Tue | Sep 19, 2017

Jamaica stock market looses footing at half-year

Published:Wednesday | June 15, 2016 | 6:00 AMSteven Jackson
A section of the complex housing the Jamaica Stock Exchange at Harbour Street, Kingston.

Compared with a year ago, the Jamaica Stock Exchange (JSE) still leads the world as the top-performing market in early June.

But calendar year to date, January to June 10, it ranks seventh globally among 92 markets, according to a Gleaner analysis utilising data from financial-research company, Bloomberg.

Hungary leads the world with gains of just under 11 per cent, year to date, while over the same period, the JSE gained less than six per cent on the index.

The JSE's annual gains, since June 2015, is estimated at 65 per cent, according to Bloomberg data. The Jamaican market is well ahead of the second in line, Latvia, which gained 43 per cent in value in the last year.

The Kingston-based exchange continues to benefit from listings and improved confidence, as indicated by the Jamaica Stock Exchange Group in its March-quarter earnings report.

"The improvement in business and consumer confidence has translated to positive performance of listed companies and, by extension, advances in all the Jamaica stock market indices over the comparable period. As more companies consolidate, it is also expected that the group will benefit from those activities," said the JSEG.

The stock exchange earned $125.5 million in net profit for the March quarter, 43 per cent higher year on year. Its outlook remains positive.

"It is also expected that the group will continue, in the medium to long term, to pursue a strategic path of growth through the promotion of new and existing markets, new product development and the continuous improvement of service delivery to the group's customers and stakeholders," the JSEG indicated.

In 2015 calendar year, JSE led the 92 markets due to a number of stocks doubling in price, partly fuelled by acquisitions of listed companies - Desnoes & Geddes/Red Stripe Jamaica was bought by Heineken, while Hardware & Lumber was acquired by Argyle Industries.

The five largest stocks basically doubled their market capitalisation since 2014: National Commercial Bank Jamaica - $103 billion, from $45 billion; Scotia Group Jamaica - $98 billion, from $62 billion; Sagicor Group Jamaica - $90 billion, from $39 billion; GraceKennedy - $39 billion, from $20 billion; and Carreras - $31 billion, from $17 billion.

The three affiliated Lasco companies, chaired by Lascelles Chin, when analysed together, hold a market value of just over $51 billion. The companies trade on the junior stock exchange.

The JSE main index, on Tuesday, closed at 158,948 points. The combined index, which incorporates the junior stocks, closed at 170,411 points.

steven.jackson@gleanerjm.com