Jun 2008 Financial News

JSE wont increase share offer to accommodate oversubscription

Jun 11, 2008

Preference share dividends to yield over 14%

Although the Jamaica Stock Exchange's (JSE's) preference share offer, which closed on May 30 was oversubscribed by 88 per cent, the company plans to maintain the size of its offer and will allocate shares to some applicants on a pro rate basis.

The JSE made a public offer of 33 million five-year redeemable variable rate preference shares at $2 a share, which will pay dividends comparable to the higher of Government of Jamaica weighted average treasury bill (t-bill) yield - having a tenor of between 178 and 184 days - fixed at the beginning of every six-month period and interest rate paid on open market instruments issued by the Bank of Jamaica (BOJ) that have 180 days tenor.

The average yield for the May issue of 182-day t-bills was 14.28 per cent, while the last adjustment of BOJ open market instruments was 14.2 per cent.

The offer was open for two weeks and ended on May 30, 2008, by which time applicants offered to buy 62,153,411 share units, valued at over $124.27 million. This was 88 per cent higher than the $66 million the JSE had targetted.
A total of 279 applications were received.

Applications received from employees of the JSE and the Jamaica Central Securities Depository (JCSD) will be fully allocated along with the first 15,000 shares applied for on all applications.

Applications in excess of 15,000 shares will be pro-rated such that the total value of the shares issued does not exceed $66 million.

The JCSD will distribute refund cheques and certificates of allotment guided by the basis of allotment above.
Last week JSE general manager, Marlene Street Forrest pronounced that the oversubscription reflected a high level of confidence in the exchange.

"We are very pleased with these results as the over-subscription by the public for the Stock Exchange's Shares signifies the level of confidence the public has in the Exchange," said Street Forrest. "It is quite heartening to see that persons from all walks of life subscribed for the company's shares."

"We are humbled by the confidence investors have shown in the Exchange and we stand ready to ensure that this confidence remains", she added.

NCB Capital Markets Limited was the lead broker for the offer.


Source:
The Jamaica Observer
Wednesday, June 11, 2008

http://www.jamaicaobserver.com/magazines/Business/html/20080610T230000-0500_136608_OBS_JSE_WONT_INCREASE_SHARE_OFFER_TO_ACCOMMODATE_OVERSUBSCRIPTION.asp