NCB Capital Market's investment in Jamaica Money Market Brokers (JMMB) has grown by close to half-billion dollars over three days, or at a rate of more than J$164 million per day as the market snapped up the JMMB stock, driven by a new wave of confidence.
Analysts said Thursday that the J$1.86 gain on the stock at mid-week was due to the bullish wave that the NCB investment sparked, JMMB's stronger-than-expected first quarter and improved cash position - from an operating deficit to J$6.4 billion of operating surplus and net cash of J$3 billion - and the Capital and Credit deal.
"NCB is a solid company, the biggest owners of JMMB - that's a plus for JMMB," said one New Kingston analyst. "The next logical step, as we now see, is movement on Capital and Credit."
Said another: "JMMB is in a better cash position. They're more solid in the first quarter."
JMMB is pursuing a J$4.55 per share combination offer for Capital and Credit Financial Group, which was disclosed after market close Wednesday (see cover story), confirming a Financial Gleaner report on July 8 that a deal was being negotiated.
NCB Capital Market has not disclosed the price paid for the holdings in JMMB, but the value of its 29 per cent stake or 428,777,325 shares has climbed from J$3.066 billion, or J$7.15 per share last Friday to J$3.559 billion, or J$8.30 per share on Wednesday - a gain of 16 per cent or J$493 million in three days.
It climbed even higher to a new one-year high of J$9.01 on Thursday as the market digested news of the planned CCFG takeover.
NCB Capital Market will be seeking seats on the JMMB board, but has not decided yet on the number of positions it will request, said a well-placed source inside NCB.
"That is still being deliberated," the source said.
NCB bought the shares in JMMB from CLICO group, said our sources, which up to last week held 554 million shares in the money market brokerage. The size of the acquisition classifies JMMB as an associate company of NCB group and NCB Capital Markets.
JMMB's stock market value has shot up from J$10 billion to J$13.2 billion since last Friday.