Main Market Slumps, Junior Jumps. Remittance Scare, TT Ratings Downgrade

Here is the latest weekly digest (Apr 24th – Apr 30th, 2017). A quick easy read of this week’s top and most relevant business news. No fluff, just the highlights.

Over J$2.4b was traded on the main market during April 2017 from 2,957 trades, much less than the over 4,000 trades executed in the previous month (March 2017) valued at over J$4.7b. As you can see there has been a steep fall off in both the value of transactions and activity (# of trades) on the main market.

The Junior Market, while also experiencing some decline in trading activity (27% reduction) saw an increase in the value of trades, with J$961.0m being traded during the month, much more than the J$393.4m traded a month earlier (March 2017).

Trading on the Main market for the month was dominated by RJR (54.8%), Sagicor group (10.9%) and CWJ (4.8%). While on the Junior market Lasco Manufacturing dominated 69.1% of volumes traded followed by Lasco Distributors (9.4%) and AMG paper and packaging (6.3%).

For April, big winners of the month were MUSIC up 43.3%, ISP up 38.2%, MEEG up 30.4%, JPS9.5 up 30%, KEY +29.51%, LASF +28.61%, JMMBGL +26.5% and BRG +25.7%. It’s interesting that after 4 months and a massive bull run there are still some stocks appreciating by over 20% each month… just a point for those who think they may be late to the party. 6 Stocks have now doubled in price since the start of this year (including 1 which has tripled) – MEEG is up 219.5%, BRG  up 178.4% and PULS, JETCON, KEX all up over 100%. ISP also joined the list this week advancing by 103.3% since the start of this year.

Declines for the month include JAMT -38.7%, ROC -22.1%, SALF -19.2%, AMG -18.9%, PTL -18.3% and CCC -14.4%.

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…

• The J$ dollar slipped in value against its United States counterpart by 0.51% between January 4 , 2017 and April 26 — a rate of decline that was about a quarter of the rate for the similar period in 2016.The more moderate pace of change coincides with the latest Inflation Expectations Survey of the Bank of Jamaica (BOJ) in which Jamaicans expressed the belief that the dollar would lose value at a slower pace than in the past.
• The Digicel Group generated negative cash flow for its financial year ending March 2017 but is on track to break even by 2020.
• Big Tax Loss From Bauxite – An estimated US$18 million (J$ 2.3 billion) in revenues annually has been lost with the government’s decision to put in place new taxation arrangements for bauxite, the International Monetary Fund (IMF) indicates.
• Remittance Scare – Jamaicans in the United States who send remittances to family back home may soon find themselves contributing to the construction of the Mexican border wall — a key commitment of US President Donald Trump’s 2016 campaign .A United States congressman proposed this week that an amendment be made to the US Electronic Fund Transfer Act to impose a fee for remittance transfers to certain foreign countries
• GraceKennedy is now manufacturing and distributing frozen patties to the United States as part of its latest thrust in securing a place in the global market.

Internationally…

• Cutting U.S. business tax to 15% would take America from the top of the global tax league to the bottom, with one of the lowest rates.
• TT Downgraded to Junk – Two international financial institutions downgraded Trinidad and Tobago this week. Moody’s announced on Wednesday that it had downgraded T&T to Ba1 from Baa3, just days after Friday’s announcement by Standard and Poor’s (S&P) that it had lowered its long-term sovereign credit ratings for this country from “A-” to “BBB+”,
  • In Moody’s ranking, Ba1 is considered to be non-investment grade, or junk-bond status, while S&P’s BBB+ is considered as investment grade.
  • Moody’s said the key driver of its decision was because the authorities’ policy response has been “insufficient to effectively offset the impact of low energy prices on government revenues, as fiscal consolidation efforts have mostly relied on one-off revenue measures.”
• Chairman of the Trinidadian National Gas Company Gerry Brooks says that an additional offering of shares in TTNGL will soon be made to the local investing community. For its financial year ended 31 December 2016, TTNGL generated total comprehensive income of TT$344 million, a 14.4 per cent decline from 2015 when the company recorded TT$402.8 million.
  • The company, an investment holding company whose primary asset is Phoenix Park Gas Processors Limited (PPGPL), also grew net assets by 6.3 per cent moving from TT$3.2 billion in 2015 to $3.4 billion in 2016.
• Barbados Opposes US Listing as Major Money Launderer – The Barbados government has described as misleading the decision by the United States to list the island as a major country for money laundering. The statement issued by the Office of the Attorney General noted that Bridgetown had become aware of the 2016 report by the US State Department naming Barbados among a number of countries which Washington regards as major money laundering countries.

Here are some key market and economic figures

• Stock Market Movement (Combined Index):
  • Week to date: 1.88% 
  • Month to date: 4.08% Apr | -3.09% (mar) | 9.26% (Feb) | 10.09% (Jan)
  • Year to date: 21.04% (27.6% YTD 2016)
• Inflation:
  • Year to date (Dec 16 – Mar 17) 1.0%
• Unemployment: 12.7% – Jan 2017 (12.9% as at Oct 2016)
• GDP: 1.1% Oct – Dec 2016  (2.0% – Jul – Sep 2016) – Rate of Growth of Value Added at Constant (2007) Prices Seasonally Unadjusted

Thanks for reading Vol. 2017 Issue No. 17 of our weekly digest. (Apr 24th – Apr 30th 2017). All Weekly reviews can be viewed here.