Fri | Oct 30, 2020

Ja Mortgage Bank next in line after Wigton

Published:Friday | May 24, 2019 | 12:00 AM
Chairman of the Petroleum Corporation of Jamaica, Russell Hadeed, affixes the Wigton Windfarm strip to the JSE’s listing board to applause from Prime Minister Andrew Holness (centre) and Minister of Finance Nigel Clarke at the listing ceremony held at the Jamaica Stock Exchange in Kingston on Wednesday, May 22.

Jamaicans were willing to shell out more than $14 billion, or nearly three times the targeted equity capital, for shares in the Caribbean’s largest wind energy company Wigton Windfarm Limited, which listed on Wednesday on the main market of the Jamaica Stock Exchange.

The offer for 11 billion shares at 50 cents per unit was oversubscribed by 158 per cent, but the Government stuck with its initial fundraising target and did not upsize the $5.5 billion offer.

The Initial public offering (IPO) that opened in April was described as historic by speakers at the listing ceremony, with 31,200 subscriptions, or four times the previous record set by the Wisynco IPO, which had 7,769 applicants vying for shares.

Wigton opened trading at $0.50 and rose to $0.65 within minutes of listing. Activity on the stock triggered the circuit breaker at one point, as the stock price climbed as high as 50 per cent to $0.75. Wigton eventually closed trading on Wednesday up 28 per cent at $0.64 per share. It led volume trades for the day with 8.35 million units.

Prime Minister Andrew Holness, who visited the stock exchange to witness the Wigton listing, along with Energy Minister Fayval Williams and Finance Minister Dr Nigel Clarke, announced that Jamaica Mortgage Bank (JMB) was up next for privatisation. Cabinet has signed off on the JMB transaction, he said, but its still to be determined how the bank will enter the market and whether it too would be floated on the stock exchange.

The bank, which provides construction loans and also serves the secondary mortgage market, manages a loan portfolio valued at $2.1 billion, amid total assets of more than $3 billion. Like Wigton before its listing, JMB is fully owned by the Jamaican Government.

The Central Waste Water Company and Jamaica’s 19.9 per cent stake in Jamaica Public Service are also to be divested, but no time lines were announced for those transactions.

Embrace digitisation

Managing Director of the Jamaica Stock Exchange, Marlene Street Forrest, said that while the Wigton listing was achieved within 21 days of the transaction, she would encourage more companies to embrace digitisation to improve the turnaround time on listings.

Street Forrest said the IPO added 11,772 new stock market accounts. At last report in January, investor accounts had fallen just below 200,000, and Wigton has grown that number by seven per cent. The renewable energy stock also drove up market capitalisation, a measure of stock market wealth in ordinary shareholdings, from $1.6 trillion to $1.66 trillion.

The lead broker for the IPO, Mayberry Investments Limited, said around 7,700 public-sector workers bought shares in Wigton, but the brokerage declined to comment otherwise on which public-sector agencies had also acquired shares and in what proportion, saying it could not divulge client information.

Street Forrest noted that over 64 per cent of all applicants for Wigton were aged under 60; and that more women invested in the renewable energy stock, and now form 56 per cent of Wigton’s shareholder base.

Investors spent $124,000 on average to acquire the Wigton shares, said the JSE head, while the largest block of shares held by a single shareholder is just over 15 million units – for which the buyer would have paid more than $7.5 million.

The identity of the persons or companies that hold the largest blocks of shares will eventually be disclosed publicly when Wigton files its quarterly earnings reports. The top 10 owners of stocks listed on the JSE are routinely disclosed on a quarterly basis.