Jamaica Stock Exchange shareholders approve five-way stock split
Shareholders of the Jamaica Stock Exchange Group (JSEG) approved a five-for-one stock split that seeks to spur continued growth of the stock.
It will encourage more people to own the stock, said Marlene Street Forrest in an interview from her office in downtown Kingston.
The split was approved last Tuesday. It will grow the listed ordinary shares by 561 million units - increasing the issued shares from 140.25 million to 701.25 million.
"Research has shown that if the company performs well, then the price of the stock will track an increase in the price. We expect that based on our performance, you will see likewise," said Street Forrest.
The stock, which trades under the symbol JSE, closed at $26.95 on the day of the vote. It edged up even more during the week to close at $27.03 on Friday.
JSE was the top-performing stock in 2015, moving from just $1.66 to $18.75 within the calendar year. The movement was the result of a bull run, and mergers and acquisitions, which bolstered the stock market's overall performance.
JSEG earned net profit after tax of $32.2 million on total income of $188.4 million for its June 2016 second quarter, or 113 per cent more net profit year on year. Over three months, earnings per share totaled 23 cents compared to 11 cents a year earlier. Year-to-date EPS totaled $1.12 per share from 73 cents a year ago.
Brokerage houses hold the bulk of the JSE stock. They have largely avoided selling any portion of their stake.
Overall, there are 464 JSE shareholders, but only 28 per cent of the stock remains in the hands of the general public.
Brokerage houses and individuals alike cannot hold more than 10 per cent of the issued share capital of the company under law. The brokerages can sell their holdings, but whether they will remains to be seen, said Street-Forrest.
The record date for the stock split is November 8, 2016.