Nov 2010 Financial News

New listing to boost JSE's dwindling bottom line

Nov 17, 2010

The Jamaica Stock Exchange recorded a $9.3 million net deficit for its September quarter but it expects increased activity with two planned listings by year end.

The Hart Group announced that it would list its subsidiar, Cargo Handlers Limited, while Dolphin Cove plans to raise capital from a public share offer.

The JSE blamed lower interest yields from the Jamaica Debt Exchange (JDX) for the loss which reversed the $3.8 million net income it made in the 2009 September quarter.

The group's revenue, comprised primarily of cess income, fee income and other operating income dipped five per cent to $36.2 million year-on-year.

"The JDX programme resulted in lower yields and revalued investment portfolios for all investors in GOJ securities," stated a joint note by Curtis Martin chairman and Dian Black audit and Finance committee chairman which accompanied the financials posted on the JSE's website.

The JSE's participation in the JDX resulted in a reduction of $5.1 million or 65 per cent in the investment income recorded for the first nine-months of 2010 when compared to the corresponding period in 2009. Similarly, its Compensation Fund Income comprised entirely of earning on investment, inclusive of revaluation adjustments showed a decrease of $61.3 million or 72 per cent over the comparative period. Despite the deficit generated in the period under review, the total equity of the group increased by $13.1 million since September 2009 due to "surpluses realised in the period September 2009 to September 2010".

But the group said that it would use "the low market activity" to improve on staff training and to effect enhancements in preparation for the expected rebounding of the market.

"The exchange has listed three companies on the Junior Market up to September 2010 and expects to have an additional five companies listed before the end of the financial year," stated the JSE on the junior exchange which will have eight stocks by year end. "This augurs well for the future market development."

The listed companies on the junior exchange currently include Access Financial Services, Lasco Financial Services, Lasco Manufacturing, Lasco Distributors, Blue Power Group and Jamaica Teas. The planned listings include Dolphin Cove and the Hart Group.

Hart Group is planning to invest US$6 million ($516 million) to develop a distribution facility at its subsidiary, Cargo Handlers Limited, at which it plans to offer an initial 20 per cent stake to the public this month.

Dolphin Cove will seek up to $250 million in its initial public issue of shares representing approximately 20 per cent of the company.

These companies are attracted to the Junior Market based on its 10 year tax break amongst other benefits.

"The group continues to work with government the financial service commission the brokerage community and other key stakeholders to increase the number of investment products offered to the market to attract investors and by extension to broaden the group's revenue base," stated the JSE.


Source:
Jamaica Observer
Wednesday November 17, 2010

http://www.jamaicaobserver.com/business/New-listing-to-boost-JSE-s-dwindling-bottom-line_8159706