Prices on the Jamaica Stock Exchange were mixed on Monday but with more gains than losses. On Monday 37 securities changed hands, in all market segments and ended with 12 stocks rising and 6 declining.
The market closed with 4,039,547 units valued at $84,778,917 changing hands in all markets. The junior market accounted for 1,018,853 units valued at $4,061,844 changing hands.
The JSE Market Index suffered a mild loss of 55.30 points to end at 152,935.03, the all Jamaica Composite Index fell 61.84 points to end at 169,868.99 and the JSE combined index gained 49.20 points, to close at 160,575.86.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator reading showed 12 stocks with bids higher than their last selling prices and only 2 with lower offers.
At the end of the market activities, Barita Investments surprisingly traded 62,383 shares to gain 25 cents and closed at $3.50, Cable & Wireless rose 8 cents to $1.09 in trading 22,817 units, Carreras ended trading 421,078 shares to end at $65. 1834 investments traded 43,000 shares with a loss of 10 cents at $1.50, Grace Kennedy closed with 231,970 shares changing hands at $80, Jamaica Broilers traded 55,156 units to close at $14.50. JMMB Group had 94,770 shares changing hands at $10, Kingston Wharves traded 2,965 shares to close at $11.50, 
Mayberry Investments added 30 cents to close at $4 with 32,500 shares changing hands, National Commercial Bank ended with 125,198 shares changing hands to close at $40.01. Radio Jamaica traded just 22,321 shares and recovered the 6 cents it lost of Friday, to close at $1.15, Sagicor Group rose 30 cents and ended with 917,593 shares changing hands at $24. Scotia Group traded 10,448 shares to close at $32.90 after rising $2.90, Supreme Ventures slipped 5 cents to close at $4.95 with 45,179 units changing hands, Proven Investments ordinary shares traded 179,009 units to end at 16 US cents. JMMB Group 7.50% preference share traded 293,449 units at $1.20 after recovering 3 cents and the Jamaica Money Market Brokers 7.50% preference share traded 452,187 units at $2.15.
More gains for juniors on Monday
ISP Finance at new high on Monday.
The junior market close slightly higher on Monday with an increase of 9.79 points to close at 1,824.16. Trading ended with 17 active securities, 4 of which advanced and 3 declined as 1,018,853 units valued at $4,061,844, changed hands.
There were 5 stocks closing with bids that were higher than their last selling prices and none ended with a lower offer.
At the end of trading, Access Financial had 6,220 shares trading to close at $16.60, Caribbean Cream lost 50 cents in trading 17,450 shares at $4, Caribbean Flavours rose 55 cents with 5,698 shares trading at $8, Caribbean Producers traded 57,130 units, to end at $4.05, C2W Music had 1,000 units changing hands at 33 cents. General Accident ended trading 59,420 units and closed at $2.59, Honey Bun had just 30,500 shares trading but ended unchanged at $11, 
ISP Finance rose 20 cents to close at a 52 weeks’ high of $2.55 after trading 6,031 units. Jetcon Corporation lost 24 cents to close at $2.60 after 8,680 shares changed hands, Key Insurance closed at $3 with 8,050 units changing hands. KLE Group traded just 1,485 shares to gain 3 cents to end at $1.69, Knutsford Express jumped $4.50 with just 100 units changing hands at $22, Lasco Distributors ended with 319,314 units trading at $5. Lasco Financial closed at $3 with 127,872 shares changing hands, Lasco Manufacturing ended with 160,969 shares changing hands to close at $3.65, Eppley 10% preference share traded 10,000 units at $6.10 and Derrimon Trading preference share fell 15 cents to end at $2.25 with 198,934 units changing hands.
6 TTSE stocks rose on Monday
T&TNGL – 1 of 6 stocks gaining on the TTSE on Monday.
The Composite Index gained 3.32 points to close at 1,133.54, the All T&T Index rose 6.54 points to close at 1,814.06 and the Cross Listed Index added 0.01 point to end at 60.17.
IC bid-offer Indicator| The Investor’s Choice bid-offer indicator ended with 4 stocks with the bid higher than the last selling price and 8 with offers that were lower.
Gains| Clico Investment Fund ended at $22.60 after rising by 9 cents with 118,717 shares valued at $2,682,938 changing hands, National Enterprises closed with 1,050 shares changing hands at $10.50 after rising 44 cents, National Flour gained 5 cents and closed with a mere 7 shares changing hands at $2.30. Prestige Holdings with 100 units changing hands ended at $11.30 to record a gain of 5 cents for a 52 weeks’ high, Sagicor Financial closed at $7.01 with 7,580 units changing hands after rising 1 cent while Trinidad and Tobago NGL gained 55 cents to close at $21.10 with 119,868 units worth $2,518,270 traded.
Losses| Massy Holdings ended with 7,124 shares changing hands to close with a loss of 5 cents to end at a 52 weeks’ low of $54.68 and Republic Financial Holdings closed at a new 52 weeks’ low of $110.98 with 337 shares changing hands with a loss of 2 cents.Firm Trades| Angostura Holdings ended with 225 shares changing hands to close at $13.20, Firstcaribbean International Bank closed at $6.50 with 102,000 units valued at $663,000 changing hands, First Citizens closed at of $33.50 with 2,975 shares trading, Guardian Holdings had 10,000 shares changing hands to end at $13.25 and National Commercial Bank traded 8,195 shares at $2.40.
Juniors up majors down early Monday
Trading the Jamaican Stock Exchange is off to a slow start with the main market indices falling while the juniors was up slightly after 75 minutes of trading on Monday. An average of 27,944 per active stock traded, up from an average of 1.4 million units traded in the mid-morning session on Friday. The average on Friday was pushed up by a 43.6 million units of RJR.
A total of 24 securities, accounting for only 670,666 shares changed hands at 10.45 am as 7 stocks gained and 3 declined, reversing the negative trend in place for a few trading days. The only trade of note has been Scotia Group with 2,441 units trading at $32.99 compared with the last price on Friday, of $30 and Cable & Wireless trading 22,817 shares, with a 8 cents gain, taking the price to $1.09 but now has a bid at $1.12 to buy 150,000 units, a total of 964,692 units were offered for sale at $1.20.
Supreme Ventures has 10,053,513 units on offer at $5 but with the bid at $4.86 for 1,601 shares.
The market saw all Jamaica Composite Index fell 249.28 points to 169,681.55, the JSE Market Index dipped 222.90 points to 152,767.43 the JSE combined index ending with a fall of 148.98 points to 160,377.68 and the junior market index moved up by 5.63 points to 1,820.00.
Cost hurts Lasco Distributors’ profit
Lasco’s ICool drinks.
Revenues for the nine months ended at $10.9 billion, 36 percent higher than in 2014 while revenues for the quarter were up 36.4 percent to S4 billion. Profit after taxation came in at $213 million and is up from $193 million in 2014, mainly driven by growth in new business.
Gross profit grew by only 20 percent for the quarter to $644 million and 23 percent for the year to December to $1.77 billion as profit margin declined. Gross profit margin slipped sharply from 19 percent in the December 2014 quarter to 16 percent in 2015 and for the nine months, gross margin ended at 16 percent from 18 percent in 2014.
Other operating income, inclusive commissions from principals and interest on investments generated $82.5 million, an increase of 19 percent compared to the prior year’s $69 million for the nine months and was up 47 percent for the quarter to $53 million.
Lasco’s products
Total assets at the end of the period stood at $7 billion, an increase of S2.5 billion or 54 percent over prior year. Growth was driven mainly by increased inventory of $950 million arising from new business lines and capital expenditure of $550 million relating to the warehouse expansion. Receivable balances grew by 25 percent over prior year to close at S2.7 billion, while Payable balances grew by 81 percent to $3.4 billion. Short term Investments, Cash and bank balances at the end of the period were $1.076 billion up from $600 million. Shareholders’ equity stood at S3.4 billion, or 26 percent growth and the return on equity for the nine-month period was 27 percent compared to 22 percent in the same period last year.
IC Insider’s forecast is for per share earnings of 27 cents after tax for the March 2015 fiscal year and 50 cents for 2016 from ongoing operations. The stock last traded at $5 on the junior market of Jamaica Stock Exchange, with a PE of 18.5 times 2016 earnings but 10 times 2017 estimated earnings. The likelihood of a large settlement for the claim against Pfizer could enhance the attractiveness of the stock.
2 new BUY RATED stocks
Jetcon Corporation and ISP Finance have been added to the IC Insider BUY RATED list. The list continues to sport selections that have some room to grow before they reach the stage of maturing. Some have reached levels that look like they may be close to the top and stay there for a while and the may be just be rated hold than BUY RATED at this stage of the market’s rally in Jamaica.
The Trinidad based companies appear to be saddled by the effects of the recession on their performance.
There are now a few that were previously listed as BUY RATED have moved to Watch, as these stocks are likely to be market underperformers. If these are already owned then investors may want to hold on a little longer, buying into them now, while such a move could be profitable such investment may not be the smartest move at this time. At this stage of the Jamaican market it has become more challenging to continue to back some of the strong performers to date, as their valuation has risen and future gains will most likely come from gain in profit, unless the market revalues the PE ratios higher, a factor that is expected with lower interest rates likely in the months to follow.
Knutsford Express has been to Market Watch as it close to our target price of $24 at this time and while there is more growth to come with increased frequency slated for the north coast routes, increased profits going forward could slow considerably from recent strong gains. 
Sagicor Group has done well since we selected it, with an increase close to 150 percent plus dividends, the immediate future looks like the gains are going to slow compared to the growth since the start of 2015. In past bull market, investors gave it a big premium over the rest of the market. That is not so now, but could change as the current bull market continues it run.
Lasco Distributors that was moved to a hold is now back to a buy, since the price has pulled back to $5, the company will benefit from taking over the overseas distribution of all of the manufacturing company products. The inflows expected from the lawsuit with Pfizer should add to the company’s value when the courts agree the amount, which management puts at more than US$300 million.
AMG Packaging, Caribbean Cream and Paramount are all up more than 300 percent but expansion into new products should give revenues and profit a kick in the not too distant future for AMG and Paramount. Caribbean Cream full year results are due shortly and should exceed 55 cents per share as the company benefited from sharp drop in raw material cost.
Jamaica Stock Exchange is now a Watch as it seems close to fairly valued currently, but dividend yield could well push it higher. In addition, of note is that while trading levels have improved they are still well off from historical highs, so there could still be much more gains ahead later on.
Trinidad is in recession and the results of companies are showing it with pressure on profit particularly for companies that earn the bulk of their income in the twin island state. As a result prices have been declining for many of the companies on the Trinidad market with a few exceptions. With the exception of Trinidad Cement that is undervalued, a hold has been placed on Trinidad based listed stocks for the time being but investors should wait for TCL to settle before buying.
Scotia positive on Jamaica
Jamaica’s creditworthiness is improving, Scotiabank’s economic units stated in the economic Executive Briefing on Jamaica. Fitch recently upgraded the country’s sovereign credit rating to “B” and assigned it a “stable” outlook Scotiabank Economic report says.
The revision reflects the successful implementation of the IMF program, strengthening external finances, and decreasing public debt the report stated. The report goes on to state, “Standard & Poor’s and Moody’s rate Jamaica in the “B” (stable outlook) and “Caa2” (positive outlook) categories, respectively. According to the IMF, the public sector debt reduction program is estimated to lower the general government debt-to-GDP ratio to below 115% in 2017 from 124.7% in 2015. Indeed, the buyback of PetroCaribe debt in August 2015 at a discounted face value lowered the country’s public debt ratio by 10 percentage points and will ease the external debt repayment burden.”
Scotia sees J$130 to US$ in 2017
After losing nearly 30% of its value since 2012, the Jamaican dollar (JMD) is expected to maintain a defensive tone against the US dollar (USD).
The value of the JMD will continue to be affected by weaker sentiment towards emerging markets as the US Fed gradually tightens monetary conditions, as well as by investors’ perceptions regarding the implementation of the austerity program under the four-year Extended Fund Facility (EFF) loan agreement with the IMF, a recent report released by the economic units of Canadian Scotia bank stated recently.
“ We forecast a further depreciation in the JMD from a year-end rate of 120 in 2015 to around 125 this year and 130 in 2017 per USD. Net international reserves stood at US$2.26 billion in February, equivalent to over 5 months of import coverage” Scotiabank Economics Report stated recently.
Neither forecast would represent major moves in the value of the currency percentage wise. IC Insider.com data suggests that the currency may well remain around current levels for a prolonged period, or head to around 125 with inflation for 2016 looking like it will be less than for 2015, with no new major taxes expected. The tax break for persons earning less than $1.5 million could have a moderating impact on wage settlements and inflation as well.
Jamaican$ loses ground – Friday
Trading in the foreign exchange market resulted in the Jamaican dollar losing value against the three major currencies it normally trades. The market closed with dealers buying the equivalent of US$30,677,839 and selling US$37,524,758, in contrast to US$29,004,952 purchased and US$30,796,524 sold on Thursday.
In US dollars trading, dealers bought US$27,717,738 compared to US$26,385,923 on Thursday, as the buying rate for the US dollar lost 1 cent to end at $121.33. A total of US$35,846,874 was sold versus US$29,540,365 on Thursday, the selling rate rose by 4 cents to $122.08. 
The Canadian dollar buying rate declined 8 cents to end at $90.77 with dealers buying C$1,231,134 and selling C$738,178, at an average rate that rose by 21 cents to $92.88. The rate for buying the British Pound fell $1.12 to $167.81 for the purchase of £858,779, while £264,854 was sold, as the rate rose 31 cents to $169.68. At the end of trading, the selling rate for Euro, rose 12 cents to close at J$138.91, from Thursday’s rate, according to data from Bank of Jamaica, while dealers purchased the European common currency at J$136.03 for a rise of 10 cents on Thursday’s rate. The US dollar equivalent of other currencies traded, amounts to US$851,288 being bought, while US$748,168 was sold.
Highs & Lows| Notable changes to the highest and lowest rates the currencies traded at on Friday are, a jump of $23.40 in the lowest selling rate of the US dollar to $118, a rise of $1.05 in the highest buying rate of the Canadian dollar to $94. The highest buying rate for the British Pound rose $1.40 to $173.50, while the highest selling rate dipped $2.32 to end at $177.50.
RJR enjoys big trade on JSE – Friday
RJR had another big trade on Friday.
The market closed with 51,448,945 units valued at $171,764,929 changing hands in all markets. The junior market accounted for 470,000 units valued at $1,549,597 changing hands.
The JSE Market Index took a sharp upturn with a 3,192.15 points rally to end at 152,990.33, the all Jamaica Composite Index jumped 3,570.00 points to end at 169,930.83 and the JSE combined index shot up 3,489.28 points, to close at 160,526.66.
IC bid-offer Indicator| At the end of trading, in the main and junior
markets, the Investor’s Choice bid-offer indicator reading showed 17 stocks with bids higher than their last selling prices and only 1 with a lower offer.At the end of the market activities, Cable & Wireless rose 5 cents to $1.10 in trading 409,741 units, Caribbean Cement lost $1.40 with just 2,922 shares changing hands to end at $22.50, Carreras ended trading 108,094 shares to end at $65. Grace Kennedy closed with 1,469 shares changing hands at $80, Jamaica Broilers traded 3,726,493 units to close at $14.50, after declining by 20 cents. JMMB Group had 6,803 shares changing hands at $10, Kingston Wharves traded 13,945 shares to close at $11.50, Mayberry Investments lost 30 cents to close at $3.70 with 5,000 shares changing hands, National Commercial Bank fell 49 cents with 42,113 shares changing hands to close at $40.01, while 138 Student Living, traded 30,550 shares at $5.50. Pan Jamaican Investments traded 3,999 shares to close at $93, Pulse Investments lost 24 cents to end at $2.99 with 10,000 shares trading,
Radio Jamaica with the largest trade for the day of 43,604,186 shares but lost 6 cents to close at $1.09, Sagicor Group rose 60 cents and ended with 65,158 shares changing hands at $23.70. Sagicor Real Estate Fund traded 5,000 shares to close at $10.02 Scotia Group traded 1,238,437 shares to close at $30 after falling by 50 cents, the stock traded as high as $34.90 ahead of the close. Seprod dropped back $3 to end at $16 with 19,314 shares changing hands, Supreme Ventures gained slipped 14 cents to close at $5 with 44,364 units changing hands, Proven Investments ordinary shares traded 553,800 units to end at 16 US cents, down from 17.50 cents previously. JMMB Group 7.50% preference share traded 868,551 units at $1.17 after shedding 3 cents and the Jamaica Money Market Brokers 7.50% preference share traded 218,200 units at $2.15.
