Bank of Nova Scotia decision to shed 1,500 workers globally and close a number of branches, within the Caribbean and Mexico, has led to other developments within the group, in an attempt to recognize areas of potential losses in the worldwide operations.
This had led the bank to record additional loan loss provisions of approximately C$109 million. The amount for “ losses relates, primarily to three existing net impaired loans, within the Caribbean region’s hospitality portfolio. Due to the prolonged economic recovery and continued uncertain outlook. These additional amounts, bring the net carrying value, in line with the expected net recoverable value,” the bankers said in their press release, on Tuesday. There is also an additional amount in the Canadian Banking related to a change in methodology in estimating loss parameters, on the unsecured lending portfolios.
Reports are that the bank plans to shutter 35 branches within the Caribbean region.
BNS provides C$109m for Carib hotels’ debt
Guardian Holdings profit up
Profits for the nine months to September 2014 attributable to equity shareholders of Guardian Holdings grew 45 percent to TT$286 million or $88 million or over the comparable period last year. The 2014 results to date translate Earnings per share (EPS) of $1.23 compared to $0.85 for the same period last year.
For the September quarter, profit for Guardian shareholders was TT$103 million, an increase of 11.2 percent, from $91.38 million in 2013. The profit position flowed from a 29 percent increase in insurance underwriting activities, in the quarter and 15 percent year to date, but lower investment income for the latest quarter, pulled the grow of profit down.
The 2013 result was negatively impacted by an extra-ordinary loss of $31 million, resulting from the Government of Jamaica restructuring their debt. The 2013 results, when this loss is excluded, would end up with an increase of profits year-on-year of $58 million, or 25 percent.
”Investment opportunities continue to be a challenge and as a result, our investment income fell from $666 million to $602 million, a decline of $63 million. This decline was offset by a favourable movement in Fair Value gains of $100 million inclusive of the Jamaican NDX,” Management stated in their release accompanying the results.
Operating Expenses increased by $34 million or 5 percent, of which $19 million is related to the Pointe Simon project. In 2013, Pointe Simon expenses were capitalised as the project was in the construction stage. The Pointe Simon project consists of an office tower building, condominiums and a hotel. From 2014, in keeping with accounting regulation the expenses relating to the project is booked through the income statement since the project has entered the commercialisation phase. Without this change in treatment, our operating expenses would have increased 3 percent year on year.
Management stated that they “expect to conclude transactions for the disposal of the majority of our condominiums by year end. Demand continues to be good for retail space at Pointe Simon and we have begun the process of signing leases for this space. The sale of the hotel will be concluded by year-end and we look forward to its opening in the latter half of next year. We continue to close a number of small leases in our office tower and are in the process of negotiating two large leases.” The sales of this real estate project will inject funds into the group and provide income and increased profits in the last quarter of 2014 and beyond.
Guardian is listed on the Trinidad & Tobago Stock Exchange and is primarily involved in life underwriting, general insurance and investments management.
Guardian Holdings stocks remains IC Insider BUY RATED.
Eppley seeking up $350m
Nigel Clarke – Chairman of Eppley
Dividends will be paid monthly at the rate of 10% per annum for the first two years, 11% per annum for years 3 to 4 and 11.5% per annum for the final year. This issue will be the second preference share to be offered to the market, since last year by the company.
The Invitation will open at 9 am on the Opening Date, Tuesday 11 November 2014 and will close at 4 pm on the Closing Date, Tuesday 18 November 2014 subject to the right of the Company to: (a) close the Invitation at any time after it opens once applications for all Preference Shares in the Invitation are received; and (b) extend the Closing Date for any reason, provided that it does not extend beyond the expiration of 40 days after the publication of this Prospectus
The Company reserves the right to redeem the Preference Shares (in full or part) on any dividend payment date that is not less than three years from the issue date at the higher of: (a) the Invitation Price plus 1 percent; or (b) the average of the last 10 days’ closing market prices on the JSE, prior to the notification date, plus any accrued and unpaid dividends subject to 30 days notice.
Eppley’s directors stated in the prospectus that “since the company’s initial public offering, of ordinary shares in July 2013, the company invested over $600,000,000 in the expansion of its credit business. The Company has deployed most of the capital it raised in its 2018 Preference Share issue in November 2013.”
Eppley provides credit to clients, allowing policyholders to finance insurance premium payments for property and motor vehicles. It also provide lease and commercial loan financing to medium and large businesses.
The ordinary shares are held mainly by Musson Investments – 37.68 percent, General Accident – 9.17 percent, ATL Pension – 25.65 percent and Stony Hill Capital – 15.28 percent.
Jamaica money Market Brokers are the brokers to the issue.
For the six months to June profit of $30 million was achieved from revenues of $74 million. At the end of June the company’s equity is $336 million with debt capital of $428 million. The proposed offer will raise debt to at least $678 million putting the leveraging at a high level. It seems as if the company needs a dose of ordinary equity as well as debt funding.
6 stocks rose as market indices jump
Grace climbed $1.50 to help push indices
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had 8 stocks with bids higher than their last selling prices and 7 stocks with offers that were lower.
Main Market| The JSE Market Index gained 807.24 points to 73,253.35, the JSE All Jamaican Composite index jumped 902.62 points to close at 80,618.73 and the JSE combined index gained by 760.32 points to close at 74,939.32.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Grace Kennedy finishing trading with 3,000 shares while gaining $1.50 to $59.50, National Commercial Bank ended with 12,777 shares rising 80 cents to $17.80, Pan Jamaican Investment closed trading with 4,000 units and put on 45 cents to $49.50, Scotia Group finished trading with 927,422 shares to end with an increase of 35 cents to $19.60 and Scotia Investments with 3,000 units to closed 20 cents higher at $21.60.Firm| The stocks in the main market to close without a change in the last traded prices are, Berger Paints closed with 14,750 shares trading to close at $1.60, Cable & Wireless finished trading with 5,310,349 shares at 28 cents after trading a small amount as low as 25 cents, Desnoes & Geddes fresh from reported a 30 percent increase in profit traded 100,000 units at $4.95, Jamaica Money Market Brokers ended with only 1,378 shares trading at $7 and Sagicor Group closed with 31,000 shares at $9.65.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Carreras with 6,707 units to close 10 cents lower at $34.50 and Jamaica Broilers ended with 219,639 shares to end 20 down at $4.
Medical Disposables sole stock trading
Medical Disposables distributes Denk Pharma products.
At the close of the market, there were 5 stocks with bids higher than their last selling prices and 3 stocks with offers that were lower. The junior market continues to exhibit weakness with 9 securities closing with no bids to buy. There were 4 securities that had no stocks being offered for sale.
Medical Disposables traded 34,000 shares gained 2 cents to end at $1.90 to be the sole junior market stock to trade.
5 stock gained on TTSE
Trading on the Trinidad Stock Exchange ended with 9 securities changing hands, of which 5 advanced, 1 declined and 3 traded firm, with a total of 64,377 units, valued at $895,542.
At the close, the Composite Index rose 0.13 points to close at 1,146.83, the All T&T Index gained 1.16 points to close at 1,964.25 and the Cross Listed Index fell by 0.12 points to end at 43.17.
Gains| Stocks increasing in price at the close of trading are, Angostura Holdings with 14,903 shares changing hands valued at $190,013 and gained 20 cents to end at $12.75, Point Lisas traded 1,839 shares to close with a gain of 5 cents, to end at $4.05, Republic Bank contributed 80 shares as the price closed up 74 cents, at $120.74, Scotiabank with 214 shares ended with a gain of 4 cents at $58.05 and West Indian Tobacco rose 2 cents to $119.02, while trading 80 units.
Declines| The only stock declining at the end of trading is, Sagicor Financial Corporation in trading 18,472 shares valued at $111,756, as the price fell 14 cents, to end at $6.05.
Firm Trades| Stocks closing with prices unchanged, at the end of trading are, Clico Investment Fund with 14,560 shares valued at $321,776 at $22.10, First Citizens Bank traded 1,695 shares to close at $36.75 and Guardian Holdings contributed 12,526 shares with a value of $169,697, to end at $13.55.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 3 stocks with the bid higher than their last selling prices and 2 stocks with offers that were lower.
Tax cut help boost D&G profit 30%
Desnoes & Geddes, brewers of the world famous Red Stripe beer, racked up a 30 percent increase in after tax profit, for the quarter to September this year, thanks partly to a reduction in tax, a 3 percent revenue increase and static to reducing cost. Profit before tax increased 14.5 percent to $640 million from $559 million in 2013. Revenues grew just 3 percent to $3.4 billion in the quarter but taxes fell from $192 million in the 2013 to $164 million as the tax rate for companies dropped to 25 percent form 30 percent for 2013.
Gross profit margin improved to 71.76 percent, in the latest quarter, from 69.25 percent last year. The improvement in the margin flowed in part from what management says are “efficiency gains from the investment in the brewery modernization such as the new combined heat and power plant.”
Gross profit improved by 14.7 percent to reach $1.156, as local sales grew 4.8 percent year over year, to reach $2.95 billion. Exports sales fell to $414 million from $465 million in 2013 leading to a fall in gross profit in the export segment to $226 from $291 million. Management stated that the reduction in exports is due to shift in the timing of a Shipment from the September quarter to the December quarter.
The company benefited from lower general, selling and administrative cost which fell to $261 million in the quarter, compared to $288 million in the 2013 quarter.
Cash funds at the end of the quarter, stood at $1.79 billion. The company declared a dividend of 27 cents per share, payable in December to cost $760 million and will be adequately funded by the earnings, for the December quarter. With the planned dividend, the company will pay 52 cents per share, in dividend for the 2014, providing a yield of just over 10 percent, based on the price of $5.10 at the end of 2013.
IC Insider is projecting earnings of 85 cents per share, for the year ending June 2015 and $1.05, for the following year. The stock which last sold at $4.95 remains an IC insider BUY RATED stock.
J$ loses against US$ gain on others Tuesday
On Tuesday, the Jamaican dollar lost marginally against the US dollar but gained on the Canadian dollar and the Pound, as authorized dealers purchased the equivalent of US$30,681,096 versus US$50,365,682, on Monday and sold the equivalent of US$34,360,936 compared with US$45,798,087 on Monday
In US dollar trading, dealers bought US$25,190,135 compared to US$45,307,960 on Monday. The buying rate for the US dollar fell 3 cents at $112.20 and US$30,791,749 was sold versus US$42,168,635 on Monday, the selling rate rose 1 cent to $112.76. The Canadian dollar buying rate, rose 86 cents to $97.98 with dealers buying C$3,145,010 and selling C$2,618,211, at an average selling rate that dropped 61 cents, to $98.79. The rate for buying the British Pound dropped 14 cents to $178.13, for the purchase of £1,586,962, while £680,146 was sold, at $179.74, a fall of 46 cents. Other currencies bought, amounted to the equivalent of US$224,969, while the equivalent of US$191,379, was sold.
Highs & Lows| The highest buying rate for the US dollar, the lowest buying and the highest selling rates were unchanged at $112.88, $91.85 and $117.70 respectively but the lowest selling rate climbed $1.81 to $93.66. The highest buying rate for the Canadian dollar lost 81 cents, to $99.85, the lowest buying rate rose 8 cents to $79.10, the highest selling rate fell 60 cents to close at $102.50. The lowest selling rate declined 20 cents to $95. The highest buying rate for the British Pound, dipped 10 cents to $180.50. The lowest buying rate was unchanged at $143.96, the highest selling rate climbed 32 centsto $185.91 and the lowest selling rate rose 30 cents to $173.75.
NCB wage award adds J$430M to cost
National Commercial Bank (NCBJ)has provided an update to the two Stock Exchange that its shares are listed on.
The bank has now stated that the total gross provision required to meet the total sum needed to satisfy the award, for the two year negotiating period, ending September 30th, 2014 is, approximately J$1.7 billion. The total amount to cover the award exceeds by approximately J$430 million, the amount that NCBJ had been providing for increased salaries and benefits, for the negotiating period. The amount is lower than the net sum of approximately $500 million IC insider suggested, would be the charge net of taxation. This shortfall, NCBJ says will be reflected in their income statement, for the year ended September 30th, 2014.
4 stocks up 5 down on JSE
Tuesday’s activity on the Jamaica Stock Exchange, resulted in the prices of 4 stocks rising and 5 declining as 21 securities changed hands, ending in 6,081,391 units trading, valued at $20,841,759, in all market segments.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had 10 stocks with bids higher than their last selling prices and 5 stocks with lower offers.
Main Market| The JSE Market Index gained 534.49 points to 72,446.11, the JSE All Jamaican Composite index rose 597.64 points to 79,716.11 and the JSE combined index gained 462.27 points to close at 74,179.00.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Carreras had 2,492 shares changing hands and gained 10 cents to $34.60, Jamaica Broilers with 9,318 units closed 5 cents higher at $4.20, Kingston Properties climbed 15 cents to $4 with 10,000 shares trading and Sagicor Real Estate Fund close trading with 30,000 units while gaining 10 cents to end at $6.75.
Firm| The stocks in the main market to close without a change in the last traded prices are, Cable & Wireless in trading 4,005,306 units to close at 28 cents, Desnoes & Geddes with 42,400 shares to end at $4.95, Jamaica Money Market Brokers with 2,865 ordinary shares trading to close at $7, Margaritaville with 44,200 shares traded to end at 11 us cents, National Commercial Bank had 5,893 units changing hands to close at $17, Pan Jamaican Investment with just 200 shares trading ended at $49.05, Proven Investments with 27,540 units closed at 18 US cents and Sagicor Group exchanged 20,100 shares to close at $9.65.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Grace Kennedy with 7,000 shares to close $1 down at$ 58, Radio Jamaica had 10,516 units changing hands to close with a loss of 2 cents at $1.18, Scotia Group traded with 725,272 shares to end 35 cents lower to end at $19.25 after trading as high as $20.49 and Scotia Investments closed with 1,700 units trading to close with a loss of 60 cents at $21.40.
Preference| Trading picked up in the preference share segment with Jamaica Money Market Brokers 8.75% preference share trading 300,000 units at $3, the Jamaica Money Market Brokers 7.50% preference share trading 576,700 units to close at $2 and Proven Investments 8% preference share trading 172,594 units to end at $5.
