22 Stocks Hit New Highs. New Tax Package Coming, Snapchat IPO

Here is the latest weekly digest (Jan 30th – Feb 5th, 2017). A quick easy read of this week’s top and most relevant business news. No fluff, just the highlights.

The market continued to experience significant momentum this week with 22 stocks hitting new highs and the combined index jumping by 5.93%. This is compared to 2016 where we averaged 4 to 5 new highs per week, except for the first 7 weeks (where we averaged about 17 new highs per week) which followed on 2015’s impressive performance. In fact, majority of the 22 stocks hit a new high more than once within this same week!  This is another indication of continued market demand and investor interest in the stock market at this time. View the full list of companies hitting new highs this week here (excel download, login required).

Since the start of this year 4 stocks are already up 90% (PULS, BRG, JP, JAMT). Another 6 are up more than 50% and another 17 up more than 20%. See the full list of companies and their performance since the start of the year here.

National Highlights

• Tax Collection Ahead Of Budget – Tax Administration Jamaica (TAJ) said preliminary figures indicate that for December 2016 net collections were $26.6 billion or 27.3 per cent above the $20.9 billion target. The year-to-date net collections now stand at $191.9 billion, $12.6 billion or 7 per cent above the $179.2 billion projection. The performance continued the positive trend set over the previous two quarters and during fiscal year 2015/2016, the agency said.
• New Tax Package Ahead – A new tax package will be brought to the Lower House to fund the second part of the income tax threshold. Finance Minister Audley Shaw announced this week that “We have not made it a secret that we are moving from the direct taxation of personal income taxes towards indirect taxation, so it’s an open book that we will have a tax package to replace the second phase of the personal income tax programme”
• $9b in Propery Taxes Owing – Minister of Justice, Delroy Chuck said the government will be moving to collect more than $9 billion it is owed in outstanding property taxes. He noted that almost one third of landowners are not paying their property taxes, which is used to finance critical services at the local level.
• Grenada Government T-Bills Oversubscribed – The Grenada government says it first issue of treasury bills via the Regional Government Securities Market – the RGSM – has been oversubscribed. A government statement noted that the 91-day Treasury bill for 2017 was aimed to raise EC$10 million, with the option to take an additional EC$5 million. The auction, which took place on the Eastern Caribbean Securities Exchange platform, was oversubscribed by EC$16.6 million, and yielded 2.499 per cent per annum
• TT Repo Rate At 4.75% – The Central Bank of Trinidad & Tobago yesterday decided to keep its repo rate at 4.75 per cent, citing a sharp decline in energy sector output, a “very subdued” non-energy sector along with moderate credit growth and low inflation. The Central Bank said its rate-setting committee, the Monetary Policy Committee (MPC) weighed international developments against a domestic economic environment characterised by continued sluggishness in coming to its decision. Citing the international developments, the MPC said interest rates have started on an upward trajectory, with the US Federal Reserve increasing interest rates in December 2016, for the first time since December 2015.

Companies & The Markets

• JN Bank Goes Live – Jamaica National formally launched its commercial bank on Wednesday, completing its eight year-long transition. JN Bank has become the seventh commercial bank locally with 34 locations comprising 25 branches and nine JN Money Shops. The bank is ranked third, with assets of $180 billion and savings of $101 billion. The sector has now grown to around $1.22 trillion by assets.
• JSE considering Exchange Focused on People, Planet and Profits – Companies that earn money doing social good, such as cancer care, crime-prevention, education or faith services, could list on the Jamaica Stock Exchange (JSE), allowing stock market investors to more easily enter and exit such ventures. The JSE wants to create a JSE Social Exchange platform for social enterprises and is working with a start-up date of mid-2018. While companies on this exchange would still need to be profitable investors would need to approach that type of investment by assessing a ‘triple bottom line’ – its impact on people, planet and profit.
• Palmyra Again – Palmyra depositors have been offered 14 cents on the dollar as settlement, following the disposal of the incomplete project. Palmyra was sold for around half the value of the US$110 million of debt that backed the project. Palmyra Resort & Spa was placed in receivership in 2011, and the incomplete development was finally sold last year to Sagicor related entities.
• Kiss Cakes To Create 100 Jobs – Jamaica Biscuit Company, which manufactures Excelsior water crackers, has expanded its portfolio to include the manufacturing of Kiss Cakes. The company is expected to provide employment for an additional 100 people once the new facility becomes fully operational. Kiss cakes, which were originally manufactured in Trinidad and Tobago by Kiss Baking Company, were previously imported to Jamaica and distributed by the Jamaica Biscuit Company, both of which operates under Bermudez Group Ltd.
• Main Events Entertainment Ltd to begin trading this Wednesday

• Sweetie To Expand, Hire 10 – Candy manufacturer Sweetie Confectionery aims to occupy its own factory space by April. Over the past two years, the local company had its products co-packed at the island’s only commercial confectionery manufacturing facility, Miel, but has now outgrown the space as it steadily increases production numbers to cater to new markets. The company is looking to hire 10 new employees thanks to new financing from the Exim Bank and the Development Bank of Jamaica
• Rainforest Expands – Rainforest Seafood has added five new markets amid  a continued push to grow its export lines. Since January, the company has exported lobsters caught in Jamaican waters and conch to Greece, Germany and the United Arab Emirates. It also began exporting frozen lobsters to China and the United States in December. The company says they have established themselves as a major exporter to the Caribbean and are now focusing on other global markets.
• Salada To Target Youth, Push Cocoa – In the second quarter of 2017, Salada Foods Jamaica Limited plans to develop and produce several new coffee products, in an aim to connect with younger consumers. While the future of its core instant coffee business remains strong, with coffee on the path to outsell bottled water globally, it also needs to satisfy younger consumers, who want gourmet coffees. Salada, which makes Mountain Peak Coffee, reported annual sales of $761 million last year, up from $600 million a year earlier.
• Snapchat IPO – Snap Inc. (owner of Snapchat smartphone app) is aiming to adopt the most shareholder-unfriendly governance in an initial public offering, ever. The Snap regulatory filing was disclosed Thursday, and the company will be issuing out only nonvoting shares in its I.P.O. Snap admits that this is unprecedented, on the U.S. stock exchange.

Here are some key market and economic figures

• Stock Market Movement: 5.93% Week-to-date (5.52% Last week) | 3.58% MTD – Feb (10.09% MTD Jan) | Year To Date – 14.03%, 7.65% YTD Last Week (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. 5 of our weekly digest. ( 30.01.2017 – 05.02.2017). All Weekly reviews can be viewed here.