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JSE top stocks deliver over 50% returns - Companies raise $9b equity capital

Published:Friday | July 8, 2016 | 12:00 AM
Marlene Street Forrest, general manager of Jamaica Stock Exchange Group

Investors more than tripled their money in the Honey Bun bakery stock during the first half of 2016 while six other stocks offered better than 50 per cent gains, according to Jamaica Stock Exchange (JSE) data.

It meant that $1 million invested in Honey Bun would now equate to $3.5 million or a gain of 355.3 per cent over the period. The bakery stock started the year at $6.17 then climbed to $19 before splitting on May 30 to $3.80. It continued to climb, eventually doubling just above $7 before closing at 5.60 on June 30.

Honey Bun made $94.8 million net profit over six months ending March 2016 on $607 million in sales or 100 per cent higher net profit year-on-year. That equates to earning per share of $1.01 (or $2.02 annualised) prior to the split.

The JSE main market gained 5.99 per cent year to date, closing at 157,717 points, while the junior market gained 23 per cent to close at 2,208 points.

Other top stocks included Palace Amusement, up 90 per cent; AMG Packaging & Paper Company, up 87 per cent; Knutsford Express Services Limited, up 82 per cent; Eppley, up 62.5 per cent; Jamaica Producers Group up 55 per cent; and Grace Kennedy Limited, up 50 per cent.

The JSE main market had slipped to seventh spot earlier in June, down from the top spot at the end of 2015.

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

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.

The JSEG expects to launch new products, including options trading, to improve market activity.

2016 will be record year

Meanwhile, JSE General Manager Marlene Street Forrest is confident that 2016 will be a record year, for listings and fundraising, the latter having already surpassed $9 billion.

"Just within the first six months of the year, over $9.4 billion was raised through initial public offerings alone. This is good news because, over the last 10 years, this is the most we have raised in initial public offerings, and if we are to include the rights issue; we would be $200 million short of the $9.6 billion raised last year," the stock exchange boss said as she addressed the listing ceremony for Portland JSX Limited (PJSX) on Wednesday, the latest of a dozen stocks to list this year.

"In respect to listings, 12 securities have been listed year to date and this is just two shy of the most securities listed in 10 years," said Street Forrest. "I am therefore encouraged that this year will be another history-making year for the stock exchange," she said.

The listings this year included four preference stock, a cross-listing on the US dollar market, and six junior companies.

The Portland flotation raised a record $1.52 billion. The previous record for a float was $1.49 billion garnered by Sagicor X Fund at the end of 2013.

Reporters Neville Graham and Steven Jackson contributed to this story.