BOJ FX auction rate drops $1 to $132.75

The average rate for the sale of the US$10 auction sale by Bank of Jamaica in its regular B-FXITT Standard Intervention on Wednesday, fell by $1 to $132.74 this week from $133.75, in the previous week’s auction.
The central bank offered US$10 million to eligible bidders that attracted 31 bids amounting to $21.5 million, 17 bids were accepted and resulted in an average rate of $132.74. the out turn suggest that rates in the spot market for foreign exchange could decline in the next series of trading.
Interestingly, the highest bid was priced at $133.90 and the lowest at $130.83. The lowest bid that was successful was at $132.30 and received just 16.3 percent of the amount applied for.
The final scheduled auction for October will be on the 17th when US$10 million will be auctioned.
In trading on the foreign exchange market on Tuesday, dealers bought $46.28 million in US dollar currency at an average of $132.39, slightly below the rate in today’s auction. Dealers sold US$46.94 million at an average rate of $133.34 overall, trading of all currency amounted to just over $55.3 million for both selling and buying. In trading on Monday, US dollars purchase amounted to just US$20 million at an average rate of $131.11 and sale of US$34 million at $133.99.
On Monday overall, trading of all currencies, amounted to just over $25 million and US$36.74 million, buying and selling respectively.

NIR steady despite BOJ sales

Jamaica’s Net International Reserves slipped by just US$32 million in September according to data just released by the country’s central bank – Bank Of Jamaica ( BOJ).
According to BOJ the NIR stood at US$3.027 billion at the end of September down marginally from US$3.027 billion at the end of August. Reserves amounts to just over 19 weeks of Goods & Services Imports, the central bank states.
The change comes against the back ground of sale of US$41 million in B-FXITT weekly auction of foreign currency.

Jamaican$ plunges below $134 to US$1

In another day of buoyant foreign exchange trading, the Jamaican dollar pushed below the $134 mark for one US dollar at the close of the market on Friday.
Dealers bought US$48.8 million at an average rate of $132.914 and sold US$46 million at $133.80 bettering the closing rate on Thursday of $134.02 for the $40.32 million sold and a bit higher than the $132.88 for the US$30.92 Million bought by dealers.
Overall the market had US$56.6 million of inflows of all currencies and US$53.17 million of sales on Friday compared to the buying of US$45.26 and the selling of US$44.58 million of all currencies.
Friday’s rate is the lowest since July 24, when it averaged $134.05 with July 23 just below at $133.39. The local dollar slipped to its lowest level ever on August 23, this year at $137.96

J$ rate could make more gains

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The rate of exchange for the Jamaican dollar versus the US dollar could fall below the J$134 mark at the close of trading on Thursday for the first time since the early summer.
At mid-day on Thursday, the average rate for selling US dollar, declined to J$133.999 for one US dollar, down from $134.25 on Wednesday, $134.43 on Tuesday and $134.51 on Monday.
In Thursday trading, at mid-day, dealers bought $14 million in United States dollars and sold $12 million while they bought Can$ 15 million and sold just $4 million. That compares with Can$ 5 million being purchased on Wednesday and selling of Can$11 million.
The softening in the rate for the US dollar comes from the Bank of Jamaica’s weekly intervention into the market, by a scheduled sale of US$10 million on Wednesday.
BOJ next scheduled sale is US$10 million each on 10th and 17th of October with none planned on October 24.

BOJ FX sale pushes rate down

BOJ sold US$11M in today’s BXFITT auction.

The average rate for the Jamaican dollar auctioned by Bank of Jamaica in today’s B-FXITT Standard Intervention Auction came out at $135.42 down from $136.55 at last week’s auction.
Bank of Jamaica offered US$11 million for sale in today’s B-FXITT auction with 42 bids received covering US$23 million. Last week 41 bids were received amounting to $26.15 million for US$11 million on offer.
The country’s central bank will be offering US$41 million in sales over the next four weeks, including $11 million next week and US$10 million for the other three weeks up to October 17.
Today’s average rate compares with an average buying rate of $134.612 for purchase of US$33.75 million in Tuesday’s foreign exchange trading and an average rate of $135.56 with US$37.67 million being sold. On Monday, Dealers bought US$42.19 million at an average of $134.87 and sold US$42.19 at $135.95.
On Wednesday, the foreign exchange market closed with dealers buying US$56.88 million in all currencies which included US$49.86 million in US dollar currency at an average rate of $134.73 and selling a total of US$519 million in all currencies with the US dollar accounting for US$38.27 million at an average of $135.65, up slightly on Tuesday selling rate.

Jamaica dollar in modest recovery

The Jamaican dollar traded at an average of $136.94 to the US dollar on Tuesday. Dealers sold US$52.7 million and bought $49.4 million at an average of $135.81.
Tuesday’s total intake of funds, amounted to the equivalent of US$61.96 million while US$62.65 million left the system.
Unlike Friday and Tuesday, Monday’s trading was moderate, with just US$27.65 million in all currencies bought by dealers and the selling of US$30.4 million. Buying of US dollars amounted to US$24 million at an average rate of J$134.56 and selling of US$28 million at $137.10 on Monday, compared to selling of US$40 million on Friday at $137.01. On Friday dealers sold a total of US$46.8 million in all currencies, having bought US$53.5 million, including $44.7 million in US dollars currency.
On Wednesday, last week, Bank of Jamaica sold $16.5 million to dealers pushing the total purchased for that day to US$57 million, while they sold $43.3 million at an average of $137.32. Trading of all currencies saw a total of US$55 being sold against $69 million bought by dealers.
On Thursday dealers bought only US$29.78 million, but sold US$51.4 million, with the rate clearing at an average of $137.55. In all, dealers sold the equivalent of US$53 million in all currencies.
Last week Wednesday, the BOJ offered US$16.5 million to the market and received 46 bids of US$39.15 million. The average clearing rate was $137.03. The highest bid was $137.50 and the lowest $135. On Wednesday, September 5, US$11 million, to be followed by US$10 million per week, over the next three weeks.

BOJ pumped US$65M in FX market last week

Bank of Jamaica (BOJ) scheduled B-Fxitt auction last week saw 43 bids seeking to purchase US$39.9 million but only $15 million was on offer, leaving a large amount of unsatisfied demand.
Only 17 bids succeeded in getting a portion of the funds offered for sale, but then not every bid really wanted the funds. The bids left the average rate at $138.19, with $137.90 being the lowest rate that succeeded. The lowest fully successful bid was $137.97 for US$1 million. The lowest bid received was $131.10 to purchase US$1.5 million.
On Friday, BOJ offered US$40 million in what they called a flash intervention tool. On Friday August 31, last year BOJ also had a flash intervention sales that pushed the amount of buying in the foreign exchange market on that day to US$76 million. BOJ sold US$5m on the Wednesday of that week.
The flash intervention this past week, was clearly to satisfy the unmet demand from Wednesday’s auction, 42 bids were presented amounting to US$76.9 million leaving U$26.9 million of unmet demand. The average rate declined to $137.49, with the lowest accepted bid price being $136.65 and the highest being $138.70. The lowest bid that was fully allocated was US$8 million at $137.00. Bids came in as low as $129. The lowest bid that had some success was $136.65, and this compares with $137.90 on Wednesday, suggesting that those bids that did not succeed included a large amount of low bids made to satisfy the requirement that all dealers must put in a bid. On Wednesday, this week

BOJ sold US$65M into the FX market last week.

BOJ will be carrying out their usual auction at which US$15 million will be made available, to be followed by US$10 million each, on September 5 and 12.
On Thursday, dealers bought US$33.9 million at $136.37 and sold US$35.3 at $137.96, up from a rate of $137.48 on Wednesday. On Friday, US$73.2 million was purchased by dealers at $136.75 and they sold US$46.2 million at $137.90. On Monday dealers bought US$45.5 million at $136 and sold US$50.3 million at $137.52, a fall from Friday’s Average rate.

Profit jumps 58% at Proven

Investors in shares of PROVEN Investments pushed the price to a year’s low of 12 US cents last month but data now available suggest that they made a big mistake, as the stock now trades back at 20 US cents and profit that suffered from foreign exchange losses in the second half of 2018 fiscal year is now back up.
The investment bank just released first quarter results to June showing profit attributable to shareholders jumping 58.43 percent to US$1.79 million from the US$1.13 million in the same period last year. Annualized return on average equity translate to 8.56 percent and is consistent with Proven target set when they went public. The sharp jump in earnings resulted from net revenue for the quarter rising a 17.4 percent to US$8.5 million compared to US$7.25 million earned in the June 2017 quarter. According to the CEO Christopher Williams, “this was mainly due to a more efficient carry trade strategy and significant improvement in foreign exchange gains.”
Earnings per share for the quarter amounted to 0.29 US cent versus 0.20 US cents in 2017. An interim dividend of 0.25 US cent per share will be paid to shareholders on September 10.
According to the report released with the financials “spread income was the major contributor to revenue during the period, with a 16.97 percent improvement compared with the same period last year as net interest income totalled US$5.28 million. This increase reflects success in the carry trade strategy as the company was able to concurrently increase interest income while reducing interest expense by 18.30 percent.
Net foreign exchange gains totalled US$1.20 million, compared to just US$200,000 in the same period last year. While foreign exchange grew fees and commission income declined from $1.2 million to $894,000 due to change in reporting some fee income with some income now being booked over the period that they cover rather than at the time of billing, the impact for the full year should not reflect a major difference, IC was informed.
Proven invests in a number of privately held entities except for Access Finance. The investment strategy seems to be working with most entities delivering increased returns in the quarter.

Christopher Williams, Proven Investments CEO.

According to the release Proven Wealth net income totalled US$0.93 million for the quarter, representing more than a six -times increase compared to the same period last year. The firm continues its strategy to offer investment products to clients in reducing the previous reliance on repurchase agreements. Total Assets of the company as at June 2018 stood at US$120.5 million.
Proven Fund Managers continues to be one of the top players in the Asset and Pension Fund Management and Administration business. Profitability increased by almost 68 percent compared to the same period last year, with net profit of US$220,000 compared to US$130,000 million for 2017.
Access Financial Services appears to be maturing contributing nearly 21 percent increase in net profits attributable to PIL of US$790,000 or 44 percent of the group’s profit for the quarter. But according to Williams, profit at Access is growing around $10 million on a monthly basis and is expected to continue for the rest of the fiscal year barring unforeseen negative development. IC gathers that they may be more acquisition in the period ahead for this subsidiary in a new market. Access seems to have absorbed the acquisitions last year that led to a hike in doubtful loan provisioning being above normal in the 2018 fiscal year. The loan portfolio was US$24.4 million up 22 percent over the balance at June 2017.
BOSLIL Bank headquartered in St Lucia is Proven Investments’ most recent acquisition and currently 75 percent owned by the group. BOSLIL contribution to group profits was just below Access at US$610,000 million. Total Assets of the bank stood at US$271 million and seems set to increase as the group has signed an agreement to acquire yet another banking entity that will fall under the arm of Boslil.
PROVEN REIT is involved in residential real estate development with two new developments scheduled to commence construction and are expected to be completed and sold over the next twelve to eighteen months. But the current fiscal year is not likely to benefit from these is they are successfully executed.
Operating expenses increased by 11.5 percent to US$5.6 million compared to US$4.9 million in 2017 but the expenses include US$236,000 in preference dividends that will not repeat as the company retires the preference shares on which dividend was paid while there was just over $400,000 provision made relating to the impact of IFRS 9. Excluding these two items profit for the quarter would have been much greater than reported.

Access Financial contributed much to Proven profit in the quarter.

At the end of June total assets amounted to US$575 million down slightly from US$599 million at June 2017 and liabilities fell from US$509 million in 2017 to US$470 million. Shareholders’ Equity grew to US$82 million from US$71 million as at June 2017 mainly from increased in the share capital following the rights issue last year.
The group has not been able to put the new capital fully to work as they awaited regulatory approval for the plan acquisition of a brokerage company in Cayman Island which has now been granted with the acquisition said by Proven to close at the end of the month. That may not be the only acquisition for Proven this fiscal year as the group seek to grow its overseas business and take advantage of the many investment opportunities management sees within the region.
In going forward, investors need to pay attention to the impact of foreign exchange trading and movement in the rate of exchange and the impact on profits positively or negatively, so the strong gains enjoyed in the quarter may not repeat in the rest of the year. The preference dividend and the provision for IFRS provisioning should not repeat and are likely to reduce cost going forward. Access continues to grow profit on a quarterly basis as the company increase loans granted and securities trading can add or subtract from profits depending how well the investment portfolio is managed.
With the continued focus on acquisition, the future could be brighter for the group, in addition IC is forecasting a rise in the PE ratio from an average of 12.5 now to a higher level by year end.
The stock that was in the IC TOP 10 and slipped out this past week traded at 19 US cents on Thursday on the JSE US dollar market and sits just outside the Top list.

Jamaican dollar gains

Dealers in the foreign market bought US$36.76 million in US currency at an average rate of J$132.05, down $1.24 from Tuesday’s rate of $133.29.
The selling rate for the US dollar declined from J$134.05 on Tuesday as US$50.77 million was sold at an average rate of J$133.60 including US$5 million sold to Bank of Jamaica in the B-FXITT Standard Intervention Tool – buy operation, at an average J$133.65. At mid-day on Wednesday the average selling rate was $133.49 with only US$12.3 million then sold.
Overall foreign currencies purchased by dealers amounted to US$41.44 million, while selling accounted for $58 million for a net outflow of just under US$17 million. On Tuesday, net inflows of US$14 million came into the market, but for the US dollar currency, net inflows amounted to US$17 million.
For the next four weeks, the central bank will buy US$5 on Wednesday July 31 and August 8 and will sell $10 million to the market on August 19.

BOJ buys $5m at J$133.65

The rate Bank of Jamaica paid on Wednesday, July 25 to purchase US$5 million in the B-FXITT Standard Intervention Tool – buy operation average J$133.65.
Eligible dealers placed bids to buy only $5.5 million with the highest priced offer at 137.24 to sell $200,000 and the lowest at $126 for $200,000. BOJ purchased funds as high as $137.10 amounting 40 percent of the amount offered while the amount of $350,000 that was offered at $137 was fully taken up. Eligible Offers were received from 19 sellers while 18 had funds bought.
The central bank will buy US$5 on Wednesday July 31 and August 8 and will sell $10 million to the market on August 19.