Stock Market Makes Soars! JN Bank This Weds & More IPOs On The Way

Here is the latest weekly digest (Jan 23rd – Jan 29th, 2017). A quick easy read of this week’s top and most relevant business news. No fluff, just the highlights. 

Market Mania – There were huge gains on the Jamaican stock market this week, buoyed by phenomenal results from some companies, market optimism and continued interest from investors seeking the best companies to invest in.

• The market made a 5.52% jump this week (compared to 2.02% total growth for the first 3 weeks of 2017). This pushed the market’s total movement for the month up to 7.65%. Major stocks seeing growth this week included
  • Berger up 61.42% this week on good quarterly results from the Christmas season. Berger’s stock is up a mind-blowing 86.79% since the start of this year!
  • Kingston Wharves up 32.83% this week. KW is up 69.87% since the start of 2017,
  • Jamaican Teas Ltd up 32.31% this week, 88.60% in the first 3 weeks of 2017,
  • Medical Disposables and Supplies up 30.44% this week and 39.76% since 2017.
  • along with 6 other stocks (MIL, PULS, JP, PURITY, KLE and MTL) that advanced between 12.50% and 28.99% this week. You can view all companies and their performance here.
• Investors constrained by the limited shares offered in the Main Event (and possibly other upcoming) IPOs can still find a number of opportunities in existing listings.

National Highlights

• More US$ In the Market, Dollar Could Strengthen– The Bank of Jamaica (BOJ) made good on its previously stated intent this week to prepay foreign currency-denominated certificates of deposit (CDs) totalling approximately US$256 million (US$158.6 million and £79 million) to holders of these instruments. The central bank made the payout this week (Weds Jan 25th) following notice issued on October 25, 2016. This move will likely result in some strengthening of the Jamaican dollar.
• Parliament Bank Fees Debate Begins – The House of Representatives on Tuesday (Jan. 24) started debate on the Banking Services (Amendment) Act. The legislation, which is a Private Member’s Bill brought by Member of Parliament for St. Catherine South, Fitz Jackson, seeks to to have the Bank of Jamaica (BOJ) regulate the use of fees and charges by financial institutions and ensure greater protection for customers.
• JPS Share Sale? Not Yet –Opposition Spokesman on Energy, Phillip Paulwell said the government’s latest proposal to divest itself of the 19.9 per cent stake in Jamaica’s light and power company (JPS), as alluded to in recent remarks by Finance Minister, Audley Shaw, is ill-advised and untimely as it would deprive the country the opportunity to maximise the expected increase in value of the JPS assets when the modernisation and energy diversification of the company is completed and the value of the full programme is being realised
  • Paulwell said that while the timelines for the divestment and method of sale have not yet been disclosed, the JPS, which has assets of nearly US$1billion, and revenues of some US$760 million as at end of 2015, is now being positioned to increase its asset base, achieve energy efficiency and significantly grow its revenues.

Companies & The Markets

• JN Bank To Launch this Wednesday – The Jamaica National Building Society (JNBS) will unveil its new status as JN Bank on Wednesday, February 1, launching a new commercial banking brand, but retaining its signature yellow and blue signage and its mutual character which makes all clients shareholders. It we be Jamaica’s third largest bank (of 7) based on assets, deposits, loans and the number of branch locations (34).
• Knutsford Express Expands – Luxury bus service, Knutsford Express, hopes to create employment for an additional 10 people with the buildout of a terminal for passengers looking to connect to its scheduled services at Sangster International Airport, Montego Bay.
• New Tracks & Records In Mobay – Hotelier Christopher Issa will open a Usain Bolts Tracks & Records (UBTR) restaurant in Montego Bay by July this year. The deal with Issa is KLE Group’s second local franchise arrangement for the restaurant and will grow the chain to three.
  • The restaurant will be located in St James Place Shopping Plaza, which adjoins Issa’s newly acquired hotel property on Gloucester Avenue. The project is in the design phase, will employ 45 people and also include a breakfast menu. The company wants to grow the chain to 15 locations globally in 5 years.
• Best First Quarter Ever – National Commercial Bank Jamaica (NCB) recorded its best ever first-quarter, earning $3.6 billion net profit for the period ending December 2016, up 50 per cent year on year. Revenues totalled $10.2 billion for the quarter. Earnings per share totalled $1.45, up from $0.96 a year earlier.
• Main Event IPO A Hit! – The Main Event Entertainment Group successfully raised the $120m it was seeking in its IPO this week. Total applications from over 1,000 applicants amounted to $673m, more than 3 times the offering. The company offered 60 million shares, priced at $2 each and the offering opened and closed on the same day, January 24, 2017
• Fly Jamaica Considering IPO – Fly Jamaica Airways will consider listing on the Jamaica Stock Exchange (JSE) in order to finance the cost of acquiring four additional aircraft, according to Chief Executive Officer Captain Paul Ronald Reece. The airline requires these aircraft in order to maintain its viability and expand. Fly Jamaica currently operates two aircraft. The company, founded in 2011, started operations on February 14, 2013.
• ARC Manufacturing Expanding (For IPO)– ARC Manufacturing Limited (which has been producing building and roofing materials for over 18 years) is taking incremental steps into new regional markets. They are now preparing their next shipment of nails and roofing material to French-speaking neighbour, Haiti.
  • ARC is already doing business in another Caribbean country, as it opens up distribution channels for materials manufactured at its Kingston plant. ARC’s growth plans are being executed as the company contemplates going public via a stock market listing.
  • ARC is primarily focused on the manufacture of construction wires and mesh, nails, fencing and roofing products, ARC also operates as a distributor of materials, such as lumber, steel and steel products, and cement.
• Cemex Takeover of Trinidad Cement Ltd Successful – Cemex’s bid for Trinidad Cement Limited was taken up by shareholders in Trinidad & Tobago, giving the Mexican company at least 67.39 per cent control of the cement maker up to the closing of the offer on Tuesday. The offer in Jamaica remains open until February 7 and did not factor into Tuesday’s tally.
• Sagicor Now 40% Owner Of Construction Company 138SL – Sagicor Group Jamaica now controls the largest block of shares in 138 Student Living Jamaica (138SL), amounting to around 40 per cent of the real estate company in the business of developing student housing. Chairman of 138SL, John Lee, made the disclosure at the company’s annual general meeting on Monday.

Here are some key market and economic figures

• Stock Market Movement: 5.52% Week-to-date (0.83% Last week) | 7.65% Month-to-date (2.02% MTD Last Week) | 7.65% Year-to-date (27.6% YTD 2016)
• Inflation: 0.3% December (Month) | 1.7% Jan – Dec 16 (YTD)
• Unemployment: 12.7% – Jul 2016 (13.7% as at Apr 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. 4 of our weekly digest. ( 23.01.2017 – 29.01.2017). All Weekly reviews can be viewed here.