TTSE — Page 252

Republic onto something good in Africa

July 10, 2013 by IC Insider.com

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.

TTSE: AnsaMcAl trades heavy

July 9, 2013 by IC Insider.com

Tuesday, 9th July 2013 | Trading activity on the Trinidad & Tobago Stock exchange took place in 11 securities of which 3 advanced, 3 declined and 5 traded firm. A volume of 878,144 shares changed hands at a value of $24 1 million of which $16,745,549 was by main market stocks and $7,373,701 for mutual funds.

ANSA McAL traded 210,375 shares at a value of $13,989,938 closing 69 cents down at $66.50. Jamaica Money Market Brokers had a volume of 165,987 shares with a value of $74,694, Trinidad Cement contributed 97,696 units with a value of $97,696, while Sagicor Financial Corporation added 27,116 shares valued at $168,119. West Indian Tobacco traded 1,500 shares and closed at $117.50 up 25 cents

Clico Investment Fund traded 327,720 shares at $22.50.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer market sentiment indicator shows that bids for 2 stocks were higher with 3 stocks having offers lower than their last selling price.

Filed Under: Stock Market, TTSE Market Tagged With: Daily Trading, Trading Activity, TTSE

Ansa McCal profit up but it’s a sell!

July 9, 2013 by IC Insider.com

The Ansa McCal Group has delivered top line revenues of $1,439 million compared to $1,305 million in 2012, an increase of 10% and this translated to a 6% increase in pre-tax and after tax profit and a 6% increase in EPS over the prior year thanks to lower interest cost.

The real issue is that profit fell in the quarter before charging interest on loan funding. But for this, profit would have been down as the group reported operating profit of $211 million down from $222 million in 2011 first quarter. A $24 million reduction in interest cost based on a decision of the Group to reduce their exposure to the possibility of interest rates increases and paid down the level of indebtedness by reducing long term debt of $812 million in 2011 to just $13 million at the end of 2012, helped the Group to deliver the profit of $163.5 million after tax as opposed to $153.8 million in the 2011 period before non-controlling interest in subsidiary. Profit due to the Group’s shareholders amount to $142 million versus $132 million in 2012 or 82 cents per share. All this translate to cost rising faster than income. Not a great surprise as Trinidad has suffered from above normal inflation while the economy is essentially in a recession although 2012 showed moderate growth after three years of declines.

In 2012 the Group made profits of $634 million, in 2011 the profit was $597 million but that was down from the $621 million earned in 2010. However, the Group, looks to be on track to earn around $4 per share for 2013.

A report from the company’s management indicates that “the Group has seen improved performance in Manufacturing, Trading, Distribution, Automotive, Media and Services. The growth in Manufacturing is particularly strong in the construction sector, which indicates increased activity in the economy and this sector remains a key driver of national economic growth. The Group continues to be well positioned to deliver on key strategic initiatives which have been previously announced, inclusive of the new block plant and the ERP project. Based on these factors, we are confident that we are on track to meet our full year targets.”

Cash flow | It is not difficult to see why the loans were paid down in 2012 as the company is throwing off lots of cash with cash flow of more than $411 million for the first quarter helping to swell the cash to $1.78 billion at the end of March, up from December’s $1.366 billion. In 2012 the Group spent $409 million on fixed assets and in 2011, $387 million as they continue to invest for expansion and modernisation. The amount spent in 2012 includes the Group’s acquisition of a furniture manufacturing and retail of appliances and electronic and electrical equipment that operates in Trinidad and Barbados.

Financials | Interestingly, profits have been growing since 2008 but return on equity has fallen each year as the equity to debt ratio improves with the cost of debt being less than the return on equity. Only time will tell if management did the correct thing in paying down cheap debt instead of paying investors more in dividends. This is also a sign that the company is reaching or has reached a level of maturity in the market where its know-how is honed, hence investment opportunities have become limited to utilising its own funds and that of others.

Segments & results | Manufacturing, packaging & brewing enjoyed 10 percent increase in revenues and 34 percent in pre-tax profit, the Automotive, trading & distribution recorded a 12 percent increase in revenues and 41.6 percent growth in pre-tax profit, Insurance & financial services suffered a 1.3 percent decrease in revenues and 11.5 percent fall in pre-tax profit, Media including radio, television and newspaper, services & parent company, increased by 21 percent but generated a 15 percent drop in pre-tax profit.

Buy hold sell |The Group’s finances is strong with a well-diversified portfolio of businesses that can help it weather storms. Unless the Trinidad & Tobago economy springs back to life soon there is little hope for rapid growth in profits. The PE of the stock is around 17 this year’s earnings and the dividend yield is low with a dividend of $1.10 per annum, hence the stock would not be attractive to investors looking to invest for income purposes. The growth rate frankly does not warrant a PE of such heights for the stock. Investors should consider lightening up on this stock based on the above negatives.

The stock trades on the Trinidad & Tobago Stock Exchange.

Filed Under: Company News, Company Results Tagged With: Ansa McCal, TTSE

TTSE: Still marking time

July 8, 2013 by IC Insider.com

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Monday, 8th July 2013 | Price changes on the Trinidad & Tobago Stock Exchange were moderate ranging from an increase of 8 cents to a decline of 5 cents as trading took place in 14 securities of which 2 advanced, 4 declined and 8 traded firm. The total amount traded was $4.3 million as 935,265 units traded. The mutual funds contributed 118,600 units valued at $2.668 million to the total amounts that traded. The all Trinidad & Tobago index gained slightly to close at 1,828.28 but the cross listed and the composite fell moderately.

Trinidad Cement traded 667,304 shares valued at $667,304, followed by Jamaica Money Market Brokers with a volume of 91,242 shares being traded for $41,099 as the stock fell by 5 cents. National Commercial Bank contributed 18,654 shares with a value of $22,365, while Guardian Holdings added 12,300 shares valued at $199,475 while putting on 8 cents to close at $16.22.

West Indian Tobacco closed with a bid for 1,000 units at $117.50 the last traded price was $117.25 the offer is for 100 units at $118.

Filed Under: Stock Market, TTSE Market Tagged With: Daily Trading, Trading Activity, TTSE

Cement could be good for your pocket

July 8, 2013 by IC Insider.com

Last year, Trinidad Cement reported a huge loss of $390 million including a loss of $64 million due to minority shareholders in its subsidiaries. Compare that to results of the first quarter of this year, when the company was able to turn around their fortunes and recorded a surplus.

The Group recorded Earnings before Interest, Taxation, Depreciation and Amortisation (EBITDA) of $114.2 million, a 74 percent improvement over the results for the same quarter in 2012. Revenue for the quarter, increased by $117 million compared with the prior year as a result of higher cement sales volumes in Trinidad and Tobago by 52 percent, in Jamaica by 7 percent, and in export markets by 29 percent, coupled with higher selling prices in most markets. Concrete volumes from Ready Mix, a partially owned subsidiary, also exceeded the prior year period by 10 percent. As a result of the significant expenditure made in the latter part of last year, plant performance has been more reliable and efficient with clinker production exceeding prior year by 32 percent, which is partially due to the TCL strike in 2012, and cement production up by 21 percent.

Finance costs for the quarter increased by $13.9 million largely as a result of foreign exchange losses of $11.3 million arising from the 6.2 percent depreciation of the Jamaican dollar in the quarter. As a consequence of the above factors, the Group is reporting a Net Profit after Taxes for the first quarter of $14 million compared with a loss of $75 million in the prior year quarter. This translates to Earnings per Share attributable to shareholders of the parent of 7 cents compared with a Loss per Share of 25 cents in the prior year.
For the first quarter of 2013, the Group generated net cash from operations of $104 million and made principal and interest payments of $71 million on the restructured loans following the first payment of $51 million made in December last year. Additionally, as at March 31 2013, the Group is said to have met the three financial ratio covenants contained in the loan restructuring agreement.

Finances | TCL is carrying interest bearing debt of $2 billion at the end of March. The debt overwhelms equity of $695 million — not a very good position to be in. The principal repayment amounts to $100 million this year, which saves $10 million in interest payments per annum. In 2014, the amount of loan payment is $171 million. The cash flow so far seems adequate to meet the payments but there is not much wiggle room.

The company directors stated in the 2012 annual report that the Group ended 2012 in full compliance with the loan Agreement. The Board and Management continued to express concerns to the Lenders about several aspects of the debt restructuring that will be burdensome to the Group going forward. These concerns are the extent of interest costs, excessive legal fees, ongoing costs of financial and technical monitoring, costly overseas directors and the requirement for an additional and expensive foreign executive, the statement concluded.

Concern | Of major concern to the Group, must be the nearly 10 percent cost of funds plus the foreign exchange exposure on elements of it, in a country where interest rates are well below 10 percent per annum. Loans amounting to $385 million at the end of December are at variable rates, which means that interest cost could rise before the loans are scheduled to be fully liquidated. In 2018 a balloon payment amounting 43 percent of the restructure debt or approximately $860 million is due for repayment.

Outlook | Management stated that the Trinidad and Tobago market has recorded very strong demand and it is anticipated this will continue. While there was declining demand in Jamaica and Barbados, it is hoped that with the post-IMF agreement in the former, and general elections in the latter, growth will return to these markets. In addition, the growth being experienced in Guyana and Suriname and the initiatives by the Group in the pursuit of additional export markets, plant efficiency and cost containment, are likely to contribute to the continuation of the good results for the coming months.

The Jamaican operation will benefit from a series of price adjustments and the removal of one importer as a competitor. These two developments should bring that operation closer to a break-even position and help improve cash flow.

Risk | Investing in the stock could pay off richly if the company maintains the current trajectory. The PE is around 2 times estimated 2013 earnings at the price of $1 on the TT Stock Exchange on Friday. With the massive debt, an investment in the stock is not without risk should something go wrong that could negatively affect earnings. The capital structure suggests that both the Trinidad and the Jamaican company should be heading to the stock market when conditions improve to raise additional equity capital from the markets and to speed up debt repayment.

Speak your mind | Will you take the leap and invest in TCL?

Read the 9th May 2013 report about Trinidad Cement Ltd, TT Cement huge turnaround but…

Filed Under: Company News, Company Results Tagged With: TCL, TTSE

Stocks to watch and buy

July 8, 2013 by IC Insider.com

Monday, 8th July 2013 | Better investing starts with a watch list. IC Insider, your independent source of market intelligence about the Jamaica and Trinidad & Tobago stock exchanges, publishes a weekly watch list based on emerging market data and trending trading activity.

In addition to a watch list, for the first time we’re introducing the stocks that have received our analysts’ Buy Rated seal of approval. Unlike a stock broker’s ‘buy’ recommendation, IC Insider has no vested interest in any stock transaction or conflict of interest. Our research is backed by published reports of the company’s performance and insights of future earnings that can be found at ICInsider.com. The final decision to buy, or not, is your personal choice.

To search for published company results on IC Insider, please use ‘Search IC Insider’ and enter the company name, in full or in part.

Filed Under: Company News, FX Market, JSE Main Market, Stock Market, Stocks to watch, TTSE Market Tagged With: JSE Company, Trading Activity, TTSE

TTSE: Demand up for TT Cement shares

July 5, 2013 by IC Insider.com

Friday, 5th July 2013 | The level of trading on the Trinidad exchange amounted to 250,000 units valued at $12 million as 12 stocks changed hands with 7 increasing in price versus 2 declining.

Shares trading in reasonable quantity are Republic Bank with 91,064 shares for a value of $10,018,860, Trinidad Cement with a volume of 50,000 shares amounting $50,000, Scotia Investments with 19,378 shares with a value of $35,849, National Flour Mills 18,588 shares valued at $14,870 and West Indian Tobacco Company traded 5,000 shares with the price up by 22 cents to end the day at $117.25. Conversely, Clico Investment Fund was the only active security on the Mutual Fund Market, posting a volume of 36,820 shares valued at $828,450 and the stock price declined by $0.01 to end at $22.50.

Trinidad Cement traded 50,000 shares at a $1, up 5 cents and has a solid bid for 623,000 at $1 at the close.

One Caribbean Media traded at a 52 weeks high of $17.43 with 6,800 units trading with the price gaining 3 cents. Prestige Holdings lost 2 cents while trading 10,852 units at $9.35 each.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer market sentiment indicator shows that bids for 3 stocks were higher with 2 stocks having offers lower than their last selling price.

Filed Under: Stock Market, TTSE Market Tagged With: Daily Trading, Trading Activity, TTSE

WITCO profit up 20 percent

July 5, 2013 by IC Insider.com

West Indian Tobacco reported profit of $115.4 million before tax for the three months ended March 2013, an increase of 18.4 percent over the corresponding period in 2012. Profit after tax for the quarter ended at $84.9 million, representing $1.01 per share, an increase of 19.6 percent over 2012 but is down on the December quarter’s figure. IC Insider estimates earnings to exceed last year’s figure and should end up around $4.40 for 2013.

While revenues climbed, the company was able to hold, or lower cost in the period. The cost of sales moved down by $1 million compared to March quarter 2012, as gross profit increased by $16 million and gross profit margin moved up to 73 percent from 70 percent in 2012. Distribution cost just barely inched up around $100,000 but administrative cost slipped slightly while other operating cost declined by $2 million to $14.5 million. The holding of expenses is quite a feat in a country where consumer prices rose by 7 percent since last year.

2012 results | For the year to December 2012 the company reported $4.16 with the December quarter being $1.08 or $91 million which was up strongly from the $79 million earned in 2011. Revenues for 2012 increased by 10 percent to reach $1.1 billion up from $1 billion in 2011.

Finances | Witco’s equity stands at $309 million at the end of March with cash funds of $212 million. Current assets total $308 million and current liabilities $137 million and there is no interest bearing debt.

Dividend | The Board has accordingly approved the payment of a first interim dividend of $0.82 per ordinary share payable on 10 May 2013 to shareholders of record at close of business on 01 May 2013. Last year the company paid out 92 percent of its profit as dividends and the same is expected this year, which has been the norm for several years. The stock last traded at $117.25 and has a PE of 27 and the dividend yield around 3.4 percent much higher than long term rates in the twin island republic. The stock traded at $70.17 in early July last year and has gained 67 percent since then, well ahead of the movement in profits.

Filed Under: Company News, Company Results Tagged With: TTSE, WITCO

TTSE: Unilever up $1.47

July 4, 2013 by IC Insider.com

Thursday, 4th July 2013 | Unilever Caribbean stock gained $1.47 to end the day at $54.01, a 52 weeks high, as 1,000 shares valued at $54,000 traded. This stock was included in this week’s Stock to Watch list.

At the end of trading, 10 stocks traded with 3 advancing, 4 declined and 3 traded firm as a total of 198,330 shares crossed the floor of the exchange valued at $3,023,973 in the main market and 90,134 shares valued at $2,029,102 traded in the Mutual Fund Market.

Sagicor Financial Corporation saw 101,730 shares changing hands for a value of $635,808, Jamaica’s National Commercial Bank with 47,946 shares trading amounted to $57,535. ANSA McAL chipped in with 20,948 shares with a value of $1,407,308 and Guardian Holdings contributed 18,392 shares valued at $296,841. Clico Investment Fund, another stock in the watch list, suffered a 49 cents drop to close at $22.51.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer market sentiment indicator shows that bids for 3 stocks were higher with 3 stocks having offers lower than their last selling price.

Filed Under: Stock Market, TTSE Market Tagged With: Daily Trading, Trading Activity, TTSE

TTSE: Arbitrage opportunity – Scotia Investments

July 4, 2013 by IC Insider.com

Wednesday, 3rd July 2013 | Scotia Investments traded 131,806 shares for $238,216 on the Trinidad Stock Exchange today, as the stock traded up 3 cents to close at $1.81 or Jamaican value of $28.60 compared to the stock price of $26.25 on the Jamaica Stock Exchange creating an arbitrage situation.

Elsewhere, trading picked up as 17 stocks traded, the most for some time. The end result is that 5 stocks advanced, 2 declined and 10 traded firm.

On the Mutual Fund Market, 1,097 shares changed hands for a value of $5,837. Praetorian Property Mutual Fund was the most active security, with a volume of 990 shares valued at $3,376.

Trading in the main market accounted for 587,979 units valued at $1,725,269 as Trinidad Cement had a volume of 258,135 shares changing hands for a value of $245,228. Sagicor Financial Corporation 93,949 shares with a value of $588,119, National Enterprises had 11,500 shares traded for a value of $182,980. Angostura Holdings chipped in with 4,070 shares with a value of $36,630.

National Commercial Bank Jamaica added 58,152 shares valued at $69,914.

One Caribbean Media Limited closed at a 52 weeks high of $17.40, increasing by 10 cents.

IC indicator | At the end of trading, the Investor’s Choice bid-offer sentiment indicator shows that bids for 3 stocks were higher with 3 stocks that had offers lower than their last selling price.

West Indian Tobacco Company, which has been on a run from April, is one of the stocks that had a bid above the last selling price.