Cuba’s First Exports, TCL Offer Saga & JSE Loses Top Spot To… ?

Here is the latest weekly digest (Jan 2nd – Jan 8th, 2017). A quick easy read of this week’s top and most relevant business news. No fluff, just the highlights.

• First Legal Cuban Exports Set To Sail – Artisanal charcoal will become the first legal Cuban export to the US in recent history this month under a new deal announced between the Cuban government and other parties. The charcoal is produced by hundreds of worker-owned cooperatives across Cuba and has become an increasingly profitable export, valued for its clean-burning properties and often used in pizza and bread ovens.

Charcoal By Kolin

• Palmyra Debts To Be Settled But… Fifty-eight investors who paid deposits on condos in the luxury resort Palmyra are to be refunded, but will likely have to take a haircut, the size of which will be determined by negotiations under way between the parties lawyers. The property which was placed in receivership in 2011 (after defaulting on US$110m of loans) was finally disposed of last year (2016) to companies managed by the Sagicor Group for an estimated US$50m.
• Teamaker Perishables Jamaica to add new factory – By the end of 2017, tea manufacturer Perishables Jamaica Limited plans to commission a second factory in south Manchester. Chief Executive Officer Norman Wright says the company, which packages its products in Kingston, is investing $30 million to shift some of Perishables’ manufacturing process to the new locale. Perishables handles contract packaging and co-packing for nine other producers also sells ground herbs and spices to Jamaican Teas Limited, local producers of Tetley Tea.
• JSE loses top market spot for 2016 but… –  While Venezuela was named the top stock market for 2016 (although questions abound), there were still some impressive gains on the JSE last year.  Nine stocks made triple-digit gains on the Jamaica Stock Exchange. The market was mostly favourable as only 10 of the 65 stocks declined. Cargo Handlers Limited (CHL), which handles wharf activities in Montego Bay beat all stocks on the JSE combined markets, increasing nearly fourfold during 2016. The stock benefited from the liquefied natural gas project in Montego Bay, which saw increased usage of the CHL facilities. Other top stocks trading on the Jamaica exchange, included Trinidad Cement Limited (TCL), and AMG Packaging & Paper Company Limited. The JSE was up 27.6% in 2016.
• Jammin Java cuts off expensive Jamaican coffee – Coffee company Jammin Java, based in the United States, says it won’t sell Jamaican beans in its new line of products. The company bought up to US$3 million of Jamaican coffee over the medium term up to last year. It got a foothold in the largest retail chains in the US and Canada with the Marley Coffee brand, which included mainly commodity beans but also beans from the Jamaica Blue Mountains (JBM). The issues include cost of the Jamaican coffee (being too expensive) and being in limited supply.
• Auditors Confirm Trinidad Cement Buyout Offer Undervalued – Auditors Ernst & Young (EY) has described as not fair the offer by Mexican-based CEMEX to acquire additional shares in Trinidad Cement Limited (TCL) at TT$4.50 each. The offer is intended to increase ownership from approximately 39.5 per cent to 74.9 per cent. The rejection by TCL directors was already known but now they are further supported with the auditors’ position. The directors have advised shareholders to read the assessment by the auditors prior to making a decision to sell or hold their shares.
• NCBJ Shareholders To Vote On Holding Company – National Commercial Bank of Jamaica (NCBJ), is planning to seek shareholder approval this month to restructure the group to include the shares of Guardian Holding Limited (GHL) which it acquired two years ago. If approved, it will result in the group holding $152.1 billion in assets related to banking and life insurance and facilitate the future expansion of the entity throughout the Caribbean region, the bank has indicated.
• Caribbean Flavours Seeking Clarity For Minority Shareholders – On behalf of its minority shareholders, the board of Caribbean Flavours and Fragrances (CFF) Ltd has said it is seeking confirmation from Derrimon Trading Ltd (DTL) of its intentions towards these shareholders and is also seeking more information on the recent purchase of additional CFF shares by DTL. On December 23, 2016, DTL indicated via the Jamaica Stock Exchange (JSE) that it had begun a process to acquire an additional 23,379,208 stock units in CFF. That amounts to another 26 per cent of the company. Derrimon previously, in 2014, acquired a 49 per cent stake in CFF. The new block of shares will push ownership by Derrimon to some 75 per cent of 89,920,033 shares outstanding. The sum prepaid by Derrimon for the new block was $105.21 million, translating to a price of $4.50 per stock unit.
• EduFocal To Target Nigeria – Social learning website EduFocal is expanding its footprint to Nigeria, Africa. EduFocal’s Head, Gordon Swaby says the company is specifically focused on offering its service to the city of Lagos which is estimated to have a population of 21 million people, in a country of about 185 million. Lagos is the largest city in Africa and is known as Nigeria’s business capital. It’s an attraction for both investors and travellers.
• Loans at the ABM? – The National Commercial Bank (NCB) has introduced loan services at its Automated Banking Machines (ABMs). The Bank piloted its ‘Loan at ABM’ solution last December which saw a select number of pre-approved customers receiving loan offers ranging from $50,000 to $500,000 at the ABMs through direct deposits on accounts associated with their Midas cards.

Here are some key market and economic figures

• Stock Market Movement: 1.63% Week-to-date | 1.63% Month-to-date | 1.63% Year-to-date (27.6% YTD 2016)
• Exchange Rates: USD – 128.09, CAD – 93.54, GBP – 155.84 (Bank of Jamaica Buy Rates as at Friday)
• Inflation: 0.4% November (Month) | 1.4% Jan – Nov 16 (YTD)
• Unemployment: 13.7% (As at Apr 2016)
• GDP: 2% as at Sep Quarter 2016 (Rate of Growth of Value Added at Constant (2007) Prices Seasonally Unadjusted)

Thanks for reading Vol. 2017 Issue No. 1 of our weekly digest. ( 02.01.2017 – 08.01.2017). All Weekly reviews can be viewed here.