Stock market activity in Trinidad on Tuesday, saw trading in 13 securities, of which 3 advanced, 2 declined and 8 traded firm as 603,335 shares changed hands, for $7,429,236. The Composite Index edged up by 0.41 points to 1,177.62, the All T&T Index declined by 0.14 points to close at 1,999.62 and the Cross Listed Index inched up by 0.13 points to 46.65.
Gains| Clico Investment Fund traded 70,814 shares valued at $1,540,905 and gained 6 cents, to end the day at $21.76. Jamaica Money Market Brokers with 230,942 shares changing hands for a value of $122,179, closed 3 cents higher at 53 cents, Republic Bank with 955 units at $120.05 up 2 cents, a new 52 weeks high.
Firm Trades| Stock trading unchanged are Agostini’s with 471 units at $17.75, ANSA McAL 10 shares at $66.49, Angostura Holdings 10 shares at $11, National Flour Mills with a volume of 172,504 shares traded for $215,574 to close at $1.25, Point Lisas Industrial Port Development 300 shares at $3.65, Sagicor Financial Corporation 13,200 shares to close at $7.05, Guardian Media 957 units at $19.75 and West Indian Tobacco which added 17,501 shares valued at $2,065,118 to close at $118.
Declines First Citizens Bank contributed 88,671 shares with a value of $3,223,211 to close 4 cents lower at $36.35, Grace Kennedy traded 7,000 units to close with a one cent fall at $3.63.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 3 stocks with the bid higher than the last selling price and 5 stocks with offers that were lower.
Trinidad’s sleepy market
Moderate demand on TTSE but 5 stocks up
Activity on the Trinidad Stock Exchange resulted in the trading of 10 securities on Friday of which 5 advanced, 3 declined and 2 traded firm.
A moderate volume of securities traded amounting to only 220,535 shares valued at $957,901. The Composite Index eased back by 0.89 points to close at 1,178.27, the All T&T Index declined by 2.73 points to 2,000.85 and the Cross Listed Index edged up by 0.13 points to close at 46.66.
Gains| In trading, First Citizens Bank moved 54 cents higher to close at $36.69 with 4,489 shares, First Caribbean International Bank traded 5,000 units at $5.76 for a one cent gain, Jamaica Money Market Brokers gained 2 cents to close at 47 cents, with 102,137 shares changing hands, for a value of $48,004. National Flour Mills traded 60,400 shares for $75,500 with the price closing 8 cents up, to end the day at $1.25, for a new 52 weeks’ high, Republic Bank had 1,335 shares changing hands to close 2 cents higher at $120.02, for a new 52 weeks’ high.
Firm trades| Clico Investment Fund traded 7,325 shares valued at $159,040, the price held at $21.71 and Scotiabank traded 2,622 units to close at $72.
Declines| Guardian Holdings lost a cent, to close at $14.14 in trading 2,000 shares, Trinidad Cement contributed 29,657 shares with a value of $65,245 while losing 10 cents, to close at $2.20 and Sagicor Financial Corporation added 5,570 shares valued at $40,605 and closed down a cent, at $7.29.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 2 stocks with the bid higher than the last selling price and 5 stocks with offers that were lower.
No winners to be found on TTSE
Market activity on Thursday resulted in the trading of 8 securities of with none advancing, 4 declining and 4 traded firm, only 41,934 shares traded valued at $2,251,206.
The Composite Index eased by 1.08 points to close at 1,179.16, the All T&T Index declined by 2.10 points to 2,003.58 and the Cross Listed Index edged down by 0.01 points to close at 46.53.
Firm trades| First Caribbean International Bank traded 540 units at $5.75, National Commercial Bank contributed 2,400 shares and closed at $1.17, Republic Bank had 12,718 shares changing hands for a value of $1,526,160 to close at $120, West Indian Tobacco added 1,378 shares valued at $162,604 and closed at $118.
Declines| Clico Investment Fund traded 19,700 shares valued at $427,699, the price fell 18 cents to end at $21.72, First Citizens Bank traded 1,148 units, 83 cents lower at $36.15, Grace Kennedy with 3,000 shares traded for $10,920 closed at $3.64 being down a cent and Scotiabank traded 1,050 units in falling 47 cents to close at $72.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 3 stocks with the bid higher than the last selling price and 4 stocks with offers that were lower.
Slight gain for Republic Q1 profit
Profit for the quarter of Republic Bank’s first quarter to December 2013 just barely rose to $303 million, up from $296 million in 2012 as net revenues inched up by 2.4 percent to $860 million from $840 in 2012. Operating cost rose faster than revenue gains, ending up at $449 million compared to $421 million in the prior period. It was not all gloom, as loan provision fell to just $2 million compared to $17 million in 2012 and share of associated profit came to $12.7 million versus just $44,000 in 2012.
Profit attributable to Republic’s shareholders came in at $291 million versus $285 million in 2012. For the full year to September 2013, the banking group reported profit of $1.17 billion. Territorially, in the latest quarter Trinidad accounted for $434 million in pretax profit up from $431 million in 2012. Barbados pretax profit contribution was down marginally to $39.4 million from $39.8 million and other territories contributed $63.6 million compared to $63.2million in 2012.
Loans grew by 6.5 percent annualized in the quarter, which is a slower pace than the 7.3 percent growth year over year to December. The difference is not great, but Republic will need to pick-up lending growth to start getting a reasonable growth in profits. There is much scope for increased lending with loans of only $25.6 billion lent out of a total balance sheet of nearly $58 billion in assets and deposits of $545.8 billion.
The Trinidad economy is estimated to have grown by 2.8 percent in 2013. Most likely growth will pick up in 2014. An improving economy should lay the foundation for an uptick in lending over and above what the bank achieved for the last fiscal year and help to move profit up at a faster pace than in the December quarter.
Republic Bank is an ICInsider Buy Rated stock. To view the full list, click here.
Related posts | Republic growth struggle | TTSE PE: Neal & Massy, Republic moves | T&T Inflation picks up
Republic growth struggle
Trinidad’s Republic Bank recorded profit attributable to shareholders of TT$1.17 billion for the year ended September 2013, an increase of only $11 million over 2012.
The performance reflects an operation that is highly influenced by the poor state of some of the economies the group operates in. While profit inched up in 2013, it is still below the $1.2 billion generated in 2008 and $1.34 in 2007 but well above $948 earned in 2009. Recovery has been slow as the main income generator, loans have been growing slowly. Things could pick up somewhat as its main market, Trinidad, has returned to positive growth but Barbados should continue to be tight with high fiscal constraints in place.
“Profit declined by $23.3 million or 29.6 percent in Barbados and a loss of $18.2 million was recorded in Grenada, mainly due to higher level of provisions for loans and investments and a general decline in business activities in both islands. In addition, a loss of $75.7 million was recorded on our investment in Eastern Caribbean Financial Holdings Limited. Improved performance in the commodity-exporting economies of Trinidad and Guyana off-set these declines.”
Republic saw losses for non-performing loan drop from $103 million to $57 million in the 2013. Net interest income barely moved ending at $2.18 billion up from $2.14 billion in 2012. Other income performed more robustly, moving from $1.1 billion to $1.26 billion in 2013. Operating expenses climbed 7.5 percent to $1.74 billion, a faster rate than revenues. The tax charge went up by 25 percent or $76 million to $383 million, well ahead of the pretax profit that increased by $46 million.
Based on the results, a final dividend of $3 per share and $1.25 interim dividend was paid for the year.
Investments | During the year, the remaining 34.86 percent minority shareholding in Republic Bank (Barbados) was acquired and a 40 percent shareholding was acquired in HFC Bank (Ghana). “Republic will continue to look at opportunities in the African continent that meet our risk profile as we seek to expand from this initial investment,” the company stated.
Financial Position | The Group’s total asset base stood at $57.6 billion with equity at $8.3 billion. Total liquid assets, which was fuelled by increase in deposits of $5.0 billion or 13.5 percent, stood at $19.8 billion at year end, an increase of $3.3 billion or 20.2 percent from 2012. Loans and advances grew by $1.9 billion or 8.2 percent to reach $25.2 billion following a growth of 6.6 percent in 2012. All territories achieves growth, led by Trinidad and Tobago with an increase of $1.6 billion or 10.2 percent, which accounted for 84.5 percent of the increase compared to the prior three years of flat growth.
Non-Performing Loans (NPLs) is at 1.4 percent for Trinidad and Tobago, the best in the Group and below the industry average in Trinidad and Tobago of 4.7 percent. However, Trinidad and Tobago which accounts for 68.9 percent of the Group’s net interest income, increased this category by 3.1 percent in 2013, after declining by 8.7 percent in 2012, primarily because of increase in loans and investments balances.
NPLs in Barbados at 11.7 percent and Grenada at 8.2 percent respectively are high and reflective of the poor economic conditions, leading to a higher overall Group NPLs of 3.7 percent.
Non-Performing Loans (NPLs) to gross loans stood at 3.7 percent. The NPL ratio rose by 4 basis points, mainly as a result of increased NPLs in Barbados and Grenada, but down from the 4.6 percent in 2009. Total specific provision as a percent of total NPLs is 37.2 percent, down from the 50 percent in 2012, mainly because of the higher level of collateral held for loans downgraded resulting in lower provisioning requirement.
Outlook | “We expect that economic conditions will be tough going forward. Nonetheless, barring any unforeseen event, we are confident that the current level of profitability will remain robust. The commodity exporting economies of Guyana and Trinidad are expected to drive our performance while tourism dependent economies of Barbados and the Eastern Caribbean are expected to face ongoing challenges with little or no growth. We remain cautiously optimistic that these economies will achieve growth in the near term as global economic conditions improve.” management concluded.
The group has much capacity for increased lending with only 60 percent of deposited funds lent out and is at the lowest level since 2003 when only 61 percent was lent and is well down from 72 percent lent out in 2008. Loan growth in the September quarter suggest that lending could increase around $3 billion for the current year. A faster pace than in 2013 and would help grow income at a level to beat the rise in costs. On the basis of the likely growth in loans, IC Insider is forecasting earnings of $9.50 cents per share for the 2013/14 fiscal year.
Republic Bank is an IC Insider Buy Rated stock
Related posts | PE Ratios: Trinidad still has good buys | Republic ups stake in Ghanaian Bank | Republic onto something good in Africa
PE Ratios: Trinidad still has good buys
Friday, 15th November 2013 | The prices of a number of Trinidad stocks have been inching up ever since the First Citizens issue was listed on the exchange in September. However, even as the prices of several stocks have moved up, there are still a number of securities that are highly undervalued.
A look at the chart or graph below shows where the best opportunities lie. However, we must point out that Republic Bank selling at a PE of 16 is a very compelling buy, versus First Citizens’ 24 or Scotia Bank’s 23.
Trinidad Cement, in spite of climbing well over 100 percent since it hit bottom earlier this year and the reporting of below par third quarter numbers, is another compelling buy that we highly recommend to investors.
Related posts | TTSE PE: Republic fails to hold on | Republic ups stake in Ghanaian Bank | TCL up 209% in two months
Image courtesy of Tungphoto/FreeDigitalPhotos.net
Ghana stocks now up 71.4%
Friday 11th October 2013 | The Ghana Stock Exchange closed the week on Friday at 2,056.27 points gaining more than 36 points for the week as 11 stocks recorded prices gains and 2 declined.
The market gained 71.4% year to date according to data from the stock exchange. During the week Guinness Ghana Brewery gained 14 percent as the price moved up by GH¢0.75 to close at GH¢6.20; the PE for Guinness is around 7 times 2013 earnings. Sam Woode Ltd, involved in publishing of educational books, printing and related businesses went up 50 percent but that was from GH¢0.02 to GH¢0.03; the last financial statements seen for Sam Woode is for 2010.
HFC Bank Ltd, the bank that Republic Bank in Trinidad now owns 40 percent, climbed by 5 percent to GH¢0.68 and Mechanical Lloyd Company gained 5 percent to end at GH¢0.33. Mechanical Lloyd are the exclusive agents for the sale and servicing of BMW cars and motor cycles, Ford vehicles, Massey Ferguson agricultural machinery and Delphi products in Ghana.
The Cedi is the Ghana currency, approximately GH¢2 to the US dollar.
Related posts | Big gains in Ghana Stocks | Republic ups stake in Ghanaian Bank | Ghana Stock Exchange rated best performing in Africa
Republic ups stake in Ghanaian Bank
Trinidad’s Republic Bank has increased its holding in HFC Bank Ghana Limited from 32 percent to 40 percent with the purchase of an additional 7.98 percent from one of the bank’s shareholders — Union Bank of Nigeria PLC.
The transaction involved 23,638,340 ordinary shares at a price of GHS 0.67 (USD 0.31) per share. This is the second such increase in Republic’s holdings in the Ghanaian Bank. The matter of Republic making a mandatory offer to all shareholder to acquire majority shares is still unresolved and this latest acquisition will probably make it more difficult to resist the demand by the Securities regulators for Republic Bank to proceed with the offer.
Republic Bank is an IC Insider Buy rated stock.
Related post | Republic onto something good in Africa | No change to Buy & Watch list
Republic onto something good in Africa
Republic Bank of Trinidad & Tobago (RBTT) acquired 8.79 percent of HFC Bank Ghana Limited in 2012 moving them into the fourth largest shareholder spot. Earlier this year, they increased to 32.02 percent making them the largest shareholder, above the Social Security & National Insurance Trust that held 77,588,794 shares or 26.18 percent.
The holding triggered the mandatory takeover requirement and resulted in an application to the Securities and Exchange Commission in Ghana for a waiver of the Code on Take Overs and Mergers. Republic Bank was informed by letter dated 24th June, 2013, that the Commission has denied its application for a waiver and has been advised to comply with the mandatory takeover requirement and make an offer for 42.98 percent of the shareholding in HFC Bank Ghana Limited.
A release from the Trinidadian bank states “Republic Bank is currently engaged in discussions with the Securities and Exchange Commission in Ghana and the Bank of Ghana regarding the next steps. Republic Bank looks forward to deepening its relationship with HFC Bank Ghana Limited and is committed to working with its management and staff to add value to its operations.”
Shares of HFC Bank Ghana Ltd (HFC) began the fourth quarter (Q4) of 2012 at a share price of GH¢0.45 (around J$23). The share price remained steady at GH¢0.45 to the end of December 2012, closing the quarter at its opening price. Thus, with a year-open price of GH¢0.45, the year 2012 closed with HFC shares registering no gain or loss on the share price. The price is now up to GH¢0.55 as of last Friday’s trading on the Ghana Stock Exchange.
HFC closed the year 2012 trading at a forward (annualised) Price-Earnings (P/E) multiple of 10.9 times, which was above the average of its peers which stood at 7.8 times as at December 31, 2012 and a Price-Book Value of 1.04 times. HFC Bank also paid interim dividends for the 2012 financial year and currently has a dividend yield of 5 percent, which compares favourably with its industry peers averaging at a dividend yield of 5.7 percent.
The fourth quarter of 2012 also saw the bank increase its stated capital by GH¢50 million through its private placement which was fully subscribed to. Consequently, the company issued additional shares of 112.42 million, and in addition to executive share options that were exercised in December 2012, the total issued shares for HFC bank stood at 296.36 million shares and a market capitalisation of GH¢133.36 million as at December 31, 2012.
In the year 2012 under review, the Group posted Net Interest Income of GH¢45.46 million up from GH¢39.74million, while profit after tax was GH¢15.42 million in 2012, up by 42.10 percent.
The Ghanaian bank is just the about a third the size of Sagicor Investments, with total assets of GH¢ 594.90 million, an increase of 36.74 percent and customer deposits increased by 35.6 percent to GH¢312.38 million up from last year’s figure of GH¢230.30 million.
Management’s Outlook | “The Bank is positioning itself to be a leading retail and SME focused financial institution in the country. We are therefore providing our staff with training and orientation to efficiently service the financial needs of the large SME market in Ghana. The Bank will also participate in financing of the oil and gas industry, infrastructural and residential real estate projects. Cocoa remains a major contributor to Ghana’s GDP, we will therefore strengthen our presence in the Country to respond to the needs of the industry.
The equity injection and the participation of strategic investors has among others, competitively repositioned the bank in the banking industry to take advantage of enormous opportunities within Ghana. HFC is poised to grow all aspects of its Universal Banking business to deliver value to its shareholders in the year 2013 and beyond. It is expected that these will impact positively on its share price performance. It is recommended that investors hold HFC shares to benefit fully.”
Ghana’s Economy | Ghana’s population is put at 25 million with a GDP per capita on a purchasing power parity basis is US$3,200, in comparison Jamaica’s is US$9,100 with a population of 2.7 million. The bank has a lot of room to grow based on size and the fact that the economy has been on a good growth path.
|
Country |
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
| Ghana |
4.3 |
3 |
3 |
5.8 |
4.7 |
5.4 |
5.9 |
6 |
5.5 |
7.3 |
4.1 |
5.7 |
13.6 |
The Bank of Ghana Composite Index of Economic Activity (CIEA) grew by 6.8 percent in December 2012 compared to 14.9 percent growth in 2011. A provisional estimate of the real GDP growth, according to the Ghana Statistical Service (GSS), was 7.1 percent in 2012.
Inflationary pressures were subdued in 2012 as depicted by trends in consumer prices ending at 8.8 percent in December 2012. The Policy Rate was raised by 250 basis points to 15 percent in June and maintained for the rest of the year, but the benchmark 91-day Treasury Bill rate rose from 10.7 percent in December 2011 to 22.4 percent in December 2012. The average 3 month deposit rate went up to 12.5 percent in December 2012 from 7.8 percent in December 2011, while average lending rates declined marginally from 25.9 percent to 25.7 percent in the same period.
Tax revenue amounted to GH¢11.6 billion, about 3.7 percent lower than the budget target of GH¢12.1 billion, mainly on account of lower company taxes, especially from oil companies. Total expenditure was 14.7 percent higher than the budget target in 2012. The resulting developments in the fiscal operations resulted in a deficit of GH¢8.7 billion (12.1 percent of GDP) against 6.7 percent targeted.
The stock of total public debt stood at GH¢33.5 billion (46.7 percent of GDP) in 2012, compared with GH¢24.0 billion (42.6 percent of GDP) in 2011 with external debt amounting to US$8.0 billion, compared with US$7.8 billion during the corresponding periods. The overall balance of payments surplus of US$546.5 million in 2011 was reversed, recording a deficit of US$1.2 billion in 2012. Gross International Reserves (GIR) at the end of 2012 was US$5.4 billion (3 months import cover) compared to US$5.5 billion in 2011. Private inward transfers through the Banks amounted to US$18.7 billion in 2012, representing a 4.9 percent growth over 2011. During the second half of 2012, stability was restored in the foreign exchange market, following a heightened volatility in the first half of the year, with the cedi experiencing a year-to-date depreciation of 17.5 percent as at December 2012 compared with 5 percent depreciation in 2011.
Major industries | Ghana is involved mainly in mining, lumbering, light manufacturing, aluminum smelting, cocoa and other food processing and shipbuilding. The major exports are gold and other minerals, cocoa, timber, and tuna. Imports include capital equipment, petroleum, and foodstuffs. The Netherlands, Nigeria, Great Britain, the United States, and China are Ghana’s major trade partners.
Insider call | Republic Bank is an IC Insider Buy Rated stock.
Republic Bank undervalued (TTSE)
Republic Bank out of Trinidad is reporting slightly lower profit for the six months to March this year compared with 2012. According to data released by the bank today profits before tax came in at TT$336.954 million or 6 percent less than the $358.97 in 2011 for the same quarter. According to the chairman, $49 million was an adjustment for the defaulted Grenada bond. On a quarter over quarter basis the December quarter was better than the March quarter by 16 percent while in 2012 the March was worse by 7 percent. For the six months to March, profits were flat with just a slight negative slant as the 4 percent improvement generated in December 2012 was wiped out by the reduced earnings in the March quarter.
After tax profits attributable to shareholders was slight better that the pretax performance as the March quarter slipped by 4 percent to TT$267.468 million, while the year to date earnings are just slightly up. Earnings per share for the six months is TT$7.27. Republic trades at just $108.90 or at a PE of just over 7 times this year’s earnings while Scotia Bank is selling at more than 20 times earnings. Republic has traded around 20 times earnings in the past and has much room to grow. What is apparently holding back the stock must be the fact that a large block of the shares is in the hands of the government and could be divested in the near term.
Loan and advances at March came in at TT$24.7 billion, investments was TT$7.7 billion and customer deposit and funding instruments amounted to TT$43.4 billion and total equity was TT$79.4 billion. The bank seems well capitalized, however, its operations reaches out into the wider southern Caribbean and some of those economies face difficult times.
