Sep 2010 Financial News

Green light for Jamaica Money Markey Brokers (JMMB) authorised share capital

Sep 22, 2010

Shareholders gave Jamaica Money Markey Brokers (JMMB) the green light on Monday to increase its authorised share capital ahead of its planned January 2011 new preference shares issue in which it will be seeking to raise some $2.5 billion.

This came at the company's annual general meeting where announcments were also made, of an increased dividend payout in the coming year..

"The new offer is a direct request from our clients for a low risk investment offer and an opportune time to take advantage of investment opportunities now available in the market," said Keith Duncan, chief executive officer of JMMB.

"Inflows will be used for investments opportunities, further expand our business lines and further expand greenfield areas such as Dominican Republic," he added.

The new issue will come behind the redemption of the two tranches of the company's existing preference share issue of $2.4 billion which will be fully paid out on December 14, 2010.

The company's share capital will move to J$431.6 million from the previous J$401.6 million, with an additional J$30 million comprised of 3 billion fixed rate cumulative redeemable preference shares.

At the same time Duncan also announced that shareholders can look forward to increase dividend payout as the company aims to achieve an improved return on average equity for the year ahead.

"We want to achieve return on average equity (ROAE) of between 15 and 20 per cent which will provide higher returns to shareholders and increase dividend per stock unit in an environment of decreasing risk premium on Government debt," he said.

JMMB recorded return on average equity of 16.15 per cent for the year ended March 2010, down from the 18.40 per cent in the previous year.

Payout increase

Duncan did not say by how much more dividend payout would increase, but the company has been consistently paying out a $0.06 per stock unit on its approximately 1.5 billion ordinary shares outstanding since last year.

"The plan is to increase dividend payout and that is because over the last two years we have reduced our dividend payout and we thank you for your patience so that now we can increase it," Duncan told shareholders.

JMMB, a company with asset base of $123 billion and approximately 167,000 clients recorded marginal growth in net profits of 12 per cent. Now the company says strategic focus for the fiscal year 2010/2011 will include a drive to capture clients from the commercial banking industry with its latest product launch of JMMB savings booster account.

"The savings booster product is specifically aimed at capturing the commercial banks deposit base," said Duncan.

Deposit base value

The deposit base among the seven commercial banks is now valued at approximately $373.66 billion as at the end of June 2010, of which Bank of Nova Scotia has the largest share totalling $144.61 billion.

Among the other local growth opportunities highlighted by JMMB are a renewed emphasis on the general insurance market, particularly in the small and medium size business sector. Also, providing finance for small and medium sized clients with financing needs of up to $50 million for the purpose of business expansion, retooling and capital expenditure as well as working capital.

In the areas of regional and international growth, JMMB said it will continue to penetrate the securities business in the Dominican Republic and the build out of its investment banking business which is now in the final stages of being approved.

JMMB also intends to assess growth opportunities in the Central American region to be initiated by entry into Costa Rica with its products and services.


Source:
Sabrina Gordon, Business Reporter
sabrina.gordon@gleanerjm.com
Jamaica Gleaner
Wednesday September 22, 2010

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