MVL & VMBS Wealth big trades on Wednesday
MVL Stockbrokers sold a series of large trades in several stocks in early Wednesday trading and VMBS Wealth was the main buyer in what appears to be prearranged trades. The trades had negligible impact on the market indices. IC Insider has been reliably informed, that the trades reflect transfer of shares that were held at the JCSD under broker MVL Stockbrokers for VMBS Wealth pension funds and have been transferred to VMBS Wealth as the brokerage house. So far its is unclear why the change was not effected by a instructions to the Stock Exchange to simply switch the broker’s accounts.
A total of 32 securities with a volume of only 32,708,601 units valued at $359,295,340 have traded with 13 stocks declining versus only 6 that rose.
The All Jamaica Index trades at 108,749.59 to dip 117.62 points, JSE Market Index fell 105.24 points to 98,244.17. The combined index slipped 114.26 points to be at 100,935.78 and the junior market index 916.82, down 1.66 points.
Significant trades are Grace Kennedy with 1,399,021 units, Jamaica Stock Exchange 2,105,142 shares, JMMB Group 8,580,291 shares Lasco Manufacturing 12,000,000 units and Sagicor Group 2,940,000.
Sweet River IPO falls well short of target
Sweet River Abattoir & Supplies Company initial public offering (IPO) missed by a huge margin, the amounted targeted to be raised, when it closed on August 26, the scheduled date for the closure. The IPO targeted $180 million to be raised from the sale of 46.6 million shares to the public.
According to VMBS Wealth Management, brokers to the issue, “preliminary numbers indicate that subscribers applied for approximately 30.6 million shares totaling approximately $118 million”. The minimum amount to be raised to facilitate listing on the junior market of the Jamaica Stock Exchange was $50 million.
The plan was for the amount targeted to be raised, was to be used in the reduction of bank loans, completion of construction of the new factory facility, installation of a solar energy generation system, working capital and payment of the expenses of the IPO.
The result achieved, is not surprising, the price was well in excess of what investors were valuing junior market stocks at. In IC Insider’s comments on the IPO stated “currently, earnings per share works out at 40 cents, placing a valuation of 9.4 times historical earnings. This is well above the junior market valuation. Value, based on netbook assets, works out at 3 times book, again a very high valuation.”