Brazil Beef Ban, Trump-care Trouble, Grenada Growth

Here is the latest weekly digest (Mar 20th – Mar 26th, 2017). A quick easy read of this week’s top and most relevant business news. No fluff, just the highlights.

The market closed down another 2.1% this week, bringing the total decline for the month so far to 4.8% (March). Remember the combined index grew by 10% in January and another 9% in February. At this rate of decline… well, let’s not worry too much about that :).  It seems however that some of the new year rush has cooled off. Despite that however there are still lots of opportunities out there plus this could be a good opportunity to invest.

There were not much stocks seeing major advances this week. PULS, 1834, BRG, and JBG all advanced more than 10% this week. JBG closed the week at $15.95, BRG at $13.01, 1834 at $1.60 and PULS at $8.5. MTL and CBNY led the declines this week tumbling by more than 20%. RJR also fell by 12%.

There were 3 stocks hitting 52 week highs this week – PAL ($200.00), ISP ($12.25) and DTL($9.00), with DTL hitting a new high 3 times this week ($8.50, $8.60 and finally $9.00). It seems the CFF takeover news, talk of new supermarkets and plans to improve margins have really spurred some investor interest in DTL. On the flipside, despite the new listing of NCBFG on the markets, the stock traded at a 52 week low of $58.50 this week (not sure why).

As always, you can see the full list of companies and their stock price performance since the start of the year here.

In other news…

  • The island of Grenada recorded economic growth of just under four per cent last year, the IMF said on Wednesday. Grenada’s performance during the last phase of the International Monetary Fund (IMF) Extended Credit Facility (ECF) supported home-grown programme has been strong
  • A two-month leadership transition has been set in motion at Cable & Wireless Jamaica, which trades as FLOW. Stephen Price has been promoted to managing director of the telecoms, effective June 1, replacing Garfield Sinclair, a former investment banker who has been one of the longest-serving bosses at the Jamaican telecoms. Sinclair has been promoted to  being president of the Caribbean operations of Cable & Wireless Communications, which is FLOW’s more immediate parent company.
  • Norbrook Equity Partners (NEP), a St Lucia-based holding company with operations in Jamaica and the United States, announced on Monday that it had successfully closed private placement of US$5.250 million ($677.25 million) indexed redeemable preference shares in the capital of the company to a group of accredited institutional investors. The placement — the first offer to outside investors — was arranged by NCB Capital Markets Ltd. Khary Robinson, executive chairman says the company is considering listing in the medium term.
    • Norbrook currently owns and operates seven companies with 240 employees, including Mailpac Services Limited, an e-commerce logistics firm. The group, whose businesses span water distribution, logistics and courier services, and ground transportation, has been financing a series of acquisitions and mergers from internally-generated resources, according to Robinson, the executive chairman.
  • Scotiabank announced on Thursday that effective immediately dormant fees, currently charged on inactive accounts, will be suspended. Scotiabank’s decision followed announcements in the past week by National Commercial Bank, First Global Bank and FirstCaribbean International Bank that they were either suspending or discontinuing charges applied to dormant accounts.
  • Brazil is struggling to contain the scandal, in which investigators say that health inspectors were bribed to overlook expired meats and chemicals and that other products were added to meat to improve its appearance and smell. The government has largely tried to downplay the extent of the corruption, while also criticizing the federal police for how they have communicated about it.
    • The result has been a stampede away from Brazilian exports. On average in March, Brazil exported more than $60 million worth of meat each day, Agriculture Minister Blairo Maggi told a Senate committee on Tuesday. That figure was $74,000 on Tuesday, a few days after investigators revealed the probe.
  • Confirming an announcement in one of our previous weekly reports, the Gleaner reported that Brokerage firm Stocks & Securities Limited (SSL) sold 35 million shares held in the Jamaica Stock Exchange Group, operator of the local stock market, which appeared to have been bought up by two Sagicor affiliated entities. Sagicor now controls 30.5 per cent of the JSE, up from 26.5 per cent.
  • Scotiabank has confirmed reports that it will cut Jamaican staff as part of its restructuring exercise, but says it is unable to state the exact number at this time. President general of the Bustamante Industrial Trade Union (BITU), Kavan Gayle, indicated that close to 100 jobs would be made redundant by the Canadian bank. Reports are that the jobs are being transferred from Jamaica to Trinidad and Tobago.
  • The BOJ has confirmed that local banks and near banks can invest as much as 50 per cent in each other.
  • The Jamaica Securities Dealers Association (JSDA) is calling for dialogue around the issue of permissible holdings of US dollar investments. With the central bank indicating last week that it is not ready to lift the five per cent limit placed on insurance companies and pension funds for holdings of foreign-denominated assets. The JSDA claims that this curtails opportunities to maximise returns.

Here are some key market and economic figures

  • Stock Market Movement: -2.13% Week-to-date (-1.16% Last week) | MTD – 4.79% (Mar), 9.26% (Feb), 10.09% (Jan) | Year To Date 16.73%, 18.09% YTD Last Week (27.6% YTD 2016)
  • Inflation: 0.6% Dec 16 – Feb 17 (YTD) | 1.7% – Jan 16 – Dec 16 (YTD)
  • Unemployment: 12.9% – Oct 2016 (12.9% as at Jul 2016)
  • GDP: 2% Jul – Sep 2016  (1.4% – Apr – Jun 2016) (Rate of Growth of Value Added at Constant (2007) Prices Seasonally Unadjusted)

Thanks for reading Vol. 2017 Issue No. 12 of our weekly digest. (Mar 20th – Mar 26th, 2017). All Weekly reviews can be viewed here.

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