The local dollar lost value against all the majors on Monday even as inflows outnumbered outflows with $50 million bought to only $39.4 million sold. On Friday, dealers bought of the equivalent of US$39,803,642 with the equivalent of US$25,324,698 sold.
In US dollar trading, dealers bought US$44,649,343 compared to US$33,708,870 on Friday as the buying rate for the US dollar rose 8 cents to $111.11 and sold US$36,125,994 versus US$23,139,314 on Friday with the rate closing up a cent to $111.56.
The Canadian dollar buying rate rose 65 cents to end at $100.91 with dealers buying C$1,466,526 and selling C$1,067,452 with the rate rising 8 cents to end at $102.53.
The Pound closed at $187.24, for the purchase of £2,344,280, the rate gained 76 cents, while £1,254,031 was sold, with the rate climbing 59 cents to $188.96. Other currencies bought, amounted to the equivalent of only US$158,563 while selling accounted for the equivalent of just $174,570.
Highs & Lows| The highest rate for buying the US dollar gained 22 cents to $112, the lowest buying rate fell 34 cents to $90.26 and the highest selling rate rose by 27 cents to $116.36. The lowest selling rate declined by $17.90 to $90.60.
The highest buying rate for the Canadian dollar climbed 40 cents to $103, the lowest buying rate inched up 4 cents to $81.13, the highest selling rate was up 30 cents to $104.89 and lowest selling rate was up by 25 cents to $98.
The highest buying rate for the Pound gained 65 cents to $189.75 while the lowest buying rate rose $1.45 to $151.27. The highest selling rate rose by $1.87 to $195.01 and the lowest selling rate was up $1.75 to $182.25.
Inflows more than outflows as J$ falls
Carreras & NCB up $1
Carreras and National Commercial Bank gained $1 each in moderate trading Monday on the Jamaica Stock Exchange as the prices of 4 stocks rose and 4 declined with 19 securities traded, resulting in 4,229,295 shares trading valued at $47,344,274, both the volume and value of traded were higher than on Friday but the number of securities traded were down from 25 previously.
Main Market| The JSE Market Index gained 683.89 points to 71,180.53 and the JSE All Jamaican Composite index moved 764.72 points to close at 78,300.96.
Gains| Stocks recording gains at the end of trading in the main market are Carreras had 28,057 units changing hands with a gain of $1 in closing at $34.50, Jamaica Money Market Brokers with 93,767 ordinary shares closing at 10 higher at $6.60, National Commercial Bank with 15,940 shares, gained a $1 to end at $18 and Scotia Group saw 1,599,574 units changing hands to close 20 cents higher at $19.50.
Firm| The stocks in the main market to close without a change in price are Grace Kennedy 15,000 units to close at $54, Hardware & Lumber 300 shares to close at $10, Jamaica Broilers with 34,000 units to close at $4.57, Radio Jamaica 5,370 shares to close at $1.29, Sagicor Group with 958,732 units to close at $9.10 and Seprod 61,832 shares to close at $10.50.
Preference| Jamaica Money Market Brokers 8.75% share traded 1,157,770 units to close at $3.05.
Declines| The number of stocks that declined in the main market are Caribbean Cement 141,566 units to close 5 cents lower at $2, Mayberry Investments with 2,522 units to close at 8 cents at $1.65, Pan Jamaican Investment 250 shares to close 5 cents lower at $48.05.
Junior Market| The JSE Junior Market Index declined by 0.66 points to close at 714.76 as only 5 stocks traded with none advancing and 1 declining.
Firm Trades| The stocks in the junior market stocks that traded to close at the same price as the previous trading day are Consolidated Bakeries with 10,100 shares to close 90 cents, General Accident 16,640 units to close at $1.36, Lasco Distributors with 83,465 shares to close $1.21 and Lasco Manufacturing 1,410 units to close at $1.05
Declines| The stock declining in the junior market at the end of trading is Lasco Financial with only 3,000 units to close at $1.13 with a 2 cents loss.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 6 stocks with the bid higher than the last selling price and 6 stocks with offers that were lower.
Sagicor Group concludes RBC purchase this month
Regulatory approval has been granted for the Sagicor Group Jamaica to acquire full control of RBC Royal Bank (Jamaica) and its subsidiary – Securities Jamaica Ltd. Sagicor In a release stated that “ we expect to complete the process of acquisition and transfer of business by the end of June. We will be taking steps to combine the operations of both banks to operate under the Sagicor Bank branch, which will involve rebranding all RBC Jamaica branches to Sagicor Bank branches. Our Teams at Sagicor Bank and RBC Jamaica will be working to ensure a smooth transition for all our new and existing customers. Over the next 12 months, we will be working to integrate our technology platforms so that customers will be able to bank at any of our branch locations”.
RBC Royal Bank (Jamaica) has been incurring large annual losses which led to its parent taking the decision to divest themselves of the local operation making it the second time that the company has exited the local market. In the 1990s Royal Bank of Canada sold out its remaining local interest to Jamaica Mutual life who subsequently sold it to National Commercial Bank.
Sagicor Group earlier in the year confirmed the acquisition of RBC Royal Bank Jamaica’s operations for a price of $9.5 billion with the book value at $9 billion at the end of March.
Pooling Sagicor Bank with that of RBC will create a combined banking group with assets of nearly $76 billion with loans of $38 billion with $28 billion coming from RBC and revenues around $12 billion
This will not be the first time that Sagicor Bank would have entered in merger arrangements having absorbed Manufacturers Merchant bank and Trafalgar Development Bank some years ago.
The RBC operation was been bleeding around $500 million per quarter the book value. For the twelve months to September last year the RBC lost $1.7 billion and $456 million between July and September according to central bank’s data. For the year ending October 2012, RBC reported a loss of $2 billion before tax which was down from $3 billion in 2011. In 2012 loan losses contributed $650 million to the loss and income was inadequate to cover housekeeping expenses. Most likely the NDX in 2013 that cut interest rates would have negatively affected them thus reducing the net interest margin. Royal Bank’s problem apart from heavy loan losses is the fixed operating cost that the income generated cannot match. The Group will embark on cost cutting some of which is expected to flow from branch closure where branches overlap.
Inflation jumps 1% in May
Inflation jumps 1 percent in May, the Statistical Institute of Jamaica (Statin) stated in a release today, compared to the index for April. An increase of 0.7 percent in ‘Food and Non-Alcoholic Beverages’ and 3.6 percent increase in the index for the division ’Housing, Water, Electricity, Gas and other Fuels’ were the major reasons for the sharp climb. The movement in the index for May 2014 resulted in a calendar year-to-date inflation rate of 2.4 percent. Inflation declined in April by 0.7 percent compared to March this year.
According to Statin, the division ‘Food and Non-Alcoholic Beverages’ was impacted by increases of 1.9 percent and 1.6 percent in ‘Bread and Cereals’ and ‘Milk, Cheese and Eggs’ respectively. There were declines of 0.4 percent and 0.3 percent for the classes ‘Fruit’ and ‘Vegetables and Starchy Foods’ respectively. Within the division ‘Housing Water, Electricity, Gas and Other Fuels’ the advance in the index for ‘Electricity, Gas and Other Fuels’ of 7.3 percent was moderated by the fall of 3.4 percent in the index for ‘Water Supply and Miscellaneous Services Related to Dwelling’
The other divisions that recorded increases in the All Jamaica ‘All Divisions’ index were: ‘Alcoholic Beverages and Tobacco’ 0.5 percent, ‘Clothing and Footwear’ 0.2 percent, ‘Furnishings, Household Equipment and Routine Household Maintenance’ 0.5 percent, ‘Health’ 0.2 percent, ‘Transport’ 0.4 percent, ‘Recreation and Culture’ 0.1 percent, ‘Restaurants and Accommodation Services’ 0.5 percent, and ‘Miscellaneous Goods and Services’ 0.5 percent.
Profit down at Blue Power
Blue Power reported a fall in profit for the year to April this year with profit declining to $93 million compared to $104 million in 2013 with most of the decline coming in the last quarter, with the quarterly profit falling to $22.7 million versus $37.1 million in 2013, but the April quarter’s profit was above the third quarter profit of $15.2 million. Earnings per stock unit moved down 10 percent from $1.84 to $1.65.Management indicated the overall contraction of demand in the country and the completion of projects supported by a foreign agency in the last two years, are contributing factors to the flat sales with combined sales for the twelve months at $1.05 billion roughly the same amount as in 2013. Revenues in the last quarter came in at $268 million versus $345 million in 2013. The last quarter figure is slightly below the $263 million generated in the January quarter.
Divisional profit contributions came from the Lumber Depot division with $42 million, while the Blue Power division provided $51 million with sales rising 5 percent from $303 million to $318 million for the Blue Power division while the Lumber Depot division had a small decline of 2 percent from $745 million to $728 million.
Administrative and other expenses fell to $135 million from $136.5 million. Gross profit declined to $218.3 million from $232 million in 2013.
Financial strength| The company remains financially sound with the bulk of the $95 million funds generated during the year, going to fund increased inventories and receivables but they still held on to $136 million in cash, at the end of the financial year. Equity climbed to $431 million up from $346 million last year.
The company announced that they will be considering the payment of a dividend at a meeting to be held on Monday, June 23, 2014.
Management stated that they have undertaken a number of initiatives to contain costs and improve margins. They also indicated that they completed solar installations at two of their locations which will begin to impact positively on energy expenses during the coming year and the third energy-saving project will be completed before the end of this calendar year and its impact will be felt in the fourth quarter. For the current fiscal year earnings should come in close to that earned for the 2014 year.
Two new highs as 3 stocks rise
Trading levels on the Trinidad stock market on Monday was moderate with 12 securities changing hands of which 3 advanced 4 declined and 5 traded firm with 63,104 stocks trading with a value of $$1,443,488 with two stock reaching new 52 weeks high.
The Composite Index lost 2.17 points to close at 1,180.84, the All T&T Index rose fell by just 4.26 points to close at 2,026.54 and the Cross Listed Index eased by a mere 0.01 points to end at 43.91.
Gains| Stocks increasing in price at the close are Neal & Massy gained 5 cents to end the day at $68.85 while exchanging 871 units, to end at another 52 weeks high, Prestige Holdings added 3,755 shares valued at $35,335 to end at $9.41 up a cent and Unilever with 1,500 shares closed a cents higher at $62.01 for a new 52 weeks high.
Declines| The stocks declining at the end of trading are National Enterprises was the volume leader with 21,594 shares changing hands for a value of $404,911 and fell 25 cents to close at $18.75, Sagicor Financial Corporation with 3,375 shares to close with a one cent loss at$6.73, Scotiabank contributed 6,501 shares with a value of $452,578 while closing 17 cents lower at $69.61 and Scotia Investments lost a cent to close at $1.55 while trading 3,300 units.
Firm Trades| Stocks closing with prices unchanged at the end of trading are Clico Investment Fund had a volume of 9,843 shares valued at $211,625 to remain at $21.50 followed by Guardian Holdings with 8,552 shares traded for $126,142 to close at $14.75, Jamaica Money Market Brokers with only 2,000 units to close at 45 cents, One Caribbean Media 1,313 to close at $23, Trinidad Cement 500 shares, closed 1.95.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 2 stocks with the bid higher than the last selling price and 5 stocks with offers that were lower.
Carreras up $1,NCB up $1top movers
Carreras was up $1 to $34.50 while trading 28,057 shares, NCB gained $1 to $18 with 4,140 units trading and Sagicor Group with 958,732 units and Scotia Group with 1,597,476 units trading were the top stocks with 15 minutes of trading to go in Mondays trading on the Jamaican Stock Exchange.
Germany 4, Portugal nil
Germany started the scoring in their group match against Portugal with a goal from a penalty kick in early play and added another following a corner kick. Seconds from the close of the first half the Germans struck again from an error by the Portugal defense in the penalty area.
Unless Portugal make serious changes in the second half with only 10 men they face a daunting task to avoid a solid whipping, similar to or greater than the one Spain got from Holland, last week. the Germans just scored another to make the score 4-0 shortly after the Portuguese should have had a penalty for a fowl in the Germans penalty area.
Guardian General Profit drops
Guardian General Insurance the Jamaica general insurance arm of the Trinidad Stock Exchange listed Guardian Holdings recorded lower profits in 2013 than it did the year before thanks to higher claims and lower investment income. Profit after tax came in at $272 million versus $392 million in the prior year even as premium income rose to $109 billion up from $$8383 million. The company reported an underwriting loss of $39 million compared with a surplus of just $12 million in 2012 due mainly to increased underwriting losses of $877 million versus $552 million in 2012.
Investment income fell from $389 million in 2012 to $296 million while administrative expenses climbed to $427 million from $323 million.
Total assets moved from $6.12 billion in 2012 to $8.65 billion due to the combination of what was formerly Globe Insurance and West Indies Alliance in September 2013 and equity ended down at $2.87 billion from $2.98 billion as dividend of $1.16 billion was paid out during the year.
TTSE PE – suggests attractive buys
The price earnings ratio is the most popular measure investors use to compare and determine stocks values. It is computed by dividing the price of a stock by the earnings per share. It allows investors to compare the value of one company with others in order to decide which ones are to be bought sold or held on to. When the market moves markedly away from the norm it is usually time for investors to move. Nowhere is this truer than PE ratios.
In looking at good buying opportunities the crude measure is to buy those stocks with low PEs compared to the market or to stocks in the same sector.
The Trinidad market has several stocks that are priced at a PE that is well below the market average, this has been so from early 2013 and continues to present.
During the past week Trinidad Cement declined to $1.95, National Flour lost ground to close at $1, but Point Lisas gained ground to $4, Neal & Massy inched up further to $68.80 One Caribbean Media moved to new highs during the week to close at $23, while Citizens Bank lost value to end at $37.47.
The market has 6 stocks that are priced at a PEs that are well below the market’s average of 15, and a few close to the average, thus offering profitable investment opportunities for investors with medium term investment horizon.
