Aug 2008 Financial News

Mixed market performance

Aug 25, 2008

HIGH inflation and other economic factors seem to be impacting on the share prices in Barbados.

That observation comes to light with 11 of the 24 listed companies on the Barbados Stock Exchange witnessing a decline in share price.

However, another 10 listed firms have seen increases in their share price. Some of these companies include Neal And Massey Holdings Ltd, moving from $15.17 to $19.02.

Meanwhile, Sagicor Financial Corporation has also witnessed an increase. With the volume of shares traded ringing in at 2 917 442 valued at $16 487 369.50, that share price has moved to $5.85 from $5.20.

Companies on the exchange that experienced a decline during the year to date include Light and Power Holdings Ltd. and Jamaica Money Market Brokers Limited.

Companies that have seen a decline up until July 31st include Ansa Mcal (Barbados) Limited, where the share price has moved from $20.14 to $16.20. Almond Resorts Inc. also falls into this category with a slight decline from the end of year 2007 $2.13, to $2.00. Bico Industries Ltd, Barbados Dairy Industries Ltd, and Barbados Farms Ltd have also witnessed slight decreases in share price since last year.

So far this year, inflation is running at around seven per cent on account of the rising price of energy. The treasury bill rate started the year at around four per cent and continues to decline in the face of high liquidity in the banking system as reported recently by Dr. Marion Williams, Governor of the Central Bank of Barbados.

That was when she reviewed the economy for the half year.

These developments in the market are causing investors to scratch their heads in search of opportunities to place their funds in the hope of achieving favourable returns on their investment.

This is especially in light of the fact that the minimum deposit rate at commercial banks is declining and the treasury bill rate is also retreating. Such a scenario is painting the picture for the local market, but according to Terry Williams, Supervisor of Operations of the Barbados Stock Exchange, this seems right on at this mid-year point. He told Business Monday last week, No one can actively predict the future. We had 11 declines but 10 increases and it was not as big a decline.

He noted that the concerns the Exchange has in this market would be if there is a rising cost of living that would affect both the persons who are buying shares and the listed companies.

So for the persons who are buying shares it means that your money does not go as far, said the BSE official.

So if you have to buckle down, often times you need to be prudent in where you go. Since we have a culture that is not developed toward the equity investing, the first thing that tends to happen is, Stock market? What stock market? Williams remarked that if people are selling and others are not buying the market could stagnate on one side. If you do not have people buying, individuals who are selling would accept less in order to trade the shares, he stated. As a result the share price will decline.

Will they improve? This hinges on what happens during the remainder of this year.

The end of year reporting period for a number of local companies is approaching. Based on their financial performance and once oil prices continue to fall, the market could recover.


Source:
Stacia Browne
Barbados Advocate
Monday August 25 2008

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