Market Momentum – Companies Report, Market Responds. Sandals Sale

Here is the latest weekly digest (May 8th – May 14th, 2017). A quick easy read of this week’s top and most relevant business news. No fluff, just the highlights.

As predicted last week, this has been a big week for the market. Quite a few companies released results and we saw the related movements in the prices of a few stocks. I expect that we will continue to see movement in the prices as people digest the results and also as more results come out this week.

There were 12 stocks advancing more than 10% this week (compared to 7 last week). They were

  • PULS making a 53.04% jump,
  • KEX (up 22.6% after jumping 24.4% last week. The stock is now up 52.4% since the start of this year),
  • MTL (up 30.8%%),
  • ISP (by +30.1%),
  • CFF (by +27.9%),
  • CCC (by +18.1%),
  • 1834 (by +17.8%),
  • and others including BRG (+17.5%), JETCON (+14.11%), ROC and KREMI.

There has also been increased demand, noticed in the volumes traded but especially in the new 52-week highs we continue to see. This was true for 7 stocks this week;

  • Main Event (traded as high as $8 and hit highs twice this week… after hitting new highs 3 times last week),
  • Berger – traded as high as $20 (new high twice this week),
  • Jamaica Broilers (new high 3 times this week. High of $18),
  • JAMT (3 new highs), ISP (3 new highs), PULS (twice), JETCON (twice) and CAR.

CFF and 1834 bounced back after having the largest declines last week (-31.2% and -18.2% respectively), and are in the top advancing stocks this week. However the big decliners this week were PURITY (-16.8%), AFS (12.6%), PTL (-12.0%) and SEP (-10.7%).

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…

  • GraceKennedy has exited its decade-old investment in Trident, a general insurer based in Barbados, and is reporting a gain from the sale of its 30 per cent stake in a deal finalised on Monday. The conglomerate sold its share in Trident for $56 million or just over BBd$800,000 to existing shareholders Leo Leacock & Company Limited and Asjam Holdings Limited.
  • Reuters reported this week that Sandals Resorts International, a privately held Caribbean resort operator that caters to couples, is exploring strategic alternatives including a potential sale of the company, according to people familiar with the matter. Sandals has hired investment bank Deutsche Bank AG to explore several options, including a sale of a majority stake in the company. The report states that sources said the company could be worth well over US$1 billion, including debt
  • NCB Capital Markets was expected to open a $6-Billion bond, providing its investors with another opportunity for financial growth. NCB Capital Markets will offer this bond between May 10 and 31 to all investors. The required minimum investment will be $100,000.
  • Cuba opens first luxury mall
  • P B Scott, chairman of manufacturing company Seprod Ltd, disclosed this week that it was the sale of the company’s equity portfolio in 2016 which allowed the upsizing of dividends to shareholders during the year ended.While earnings per share improved from $1.68 to $2.11, the company paid $3.23 per unit in dividends, up from $0.95 in 2015.
  • Seeking to capitalise in a market set to swim in liquidity this week as it pays out $64 billion in NDX bonds, both the Jamaican government itself and private investment companies are setting their cap for the funds which will become available.
  • Microfinance company ISP Finance Services Ltd hopes to increase market share by expanding its footprint outside of Kingston, Spanish Town and the metropolitan area.
  • Sagicor Real Estate X Fund Ltd (the X Fund), a subsidiary within the Sagicor Group, disclosed this week that it has bought more land on the north coast for development. With $44.4 billion in assets, the real estate fund is one of the largest investors in the Jamaican commercial and tourism real estate market.
  • Pre-owned car dealer Jetcon Corporation, generated strong growth in revenues of 75 percent to end with $258.5 million in the first quarter ending March, this year compared to 55 percent growth in the same period in 2016.
    • The company results benefited from gains in gross margin during the quarter, from 18.5 percent to 20.7 percent and an increase of 148 percent in pretax profit, to $37.3 million versus $15.7 million in 2016.
  • Lasco Distributors Limited wants US$490 million as the full payout from Pfizer in the long-running court case, documents related to the case indicate. The figure translates to around J$64 billion.
  • Mayberry Investments Limited, MIL, has added a new layer that will result in the company’s investment portfolio being managed by a related firm
  • Citi, a global financial institution, described the US$1.25 billion refinancing of Digicel’s debt as the largest in its class from emerging markets.
  • Sagicor Group Jamaica (SGJ) made $2.59 billion net profit for shareholders in its March quarter, or 36 per cent higher profit than a year earlier.

 

As it relates to the economy

  • The Government is reporting that the Net International Reserves (NIR) are at the highest they have ever been at US$2.849 billion, since 2002.
  • At the end of March 2017, the country’s Debt to Gross Domestic Product (GDP) ratio was at 115 per cent.
  • The primary surplus outturn for the 2016/17 fiscal year surpassed the target by $12.8 billion.
  • However (in other news), it is reported that the Government will be giving up about US$14.6 million, which equates to nearly J$1.9 billion annually, as a result of its decision to grant exemptions on the bauxite levy as part of a tax regime overhaul for extractive industries.
  • The government says the revenue generated from the cess imposed on imported coconut products will be used to develop the sector.

 

Here are some key market and economic figures

  • Stock Market Movement (Combined Index):
    • Week to date: 1.14% | 1.46% Last week
    • Month to date:  2.62% May | 4.08% Apr | -3.09% Mar | 9.26% Feb | 10.09% Jan
    • Year to date: 24.21% (27.6% YTD 2016)
  • Inflation:
    • Year to date (Dec 16 – Mar 17) 1.0%
  • Unemployment: 12.7% – Jan 2017 (12.9% as at Oct 2016)
  • GDP: 1.1% Oct – Dec 2016  (2.0% – Jul – Sep 2016) – Rate of Growth of Value Added at Constant (2007) Prices Seasonally Unadjusted

Thanks for reading Vol. 2017 Issue No. 19 of our weekly digest. (May 8th – May 14th 2017). All weekly reviews can be viewed here.

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