CARICOM stock market review 2012
The year 2012 was a challenging one for equity investors in CARICOM. Despite solid gains on manufacturing, conglomerate and banking stocks, returns were depressed by declines on tourism, real estate, insurance, investments and retail stocks.
As a result, the CSX 30, which tracks the 30 most influential stocks in CARICOM, posted a modest gain of 7.27 per cent for the year. Investors in Junior Market shares had a torrid year. The CJSX, which tracks the returns of Junior Market shares in CARICOM posted a decline of 20.48 per cent. New readers should note that returns are in US dollars, and reflect movements in the stocks price (capital gains), dividends and movements in the exchange rate against the US dollar.
For the year, 1,991,884,759 shares valued at US $400,107,790 crossed the floors of the six stock exchanges across CARICOM, with 50 stocks advancing, 74 declining and 8 remaining unchanged.
Sagicor Life Jamaica was the most active stock of the year with 358,057,483shares being traded. Demerara Tobacco Company posted the largest gain for the year,117.32 per cent, while on the losing end, Caribbean Cement Company fell66.51 per cent.
For the year, 15 of the CSX 30 stocks advanced and 15 declined. The CSX 30 gained 95.62 points to close the year at 1,410.60, up 7.27 per cent for the year.
In the CSX 30 there were gains for Bank of Trade and Industry Guyana (71.41 per cent), Lascelles (51.29 per cent), One Caribbean Media (43.52 per cent), Banks DIH Guyana (42.95 per cent), West India Tobacco Company (41.15 per cent), Scotia Bank Trinidad & Tobago (32.67 per cent), Guardian Holdings (31.14 per cent), Finance Corporation Bahamas (21.78 per cent), Agostinis Limited (24.23 per cent), Ansa Mcal (22.15 per cent) and Republic Bank (12.54 per cent).
On the losing end, Caribbean Cement Company fell (66.51 per cent), Gleaner (37.16 per cent), Jamaica Money Market Brokers (37.48 per cent), Lime Jamaica (30.12 per cent), Montego Bay Free Port (23 per cent), Grace Kennedy (22.99 per cent), Mayberry Investments (22.40 per cent), Sagicor (19.51 per cent), NCB Jamaica (15.78 per cent), Desnoes & Geddes (14.62 per cent) and Scotia Group Jamaica (11.81 per cent).
The Junior Market experienced a difficult year, with one stock advancing and 14declining. The CJSX lost 372.1 points to close at 1,444.80, down 20.48 per cent for the year.
Access Financial Services posted a gain of (35.24 per cent).
However, there were losses for Honey Bun (38.82 per cent), General Accident (30.66 per cent), Jamaica Teas (25.60 per cent), Lasco Manufacturing (25.42 per cent), LascoFinancial (24.84 per cent), Lasco Distributors (21.67 per cent), AMG Packaging (16.65 per cent), and Caribbean Producers (12.42 per cent).
Stocks on the move: CARICOM stock performance by sector
Stocks in the manufacturing sector generated the best returns in 2012, while tourism, real estate and retail stocks were the weakest performers.
The CARICOM Manufacturing Share Index (CMSX) gained 184 points to close the year at 1,476.5, up 14.29 per cent.
The CARICOM Conglomerate Share Index (CCSX) gained 99.45 points to close the year at 1,294.2, up 8.32 per cent.
The CARICOM Banking Share Index (CBSX) gained 66.3 points to close the year at 1,321, up 5.29 per cent.
The CARICOM Communications and Utilities Share Index (CCUX) gained 12.9 points to close the year at 1,118.5, up 1.16 per cent.
The CARICOM Retail and Distribution Share Index (CRDX) posted the largestdecline for the year, down103.5 points or 8.67 per cent to close the year at 1,090.4.
The CARICOM Tourism and Real Estate Share Index (CTRX) lost 136 points to close the year at 1,464.1, down 8.50 per cent.
The CARICOM Insurance and Investments Share Index (CIIX) lost 50.8 points to close the year at 1,120.8, down 4.33 per cent.
New listings and de-listings
There were a number of listings and de-listings across the regional exchanges in 2012.
On the Bahamas International Securities Exchange, Arawak Port Development was listed on April 23. In Guyana, Rupununi Development Company Limited was listed on March 19.
In Jamaica, First Caribbean International Bank, First Jamaica Investments Limited, Montego Freeport and Pegasus Hotels were de-listed, while on the main market Proven Investments was listed.
Consolidated Bakeries, Paramount Trading Jamaica, C2W Music Limited and K. L.E. Group Limited were listed on the junior market. Supreme Ventures was de-listed from the Trinidad and Tobago Stock Exchange.
Commodities and currencies
On the commodity markets, crude oil futures stood at $91.76 per barrel, down 8.50 per cent at year end.
Gold futures stood at $1,675.85 per ounce, up 6.55 per cent. Corn futures stood at $699.25 per contract (5,000 bushels per contract), up 8.06 per cent for the year.
On the currency markets, the US dollar ended the year stronger against the Canadian dollar, Japanese yen, Brazilian real, Indian rupee, but weakened againstthe euro, Chinese yuan and the British pound.
Investing school: Should you sell those shares to finance Christmas shopping?
In the two years we have been publishing this report, we have noticed an increase in share trading around the end of the year. This has led us to suspect that some investors may be liquidating their shares to help finance Christmas and New Year holiday expenditures. Is this a wise decision?
Like so many things it all depends. In general, you should not use investment funds to finance consumption. If you are holding the shares as a means of financing some future expenditures like retirement, education and so on, then you should desist from liquidating shares to finance holiday related consumption expenditures.
However, liquidating shares to help finance Christmas and New Year expenditures isgenerally a better financial decision than undertaking expensive hire purchases or neglecting to pay other bills.
In general, I would suggest that you save over the course of the year to finance holiday expenditures. Avoid debt to finance holiday expenditures. Exercise moderation in holiday expenditures and if you must, then only finance holiday expenditures from the gains on your investments rather than liquidating your capital.
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