Jamaica’s remittances inflows slowed from the torrid pace experienced between May, last year to May this year, with an increase in June and July of 10 percent each over the record levels of 2020 with increases of 42 percent and 37 percent respectively in 2020 over 2019 and bringing the year to date growth to 30.4 percent, down from 42 percent to May this year.
According to a release from Jamaica’s Central Bank, June enjoyed inflows of US$303 million versus US$275 million last year and July US$324 million, up from US$293 million in 2020. For the year to July, the country has garnered US$2 billion up from US$1.56 billion for the same period in 2020. Remittances appear on track to hit US$3.5 billion by the end of the year if the recent trend continues which would be US$600 million than last year and US$1.1 billion over 2019.
Remittances slow from torrid pace
NCB US$ selling revalues Jamaican$
The Jamaican dollar continues to revalue from the low point reached in August $151.18, with the rate ending at J$$141.94 in Thursday’s trading as National Commercial Bank (NCB) continues to be the primary seller of the US dollar for the week to date.
For the week to Thursday, NCB sold off a net of US$24 million. Dealers bought US$32 million on Thursday and sold US$56.6 million compared to buying US$46.8 million and selling US$51.4 million on Wednesday at an average rate of $142.6258. On Thursday, NCB sold a net of nearly US$20 million.
IC Insider.com’s technical chart suggests further appreciation for the currency that came under selling pressure with the fall out caused by the COVID 19 inflicted crisis. The local currency has broken resistance at $142.60, with the next resistance set at $140. If it breaks through that level, it will hit the next resistance level at J$137.
In Thursday’s trading, NCB bought only US$2.36 million at an average rate of $138.01 to the US dollar but sold US$22 million at $141.06. In comparison, Scotiabank bought just US$3.5 million on Thursday at $139.81 sold US$8 million at $142.87 after buying US$18.2 million Wednesday and sellingUS$9.6 million on that day.
Sharp rise in Jamaican$ value
NCB purchased US$32m and sold US$73m at J$130.16 on Thursday & drag the US$ down vs the J$.
The sharp improvement in the value of the local currency may not last in the short term, as the drop in the value of the US dollar versus the Jamaican dollar, was due mostly to big trades by National Commercial Bank well below the average for the rest of the market. The market is now in a period of increased supplies and lower demand that is likely to result in further appreciation of the local currency until April unless the central bank intervenes to buy excess flows from the market.
At the end of 2019, the selling rate for the US dollar was J$127.716 but the currency depreciated during the year to a low of J$141.89 to the US dollar on November 7.
National Commercial Bank bought US$32,148,142.99 at an average rate of J$129.83 and sold US$73,145,676 at J$130.16 each. The trade by the country’s largest commercial bank accounted for 48 percent of the total of US$67.5 million purchased and 70 percent of the US$104.3 million sold. After NCB, the next biggest trades were by Bank of Nova Scotia, in buying US$10.3 million, at an average of $132.60 and selling $7 million at $133.54.The largest single purchase is US$25 million at $129 and the largest sale was US$68.35 million at J$130 each.
5% of Proven shares traded
An investor picked up 31,265,399 proven shares in trading on the US market of the Jamaica Stock Exchange today, representing 5 percent of the total issued share capital of the company of 625,307,963 units.
The trades were executed at 31.55 US cents per share and cost US$9,864,233. The trades comprise a block of 21,374,171 shares with amounts in smaller denominations. Proven Investments’ record show Nekia Limited as the owners of the 21.37 million block and the second-largest shareholder.
The purchaser is unknown at the time of going to press, but Barita Investments subsequently announced that they acquired the block of shares that put them as the lead shareholder in the company. The move is consistent with realignments taking place within the dynamic Jamaican financial market.
BOJ sells US$40m into forex market
Bank of Jamaica sold US$40 million via B-FXITT to authorized dealers and Cambios to augment supply in the market on Tuesday.
“The factors behind the recent depreciation in the exchange rate are well known and Bank of Jamaica expects that these impulses will subside and that normalcy will return to the market. There has been an increase in demand for foreign currency due to the regular re-stocking by retailers for the Christmas season. Further, there has been extraordinary demand relating to portfolio transactions,” the central bank stated in a release today.
“Notwithstanding the recent depreciation, inflows into the foreign exchange market remained healthy. For October 2019, average daily inflow from earners was approximately US$31 million, in line with October 2018. However, driven by the factors noted above, demand has outstripped this supply,” the release went on to say.
The local currency moved in recent weeks and traded at $141.96 to one US dollar on average on Monday as dealers bought US$30.7 million at an average rate of $138.89 and sold $31.5 million at J$141.96 each. On Friday, dealers bought US$33 million at an average price of J$139.49 and bought US$30.2 million at J$141.89.
BOJ sold US$30m to FX market on Friday
BOJ interest cuts overnight rate.
Bank of Jamaica introduced a bidding system when they intervene in the foreign exchange market officially called “Foreign Exchange Intervention and Trading Tool (BFXITT).” The system was introduced in 2017 with the central bank buying and selling funds in the market whereby authorized dealers and Cambios had bid for the amounts on offer.
Friday’s intervention was to address temporary demand and supply imbalances in the market Jamaica’s central bank stated. Friday’s intervention is the first being made since the central bank intervened with two flash sales on July 18 and 19th this year with a total sale of US$35 million and prior to, US$30 million on July 11.
In 2017 and 2018 the central bank had regular weekly scheduled interventions in the market from August to October and November, but there has been none in 2019 after BOJ lowered the amount dealers had to surrender to the central bank from amounts they bought weekly.The amount offered for sale on Friday attracted 42 bids amounting to US$72.6 million but just 17 were accepted with the highest bid at $139.15 and the lowest at $137. Bids at $138.65 got 33.33 percent of the amount applied for.
The intervention comes against the background of the country’s Net International Reserves climbing US$162 million, from US$2.936 billion at the end of August to US$ 3.098 billion at the end of September.
US$20m pumped into Jamaica’s forex market
Jamaica’s Central Bank is offered US$20M for sale in FX market on monday.
The intervention, not previously announced, comes against the background of the exchange rate for the US dollar closing on Friday at $129.41, up from $128.19 on Thursday, with selling by dealers, amounting to US$25.3 million on Friday. It also takes place with a US$77 million build up in Net International Reserves at the end of March, to US$3.085 billion from US$3,007 at the end of February.
The flash offer resulted in 39 bids amounting to $45.65 billion that came in for the amount auctioned. Just 15 bids were accepted, with rates ranging from $130.25 to $131.80. The average clearing rate was $130.85.
Jamaican dollar makes more gains
NCB had the highest net sale of US$ on Friday
The rate of exchange for the United States and Jamaican dollar inched further in favour of the local currency on Friday as dealers sold US$42.2 million at an average rate of $127.99 on Friday, down from an average of 128.126 with the sale of $67 million on Thursday.
On Friday, dealers bought US$37.38 million at an average of $126.74, a decline from $127.38 with the buying of US$61 million on Thursday.
Dealers bought $45,56 million in all currencies on Friday and sold US$50.28 million compared to purchases of US$77.6 million and sale of US$82.5 million on Thursday. Thursday’s trading includes the buying of Can$19.7 million and sale of Can$19.4 million.
Major net sellers of US dollars on Thursday are, Citibank with the purchase of US$160,000 and sale of US$1.65 million, First Global Bank buying US$271,000 and selling US$1.96 million. JMMB Bank ended with the buying of US$839,000 and selling $3.6 million, JN Bank purchased $868,000 and sold $2.48 million, Victoria Mutual Building Society bought $720,000 and sold of $2.45 million but First Caribbean purchased $5.6 million and sold just $1.38 million.
On Friday, Bank of Nova Scotia purchased $9.2 million and sold just $5 million, First Caribbean Bank bought US$813,000 and sold US$1.3 million, JMMB Bank ended buying US$1.87 million and sold $4.8 million, JN Bank purchased $1.16 million with sales of $1.87 million. National Commercial bought US$3.56 million and sold $8.5 million, Sagicor Bank bought $852,000 while selling US$1.99, Victoria Mutual Building Society purchased $693,000 and sold $1.3 million but Citibank purchased US$1.7 million and sold just US$587,000.
Margaritaville flat profit, growth coming
Margaritaville Turks traded 531,220 shares at 20 US cents on friday
Revenue was also down moderately to $1.8 million, from $1.86 million in the 2017 period, but growth should be coming when Carnival Lines expands the port facilities in Turks and Caicos in 2019.
Cost declined modestly, with direct expenses falling to $471,386 from $483,803 in 2017, resulting in a gross profit margin of 74 percent, while administrative and other cost declined to $1.057 million, modestly down from $1.082 million in the prior period in 2017.
Earnings per share came in at 0.43 cents. For the full year to May 2018, earnings per share was 1.58 cents resulting from net profit of $1.067 million. The stock trades on the Jamaica Stock Exchange US market at 25 US cents at a PE of 16.
Equity capital stood at $5 million while current assets amounted to $2.7 million with current liabilities of $1.1 million.
Ian Dear Chairman
Some banks offloading US dollars
National Commercial Bank sold off US$ on Thursday.
The Jamaican dollar closed below the J$130 to the US dollar on Thursday, with the selling rate to buyers ending at an average of $129.62. The rate fell as National Commercial Bank bought just US$6.2 million and sold $14.8 million while JN Bank offloaded US$5.3 million while buying a mere $190,000.
On Wednesday, Scotiabank offloaded nearly US$23 million against buying $13.6 million. For the week to date, dealers bought US$182 million and sold US$204 million. In the previous full week, purchases amounted to $192 million and selling $188 million. With one more day of trading to come for this week, inflows will be well ahead of last weeks’ level which included purchases of US$10 from Bank of Jamaica (BOJ). No sale of foreign exchange was done by the central bank this week, and none are planned for the next four weeks. BOJ sold US$19 million to the market up to November 15 last year.
For the current week dealers also bought 5.9 million of Pound sterling and sold 3.4 million and purchased $21.2 million Canadian dollars and sold $18.9 million.
In 2017, for the first four days of the fourth week of October, purchases of all dealers and Cambios amounted to $196 million which including purchases from BOJ of US$10 million with sales of US$179 million.
