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NCB Capital doubles value in Knutsford Express investment

Published:Wednesday | April 13, 2016 | 12:00 AMSteven Jackson
A Knutsford Express luxry coach.

Brokerage house NCB Capital Markets Limited doubled the value of its investment in the listed bus service Knutsford Express to over $450 million, based on the price movements of the stock in the March quarter alone.

The stock movement represented the fastest price rise on the Jamaica Stock Exchange (JSE) year to date.

NCB Capital bought roughly $220 million worth of shares in Knutsford from Proven Investments Limited at over $10 each in December. Knutsford now trades at $22 resulting in hefty unrealised gains for NCB Cap, a subsidiary of National Commercial Bank Jamaica.

NCB Cap however remains mum on whether it would sell its shares equivalent to 20 per cent of the bus company which offers a cross-country service.

"We are not able comment at this time on discussions related to any potential trades," said Tracy-Ann Spence, assistant vice-president for investments at NCB Capital Markets.

Proven sold its shares in Knutsford in December reportedly after doubling its money. Proven had acquired its stake in Knutsford through various block transactions, the last at around $5 in November 2014 which took it to 20 per cent shareholding of the luxury bus company.

For the first half of the year, Knutsford's revenues grew 31 per cent and profits 107 per cent, said Spence.

"This improvement in company performance coupled with overall market activity have contributed to the rapid price increase and we are pleased with the increased value of our investment within the short time frame," she said.

Spence says NCB takes positions in companies with sound fundamentals and which it believes will increase shareholder value whether in the short or long-term.

"Knutsford Express is one such company. The company has performed well and we expect it to continue doing so, especially with increased routes and the fleet expansion programme. But as with any stock in our portfolio we determine an exit strategy and price, and if the opportunity arises we would not be adverse to selling at the right price," she said.

The top stocks with the biggest price gains in the March quarter: Knutsford up 129 per cent; Honey Bun 99.8 per cent; Gleaner 58 per cent; AMG Packaging & Paper 57 per cent; General Accident 45 per cent; Caribbean Cement Company 40.7 per cent; Jamaica Broilers 39 per cent; Paramount Trading 22 per cent; Berger Paints 21 per cent; and JSE Group 20.9 per cent.

Sixteen stocks made double-digit gains in the quarter even though more stocks declined than advanced over the period.

The JSE made the largest gains among 92 comparative equities markets globally in 2015.

The combined market closed the March quarter up 2.7 per cent at 162,518 points relative to the end of December when it closed at 158,269 points.

The JSE Combined Index peaked at its all-time high of 176,139 points on February 4, but has since given up all of its gains for the year.

On Tuesday, April 12, the index closed at 157,743, reflecting a 0.3 per cent contraction of the market year to date.