Barita is stock to watch this week

September 17, 2018 by

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.

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Under 1,000 investors bought Stanley Motta

September 2, 2018 by

Stanley Motta shares were recently listed on the Main Market Jamaica Stock Exchange in late August after a successful initial public offering (IPO), which raised $4 billion for the Musson Jamaica, the sellers of the shares.
Investors were given the opportunity to be a part property rental business located at 58 Half-Way-Tree Road next door to New Kingston, the country’s premier business centre. The IPO which opened July 6 and closed on July 20, attracted just under 1,000 investors and is one of the issues since 2018 with the lowest number of investors who bought into the issue. That is not surprising as the issue was geared to long term investors. Since listing the stock that was sold at $5.31 has fallen in price and last traded at $4.60 but could well increase significantly, as it now boast a PE ratio of just 10 at the latest price.
58 Half Way Tree Road, boasts five buildings with more than 230,000 square feet of office space for BPOs and other technology-based companies.

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

Stanley Motta list Wednesday

August 21, 2018 by

58 Half Way Tree Road owned by Stanley Motta.

After more than a month from closing of initial public offering (IPO) in July, Stanley Motta will be listed on the main market of the Jamaica Stock Exchange on Wednesday.
The company successfully raised $4 billion from the sale of 757,818,862 ordinary shares to the public at $5.31 each. The shares will start trading after the listing of the company when trading commences at 9:30 in the morning. NCB Capital Markets, was the lead arranger and broker for the initial public offering that closed on July 20. The issue was just subscribed to, with NCB Capital Markets picking up a relatively small amount of the units.
The Stanley Motta own property at 58 Half Way Three Road in Kingston comprises  200,000 square feet rentable space, is said to be the Caribbean’s largest technology park, which is set to employ more than 5,000 Jamaicans within the Business Process Outsourcing (BPO) and technology industry, working for international brands like Alorica and Amazon.
Rental income for a full year is likely to be in the order of US$2.5 million with most expenses picked up by tenants, it should net out around the same amount tax free. The yield on investment will translate to just under 7 percent.

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

Record run for IC TOP stocks

July 8, 2018 by

Kingsley Cooper Chairman of Pulse that gained 67% during the past week.

Pulse Investments, in the main market TOP 10, up to the week starting June 25, jumped 67 percent this past week, to close at $3. Current listings, Caribbean Cement traded at $45 and Grace Kennedy at $56 both at 52 weeks’ highs during the week.
Former listing, Derrimon Trading ordinary share traded at an all-time high of $20.50 during the week while, the preference share traded at $2.45 for at a new high. The week closed out with 138 Student Living, falling to a 52 weeks’ low of $4.40 but C2W Music climbed to a 52 weeks’ high of $1.30 as the main market moved within just 300 points of the record high reached on June 13, while the Junior Market traded at the highest level during the week, since December last year.
There is just one change to the TOP 10 listings at the end of the week, with Stationery and Office Supplies that just slipped off the Junior Market list at the end of the previous week returning after Caribbean Producers that dethroned it in the previous week was squeezed it out, as Carib Producers rose to $5.50 from $5.10 at the end of the previous week.
With the average PE ratio for Junior Market Top stocks at 6.2 compared to an average PE for the overall market of 11, based on 2018 estimated earnings and the main market PE at 7.9 for the top stocks, compared to a market average of 13, suggest that the rest of the year should deliver better returns than the first half. A look back on the markets shows that they made noticeable rise in August last year, a pattern that goes back several years and could well do so again.
The sharp reduction in Bank of Jamaica policy rate to an unprecedented 2 percent and Treasury bill interest rates to record lows of 2.5 percent, is set to push stocks values much higher unless profits for most of the listed companies decline. The shortage of supply of many listings continues and is set to result in a big rise in prices going forward before supplies will be able to satisfy what is likely to be a rising demand.
Last week prospectuses for Stanley Motta and Mayberry Jamaican Equities were published and this week Indies Pharma is released. The first two are not priced to bounce based on the underlying nature of these companies. Stanley Motta is a real estate play that will provide income that is better than most fixed interest securities with moderate capital appreciation going forward, while Mayberry Jamaican Equities is a closed end mutual fund, growth is going to depend of appreciation in the investments held or to be acquired. Indies Pharma, with IC Insider.com preliminary earnings estimate for 2018 of 16 cents per share, could get a bounce sometime after listing and could reach $2.40. The stock sits in the mid-range of IC Insider.com’s ranking of Junior Market stocks with a PE of 10 just a bit less than the average of 11 for the market but most IPOs have traded around 15 times the current year’s earnings.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 45 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be of 20 times earnings and main market stocks traded at a discount of 39 percent to the market.
 Stocks to Watch The stocks to watch this week include, NCB Financial. PanJam Investment could move higher again, as there continues to be buying but there is very limited supply of the stock on offer. Radio Jamaica that came for increased buying recently seems to be seeing supplies coming to market at $1.20 or higher and could get more attention with the network broadcasting the popular world cup matches as adverting revenues should climb from the coverage. Others worth watching include Caribbean Cement, Berger Paints with little selling, Grace Kennedy for which there is also limited supply and Pulse Investments. In the Junior market, Demand for Derrimon Trading should continue with a resolution to be voted on at the upcoming AGM to split each share into 10 units. Supplies for Stationery and Office continue to trade around the $8 mark with limited supply, the stock could move higher in coming days or weeks. Jamaican Teas pulled back in the past week from $5.50 to $5 this week, but with limited stocks being offered for sale, is worth watching.

Filed Under: Buy Rated, Stock Market, Stocks to watch Tagged With: , , , , , , , , , , , , , , , , , , ,

Indies Pharma IPO coming this week

July 3, 2018 by

Last year summer was hot, very hot for the Jamaica stock market as for the first time there were multiple Initial Public Offers (IPO) on the local market at the same time.
This summer is turning out to be another hot one as well. Already, there are two new issues out with Stanley Motta and Mayberry Jamaican Equity to open this week.
Information reaching IC Insider.com is that another Montego Bay based company, Indies Pharma will issue its prospectus by the end of this week, to raise around $400 million. The issue is likely to be priced at just under 10 times 2017 earnings but slightly less, based on earnings for 2018, IC Insider gathers. According to the company’s website, they have approximately more than hundred drug presentations in the market and have filed to have more than 350 drugs licensed at the Jamaica Ministry of Health and hope to capture 10 percent of the local market after they obtain the licenses. The broker handling the offer is GK Capital.
IC Insider also gathers that there is a venture capital firm offering shares in a private placement currently.

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

Motta for income & long term gain

July 3, 2018 by

The Musson Group is disposing of all their interest in Stanley Motta Limited in a scheduled sale of all the 757,818,862 ordinary shares currently owned.
Our source states that the business which is a solely a real estate venture is not part of Musson’s core business. If the shares are listed it would be the fifth company connected to the group to do so.

ALorica, parent company of the prime tenant at 58 Half Way Tree Rd.

The offer has 227,348,547 shares reserved mostly for family members of the majority shareholders of the Musson group and 529,970,315 units for the General Public for purchase at $5.31 per share. All the net proceeds will be payable to selling Shareholders. Sources indicates that General Accident Insurance will make be taking up a large block of the shares that offered to the public.
The Company intends to apply to the Jamaica Stock Exchange for the listing on the Main Market of all the Shares and to make such application as soon as is conveniently possible following the close of the offer. The offer opens on July 6, with July 20 set as the closing date.
A business process outsourcing and technology park consisting of five buildings totalling over 200,000 square feet of rentable commercial office space at.
The company owns 58 Half Way Tree Road in Kingston, next door to the new Kingston, comprising 200,000 square feet of rentable space that is fully leased with the lease quoted in US dollar. Tenants are responsible for all expenses arising by reason of occupation, including insurance, property tax and maintenance expenses. The weighted average tenor and annual rent per square foot are 4.7 years and US$12.09, respectively.
The anchor tenant is Jamaica Agent Services Limited, the local subsidiary of Alorica Inc. Alorica is a US based global business process outsourcing firm and the third largest provider of customer experience solutions in the world. The company has over 100,000 employees and operates from 140 locations in 16 countries around the world in North America and the Caribbean, Latin America, Europe, China, the Philippines, and Japan. Alorica serves over 600 clients many of which are on the annual list of the 500 largest companies in the United States as compiled by Fortune magazine. Under the terms of Stanley Motta’s two leases with Alorica, who took possession of Units 2, 3 and 4 each as a “cold hard shell” and paid to complete the buildings at its own expense including all interior walls, ceilings and finishes.

Site plan of 58 Half Way tree road.

The complex will be managed by Felton Property Management Services Limited, a subsidiary of Musson. Felton will be responsible for all day-to-day on-site property management, administration and accounting services.
The property is a designated Free Zone, accordingly, Stanley Motta is exempt from corporate income tax on the rental income of Free Zone property.
The Board expects to distribute approximately 90% as dividends subject change from time-to-time if circumstances dictate.
The Projected Valuation obtained from an independent appraiser, using the income capitalization approach, for Unit 4 at completion is US$21.3 million or approximately $2.63 billion using rates of exchange as at December 31, 2017 and $2.79 billion using the weighted average selling rate according to the Bank of Jamaica as of June 19.
The Company’s sole source of direct income is from the rental of units in the technology park. Its only other source of income is from dividends from Unity Capital, whose sole income is derived from the rental of office space in its building at 58 Half Way Tree Road. The lack of diversification means that the Company is particularly exposed to risks affecting the property market.
The Invitation is underwritten by the Underwriter up to a maximum of the equivalent of US$21 million.
The stock is not for all investors in the short term. Investors looking for relatively high return in US dollars with modest capital appreciation over time may find this an attractive offer. While most investors may view the income in US dollars as a big positive, they ought to be aware that continued devaluation of the local currency going forward is not guaranteed. Of note is that the rental income for a full year is likely to be in the order of US$2.5 million with most expenses picked up by tenants, it should net out around the same amount tax free. The yield on investment will translate to just under 7 percent. The property has room for some amount of expansion which is done could increase the revenues and profit. The new leases while priced at $12 per square foot is set to rise to $14 dollar at renewal in 5 years and should go higher on renewal thereafter.
With Jamaica, on target to lower the fiscal deficit to 60 percent of GDP and with government maintaining balanced fiscal operations inflation going forward is likely to remain low and should result in low interest rates, against this back drop ground, the income from this operation could see investors ultimately acquiring the stock as a good income play and then drive up the price over time.

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

Grace, CPJ, Palace & Salada in TOP 10

July 1, 2018 by

Jamaican stocks have not had a spectacular year with six months having elapsed so far. The main market grew 6 percent and the Junior Market is up just over 11 percent for the year to date.
Palace Amusement with an increase of 164 percent was the only stock to double in price, C2W Music and Express Catering came close with more than 90 percent gain, while former TOP 10, Stationery and Office Supplies came in with an attractive 63 percent.
With the average PE ratio for Junior Market Top stocks at 6.2 compared to an average PE for the overall main market, of 11, based on 2018 estimated earnings and the main market PE is 7.9 for the top stocks, compared to a market average of 13, suggest that the rest of the year should deliver better returns than the first half. The sharp reduction in Bank of Jamaica policy rate to an unprecedented 2 percent and Treasury bill interest rates to record lows of 2.5 percent, is set to push stocks values much higher unless profits for most of the listed companies were to fall. A factor that is at play that is not known to the vast majority of investors, is the lack of supply for many stocks. The shortage of supply is set to result in a big rise in prices going forward before supplies will be able to satisfy what is likely to be a rising demand.
Out of the top lists are JMMB Group that rose by week end while Jamaica Broilers earnings was downgraded to $2 per share based on lower 2018 results from ongoing business operation and Pulse inched up in price to be squeezed out of the main market list. Stationery and Office Supplies slipped off the Junior Market list after Caribbean Producers just got squeezed in, with the price slipping to $5.10. Grace Kennedy, Palace Amusement and Salada Foods return to the top list with the latter price falling from $14.25 at the close of the previous week to $11.70 now. Importantly, Palace implemented price increases mainly between 4.8 and just over 8 percent for the movies, effective at the start of July, this resulted in projected earnings for 2019 now put at $150 per share, up from $140 at our last revision.
On Friday, prospectuses for Stanley Motta and Mayberry Jamaican Equity were published. These issues are not priced to bounce based on the underlying nature of these companies. Stanley Motta is a real estate play that will provide income that is better than most fixed interest securities with growth moderate going forward, while Mayberry is a close end mutual fund that growth is going to depend of appreciation in the investments held or to be acquired.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 45 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be of 20 times earnings and main market stocks traded at a discount of 39 percent to the market.
Stocks to Watch The stock closed without an offer at the close of the week. NCB Financial, PanJam Investment could move higher again this week as there continues to be buying but there is very limited supply of the stock on offer. Radio Jamaica that came for increased buying in the past week could get more attention with the network broadcasting the popular world cup matches as adverting revenues should climb as a result from the coverage. Others worth watching include Caribbean Cement, Berger Paints with little selling, Grace Kennedy for which there is also limited supply and Pulse Investments that traded a large volume on Wednesday and Thursday with the price shooting to $2.28 before pulling back on Friday. In the Junior market, demand for Derrimon Trading closed the week at a new high, during the past week and seems poised to move higher. Stationery and Office Supplies settled down during the week is set to rebound soon as selling around the $8 level starts to ease. Jamaican Teas pulled back in the past week to $5.50 but with limited stocks being offered for sale, it is worth watching.

Filed Under: Buy Rated, Feature Stories, Stock Market, Stocks to watch Tagged With: , , , , , , , , , , , , , , , , , , , , , , ,