Feb 2016 Financial News

35 new stocks slated for USD-benchmarked trading by mid-year... Sterling Investments to cross-list (Jamaica)

Feb 03, 2016

Thirty-five new securities, all at different stages of approval, are slated to be added to the US dollar market of the Jamaica Stock Exchange (JSE) by mid-year – a development which will feed an appetite for hard currency-denominated investments.

The number includes 33 stocks proposed for the deposit receipt market which are slated to go live at mid-year, one new cross-listing slated for February, and two other USD market listings which are awaiting board approval, General Manager of the JSE, Marlene Street-Forrest told the

Jamaica Observer.

Sterling Investments Limited, currently listed on the Jamaican dollar market, main market of the JSE, is awaiting cross-listing.

When cross-listing, Street-Forrest observed, there is one security and one ISIN (international securities identification number) and the security is listed on both the Main Market and the US Dollar Equities Market; however, the short code and the name of the security are reported differently in each market on the trading system.

She explained, “The client’s account reflects the number of units owned in the security, and traders may buy and sell the units on either the US Dollar Equities Market or the Main Market. Client statements report the value of the security in both Jamaican dollars and US dollars. At listing, the opening price is determined based on the current exchange rate.”

The JSE indicates that cross-listing takes the form of a Listing by Introduction.

The 33 deposit receipt stocks will be equities listed on such developed market Exchanges as the NYSE. Other US listings new to the Exchange are expected to be Jamaican companies.

Evidence of demand-in-waiting lies in the robust trading around two sole stocks on the market and the recent oversubscription of two new issues of the JMMB prefs which are expected to be listed as well for trading, if approved.

There are only two companies currently listed on the US dollar market, Margaritaville (Turks) Ltd. and Proven Investments Ltd, while there are near 60 on the Jamaican dollar market.

In 2015, the Jamaican dollar market saw 5.4 billion units being traded with a total value of $72.07 billion in 2015, averaging a spend of J$13 per trade.

Comparatively, on the US dollar market the number of units traded was 24,602,573 with a value of US$5,035,436, reflecting an average trade of $24 (US$ = J$121.11), or twice the spend per Jamaican dollar trade.

Street-Forrest said she had heard of one other USD IPO pending, for which the Exchange was yet to see the prospectus.

Altogether, it is expected that by mid-year the architecture of trading will shift significantly if the planned placements are approved.

Local brokers said that US dollar stocks are seen as a dependable store of value, in the context of the changing value of the Jamaican dollar.

Charles Ross of Sterling Asset Management Limited, commenting on the consistent trading around the two existing stocks, said: “The USD dollar stocks may have seemed particularly attractive when the Jamaican dollar is depreciating in value.”

Julian Mair, also commenting on the investor interest in the two USD dollar stocks, said it reflected a general pattern.

“We view that the US dollar market on the JSE has performed in keeping with the other markets of the JSE where we observed both the JSE Main Market and the Junior Market performing well relative to historical values. We view this as a reflection of general investor appetite and confidence in the local equities market.”

Street-Forrest said, “Based on the soundings, companies are energised, have seen the opportunities and are preparing themselves.”

 

Source:
BY AVIA COLLINDER
collindera@jamaicaobserver.com
Business reporter 
Wednesday February 3, 2016

http://www.jamaicaobserver.com/business/35-new-stocks-slated-for-USD-benchmarked-trading-by-mid-year_50496