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Sagicor Expensive Real Estate Fund

January 25, 2015 by IC Insider.com

Sagicor Real Estate X Fund has been selling significantly above its IPO price of $5 and has since risen by 40 percent to $7, making it one of the better performing stocks on the local stock market since listing.

One of the properties in the fund

That is great for those who invested at the time of the IPO. Do the fundamentals justify the price? The fund reported earnings or better yet capital appreciation of $271 million or 18 cents per share in the September quarter and $681 million or 46 cents for the nine months to September, representing a 10.7 percent rate of return for the year. This is a very high return for a real estate investment, suggesting that a large portion is capital appreciation and not regular income.
Of import is the seasonality of the hotel operations—high income and profits in the period between December and April, July and August, and lousy in the other months, which are usually loss making months. Sagicor Real Estate X Fund had assets of $9 billion at the end of September and net book value of $6.09. The stock price is $7, for a near 20 percent premium, which is well over the market.
The fund with 1,495,336,750 shares issued, boasts a very high PE ratio of 12, which is far greater than the other stocks in the market, and without the growth prospects of the vast majority of them. In a market that values stocks based on earnings generating cash flow, the valuation placed on the fund is even higher than the PE suggests and may be as high as a PE of 30. But that is the value that would be placed on a company
growing profits at 30 percent per annum. Earnings growth will not be there to drive the stock price compared to many of the quality listed stocks. The stock is now being valued on hype not reality.
The Sagicor Real Estate X Fund has a number of hotels, but many hotels have been notorious for not being highly profitable. There is also a great level of seasonality in performance in the sector. Income from other local properties will be steady as
most are rented on a long term basis.
The company has strategically invested in the Sigma Real Estate Portfolio, which holds a mix of hotels, commercial, industrial and warehousing properties. At this time, the only investment for the Fund is the units in the Sigma Real Estate Portfolio.
The Fund is 67.7 percent owned by the Sagicor Pooled Pension Investment Funds, which are administered by Sagicor Life Jamaica and is listed on the Jamaica Stock Exchange.

Filed Under: Company News, Company Results, Investor's Choice Best Tagged With: Jamaica Stock Exchange, Sagicor Real Estate X Fund

NCB modifies dividend payments

January 25, 2015 by IC Insider.com

National Commercial Bank Jamaica, (NCB) approved the payment of an interim dividend of 45 cent per ordinary stock unit to be effected on February 20, 2015, for stockholders on record at February 6. The ex-dividend date is February 4.
The amount to be paid represents 51.7 percent of the reported profit of 87 cents per share for the quarter to December and just under 40 percent of the profit of $1.13 per share adjusted for the up front charge of the bank asset tax, the amount cannot be spread out over the full year on a month by month basis as was done in the past based on new accounting standard. The latest payment, if maintained for the balance of the year, would translate to $1.80 per share, a bit less than the total paid last year. In 2014, NCB hiked the final dividend to 96 cents per share to stockholders in December, from only 16 cents, in the prior year, December. The final payment for 2014 brings the total dividends for that year to $1.98. They made dividend payments of 35 cents per share in August, 35 cents in May and 32 cents per share on February last year.
IC Insider has been reliable advised, that the banking group decided to up their dividend payments to be ahead of Scotia Group and payment should continue at the heightened levels going forward, effectively moving away from a policy that was chopped and changed for several years to the disgust of many shareholders.

Filed Under: Company News, Dividends Tagged With: Dividends, NCB, Scotia

JSE stock moved to Buy Rated list

January 25, 2015 by IC Insider.com

The Jamaica Stock Exchange shares which were issued at $2.85 in the IPO in 2013, dropped last year to a low of $1.50 and the stock languished below $2 for months begging to be bought but with a few takers. This past week it hit $2.
At the close of last week, there was a bid in to buy 282,565 units at $2, but selling has dried up substantially. The prospects for the company is bright. Investors may be looking at 2014 performance to guide them, but it is 2015 onwards where the exciting times will be, this why IC Insider moved the stock from Market Watch to Buy Rated.
For the nine months to September last year, the JSE reported profit for the quarter of $11 million up from a small loss in the June quarter and for the first six months of the year. The big change in the September quarter resulted from a large block of shares traded that provided increased one-off income but also the recovery of $6 million in bad debts. For the year to September the JSE reported only $8 million in profit or a mere 6 cents per share, but bad debt recovered amounted to $10 million before tax. Revenues climbed to $89 million in the September quarter, an increase over the $73 million garnered in 2013. For the year to date revenues jumped $41 million to hit $242 million. Quarterly expenses climbed from $85 in 2013 to $91 million in 2014, and for the nine months, from $247 million to $273 million or just over 10 percent, a slower pace than the income growth of 20 percent.
Based on these results alone, the stock would at best be a hold and more likely a sell. Investment is about the future more than the past, and the latter is where the attraction is. The local stock market is exhibiting all the signs of a bull market in 2014. The early trading for the year to date is mostly positive. Increased market activity will mean more income from trading transactions. Increased prices will result in much more income from annual listing fees in 2015. More securities were listed in 2014 and more are expected in 2015 which will result in increased listing fees and the possibility of increased trading opportunities going forward.
Some of the factors supporting the above can be found in strong technical indicators pointing to a strong market ahead, sharp decline in interest rates and projected low inflation. Additionally, the fall in the price of oil and other commodities on the world market will provide consumer with added disposal income to spend and this is likely to improve the profits of many listed companies and should result in increased gains in stock values and trading volumes. Political winds may be blowing over the market, with elections due by 2016, but that should not stop investors from picking the stock up cheaply, if they can, and await what will be a huge pay off in two to three years’ time as the market gets back to full life, in a low inflation, low interest rate environment. The JSE had cash and investments at the end of the period of $375 million equity of $571 million with no borrowed funds.
Caribbean Producers have been restored to the Buy Rated list based on strong revenue growth in the September quarter that suggest higher profits in the current year compared with the 2014 results.

Filed Under: Buy Rated, Company News, Company Results Tagged With: Caribbean Producers (CPJ), JSE Company

GOJ T-bill rate decline conftinues

January 24, 2015 by IC Insider.com

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Ministry of Finance Building Kingston, Jamaica

Interest rates on government of Jamaica Treasury bills, continue their decent in the latest offering this month. Two offerings at the January 23 auctions and one on January 14, resulted in a further decline in the interest rates on all three instruments offered to the public.
The 182 days note that fell to 7.14 percent at the December auction, the lowest level since June 201, returned a lower rate in the January auction at 6.99 percent.
The pace at which the 182 days treasury rates are falling, have slowed from 0.34 percent dip in November to 0.15 percent at the latest issue. With the latest announcement by Bank of Jamaica on projection for inflation for 2015 being in the range of 3-5 percent there will be lots of room for the treasury rates to decline sharply in the months ahead.

The latest auction, dated January 14, 2015, for the 28 days instrument, ended with an average rate of 6.29528 percent. The rate fell from the average rate of 6.38 percent at the December auction and from 6.71 percent in November and 6.826 percent in October, as $1.1 billion up from $686 million in December, chased the $400 million on offer.
Investors’ demand for the 91 days Treasury bills, climbed to $706 million, from $531 million in December, but is still well below the $1.042 billion that chased the November auction offering. Demand for the longer-term 182 days instrument, was down to $717 million from $925 million for the December auction. The amounts available were $400 million for each for the Treasury bills on offer.
The Treasury bill for the 91 days period, Friday, January 23 to mature on Friday, April 24, attracted an average yield of 6.8817 percent down from 6.956 percent in December. November’s rate was 7.052 percent, 7.336 percent in October and 7.46952 percent, at the September auction. At the August auction the average rate out turn was 7.46767 percent. The yield for July was an average of 7.63643 percent, for the June issue 7.65893 percent and 8.2 percent in May, for the Treasury bill of same duration.
The offer of 182 days duration, dated December 2014, maturing on June 19, 2015, resulted in an average interest rate yield of 7.14 percent, down from 7.387 percent at the November’s auction. At the October auction the average rate declined to 7.73187 percent from 7.99887 percent, at the September auction, 8.11578 percent, in August, 8.21982 percent at the July’s auction and 8.36502 percent for the June issue, of the same duration. At the May auction, the rate came out at 8.932 percent.

Filed Under: Breaking News, Economy, Feature Stories Tagged With: Bank Of Jamaica, Inflation in Jamaica, Jamaica Government, Latest GOJ T-bill rates, treasury bill

Carreras climbs $2.29 pushes JSE

January 23, 2015 by IC Insider.com

Carreras closed trading at $39.50 to end the day at a new 52 weeks’ high and Scotia Group after hitting $21.99 with 739,792 shares by mid-day, closed at $20.50 and were the main contributors to a strong increase in the main market indices on Friday. The gains were not adequate to stop the overall market from registering the third consecutive day of declining stocks out numbering advancing ones.
Activity on the overall Jamaican stock market, resulted in the prices of 6 stocks rising and 9 declining as 29 securities changed hands, ending in 5,019,576 units trading, valued at $36,430,375, in all market segments.
Main Market| The JSE Market Index gained 1,175.44 points to 77,828.04, the JSE All Jamaican Composite index rose 1,314.20 points to close at 85,733.67 and the JSE combined index gained 1,070.76 points to close at 79,654.74.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator shows 10 stocks with bids higher than their last selling prices and 3 with offers that were lower.

Scotiabank shares helped to push the index in Fridays trading.

Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Caribbean Cement ending with 12,825 units changing hands, to close with a gain of 5 cents at $2.35. Carreras swapped 124,240 shares to close with a gain of $2.29 at $39.50, the highest price it closed at since, November 6, 2013 when it then closed at $40. Jamaica Money Market Brokers closed with 93,329 ordinary shares trading, with a gain of 2 cents to $6.57, Scotia Investments contributed 5,000 units in trading to close 4 cents higher at $22.55 and Supreme Ventures had 10,600 shares changing hands, the price gained 15 cents to $2.15.
Firm| The stocks in the main market to close without a change in the last traded prices are, Berger Paints in trading 1,569 units ended at $1.55, Cable & Wireless closed with 31,881 shares changing hands at 50 cents. Ciboney ended with 10,000 shares trading at 7 cents, Desnoes & Geddes closed with 909,979 units trading to end at $4.80, Jamaica Broilers closed with 89,998 units traded at $4, Jamaica Stock Exchange finished with 10,000 units changing hands at $2. Kingston Wharves exchanged only 827 units at $5.60, Mayberry Investments traded at $2, in swapping ownership of 200,406 shares, Proven Investments traded 17,000 shares at 21 US cents, Radio Jamaica closed with 800 shares changing hands at $1.30 and Scotia Group ended up with 750,762 shares changing hands at $20.50.

Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Gleaner closing with 64,463 units trading as the price slipped 5 cents to 80 cents, for a new 52 weeks low, Grace Kennedy finished with 23,770 shares trading lower by 50 cents to $62.50, Kingston Properties closed with 29,925 shares changing hands to close lower by 50 cents at $7, National Commercial Bank closed with 50,453 units as the price slipped 19 cents to $19.31, Pan Jamaican Investment finished with 26,363 units trading, the price eased by 10 cents to $52, Radio Jamaica ended with 560 shares trading lower by 15 cents to $10.05 and Sagicor Group closed trading with 10,947 units as the price slipped 30 cents to $6.65.
Preference| Eppley 10% preference share traded 34,500 units at $6 and Jamaica Money Market Brokers 7.50% preference share ended with 1,773,100 units trading at $2.

Filed Under: JSE Main Market Tagged With: Berger Paints, Broilers, Cable & Wireless, Caribbean Cement, Carreras, Ciboney, Desnoes & Geddes, Gleaner, Grace Kennedy, jamaica, Jamaica Money Market Brokers, Jamaica Stock Exchange, Kingston Properties, Kingston Wharve, Mayberry Investments, National Commercial Bank, Pan Jamaican Investment, Proven Investments, Radio Jamaica, Sagicor Group, Salada Foods, Scotia Investments

Juniors slip on low activity

January 23, 2015 by IC Insider.com

Activity Trading on the Junior Market closed with only 5 securities trading and ended with 770,779 units valued at $1,145,965. The JSE Junior Market Index fell 3.76 points to close at 692.70, with the price of 1 advancing and 2 declining.
At the close of the market, there were 7 stocks with bids higher than their last selling prices and 1 stock with the offer that was lower. The junior market closed with 4 securities closing with no bids to buy and 6 closed with no offers to sell.
The stocks trading in the junior market on Friday are, Lasco Distributors trading 277,170 shares at $1.40, after shedding 4 cents. Lasco Financial Services closed with 302,502 shares trading 6 cents higher at $1.06, Lasco Manufacturing ended trading with 127,016 units trading at $1.19, Eppley 10% preference share traded 34,500 units at $6 and Paramount Trading lost 8 cents to close at $3.22 while trading 29,591 shares.

Filed Under: JSE Junior Market, Stock Market Tagged With: Eppley, Lasco Distributors, Lasco Financial Services, Lasco Manufacturing, Paramount Trading

J$ loses against US gains on others

January 23, 2015 by IC Insider.com

The Jamaican dollar fell in value against the US but gained on Canadian dollars and the British Pound on Friday. Purchase of all currencies by dealers, translated to US$36,907,493 compared with the US$32,199,150, on Thursday and selling of the equivalent of US$31,955,892 versus US$32,727,717 sold on Thursday.
In US dollar trading, dealers bought US$32,907,129 compared to US$28,635,833 on Thursday. The buying rate for the US dollar rose 24 cents to $115.21 and US$29,758,416 was sold versus US$29,864,735 on Thursday with the selling rate climbing 20 cents to $115.72. The Canadian dollar buying rate lost 42 cents to $92.16 with dealers buying C$1,482,650, and selling C$995,859, at an average selling rate that dropped 10 cents, to $93.41. The rate for buying the British Pound fell $1.48 to $171.58 for the purchase of £1,228,129, while £560,898 was sold, the rate dipped $1.52 to $173.33. At the end of trading it took J$131.89 to purchase the Euro, $1.88 lower than on Thursday, according to data from Bank of Jamaica, while dealers purchased the European common currency at J$129.29, $1.77 lower than on Thursday. Other currencies bought, amounted to the equivalent of US$985,359 while the equivalent of US$553,553, was sold.
Highs & Lows| The highest buying rate for the US dollar, climbed 20 cents to $116.05 and the lowest buying rate remained at $94.19. The highest selling rate moved up 16 cents to $120.86, while the lowest selling rate rose 45 cents to $112.95. The highest buying rate for the Canadian dollar fell $1.21 to $94.09, the lowest buying fell 66 cents to $74.04. The highest selling rate rose 4 cents to $98 and the lowest selling rate eased 80 cents to $89.20. The highest buying rate for the British Pound, declined $1.10 to $174.90. The lowest buying rate rose 95 cents to $140.56, the highest selling rate fell $1.72 to $178.25 and the lowest selling rate rose $1 to $169.20.

Filed Under: FX Market, Stock Market Tagged With: BOJ, British Pound, Canadian dollar, FX Market, J$ vs euro, Jamaica dollar, US Dollar

4 advancing 1 declining but TTSE weakens

January 23, 2015 by IC Insider.com

Trading on the Trinidad Stock Exchange closed the week with 10 securities changing hands of which 4 advanced, only 1 declined and 5 traded firm with a total of 113,898 units, valued at $1,646,886.
At the close of the market, the Composite Index lost 0.39 points to close at 1,151.25, the All T&T Index fell by just 0.92 points to close at 1,984.88 and the Cross Listed Index increased by a mere 0.02 points to end at 41.59.
Gains| Stocks increasing in price at the close are, Grace Kennedy closing with a 1 cent gain to $3.67 as 327 units changed hands, Guardian Holdings with 1,000 shares traded at $13.27 to close with a 1 cent gain. Sagicor Financial Corporation closed with 11,026 shares changing hands and increasing 1 cent to end at $5.50 and Scotiabank that traded shares 2,177 valued at to close with a gain of 1 cent to end at $61.01.
Declines| The only stock declining at the end of trading is, Ansa Merchant Bank added 2,646 shares valued at $102,929 falling 56 cents to close at $38.90.
Firm Trades| Stocks trading with prices unchanged at the close of the market are, Angostura Holdings contributing 750 shares, the price closed unchanged at $15.50. ANSA McAL with a volume of 5,000 shares traded for $332,600, to close at $66.52, Clico Investment Fund trading 22,650 shares valued at $531,143 to end at $23, One Caribbean Media with 2,328 shares ended at $23.95 and West Indian Tobacco contributed 2,694 shares with a value of $328,668 to close at $122.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator is showing only 3 stocks with the bid higher than their last selling prices and 6 stocks with offers that were lower, continuing a negative bias in the market.

Filed Under: Stock Market, TTSE Market Tagged With: Angostura Holdings, Ansa Mcal, Ansa Merchant Bank, clico, Daily Trading, Grace Kennedy, Guardian Holdings, One Caribbean Media, Sagicor, Scotia, West Indian Tobacco

A Lime money wallet in your pocket

January 23, 2015 by IC Insider.com

Cable & Wireless Jamaica plans to launch its own mobile wallet as early as this year. It would provide money payment services for those without banking accounts, the company chief executive says.
“We are going to hopefully launch this year the M-wallet. We are going to create the ability of the average Jamaican with a cell phone to engage in sophisticated banking services as never before for those people who are unbanked,” Cable & Wireless president Garfield Sinclair said at the JSE 10th Regional Conference held at the Jamaica Pegasus Hotel on Tuesday.
Local smartphone users already can pay for goods and services using apps including Paypal and Payoneer. However Cable & Wireless could offer the services similar to m-pesa money transfer system on phones in Kenya. It allows phones to transfer cash using SMS text without internet connectivity.
The jump towards mobile wallets however requires a strong uptake to cover start-up costs. Just this week US based Amazon, the largest online retail store announced plans to fold its mobile wallet after just six months amid a slow take up. It reportedly offered loyalty points but failed to integrate with debit and credit cards.

Filed Under: Company News Tagged With: C&WJ, Garfield Sinclair, Jamaica Pegasus Hotel, JSE 10th Regional Conference, M-wallet, Payoneer, Paypal

Jamaican Teas’ profits up 28%

January 22, 2015 by IC Insider.com

Jamaican Teas stock gained the most in the junior market on Wednesday

The group made a profit of $27.5 million in the December quarter, representing a 28 percent increase from the similar period in the prior year and flows from a 16 percent increase in sales to $319 million.
Sales were helped by 91 percent jump in exports, moving from $55 million to $103 million, Sales in the prior year included Real Estate sales of $21.75 million, excluding these sales, revenues would be up by 26 percent for the quarter. The increase in exports, relate mainly to supplies to the US market and is partially due to the appointment of a new Distributor for the North East USA and expect that this will result in further improvement in sales. Sales also benefited from the launch of four new products during the period. Sales for Supermarkets are up 9 percent compared to the comparative quarter, in 2013, however, profits are flat. The jointly owned Supermarket in Montego Bay showed a reduction in losses which was helped by certain actions taken to reduce cost in 2014.

Gross profit margin increased to 24.3 percent from 24 percent in 2013, while gross profit increased 16 percent to $62 million but cost rose in other areas, with marketing climbing 24 percent to $7.3 million, administration by only 4 percent to $25.5 million and finance used to generate revenues in the period is up 14 to $6.2 Million.

The Orchid property being developed that should add to Jamaican Teas’ profits in 2015 & 2016.

Property Development| The group has completed construction of more than 50 percent of units in phase 1 of the residential development in Yallahs, St Thomas. Approximately a half of the units have been sold and delivery to the purchasers should start in April. The group should enjoy increased profits from this development which should start reflecting in the June quarter.
Barring any unforeseen developments, 2015 could produce the best financial performance far. The stock which is now at $2.55 seems to have much room for growth.

Filed Under: Buy Rated, Company News Tagged With: Jamaican Teas, Orchid Estate