The best short term indicator of the health of Jamaica’s tourism sector can be gleaned from data released by Grupo Aeroportuario del Pacifico, operators of Jamaica’s two major airports showing a 9.4 percent drop to 424,600 passengers coming and going out of the island in August this year, from 468,600 handled in August 2023. The fall in August is far less than the near 14 percent decline in July.
At the same time, Kingston’s Norman Manley Airport, handled 1.8 percent more passengers in August this year, with 199,500 passing through the airport up from 196,100 in August 2023.
For the first eight months of the year, the Montego Bay Airport saw total passenger movements decline 0.8 percent to 3,610,300 in 2024 from 3,639,100 in the first eight months of 2023, while total passenger movements fell by 1.6 percent. Kingston’s Norman Manley International Airport had handled 1,189,300 passengers down from 1,208,100 in the first eight months of 2023.
The decline in arrivals will affect various linkage industries negatively with less business. These include farming, with products such as eggs, pork, chickens, vegetables, fruits, juices and liquor. Also affected are attractions such as Dolphin Cove, Dunns River Falls, ground transportation, water, electricity, workers’ wages and gratuities. This means less money will be spent in the communities impacted by tourism, while Government will collect less taxes from the sector.
Second monthly decline for Jamaica’s tourism
More decline for interest rates
The auction of the latest Certificate of Deposit offering by the country’s central bank, saw 382 bids amounting to $53.35 billion chasing after the $33 billion offered by Bank of Jamaica of which 235 bids succeeded, resulting in an average yield of 6.93 percent, down from 7.03 percent last week.
At the end of the week, the country’s central bank will hold short term CDS of $120 billion, consistent with the holdings in recent weeks.
Murders drop 17% in Jamaica
The pace at which murders in Jamaica are now being committed is progressing at an accelerated lower rate of 17 percent for the year to date, compared to the similar period in 2023 and a reduction of 16 percent at the end of August and 14.5 percent to July 6, according to data released by the Jamaica Constabulary Force up to the end of the first week of September.
The report shows the period with 163 fewer murders than for the similar period in 2023 when 969 persons lost lives at the hands of criminals, resulting in 806 murders being recorded to date, holding the trend of less than 1,200 for the year.
Profit slows in Q3 at Scotia Group
Profit grew just 7.5 percent in the July 2024 quarter even as revenues climbed nearly 19 percent, to $5.46 billion from $5.07 billion in 2023 at Scotia Group, increased provisions for loan losses and lower gains from foreign exchange trading helped to reduce the quarterly profit. For the nine months to July, profit popped 11.43 percent higher to $14 billion from $12.56 billion in 2023.
For the July 2024 quarter, other comprehensive income pushed total profit to $6.4 billion for the latest quarter versus $5.5 billion in 2023 and to $9.15 billion for the nine months after accounting for negative other comprehensive income of $4.85 billion and $9.17 billion in 2023 after negative other comprehensive income of $3.4 billion.
Total revenues climbed 18.7 percent for the quarter, to $17.3 billion from $14.49 billion and at a faster pace than the 15.65 percent increase for the year to date to $50.7 billion from $43.8 billion in 2024.
Net interest income rose a solid 18.5 percent to $11.85 billion in the third quarter of this year, from the same quarter in the prior year of $10 billion. For the nine months, Net interest income jumped 18.3 percent to $34.2 billion from $28.9 billion in 2023. Net fee and commission income inched from $1.65 billion in 2023 to $1.68 billion in the July 2024 quarter and from $4.94 billion in the nine months to July 2023 to $5.11 billion in the current year.
Net foreign exchange trading gains amounted to just $2.28 million in the July 2024 quarter, down from $2.47 billion in the previous year. The nine months came in at $6.84 million compared with $6.49 billion. Insurance activities delivered profits of $602 million for the latest quarter, up from $478 million in the previous year. For the nine months, it moved to $1.66 billion from $1.5 billion in the comparative period in 2023.
Scotia Group increased loan loss provision by 344% in July quarter.
Credit impairment losses jumped sharply to $858 million in the July quarter, from $480 million last year, but less than the $1 billion in the April quarter and $2.89 billion in the nine months, compared with $1.66 billion in 2023.
The various segments had mixed results for the nine months to July, with the Treasury banking generating a robust 29 percent increased revenues of $11.77 billion, up from $9.1 billion in 2023, with net results of $2.9 billion in 2024 compared with $2.64 billion in the prior year’s nine months to July. Retail Banking enjoyed a 12 percent increase in revenues to third parties of $16.8 billion contributing segment results of $2.64 billion, down from $3.4 billion from revenues of $15 billion in 2023. Corporate and Commercial banking had an 11.6 percent growth in revenues to $11.72 billion from $10.6 billion in 2023 with net segment results surging 25 percent to $10.5 billion in 2024 from $8 billion in 2023.
Investment Management had a moderate decline in revenues to $2.3 billion from $2.38 in 2023 and net results of $1.25 billion in 2024, down from $1.3 billion in 2023. Insurance Services delivered revenues of $3.25 billion in 2024, net results dropped to $3.2 billion compared with revenues of $3.48 billion in 2023 with net segment results of $3.1 billion.
Staff cost rose 12.5 percent to $2.97 billion from $2.64 billion and grew 12.8 percent to $8.88 billion for the nine months from $7.87 billion. Other operating expenses rose moderately to $3.4 billion in the quarter from $3.3 billion and inched up in the nine months from 9.7 billion to $10 billion. Total operating expenses increased by 11 percent to $7 billion from $6.39 billion for the latest quarter and 8.3 percent to $22.56 billion from $20.82 billion for the nine months to July.
Audrey Tugwell Henry Scotia group’s CEO
Loans, the most important contributor to income, grew 13.54 percent from $256.85 billion in July 2023 to $291.64 billion in 2024. The growth rate in the July quarter is consistent with that for the full year and should pick up with rates on Bank of Jamaica CDs now at the 7 percent level and well off for the peak earlier this year of nearly 12 percent. Investment securities moved by 12.7 percent from $157 billion to $177 billion this year. Customer deposits grew 6.4 percent to $472 billion. Shareholders’ equity ended the period at $132 billion, up from $113 billion at the end of July 2023, partially aided by reduced losses on investment securities from $3.2 billion to $687 million.
Earnings per share for the quarter were $1.75 and $4.50 for the year to date. IC Insider.com computation projects earnings of $6.50 per share for the fiscal year ending October 2024, with a PE of 6.6 times the current year’s earnings based on the last traded price of $43 on the Jamaica Stock Exchange.
The Group will be paying a dividend of 45 cents per share in October, an increase from 40 cents since last year, October and brings the total payment to $1.65 versus $1.45 for the similar period to October last year, for an increase of 13.8 percent.
Scotia Group is graded ICInsider.com BUY RATED with the stock currently severely undervalued, with good growth prospects going forward that will deliver an increasing flow of dividend income.
Scotia Group hikes dividend
Scotia Group increases dividend payment by 12.5 percent to 45 cents per share, to be paid in October. The payment brings to $1.65 the amount paid per share for the year to date amounting to a total of $5.134 billion.
The group increased the dividend payment to 40 cents in October last year, from 35 cents in July 2023. The increase is in line with profit for the nine months to July. Based on historical trends, the increase is consistent with payments of 45 cents per quarter until July 2025 with a likely increase in the October payment. That would put the dividend yield at more than 4 percent at $1.80 per annum.
Scotia reported earnings per share of $1.75 for the July quarter and $4.50 for the nine months to July, the dividends represent a pay out ratio of 28 percent versus 27 percent for 2023.
BOJ CD rates at now at 7%
Interest rates plunged on the latest Bank of Jamaica Certificate of deposit offer of $7 billion to the public. The auction attracted 295 bids amounting to $32.6 billion but only 39 bids were successful sending the average rate to down to 7.03 percent, just above the Banks’ Overnight rate of 6.75 percent.
The highest successful bid was 7.14 percent. At last week’s auction the average rate clear at 7.61 percent. Rates are down from a peak of nearly 12 percent in march this year.
The central bank continues to hold the stock of short term CDs at $120 billion.
Murders plunged 16% in Jamaica
Decline in murders is accelerating in Jamaica with the numbers up to the end of August falling by 15.9 percent according to the data released by Jamaica Constabulary Force, this is an improvement over the 14.5 percent fall to July 6.
According to the report, the period saw 147 fewer murders than for the same period in 2023 when 930 persons lost their lives at the hands of criminals. For the year to date, murders were 783 and seemed on track to fall below 1,200 for the year, with the trend suggesting 1,175, with the average murders over three per day, if that were to happen it would represent the third consecutive year of decline. If the trend continues into 2025, murders will fall below 1,000 for the first time since 2003 with 976 murders.
Police divisions with sizeable increases are, St. Andrew Central with 17 more murders up by a whopping 49 percent, St. Andrew North had 10 percent more murders with a rise of 27 percent to 47, but St. Andrew South had 15 percent fewer murders for a total of 67.
Westmoreland experienced declines with a high murder rate of 68, down by 16 percent compared to 2023. Hanover enjoyed a 29 percent cut in murders to 39 while the murder capital of Jamaica, St James enjoyed a sharp 32 percent cut to an extremely high 92, by far the highest of any division. St Ann had a 21 percent reduction to 35 and Clarendon dropped 23 percent to a still-high 52.
More fall in Jamaican interest rates
Bank of Jamaica offered $31 billion worth of Certificate of deposits to the market today and was snapped up by the public with an oversubscription of $26.5 billion, with 443 bids amounting to $57.5 billion chasing after the amount offered.
The auction resulted in rates dropping again with an average yield of 7.61 percent, down from 7.99 percent last week. CD rates have fallen sharply from just under 12 percent in March as inflation in the country, dropped to an average of 4 percent currently. The average is now just under 100 basis points from the current overnight rate of 6.75 percent.
RA Williams share plunges on listing
Shares of the latest public offer to the market by RA Williams Distributors limited, distributors of pharmaceutical products in Jamaica, commenced trading on the Junior Market of the Jamaica Stock Exchange on Wednesday, with the price falling sharply below the offer of $1, after hitting a low of 75 cents in the early morning session before rebounding to 84 cents but since then traded at 80 cents as investors head for the exit.
Just over one million shares were traded in the morning session of the Jamaica Stock Exchange, up to 11 o’clock. The stock continues to be under selling pressure, with more than one million shares lined up for sale below the IPO price. There are limited bids up to 78 cents, suggesting that the price is likely to fall further before settling.
The attached listing shows the outstanding orders minutes before 11 o’clock today.
The stock IPO price was in line with the average market value, leaving no room for growth in the short run. Some investors clearly saw that hence the lukewarm level of over subscription. Management now has work to do the repair the breach. The first think is to get earnings growing attractively to encourage increased buying and less selling.
Flat remittance flows to Jamaica
Remittances grew by a mere 0.1 percent for the first six months of 2024 over 2023 to Jamaica, with inflows of US$1.651 billion, from $1.649 billion in 2023.
Total inflows for June, this year fell 2.8 percent to US$278 million from $286 million in 2023 and is worse than the one percent fall in May, with inflows of $287 million, down from $290 million in 2023.
Barring a major pick up in inflows in the last six months of the year, inflows are likely to result in 2024 being the third year of decline since inflows peaked at $3.497 billion in 2021, and yet inflows would be well ahead of $2.9 billion achieved in 2020 and $2.4 billion in 2019.
