TTSE: WITCO at all time high again

 Tuesday, 11th June 2013 | West Indian Tobacco Company (WITCO) continues to trade higher as the amount of stocks available to sell is limited at current price levels. As such, the stock closed at yet another all time high of $112.01 with only 100 shares trading. At the end of trading there were no stocks on offer and the bid was the same as the last selling price.

The market continued with low activity as 10 securities traded of which 3 advanced, 2 declined and 5 traded firm. At the close 4 stocks had bids that were higher and 4 had offers that were lower than their last selling price. 88,392 shares crossed the floor of the main exchange valued at $1,073,977. Clico Investment Fund posted a volume of 7,606 shares valued at $161,651.

Trinidad Cement had 48,754 shares changing hands for a value of $46,439. Angostura Holdings had a volume of 24,381 shares being traded for $218,920, National Enterprises 7,284 shares with a value of $115,597, while Republic Bank contributed 5,330 shares valued at $586,300.

TTSEJun11

Cable & Wireless email moves to Google

Cable & Wireless (C&WJ) has announced that they are going to use Google to host cwjamaica.com email and portal services in the future. According to a message to their subscribers the company says “this is a very exciting change, as it will enable us to provide you with latest email technology through Google’s dynamic suite of communication applications.”

The company said that they expect the Google migration to be implemented within the next two months and that email addresses will not change and that the change will not impact virtual domain customers nor will it impact any aspect of their Internet connection.

“In preparation for this move, a change to your email password may be required. Once the mail services have been transitioned to Google, your email password will need to be at least eight characters. This change is necessary to be compatible with Google’s security requirements, if your password is already least eight characters, you will not need to make any change. If not, you will need to change the password before July 8th, 2013 to avoid any possible downtime during the move to Google.” the release from the company said.

The move is likely to make it easier for the company’s customers to send and receive emails, especially when overseas. Presently, when overseas, email access is through the company’s webmail service which is not user friendly.

$2B slide in landline revenues sinks C&WJ

Cable & Wireless (C&WJ) revenues from landlines slipped $2 billion in the year ending March 2013 which helped push the company’s operating income into a loss before an exceptional charge of $2.75 billion relating mostly to reduction in staffing. A $670 million increase in mobile revenues could not prevent a slide of $1 billion in overall revenues which came in at $19.1 billion versus $20.4 billion in the previous year. In spite of the fall in revenue, a $1.5 billion drop in out payments made to other carriers offset by $500 million increase in other cost of sales resulted in gross profit slipping by just $340 million.

New rates | Last year June, when it announced radically new low rates, “the company indicated that it hoped the “game-changing” Talk EZ plan will double its market share from 18 per cent to 36 per cent within three years. It currently has 400,000 pre-paid customers and 50,000 subscribers, according to a Jamaica Observer report. The initial up take of the service last year suggested that they were on target to achieving that target with 250,000 new subscribers by the end of December but by March this year the numbers melted down to a 16 percent net increase or just under 100,000.

More customers | For the September quarter, the company stated that the mobile customer base increased by 20% and that they attracted 100,000 customers within 100 days of launching the new plan. Extrapolating, they started off with 500,000 mobile customers which reached 600,000 by September. In March the company shifted the tax of 50 cents per minute on cell calls to customers which they had absorbed from July last year when it was 40 cents per minute. This shift seems to have resulted in the attrition in new customers. Our estimate is that C&W decision to absorb the cell tax, cost the company about $500 million, a cost that won’t be repeated this year.

cellphone280x150Banking | The company is banking on the recent reduction in termination rate to hand it an advantage, as they retain more of the amount customers spend with them, as they talk more with the new rate for both local and overseas calls to other networks. Down the road they expect that number portability will also present them with another opportunity as mobile users will be freer to switch networks.

Going forward | “Now that we have the new, lower Mobile Termination Rate that will be almost 90 percent less than what it was a year ago, LIME is in a better position to increase subscriber numbers and grow revenues,” management said in an exclusive response to IC Insider.

What seems logical is that persons will be less concerned about what number they are calling once the various rates are close to each other. So the scenario where customers were ring fenced to calling within their network due to the high cost of calling other network will no longer exists, allowing for freer calling and quite likely more time spent talking.

It will also reduce staffing and related costs and have a net benefit as a result of outsourcing the repairs and servicing to Ericsson. The first quarter of the last fiscal year had a lower margin on calls made to other networks as the termination rate came into effect in July 2012. In this year’s first quarter, C&WJ will enjoy a higher margin on cross network calls, helping improve the bottom line.

The savings to come from outsourcing of the field service support and from the absorption of the mobile call tax plus some growth in net cell revenues suggest that the company should be much closer to a profitable position, if not a profit, in the current year from normal operational expenses, assuming they maintain substantially existing business and continue to add mobile customers and get more talk time from existing ones.

Stock outlook | The stock last traded at 16 cents with a bid of 17 cents. The company has a negative net book value and it owes the parent company $28 billion which attracts interest at Treasury bill rates plus 1 percent. Working capital is negative with current assets being less than current liabilities.

FX: Buying exceeds selling

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Monday, 10th June 2013 | The selling of US dollars to purchase BOJ bond instruments seems to have come to a halt in Monday’s trading as the buying of foreign exchange exceeded selling for the first time since the week ending May 31. Authorized dealers purchased US$32.78 million and sold US $30.16 million. C$1.2 million was purchased and C$933,500 was sold. GBP1.9 million was purchased and GBP985,000 was sold.

All the rates moved up marginally except the buying rate of pound sterling which moved up quite a bit. The movements in rates were more moderate than on Friday.

The US dollar put on 19 cents on the buying side while just barely inching up 6 cents on the sell side. For the Canadian dollar it took 10 cents more to buy the dollar while selling cost 49 cents more and for pound sterling the buying rate rose by $1.57 to $153.18 and selling rose to $155.64, some 20 cents more.

On Friday the US$ buying rate increased by 22 cents and the selling rate was up 15 cents, while the Canadian dollar buying rate was up $1.60, and the selling rate gained  81 cents. Buying rate down $2.30, selling rates up $0.56.

FX_TRADE+Currency+Jun10

FX_TRADE+HighLow+Jun10

JSE: Light trading, advancers dominate

Monday, 10th June 2013 | Probably the most noted features of Monday’s trading was the continued strong positive advance decline ratio which started in the first week in April. At the end of the day, the indication from the bids and offers suggest further gains ahead with bids for 11 stocks being higher and only 1 stock had the offer that was lower than the last selling price.

A total of 3,390,391 shares valued at $22,151,233 traded, on a day when 24 stocks traded with 11 gaining and 4 declined in price continuing a strong advance decline ratio that has been present throughout May and now into June.

Trading was on the light side as only Jamaica Money Market Brokers exceeded the million share mark with 1.5 million units valued at $13 million. Caribbean Creams traded 613,481 units and Caribbean Producers 420,613 units were the other volumes of note.

Price movements were moderate with National Commercial Bank gaining 20 cents to close at $19.20, Sagicor Life closed at $9.43 up 3 cents and Scotia Group up 50 cents to close at $22, having traded as high as $23 during trading.

Access Financial Services reached a new all time high of $8.10 as well as Blue Power which closed at $8.10.

Stocks to watch

  • Access
  • Blue Power
  • Consolidated Bakeries
  • JMMB
  • Sagicor Investments

JSEIndicesJun10

TTSE: Declines outnumber advances as index rises

Monday, 10th June 2013 | The market index rose on Monday although the number of stocks gaining was just one against 3 that declined, as a mere 8 securities traded on another lackluster trading session when 72,071 shares crossed the main floor of the exchange valued at $4,018,507 and 29,624 shares changed hands for a value of $558,190 in the Mutual Fund Market.

Trading activity on the First Tier Market registered a volume. ANSA Mcal was the volume leader with 50,000 shares changing hands for a value of $3,360,500.00, followed  Neal & Massy Holdings with a volume of 10,026 shares being traded for $591,534. National Flour Mills contributed 8,673 shares with a value of $6,505, while One Caribbean Media accounted for 3,280 shares valued at $56,580.

At the end of trading, bids for 4 stocks were higher and 4 stocks had offers that were lower than their last selling price.

TTSEJun10

FX: BOJ buys as J$ hits $100 mark

Friday, 7th June 2013 | The Jamaican dollar hit the dreaded $100 mark to the US dollar on Friday but Bank of Jamaica seems to have been the major buyer of the foreign funds as opposed to serious speculation of the local dollar. The central bank, in response to an ICInsider query, stated, “please note that Jamaica Dollar liquidity conditions were constrained during last week (3-7 June), given fairly strong subscriptions to the longer tenors of BOJ instruments on offer. In that context, several institutions sold USD to BOJ to shore up their Jamaica Dollar positions.”

Trading patterns seemed odd for the past two weeks as the dealers bought US$17 million more in the week ending May 31 but sold substantially more than they bought in the week ending on Friday, in a scenario that did not appear to be buying pressure even as the average selling rate slipped to hit J$100 to the US dollar on Friday.

In a market where demand was greater that supply, dealers would most likely be selling what they purchased and not much more as occurred during the current week. This suggested that they were switching from foreign currency holdings to local currency and this was supported by the presence of the two bonds that were on the market with that objective in mind. The bonds that were put out by Bank of Jamaica was to tighten Jamaican dollar liquidity and pump more foreign currencies into the central bank coffers closed on Friday.

Dealers bought US$24.65 million on Friday and sold $37.97 million, they bought GBP2.35 million and sold GBP800,986 and sold C$866,000 while buying C$1.25 million.

FX_TRADE+Currency+Jun7

FX_TRADE+HighLow+Jun7

JSE: Profit taking took prices down

Friday, 7th June 2013 | The market indices that had trading activity recorded declines even as the advance decline ratio was one to one, with 8 stocks advancing and 8 declining. But by the end of trading, bids for 8 stocks were higher and 2 stocks had offers that were lower than their last selling price. Trading was much lighter than for most of the week with 3,738,986 units valued at $21.2 million as only 25 companies had stocks trading.

The all Jamaica composite index closed down 498.47 points at 89,195.42 and the main market index closed at 87,495.76 falling 283.14 and the junior market index closed at 747.27 down 2.68 points.

Price movements | Grace lost $1 in closing at $59, less than the bid price in Trinidad, NCB lost $3 to close at $19, similar to the price in Trinidad. JMMB lost 34 cents to close at $8.65 close to the Trinidad closing price, Sagicor Life lost 40 cents and closed at $8.60.

One noticeable trade was Caribbean Creams that traded 948,000 units, the largest volume for the day, between $1.03 and $1.10 all but 21,000 were purchased by Mayberry Investments for their own account.

JSEIndicesJun7

TTSE: Supply limited for stocks in demand

Friday, 7th June 2013 | Investors are just biding their time in picking up the stocks they desire in the Trinidad market. No one seems to be pushing up prices aggressively to get supplies. The same seems true for the sellers of stocks that are not in demand as they refuse to lower the prices they are offering. The end result is that prices are inching up or down on very low volume. Trading activity remains subdued on the Trinidad & Tobago Stock Exchange on Friday as only 10 securities traded of which 5 advanced, 1 declined and 4 traded firm. The indices hardly moved with such low market activity and price movements.

In the main market, 203,013 shares crossed the floor of the exchange valued at $5,069,043. Trinidad Cement accounted for more than half of the volume with 110,549 shares changing hands for a value of $105,902, followed by Neal & Massy Holdings with a volume of 61,566 shares traded for $3,632,394. National Flour Mills had 10,327 shares with a value of $7,745 changing hands, while Republic Bank saw 7,801 shares valued at $858,110 crossing the floor of the exchange.

Clico Investment Fund was the only active security on the Mutual Fund Market, posting a volume of 86,520 shares valued at $1,838,550. West Indian Tobacco Company reached an all time high closing at $112 up $1 on the day. Scotia Bank reached an all time high of $70 and so did One Caribbean Media at $17.15.

At the end of the day, bids for 2 stocks were higher and 5 stocks had offers that were lower than their last selling price.

At the end of the day Jamaica Money Market had a bid at 57 cents, the equivalent of J$8.80 and Grace’s bid is $3.90 or J$60.45 but both stocks have no offers at the close. The clear message is that prices of these two will rise in the days ahead. Other stocks that seem clearly poised to move up in price are West Indian Tobacco Company and Scotia Bank. Unilever Caribbean is also poised to rise in price as well.

TTSEJun7

Dividends & Insider Trades

Seprod Limited | Declared a dividend of $0.53 per share payable on July 8, 2013 to shareholders on record as at June 21, 2013. The ex-dividend date is June 19, 2013.The previous dividend paid by the company was $0.30 per share, on November 9, 2012.  Prior to this, the company paid a dividend of $0.53 per share on August 7, 2012.

Seprod reported profits for the first quarter of this year that was down on the similar quarter in 2012. Profit after tax profit slipped to $231 million compared to $292 million in the 2012 first quarter.

JPS Preference dividends | Declared quarterly dividends for the issued preference shares which will be paid on July 1, 2013 to shareholders on record as at June 14, 2013, the ex-dividend date is June 12, 2013. The following are the shares and the amounts:

  • Jamaica Public Service Company Limited 7% – $0.035
  • Jamaica Public Service Company Limited 5% C – $0.025
  • Jamaica Public Service Company Limited 5% D – $0.025
  • Jamaica Public Service Company Limited 6% – $0.03

Insider trades | Jamaica Producers Group Limited advised that two Directors purchased a total of 290,287 of the company’s shares, between May 17 & 24, 2013. Mayberry Investments Limited has also advised that a connected party purchased 29,037 shares in the company on June 3, 2013.