Stinking Berger behaviour

There are some strange and shocking developments regarding the offer by Ansa Coatings International to purchase the minority shares in Berger Paints Jamaica.
First the directors in recommending that shareholders accept the offer made critical claims that are not back up by facts and they offer no information to support same. Secondly, the shares have been suspended in questionable manner and without adequate reasons.
The directors in recommending that shareholders accept the offer said,” in your directors view, it is highly likely that acceptance of the offer will take the aggregate holdings of ACI beyond 80 percent. Under the rules of the Jamaica Stock Exchange, where one shareholder either individually or collectively with concert parties holds more than 80 percent of the listed shares of a company, the stock exchange has the right to de-list such company. In fact the offeror has made it clear its intention to delist the Berger Shares.” The directors’ recommendation goes on to quote ACI statement that they will seek delisting if they acquire an additional 29 percent of the shares. “It is therefore clear that Berger Jamaica shares will in all probability be delisted from the JSE,” the directors’ statement concluded.
According to the directors, Ansa Coatings International controls 51.01 percent of the issued Berger Jamaica’s shares and as a result of this Offer, its holding will most likely exceed 75 percent.
It seems that for the recommendation to shareholders to be substantially based on the “highly likely that acceptance” taking the holdings of ACI beyond 80 percent and most likely exceed 75 percent, is highly flawed. Where did the directors get that information from and why did they not disclose the source in the recommendation. Why they did not think it appropriate to disclose the interim results figures up to August in the report?
At $10.88 per share, Berger is priced at 5 times the current years’ earnings against more than 13 for the main market, on what basis could it be regarded as a fair price?
The situation gets more curious and raises a huge question, is someone is trying to manipulate shareholders in giving away their shares at less than a fair price? That is the only conclusion to be arrived at, when without notice, the shares of Berger were without notice, suspended by the Jamaica Stock Exchange on Thursday, October 5, 2017 and is to remain suspended to Friday, October 13, 2017. According to a release late on Thursday, “this is to facilitate the processing of the transaction in respect to shareholders of the Company who have agreed to sell their shares to Asna Coating, as a part of their Takeover Bid of Berger.” That of course is a load of crap. Trading shares of Desnoes and Geddes a much bigger company was never suspended when Heineken acquired the minority shares in 2016, Hardware and Lumber shares were never suspended either, nor was Scotia Investments’ in Scotia Group’s recent acquisition of the minority shares. Why is there a need to prevent Berger shareholders who want to trade the shares if they so desire? Worse why is there need to suspend it beyond Monday?
The capital market cannot prosper as well as it should if the above abuses continue to take place without corrective action being taken. The Jamaica Stock Exchange and the Financial Services Commission should have intervened when the directors’ recommendation included information that was not backed up by facts and should have intervened and prevented the unwarranted suspension of trading in the company’s shares.

Buy out interest for Berger Paints?


Reports reaching IC is that Jamaican based Berger Paints is in play with more than one interested party eyeing the profitable target one source within the financial community stated.
I know as a fact that an offer was made on Thursday but was rejected by Berger as inadequate and would not involve taking over the staff. Another source indicates that the parties are in discussion on terms with the price of $20 that the stock traded at today being within the ball park of where an offer could be at. By next week a clearer picture should emerge our source advises.
One name said to be associated with the one of the offers is Josef Bogdanovich one of the investors involved in the takeover of Hardware and Lumber.
It’s unclear if the planned acquisition by Bogdanovich if successful would be placed under the Hardware and Lumber umbrella which would make economic sense as it would lead to economies of scale in a number of different areas.
The interest comes against the back ground of Berger having recorded the highest level of profit ever at $316 million up from $122 million in 2016, with IC Insider forecasting earnings of $2 per share or $430 million for the year ending March 2018.
Berger closed trading at $6 at the end of 2016 and is up 233 percent for the year to date and is the second best performing main market stock for the year second only to Pulse Investment that is up 360 percent. Berger has been in IC TOP 10 since this year and in the TOP 5 Main market from inception on September 9 last year.

Stock split revs Pan Jam’ stock not profit

pan_jamaican_logo280x150Pan-Jamaican Investment Trust (Pan Jam) recently announced a proposed 5 for 1 stock split which sent the stock flying to $125 from below $90. The company also announced a second dividend for the year with the stock trading ex-dividend on May 27. The dividend is for 75 cents per share, payable on June 22, to shareholders on record as at May 31.
The latest payment makes the second dividend of the same amount in March this year. In June 2015, the company paid a dividend of seventy cents per shares.
Pan Jam also advised that on May 13, four members of the management team were issued stock grants under the Long Term Incentive Plan totaling 242,691 shares.
The group reported net profit attributable to owners for the quarter ended March of $721 million, up from $542 million in the 2015 first quarter, an increase of 33 percent. Earnings per stock unit amounted to $3.44 compared to $2.59 for the same period in 2015. Earnings from ongoing operations seem headed for $15 per share for this year.
Performance for the quarter reflect a gain of $185 million arising from the divestment of shares in Hardware and Lumber and an increase of $149 million in the share of associated company and joint venture companies’ results. These more than compensated for decreases of $43 million and $84 million in property and other income respectively.
Property income was reduced by lower rental income as a result of a reduction in average occupancy from 85 percent in March 2015 to 81 percent in the current year as well as reduced booking of property revaluation gains. In the first quarter of 2015, other income increased by a one-off lease buyout amounting to $87 million. Operating expenses increased principally as a result of pension costs related to the reorganisation of the group’s pension arrangements as well as amortization of new property management software. Operating expenses rose to $288.59 million from $259.57 million while Finance costs rose sharply to $130 million from $94 million.
Total assets amounted to $28.3 billion at the end of March while stockholders’ equity increased to $22.4 billion, equating to a book value per stock unit of $106.86.
Since Pan Jam announced the stock split, the stock rose to $125 on the Jamaica Stock Exchange, up from $88 at the beginning of May.

JSE majors dives on Tuesday

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JSe online logo Jamaican main market stocks lost much ground on Tuesday, as Cable & Wireless lost 7 percent and Carib Cement 13 percent in value. Declining and advancing stocks were even, at 15 each as 38 securities changed hands, in all market segments. At the close 2 stocks traded at 52 weeks’ intraday highs with 6,931,877 units valued at $84,204,868 changing hands in all markets. The junior market accounted for 1,498,582 units changing hands, valued at $7,035,386.
The JSE Market Index dived 2,056.31 points to 153,186.49 the all Jamaica Composite Index dropped 2,298.05 points to end at 170,150.84 and the JSE combined index shed 1,809.09 points to close at 162,629.19.
IC bid-offer Indicator| At the end of trading, in the main and junior JSE sum 08-03-16markets, the Investor’s Choice bid-offer indicator reading was 12 stocks with bids higher than their last selling prices and 6 with lower offers.
At the end of the market activities, Berger Paints lost 27 cents while trading 5,869 shares at $4.10, Cable & Wireless fell 11 cents in closing at $1.40 with 2,143,771 units, Caribbean Cement dropped $3.11 to end at $20 with 182,378 shares trading. Carreras fell by 10 cents to close at $64, while trading 7,157 units, Grace Kennedy ended with 89,733 shares trading to close at $83, Hardware and Lumber traded 37,426 shares at $15, Jamaica Broilers gained 14 cents after trading 583,222 units to close at $14.50, Jamaica Producers traded 47,500 shares but lost 50 cents to close at $35. Jamaica Stock Exchange traded 1,400 shares to end at $22.90, JSE fn Qts  08-03-16JMMB Group had 39,263 units changing hands but rose 12 cents in closing at $10.52, Kingston Wharves had 11,800 shares trading with a rise of 5 cents at $11.35, National Commercial Bank had 805,840 shares changing hands to close at $41. Pan Jamaican Investments traded 12,900 units at $96 after rising $1, Sagicor Group fell 5 cents with 85,759 shares changing hands at $23.50, Scotia Group had 444,188 shares changing hands to close with a gain of 50 cents at $31. Scotia Investments dropped 5 cents with 22,300 units changing hands at $26.50, Supreme Ventures closed at $5.15 with 76,200 units changing hands after shedding 10 cents, Proven Investments lost 2 US cents to end at 20 US cents with 518,500 units trading and JMMB 7.5% preference share traded 300,000 units at $2.15.

Iron Rock IPO hits market shortly

bill McConnellIron Rock Insurance is one of 5 junior market companies poised to hit the market between February and March, ahead of the deadline for the ending of the tax break, accorded junior market companies.
Iron Rock is expected to be capitalized at just under $500 million and has as two of its principals William McConnell formerly managing director of Lascelles deMercado who use to own Globe Insurance Company and Evan Thwaites former of Globe Insurance.
Informed sources tell IC Insider that the prospectus should be out by the February 22, with the issue to be opened before the end of the month.
Mayberry Investments are the brokers for Iron Rock while JMMB Securities is handling two issues. The new listings if they are all approved, will raise the number of junior market listings to 34 and the number of companies listed to 30. In contrast the main market and the US dollar market has 35 companies listed plus a number of preference shares issued by companies with ordinary share listing.
The main market has almost stagnated and seems set to contract with two main market companies, that of Hardware and Lumber and Desnoes and Geddes look set to be delisted.

Grace Kennedy sells H&L interest

Grace HStGrace Kennedy has sold its 58.15 percent interest in Hardware & Lumber (H&L) with the shares traded over the Jamaica Stock Exchange floor today by broker – GK Capital Management in the amount of 47,013,417 shares at $18.50 each.
The shares are sold to, Argyle Industries Inc. (“Argyle”) a St. Lucian Company special purpose vehicle incorporated for the purposes of acquiring and holding the Investor’s equity interests in Hardware & Lumber. The investors in Argyle include a group of investors led by, ABBECO INVEST S.A. ( a Bahamian investment company), Sterling Asset Management along with its affiliates and associates and Greystone Equity Partners Inc. along with its affiliates and associates a release from Grace Kennedy said.
Grace Kennedy Group CEO, Don Wehby, stated “As previously indicated GraceKennedy’s decision to sell our shares in H&L was not an easy one, however, this divestment is consistent with our present strategy of concentrating on the food business locally and internationally and financial services in the region.” He added, “I feel very positive about the continued growth of H&L under the prospective new owners, Argyle, who are excited about the possibilities for the future.”

Rapid True Value owned by Hardware & Lumber an associate of Pan Jam

Rapid True Value owned by Hardware & Lumber an associate of Pan Jam

Total revenue for the nine months to September this year was $5.37 billion or 2.3 percent more than the comparative period in 2014. Profit after tax for the nine-month to September 2015 was $64 million, 43.2 percent less than the $112.9 million for the same period in 2014.
H&L comprises the Rapid True Value and the Agro Grace business. There are currently 10 Rapid True Value outlets across Jamaica, along with six Agro Grace Retail Centres. The company is headquartered at in Kingston.
The buyers will be required to make an offer to buy the remaining shares at the same price of $18.50.

12 JSE stocks rise 3 fall on Friday

JMMB preference share was the dominant trade on the JSE's main market

JMMB preference share was the dominant trade on the JSE’s main market

The Jamaica Stock Exchange saw low activity with securities trading, at the close there were 12 stocks rising to only 3 declining. The market closed with 23 totalling 2,461,162 units, valued at $7.455 million changing hands traded in all market segments. Trading in the main market was very light with only 253,878 shares with the exception of Jamaica Money Market Brokers 8.75% preference share, with 682,996 units at $2.50.
The main market indices enjoyed a second day of increases with the JSE Market Index gained 680.16 points to 96,507.41, the JSE All Jamaican Composite index added 693.16 points to 106,808.75 and the JSE combined index rose 760.12points to end at 99,739.05.
JSE Sum -25- 9-15 IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had a reading of 17 stocks with bids higher than their last selling prices and 8 with offers that were lower. This indicator has been increasing in strength over the past week as the period for company results for the third quarter approaches. Notwithstanding, there are still some pockets of weakness as shown by the number of stocks that are offered below their last selling prices.
Stocks that particularly weak are Hardware and Lumber with a last sale of $13 now being offered at $11.50. Grace Kennedy reported earlier in the year that they were considering a buyout offer for the shares thy own in this subsidiary at a maximum price of $18.50 and that the deal should be closed by the end of July, there is no further information on the deal. JSE fn qts 25-9-15Sterling Investments with a last sale of $13.40 is now on offer at $13.15, at 11 o’clock on Friday morning the amount of stock on offer at the closing quote was 242,600 units a Grace Kennedy that has an offer of $63.70 versus the last traded price of $64.
In trading, Cable and Wireless added 2 cents with 46,300 shares changing hands, to close at 51 cents, Jamaica Broilers had 86,628 units trading at $6 after shedding 9 cents, JMMB Group traded at $7.63 with 36,487 shares changing hands. National Commercial Bank had 23,100 units changing hands and ended at $27.75 while dropping 1 cent, Scotia Group traded 26,428 shares to close at $23.77.
IC Insider was unable to get the closing bids and offer volumes at the close of trading on Friday, accordingly the trading sheet do not carry this information.

Scotia Group tops trading on Thursday

Scotia Group accounted for 79% of shares traded in main market

Scotia Group accounted for 79% of shares traded in main market

Activity on the Jamaica Stock Exchange ended with 8 stocks rising, 13 declining as 29 securities changed hands and ending in 2,085,568 units trading, valued at $38,307,831, in all market segments. The main market had more stocks declining than advancing at the close with 10 falling to 5 advancing. Trading volumes were mostly low with Scotia Group accounting for 1.4 million units or 79 percent of the 1.79 million shares trading in the main market.
The JSE Market Index lost 264.93 points to 97,050.42, the JSE All Jamaican Composite index declining by 296.12 points to close at 107,415.22 but the JSE combined index declined 377.15 points to end at 99,605.19.
IC bid-offer Indicator| At the end of trading,JSE sum 25-6-15 in the main and junior markets, the Investor’s Choice bid-offer indicator was showing a better reading than Wednesday’s close of 9 to 8, with Thursday’s reading of 12 stocks with bids higher than their last selling prices and 5 with offers that were lower.
In trading, Caribbean Cement closed with 48,780 shares changing hands at $5.45 after slipping 5 cents, Carreras put on 2 cents while trading 26,534 shares at $48.37, Gleaner ended with 30,000 shares changing hands but lost 1 cent to close at $1.07, Grace Kennedy gained 45 cents with only 2,040 units changing hands at $63.95. Hardware and Lumber fell 50 cents to $17.50 with 1,500 shares changing hands, Jamaica Broilers lost 50 cents in trading 1,497 units to end at $5.50, JSE fn qts 25-6-15Jamaica Stock Exchange dropped 46 cents in trading 5,400 shares and ended at $6.35. At the close Stocks and Securities offered 982,465 units for sale at $6.80, Kingston Properties climbed $1 to $8 with 2,705 shares, National Commercial Bank rose 10 cents in trading 25,224 shares to close at $29.10, Sagicor Group fell 24 cents with 28,533 units trading to end at $12.61, Scotia Group had 1,419,099 units trading at $23.50, Scotia Investments fell by $2.35 to $27.50 with only 4,217 units. Jamaica Money Market Brokers 8.75% preference share traded 56,983 units at a loss of 1 cent at $2.98 and Proven Investments 8% preference share ended with 42,500 units trading unchanged at $5.

JMMB dominates trading as JSE rises

JMMB_Building600x250 JMMB Group dominated trading with 9.9 million units valued at $74.5 million on Wednesday in activity on the Jamaica Stock Exchange but the stock price was up only moderately.
In trading the prices of 14 stocks rose, 6 declined as 28 securities changed hands, ending in 13,740,198 units trading, valued at $109,298,383, with two new closing 52 weeks’ high, in all market segments but with Jamaica Broilers trading at a 52 weeks’ high during the day.
TheJSE Market Index gained 661.40 points to 97,257.91, theJSE All Jamaican Composite index rose 739.27 points to close at 107,647.14 and the JSE combined index gained 659.28 points to end at 99,953.05.
Stocks trading include, JSE sum 17-6-15Caribbean Cement adding 800,705 shares to gain 40 cent to close at $5.40 for a new closing 52 weeks’ high, Desnoes & Geddes lost 40 cents to $7.60 with 7,235 shares trading, Hardware and Lumber traded 210,000 shares at $18 but the bid that was at $18 was moved down to $16, shortly the trade. Jamaica Broilers had 47,213 shares trading to close at $5.45 for a gain of 25 cents but traded earlier in the day at $6. JMMB Group traded 9,935,904 shares at $7.50, up from $7.41 on Tuesday, the shares were sold in 10 lots by JMMB Securities and all but 96,142 were purchased by NCB Capital Markets for clients. Mayberry traded 147,3000 shares at $2.88, National Commercial Bank trading only 4,777 shares as high as at $29.99 but closed at $29.45, Pan Jamaican Investment closed at a new 52 weeks’ high of $63.51 with only 5,000 shares but traded at $63.75 during the day. JSE fn qts 17-6-15Sagicor Group in trading 1,773,139 shares, ended up 10 cents higher at $12.40 at the close. Sagicor Real Estate Fund gained 30 cents in trading 23,151 units and closed at $8, Scotia Group ended with 61,864 shares at $23.11, Supreme Ventures had 59,656 shares trading at $3.70 at the end and Jamaica Money Market Brokers 8.75% preference share traded 143,000 units to lose 1 cent and close at $2.99.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator shows 11 stocks with bids higher than their last selling prices and 5 with offers that were lower well down on the 19 bids and 7 offers on Tuesday.

Declining stocks outpace advancers

Activity on the Jamaica Stock Exchange, resulted in the prices of 10 stocks rising, 13 declining as 33 securities changed hands, ending in 9,407,399 units trading, valued at $83,136,775, with 4 stocks closing at 52 weeks’ high, in all market segments.
The JSE Market Index lost 787.71 points to 98,401.83, the JSE All Jamaican Composite index declined 880.45 points to close at 108,925.75 and the JSE combined index dropped by 631.19 points to end at 100,937.41.
JSE sum fn 3-6-15 IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator shows 15 stocks with bids higher than their last selling prices and 9 with offers that were lower. The indication is for fluidity in price movements on Thursday and the likelihood of declining stocks out numbering advancing ones.
In trading, Berger Paints traded 71,289 units at $3, Caribbean Cement had 201,560 units trading at $5 after dropping 10 cents. Interestingly, even as Cable & Wireless posted a large loss after taking a $7 billion one off extra ordinary expense hit, the stock traded 649,000 units between 50 cents and the closing price of 48 cents, the same as on Tuesday. Carreras traded 483,380 units at $50, after falling $1.50, Gleaner Company had 219,403 shares trading at $1, Hardware & Lumber closed with 38,638 shares trading unchanged at $18, Jamaica Broilers having 2,428,147 units trading with the price holding at $5.18 after slipping from $5.50 earlier in the day, to end the day down 7 cents. JMMB Group lost 79 cents while it traded 1,130,033 units as the price closed at $7.71, following poor profit results in the final quarter of the fiscal year to March.JSE fn qts 03-6-15 Mayberry Investments had 1,099,821 units trading 4 cents lower at $3.05. One million units of the stock were sold by JMMB Securities and Mayberry bought them for in house purposes. National Commercial Bank ended with 81,153 units changing hands 35 cents down at $29.55, Pan Jamaican Investment traded 4,078 units 2 cents higher for a new 52 weeks’ high of $60.52. Sagicor Group had 1,199,248 shares trading at $12, after slipping 5 cents, Scotia Group had 315,085 units changing hands to end 250 cents higher at $25.50 and Jamaica Money Market Brokers 7.50% preference shares closed with 295,000 units trading to end at $2.11.