JSE Combined, Stock Market Tagged With: , , ,

Proven sells Knutsford shares

December 22, 2015 by

Proven Mb siggn Knutsford Express traded a big block of 20,000,002 shares at $10.65 with the price falling 65 cents, helping the junior market to lose ground on Tuesday. The record of the company showed Proven Investments as the holders of the exact amount traded, representing 20 percent of the shareholdings with their brokerage house being the seller with NCB Capital Markets being the brokers buying.
The junior market index falling by 24.27 points to 1,666.91 points as the market retreated from the all-time high reached on Monday. Trading ended with 14 securities trading of with 7 advanced and 2 declined with 20,742,505 units, valued at $215,634,789 changing hands as 2 stocks closed at 52 weeks’ highs.
At the close there was 1 security ending with no bid to buy and 6 securities had no stocks being offered for sale. A total of 2 stocks closed with bids higher than their last traded prices while one closed with a lower offer.
In trading, Access Financial Services closed at $16 with 2,646 units changing hands, AMG Packaging closed with 8,964 units changing hands at $7, Blue Power had 581 units changing hands to close at $13.10, Caribbean Cream gained 43 cents with 13,000 shares changing hands at $3.70. JM trde Sht-22-12-15Caribbean Flavours traded 450 units to close at a 52 weeks’ high of $10, by adding 97 cents, Caribbean Producers closed at $4.62 to gain 17 cents with 290,856 units changing hands, Consolidated Bakeries rose 10 cents while trading 35,000 shares at $1.20, Derrimon Trading ended with 27,247 shares changing hands at $3.80. General Accident closed at $1.95 with 4,500 shares trading, Honey Bun finished with 2,000 shares changing hands, to close at $6, Lasco Distributors closed with 80,000 shares changing hands at 25 cents higher at $4.60. Lasco Financial rose 43 cents to close at a 52 weeks’ high of $3.55, with 241,631 shares changing hands and Lasco Manufacturing lost 55 cents to close at $3 with 298,484 shares trading.

Filed Under: JSE Junior Market, Stock Market Tagged With: , , , , , , , , , , , , , , , , , , ,

tTech to refund JCSD fees

December 21, 2015 by

TtechSubscribers to the initial public offering of the tTech shares who did not pay the JCSD fee of $134 with their applications will not be required to pay the amount and investors who actually paid will be refunded in full, Ramon Pitter of NCB Capital Markets, brokers to the issue informed IC Insider today.
Pitter said management agreed to the proposal from the brokerage house of the position recommended to them.
IC Insider learnt that the level of subscription was higher than first disclosed that the level of oversubscription now stands at close to 400 percent. Allocation of the shares has not been fully determined, Pitter indicates that all successful applicants will get at least the minimum of 5,000, with amounts over that amount to be determined when the final numbers have been agreed. The allocations should be know before Christmas with trading likely to commence before the year closes.
CAC 2000 public issue which was closed on Friday, is said to be over the amount by mid-day of Friday. The level of oversubscription was unknown earlier today, but seems not to be heavily over, with closer on the same day but ahead of the official closing date of Wednesday December 23.

Filed Under: Initial Public Offers, Stock Market Tagged With: , ,