Noranda Bauxite Sold, CAC’s $55m+ Hit, Stock Split Mania

October 30, 2016

Here is the latest weekly digest (Oct 23-29, 2016). A quick easy read of this week’s top and most relevant business news. No fluff, just the highlights.

  • JSE stock split approved – The Jamaica Stock Exchange shareholders met and overwhelmingly voted in favour of a 5-for-1 stock split which will be effective in another two weeks (November 8, 2016)
  • Cargo Handlers Limited also had their 10-to-1 stock split done last week
  • And continuing on the stock split hype PTL (Paramount Trading Ltd) also had their AGM & Board meeting yesterday (yes, saturday) to consider a stock split as well

  • CAC 2000 LtdCAC 2000 Ltd was ordered by the supreme court to pay approximately $55m plus interest ($35m after deducting $20m insurance) to X-ray diagnostics and Ultrasound Consultants. The court ruled on a longstanding case relating to a fire (which happened in 2003) involving Air conditioning equipment they were hired to service. The company has said it will be a significant hit, but they will recover.
  • Supreme Ventures Limited appointed James Danny Morrison, Senior Vice President Group Finance to act as President and CEO until a new President and CEO has been appointed. This, Following the Supreme Ventures’ Boss untimely passing last sunday (Oct 23rd).
  • Mr. Johann Heaven (of PROVEN) resigned as a Director of Access Financial Services Limited (AFS) effective October 20, 2016. Mr. Norman Reid (retired banker previously from NCB) was appointed as a Director. PROVEN is a controlling and the largest shareholder in AFS.
  • Following news last week that Pan-Jamaican Investment Trust Limited scheduled (and held) a meeting to approve a name change – they will be having another meeting (EGM) on November 16, 2016 to vote on changing their name to Panjam Investment Limited
  • News also came that Noranda Bauxite Company in St. Ann was sold to DADA Holdings LLC, under its affiliate, New Day Aluminum LLC for a purchase price of $US24.4 million (J$3.1billion).
    • It was later announced that the government will be entering into a profit-sharing agreement (a better source of foreign exchange they claim) with the new owners and forego the usual bauxite levy (a fairly certain source of revenue)
    • With the new agreement, the Government will earn 17.33% of earnings before interest, taxes, depreciation and amortisation or “US $1.50 per shipped dry metric tonne of bauxite whichever is the greater”
    • The Government will have a member on its board and the company is committed to spending in excess of US$35m (~J$4.5b) between 2017 and 2021 to improve its Jamaican assets.
  • Internationally, tech giants Apple, Microsoft, Alphabet (Google) and Amazon all released results this week. Microsoft released new surface desktops (which the market labeled as ambitious and exciting), while Apple also released new MacBooks  – with a new touch bar being the major change. The market doesn’t seem impressed.

Stocks having a good week

  • MDS (Medical Disposables and Supplies) shot up to new heights (advancing 15.91%) and ending the week at $5.39. The stock is up 23.6% since the beginning of this month (October 2016).
  • MIL (Mayberry Investments Ltd) also had a good week after announcing impressive quarterly results. The stock jumped 10.9% this week and is up 14.2% this month (October).
  • CHL (Cargo Handlers Ltd) jumped 23.2% this week following their stock split last week.
  • DCOVE approved a dividend of 0.20 cents.

The week ahead

  • Seprod’s board will be meeting on Mon Oct 31, 2016 to consider a dividend payment
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