Jun 2016 Financial News

Equities march on at moderate clip

Jun 01, 2016

During the preceding March quarter, the equities market continued to grow at a moderately lower pace than the outturn for December – the previous reporting period.

As indicated by the central bank in its quarterly monetary policy (QMPR) report for period ended March 2016, all the Jamaica Stock Exchange (JSE) indices – with the exception of the Cross Listed Index – recorded growth ranging between 83.7 per cent and 179.5 per cent.

During the March quarter, the value of transactions, volume of stocks traded and number of transactions for the Main JSE Index recorded respective growth rates of 10.3 per cent, 6.8 per cent and 21.3 per cent.

This compares to moderately higher growth of 18.8 per cent, 13.6 per cent and 27.1 per cent, respectively, for the December quarter.

During 2015, for the combined market, the value of stocks traded increased by 400 per cent to $64.6 billion from $12.8 billion.

Most of this value change in the index – 71 per cent – occurred in the last three months of the year.

For the first quarter in 2016, while the pace was more moderate, the BOJ said the performance of the equities market reflected demand related to continued “growth in GDP, low inflation, low interest rates and improved liquidity conditions”.

The central bank said market activity was also fuelled by several companies which reported higher company profits.

Also influential, it stated, was the entry of six new junior market listings as well as the continued restructuring of the securities dealers’ business model would have bolstered the demand for equities during the review period.

The minimum transaction size for retail repo contracts increased to $1,000,000 and US$10,000, respectively, at end- 2015 from $750,000 and US$7,500 at the end of October 2015.

Notably, the bank said, investments in equities continued to provide greater return relative to foreign currency and domestic money market investments.

Equities offered a return of 86.2 per cent while GOJ global bonds offered an average return of 6.8 per cent. In addition, the average interest rate in the 30-day private money market was 5.3 per cent for the year ended March 2016.

The Jamaican dollar vis-a-vis the US dollar depreciated on average by 5.3 per cent on an annualised basis during the quarter.

The BOJ said the improved outturn in the equities market was broad-based as reflected in the advance to decline ratio which increased to 27:5 for the year ended March 2016 from 16:11 for the year ended March 2015.

The top 10 performing stocks for the review period were reflected in six of the seven industry sectors, with the manufacturing and financial sectors accounting for five of the top ten advancing stocks.

These top stocks recorded average price appreciations of 204.3 per cent and 185.4 per cent, respectively.

Source:
Jamaica Observer
Wednesday June 1, 2016

http://www.jamaicaobserver.com/business/Equities-march-on-at-moderate-clip_62521