March A Busy Month For Stocks, SOS IPO, Property Taxes & Brexit

Here is the latest weekly digest (Mar 27th – Apr 2nd, 2017). A quick easy read of this week’s top and most relevant business news. No fluff, just the highlights.

The first quarter of 2017 is now behind us. Yes, believe it or not the first 3 months of 2017 are history, with 9 more months to go.

For March, big winners for the month were KPREIT up 48.6%, ISP by 37.2%, CBNY by 29.4% and another 10 more stocks which advanced more than 10%. Declines for the month include BPOW by 36.3%, MTL by 28.1%, CWJ by 26.0%, and JSE, MUSIC and PURITY all down by close to 25%.

Despite the 3.08% decline in the index over the month, March has been one of the busiest months on the market in recent times with over 340m units traded (compared to the normal average of around 150k – 200k units) or a daily average of 17m units (compared to 7 – 10m units on average over the last 6 months).

There were also a few quarterly results this week and we’re looking forward to the Main Event results which should be here any time now (already late if my calculation is correct).

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…

• Property Tax Uproar – A number of groups have chided the government for its aggressive and oppressive roll out of the new property tax rate increases. The JMA and JHTA are among some who have expressed their dissatisfaction and concern with new property tax rates which have increased significantly in a number of cases. The government is however promoting it as a part of its plan to move to indirect taxation and saying that the increases vary with over 270 thousand landowners seeing a reduction in rates. Rental rates are projected to increase.
• Wisynco Factory Almost Ready To Go – Less than a year after Wisynco Group Limited suffered over $2 billion in losses from a fire at its Lakes Pen warehouse, the company is hoping to begin its relocation exercise by May. Wisynco is one of Jamaica’s largest manufacturers and distributors, employing about 2,000 people.  Today Wisynco distributes 110 brands with more than 4,000 different products, including beverages, grocery and synthetic items.
• Jamaican Made Beds For Hotel – Bedding company Therapedic Caribbean has been contracted to outfit the Hilton Rose Hall Hotel in Montego Bay, an arrangement that is expected to run for another two years. The 489-room hotel is locally owned by Sagicor Real Estate X Fund, a member of Sagicor Group Jamaica.
  • Therapedic has already supplied 850 mattresses and 850 bed foundations to the beachside property, all for $60 million. Sagicor made an exception to its long-standing procurement procedures by appointing a Jamaican bedding manufacturer as a preferred supplier of customised sleep products to the hotel’s international specifications.
• Speaking of Jamaican Made … – Pricesmart is also looking to expand and open a 2nd location, but what stands out is their desire to have more Jamaican made content on their shelves. The company says Jamaica is listed as ‘having one of the highest percentages of imported products’ since we do not produce enough of our own goods. The company is doing way better than they anticipated and is regularly overcrowded (which creates another problem).
• Banking Sector Competition Review – Jamaica’s commercial banking regulations that impact access to financing are to undergo a review, with recommended measures to be adopted by midyear. The Ministry of Finance said the objective is to assess competition in the space/market in which commercial banks operate, identify bottlenecks and impediments, and propose policy recommendations for improved competition. The review is expected to cover insurance and pension regulations that impact access to financing.
  • Two banks continue to dominate the market among seven players today, accounting for around two-thirds of the more than $1 trillion of sector assets.
• The Ministry of Tourism wants to raise the profile of Devon House among food enthusiasts, while also creating a series of culinary tours across Jamaica in a bet that the country’s gastronomic delights, and its rum, can draw additional business from visiting vacationers.
• NCB promotes Bob Blake to COO and makes a few other changes
• NWC to do an IPO? More to come.
• Stationery & Office Supplies To List This Year – Stationery & Office Supplies Limited (SOS), a family-owned company that has been around for half-a-decade, is planning to float shares in the company on the junior market of the Jamaica Stock Exchange. The company wants to tap the market for equity capital to push forward with new expansion plans, said SOS director for logistics and warehousing Allan McDaniel on Friday.
  • The company is yet to give a timeline to go public, or state the amount of funds they plan to raise through the IPO. However, the company wants to list this year. SOS has retained the services of JN Fund Managers, a member of the JN Group.
  • SOS is a large supplier of office and stationery equipment to corporate entities in the main, with hubs in two cities that serve markets in Jamaica and the Caribbean region. The company operates a 35,000 square foot warehouse and showroom from its 23 Beechwood Avenue headquarters; and a second operation in Montego Bay spanning 3,000 square feet of space.

Internationally…

• More Oil in Guyana (the third find) – On March 30, 2017, ExxonMobil announced its third oil discovery in Guyana (at the Stabroek Block at its Snoek-1 well). This marks the company’s third such discovery on the Stabroek Block, after Liza and Payara discoveries. The discovery adds to evidence that the area offshore Guyana, a small South American country that sits between Venezuela and Suriname, is a budding exploration province.
  • ExxonMobil subsidiary Esso Exploration and Production Guyana Ltd. is operator and holds 45% interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Nexen Petroleum Guyana Ltd. holds 25% interest.
• Also in Guyana, the Govt plans to construct a logistics hub – The government of Guyana has said that it will be investing US$500 million to construct the onshore facility on Crab Island, which is located in the Berbice River, during the course of this year. The facility will serve as a logistics and supply base to the offshore production. The facility is expected to create some 600 jobs
• Theresa May Triggers Article 50 – On March 29, after forty years of membership, the British government formally gave notice that it will leave the European Union in 2019. The United Kingdom says it hopes for a deep and special partnership with the EU that involves both economic and security cooperation. What’s the Caribbean response?
• Samsung S8 or Iphone 10? – Months before Apple could release a new iPhone that’s all screen, glorious screen, Samsung beat it to the punch. Samsung unveiled its latest smartphone on Wednesday, the Galaxy S8. The sleek phone’s standout features are a screen that goes nearly to the edges of the device, and a virtual assistant named Bixby. This summer marks the iPhone’s 10th anniversary. As it does every year, Apple will likely unveil a new version of the smartphone at a flashy press event.
• President Trump’s Mexican wall – Contractors are already submitting bids for the first step of President Donald Trump’s signature promise – a border wall with Mexico. This first round of bids is only to design and build wall prototypes in the San Diego border area. While construction of the prototypes could start within weeks, it will be months, if not years, before construction of the actual wall begins. The prototypes will be smaller than the eventual wall will be — only 10 feet tall and 10 feet long, enough to demonstrate what a full-size version would look like.
• Amazon Founder now 2nd Richest Man – Amazon founder Jeff Bezos has become the world’s second richest person, leapfrogging Warren Buffett and Amancio Ortega, the former second and third richest, respectively. Bezos’ ascent was propelled by an Amazon.com stock surge following the recent disclosure of the company’s plans to purchase Middle East online retailer Souq.com. Amazon stock rose $18.32 on Wednesday on the back of the announcement, Bloomberg reports, adding some $1.5 billion to its founder’s fortune. Bezos—who now has a net worth of $75.6 billion according to Bloomberg‘s Billionaires Index—has seen his coffers swell by $10.2 billion in the last year.

Here are some key market and economic figures

• Stock Market Movement (Combined Index):
  • Week to date: -0.16% | -2.13% Last week
  • Month to date: -3.08% | 9.26% (Feb) | 10.09% (Jan)
  • Year to date: 16.73% (27.6% YTD 2016)
• Inflation:
  • Year to date (Dec 16 – Feb 17) 0.6%
  • Prior Year-To-Date (Jan 16 – Dec 16) 1.7%

• Unemployment: 12.9% – Oct 2016 (12.9% as at Jul 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. 13 of our weekly digest. (Mar 27th – Apr 2nd 2017). All Weekly reviews can be viewed here.