Big Week Ahead. Starbucks Hits MoBay & Digicel and TSTT Make Acquisitions

May 7, 2017

Here is the latest weekly digest (May 1st – May 7th, 2017). A quick easy read of this week’s top and most relevant business news. No fluff, just the highlights.

We are now approaching one of the busiest times of the year for quarterly results. Over the next week or 2 a large number of companies should be reporting quarterly results for the quarter ended March 2017, and this should definitely have an impact on trading activity over the days that follow – as we get a glimpse into the performance of these companies.

This week the market closed up by 1.46% this week, recovering from a decline of 2.13% last week. The combined index has now grown by 22.81% since the start of this year (compared to 27.61% for the all of 2016).

There were 7 stocks advancing by more than 10% this week. They were

  • JPS9.5 making a big 30% jump,
  • KEX (up 24.4%),
  • SALF (up 22.9%),
  • MUSIC (by +16.3%),
  • PTL (by +13.2%),
  • AFS (by +12.6%) and
  • JSE (by 10.4%).

There has also been increased demand for Main Event (MEEG), Berger (BRG) and Jamaica Broilers (JBG) shares as these 3 saw new highs this week. MEEG hit a new high 3 times this week with the latest being 6.99, BRG traded at 16.90 and JBG hit 17.10.

CFF and 1834 had the largest declines this week diving by 31.2% and 18.2% respectively.

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…

  • Jamaica’s Economic Growth Council (EGC) has projected an economic growth rate of 2.3 percent for financial year 2017/18. In its quarterly “Report to the Nation” for the period January-March, 2017, the EGC said that the 2.3 per cent growth is predicated primarily on improvements in all industries, with the exception of producers of government services.
  • Digicel Group has bought another telecoms firm, giving it a presence in at least four French-owned territories. The full acquisition of IDOM Technologies, announced this week, gives Digicel ownership of another 265 kilometres of fibre-optic cable assets. Its fibre optic networks across 30-plus markets now span just over 6,000 km of cable.
    • IDOM Technologies, headed by President David Bruyer, says on its website that it has “a workforce of 50 people, including 29 skilled and experienced engineers and technicians”. The best available valuation, dated 2012, puts its equity at over €1 million.
  • Nine entities have applied for prequalification for the Norman Manley International Airport (NMIA) public-private partnership in response to the government’s request, the Development Bank of Jamaica (DBJ) said. The Norman Manley International Airport is owned by the Airports Authority of Jamaica (AAJ) and currently operated by NMIA Airports Limited, a wholly-owned subsidiary of the AAJ.
  • GraceKennedy Group CEO Don Wehby has snagged the services of retired banker Peter Moses, who has been hired as a consultant for the financial group and will eventually take on the chairmanship of the conglomerate’s commercial banking business
  • Further in the Caribbean, majority state-owned Telecommunications Services of T&T (TSTT) signed a share purchase agreement (SPA) to buy 100 per cent of the shares of Massy Communications Ltd for TT$255 million. The purchase will allow TSTT to have immediate access to an additional 34,000 homes in Diego Martin, Port-of-Spain, Trincity, Arima and San Fernando, which Massy Communications has already passed with fibre optic technology.
  • International coffee chain Starbucks has entered an agreement with Caribbean Coffee Traders Ltd to open its first café in Jamaica, in a move that is likely to shake up the existing local coffee shop market.
    • Under the agreement, Caribbean Coffee Traders Ltd which is a consortium led by the Margaritaville Caribbean Group, will have exclusive rights to own and operate stores on the island, with the first store to be opened in Montego Bay. Other locations and some inclusion of local flavours and mixes are expected.
  • NCB Financial Group Ltd (NCBFG) and its subsidiaries booked net profit of $9.5 billion at mid-year March 31, 2017 – an increase of 58 per cent over the prior year. The group achieved its highest quarterly result of $5.9 billion, up 63 per cent over the comparative quarter, which management said was due to its strategic focus on expansion in the Caribbean region.
  • Dolphin Cove Ltd, says the decision in 2016 to adopt the United States dollar as its functional currency instead of the Jamaican dollar resulted in Dolphin Cove showing “real growth rates”.
  • Faced by higher raw material costs and other rising expenses, Caribbean Cream Ltd ended its fourth year on the Junior Market of the Jamaica Stock Exchange with profit slightly improved to $172 million.
  • Palmyra Resort and Spa in Montego Bay, St James, which was acquired by Sagicor in 2016, will be rebranded and reopened by the end of the year as the Jewel Grande.
  • Portland Private Equity, chaired by Michael Lee-Chin, has poured US$17 million into financing the merger of two iconic restaurant chains in Colombia through its Caribbean Fund II
  • Mayberry Investments Limited announced that it will now act as financial advisor to Jamaican hospitality outfit, Express Catering Ltd. The deal, which was signed earlier this month, signals that the food and beverage operator is considering raising funds, privately or publicly.
    • Express Catering began operations in 2001 and has its operation overseen by Chairman and CEO, Ian Dear.

Here are some key market and economic figures

  • Stock Market Movement (Combined Index):
    • Week to date: 1.46% | -2.13% Last week
    • Month to date:  1.46% May | 4.08% Apr | -3.09% Mar | 9.26% Feb | 10.09% Jan
    • Year to date: 22.81% (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. 18 of our weekly digest. (May 1st – May 7th 2017). All Weekly reviews can be viewed here.

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