A likely 6 percent growth in Jamaica’s economy in 2022 helped several Main Market stocks to overcome a sharp rise in interest rates to record gains between two and 82 percent after the Jamaica Stock Exchange started 2022 tentatively, with the market index gaining just two percent at its peak in mid-May after which the JSE Main Index dropped 10.2 percent for the year as Bank of Jamaica pushed interest rates higher during the year.
The first real sign of change in the market was after investors pushed Treasury bills rates to peak in April, seven months before the country’s central did. Stock prices started to slip in May, sending the market into reverse from then until year end, except for the last two weeks when there was a near 6 percent rebound.
Although the market declined for the year, the market ended the year with gains in 22 stocks, compared with 25 losers that fell from 3 percent to 40 percent, with Salada Foods being the worst performer, following a 38 percent fall in NCB Financial despite profit jumping sharply over that of 2021. The group recorded huge unrealised investment losses net of gains that wiped out the traditionally reported profit of $40 billion and left a deficit of $7.6 billion for the fiscal year that reduced shareholders’ equity from $161.5 billion to $149.5 billion, and resulted in continued dividend suspension, that may have encouraged more pressure on the stock than usual. Massy Holdings and VM Investments both declined by 35 percent for the year. 1834 Investments was the top stock resulting from its acquisition by Radio Jamaica, productive Business Solutions delivered gains of 64 percent, followed by Supreme Ventures, with 62 percent, both flowing from solid increases in profit for the period to September last year.
I Create another IPO coming soon
iCreate, a fairly new company that is involved in the creative industry is at an advanced stage of planning to raise funds publicly by way of an IPO, ahead of a potential listing on the Junior Market of the Jamaica Stock Exchange.
According to the company’s website, they are a Creative Institute, developed with the aim of filling the gap in skills training and development of creatives in Jamaica and the wider Caribbean. As a part of the creative eco-system, students are provided with a wide range of career opportunities in the Creative Economy, while being a key partner of the Advertising Industry, Film Production Companies, Animation and Gaming Companies, and Creative Outsourcing initiatives.
iCreate partners with the University of the Commonwealth Caribbean (UCC) as its Creative Training arm for courses offered in Jamaica and the Caribbean. iCreate is also partnered with the Digital Marketing Institute, to become the only institution in the Caribbean licensed to deliver their Digital Marketing Diploma programme.
The majority shares are currently owned by eMedia Interactive Group with Sagicor Investment said to hold 19 percent of the shares. The total of just over 123.5 million shares issued are issued currently that will go to 196 million if the IPO is fully taken up. The issue should be coming to the market place soon, by the end of the year or early in 2019. Tyrone Wilson is the Managing Director of the Group.
Also expected to list in 2019 are Wigton Wind Farm which will provide an investment more for income than growth. Also exploring listing are a paint company and a manufacturing company from central Jamaica.
MPC Caribbean Clean Energy next IPO
MPC Caribbean Clean Energy ltd is a Caribbean-based investment company set to be the next Initial Public offer in Jamaica and Trinidad simultaneously in early December.
The company is being sponsored by German based MPC Capital that is publicly listed since 2000 with a market capitalization of €158 million.
Trinidad regulators have already signed off on the prospectus while the draft prospectus is now going through the FSC in Jamaica, Martin Vogt, managing director of MPC capital advised IC insider.com.
The company was established in 2017 with the clear vision to invest in renewable energy projects in Jamaica, Trinidad and Tobago and the wider Caribbean region through the MPC Caribbean Clean Energy Fund LLC. The listed company will be just an investing vehicle, with capital raised to be invested through MPC Caribbean Clean Energy Fund LLC, the entity investing directly in the projects.
The company will seek to raise at least US$50 million in the Jamaican and Trinidad markets with the IPO expected to debut around the first week in December. Brokers for the issue are JN Fund Managers.
The Company is registered in Barbados and was established by the clean energy investment specialist MPC Renewable Energies (MPC), a 100% subsidiary of the publicly listed German asset and investment manager MPC Capital, based on its extensive renewable energy experience worldwide and after research and analysis of the Caribbean market.
The initial investment in Jamaica is “Paradise Park”, a 50 MW solar park in Westmoreland with a capital outlay of US$64 million. Once completed by May 2019, the solar park will be the largest photovoltaic power plant in the island. Vogt told IC Insider.com that they have a 20 years power supply contract with JPS. The company also has a 21 MW wind power plant in Costa Rica that has been in operations since 2015 and is profitable. Importantly, the Jamaican operation which is now being built out will have a rated capacity of 50 MWH.
The plan is to raise around US$200 million for investment in the region’s renewables. According Vogt, the Jamaican government is expected to open the market in 2019 for bids for 150 MW renewable supply and the company is planning to bid for another 50 MW to add to the Paradise Park operation. If the bid is successful the expansion will result in some amount of economy of scale in the operation.
The is likely to invest in the Wigton Wind Farm when that company goes public in the first quarter of 2019.
The rate of return for the company is expected to be north of 9 percent per annum which will make it attractive for investors looking for income but payment of dividend may not be more than once per year initially.
The stock issue is likely to be a relatively high income generator, rather than one for rapid stock price gains. shares will be sold in Jamaica in local dollars but in Trinidad they will be in US dollars.
News reaching IC Insider.com is that Fantana Pharmacy should be heading to the market soon, to raise around $500 million to help fund the new location on Waterloo Road in Kingston. A few others are said to be planned for next year with IC insider.com gathering that at least two are in the manufacturing sector and one in the financial sector.