Sep 2016 Financial News

Jamaica Stock Exchange Ltd ponders stock split

Sep 07, 2016

The Jamaica Stock Exchange (JSE) Ltd is set to lay before its board of directors a proposal for a stock split. The company, which manages the Caribbean’s most active Exchange, is the latest in a series of local companies which are considering the split as a means of improving float and trading frequency.

Marlene Street-Forrest, general manager of the Jamaica Stock Exchange said Monday that no comment could be made on the proposed split until after the board meeting to consider the proposal. However, the market was advised of the proposal last weekend.

Listed on the main market, the stock has been one of the best performing of the Exchange over the last 12 months, moving upward in value some 1,094.27 per cent and closing at $18.75 on December 28, 2015.

The Jamaica Stock Exchange traded at its 52-week high of $29.50 yesterday.

In general, companies on the Exchange have been executing splits as a means of improving liquidity.

Cargo Handlers is currently considering a 10:1 stock split. The extraordinary general meeting when shareholders vote on the split will be held on September 26..

The port services company has seen a run-up in price per unit to $82 per share – an improvement of 78.26 per cent for this quarter and 118.67 per cent year to date. At year end December 28, 2015, share price was $38.50, itself representing an increase of 134.38 per cent year over year.

Similarly, other stocks improved in value in the weeks approaching the split date, but have remained relatively stable since.

Honeybun, which split shares in issue 1:5 on June 1, was priced at a high of $19.00 per unit (coming from $6.30 per unit on December 28) before split and $3.80 per unit after the split. The stock traded at $5.30 per share on Monday.

Jamaica Teas, whose effective date of stock split was March 15 this year, was priced at $7.67 per unit before the split and $.3.84 right after. It was trading at $3.63 on Monday.

Pan Jamaican Company Ltd which on May 31 split each share in issue five ways traded at $121.14 on that date and $24.23 per unit thereafter. It is now trading at $24.26.

GraceKennedy Ltd, which split its share 1:3 on August 9, was priced at $124.46 before and $41.49 after. The company’s shares traded at $43.30 on Monday.

Street-Forrest commented, “…to get the real picture of stock performance after a split, that is, the trend, the period of observation must be longer.”

Jamaica Producers, which made an offer of bonus shares to new and existing shareholders up to July 12, saw price appreciation in excess of 40 per cent after the offer opened. For example, on Monday June 6, share price closed at $44 per unit, up 41 per cent quarter to date.

On July 7 the stock crested at $49 per unit. After July 12 shares were distributed to shareholders at the rate of five shares for every existing one held by them, resulting in a new share price of $8.03, reflecting the dilution.

Share price for JP closed at $8.41 unit price on Monday.

Source:
BY AVIA COLLINDER
collindera@jamaicaobserver.com
Business reporter 
Jamaica Observer
Wednesday September 7, 2016    

http://www.jamaicaobserver.com/business/Jamaica-Stock-Exchange-Ltd-ponders-stock-split_73089