News & Insights

Dividend information

Dividend Declaration:

Scotia Group Jamaica Limited (SGJ) has declared an interim dividend of $0.42 per share payable on October 25, 2016 to shareholders on record as at October 4, 2016. The ex-dividend date is September 30, 2016. SGJ has also submitted its unaudited financial statements for the third quarter ended July 31, 2016.

Dividend Consideration:

The Board of Directors of Scotia Group Jamaica Limited (SGJ) will consider a dividend payment at a meeting to be held on June 9, 2016.

AGM

Annual General Meeting:

The Annual General Meeting of Honey Bun (1982) Limited will be held on February 17, 2016 at 10:00 a.m. at the Knutsford Court Hotel, 16 Chelsea Avenue, Kingston 5.

Special Advisories

Special Advisory:

The Board of Directors of Kingston Properties Limited (KPREIT) has advised that its board of directors has authorised a buy-back of up to one percent (1%) of the company`s shares in issue for up to two years following the expiry of 21 days starting from April 22, 2016. The repurchase of the shares will be conducted on the open market through the company`s stockbrokers. The company`s cash flows will be the source of the funds for the repurchase of shares. KPREIT also advises that it will not be setting a fixed price for the share repurchase. Instead, the price for the acquisition of the shares will be the market price at the times of repurchase. The company also reserves the right to decline any offer above the ceiling that the company may from time to time determine in its sole discretion. The Board of Directors of KPREIT sees this use of capital as an opportunity to enhance shareholder value through the purchase, from time to time, of undervalued shares.

And trade in shares can go along with changes in the 52-week highs and lows

Trade In shares:

Seprod Limited (SEP) has advised that a related party purchased 69,437 SEP shares on October 7, 2016.

52 Week High/Low:

Seprod Limited (SEP) traded at its 52-week high of $23.50.
Blue Power Group Limited (BPOW) traded at its 52-week high of $28.00.
Paramount Trading (Jamaica) Limited (PTL) traded at its 52-week high of $26.00.
Berger Paints Jamaica Limited (BRG) traded at its 52-week high of $5.70.

NIR

Net International Reserves

Jamaica’s Net International Reserves totaled US$2,515.52 million as at August 2016, reflecting an increase of US$126.02 million relative to the US$2,389.49 million reported as at the end of July 2016 (see figure 1).

Changes in the NIR resulted from an increase in Foreign Assets of US$126.39 million to total $3,068.58 million. Currency and Deposits contributed the most to the increase in Foreign Assets. Currency and Deposits as at August 2016 totaled US$2,751.45 million reflecting an increase of US$127.57 million compared to US$2,623.88 million booked as at July 2016. There was an increase in Foreign Liabilities of US370, 000 to total US$553.06 million, stemming from a rise in Liabilities to the IMF. Liabilities to the IMF which accounted for 95.93% of total foreign liabilities, increased to a total of US$553.06 million as at the end of

August 2016 relative to US$530.20 million recorded in July 2016.

At its current value, the NIR is US$19.83 million lower than its total of US$2,535.35 million at the end of August 2015.

The current reserve is able to support approximately 35.54 weeks of goods imports or 21.07 weeks of goods and services imports.

Inflation

Consumer Price Index

The inflation rate for the month August 2016 was 0.4%. The main contributor to the increase was an upward movement in the index for ‘Housing, Water, Electricity, Gas and Other Fuels’ which advanced 1.8%. Notably the Division recorded the highest movement for a second consecutive month, due mainly to a rise in the rates for both electricity and water resulted in the groups ‘Electricity, Gas and Other Fuels’ and ‘Water Supply and Miscellaneous Services Related to the Dwelling’, showing an inflation rate of 3.1% and 1.7% respectively. The index for the group ‘Rentals for Housing’ recorded an increase of 0.1%, while ‘Maintenance and Repair of Dwelling’ recorded a negligible movement.

The ‘Food and Non-Alcoholic Beverages’ division registered an increase of 0.4% for the month of August 2016. The group ‘Food’ advanced by 0.4% driven by a 0.9% increase in the index for ‘Vegetables and Starchy Foods’. Prices continued to move upwards for the items Irish Potato, Yam, Sweet Pepper and Tomato, while an increase was also recorded for items in the ‘Fruits’ class by 0.6%. The index for ‘Non– Alcoholic Beverages’ rose by 0.2% with increases in the classes ‘Coffee, Tea and Cocoa’ of 0.3% and ‘Mineral Waters, Soft Drinks, Fruit and Vegetables Juices’ up by 0.2%.

‘Transport’ was the only division to record a negative movement in its index, declining by 0.2%. The decline was attributed to decreases in petrol prices, however the downward movement of the index was tempered by increases in air fares.

The Calendar year-to-date inflation rate was 0.3%, while the fiscal year-to-date and point-to-point rates (August 2015 – August 2016) was 1.6% and 1.8% respectively.

Individual divisions saw the following changes:

Food and Non-Alcoholic Beverages: (0.4%)
Alcoholic Beverages and Tobacco: (0.1%)
Clothing and Footwear: (0.1%)
Housing, Water, Electricity, gas and Other Fuels: (1.8%)
Furnishing, Household Equipment and Routine Household Maintenance: (0.2%)
Health: (0.2%)
Transport: (-0.2%)
Communication: (0.0%)
Recreation and Culture: (0.9%)
Education: (0.0%)
Restaurants and Accommodation Services: (0.0%)
Miscellaneous Goods and services: (0.2%)

Govt. Operations

Government Operations Results for August 2016

Monthly Summary

Monthly Economic Review – August 2016

Other econ reports:

The Jamaica Chamber of Commerce Survey of Business & Consumer Confidence Third Quarter 2016 Summary Report

Business Confidence Declines in the Third Quarter

For the quarter ending in September 2016, the Conference Board’s index of Business Confidence declined to a reading of 139.2 relative to 141.6 in the June quarter. The index however increased year over year from the 110.6 reported for the third quarter of 2015. Notably, the index of Current Business Conditions rose to 161.3 compared to 160.0 in the June quarter while the Business Expectations index fell from June’s 134.4 to 130.5 in the third quarter.

The Business Confidence index declined from its all-time peak in the first quarter of 2016. According to Don Anderson, Managing Director at Market Research Services Limited, “firms have maintained their confidence that the new government programs will establish renewed economic growth. However it is difficult for firms to judge in advance the eventual impacts of such a comprehensive change in economic policy, so it is not surprising that some of the index components have recorded larger and smaller shifts than the overall Index.” The data also suggests that firms have lowered the expected pace of economic growth in the years ahead following the remarkable second quarter rebound to 1.6%, which was higher than the growth rates among Jamaica’s trading partners, most notably the United States, United Kingdom and Canada as well as other countries. Don Anderson highlighted, “firms have not lessened their belief that a new economic era has begun. The most telling commitment is the continued strength in firm’s finances which has kept their plans to invest in new plant and equipment near all-time record levels.” He further added that, “to be sure, old and new barriers to more robust growth must still be overcome, including crime, tax compliance, reduced remittances and pension flows to Brexit as well as more effective credit arrangements so domestic firms can reduce imports and increase exports. Building on the existing upwards momentum can ease and speed the accomplishment of what were once thought all but impossible changes.”

A breakdown of the Business Confidence Index components is as follows, reported as the third quarter of 2016 relative to the second quarter:

Current Returns on Investments increased to a reading of 87 from 85.
Investment/Expansion Climate fell to a reading of 139 from 140.
Expected change in the Economy declined to a reading of 133 from 151.
Expected Change in Firm’s Finances improved to a reading of 169 from 160.
Expected Change in Profitability dropped to a reading of 161 relative to 166 in the previous quarter.

Consumer Confidence Decreases in the Third Quarter

For the September quarter of 2016, the Conference Board’s index of Consumer Confidence decreased to a reading of 151.6 relative to 155.6 in the June quarter. Particularly, both the indices for Current Economic Conditions and Consumer Expectations declined in the third quarter of 2016. The index of Current Economic Conditions fell to 147.9 in third quarter from 153.0 in the second quarter while the index for Consumer Expectations slid to 152.8 from 156.5 in the June quarter.

In the most recent survey, consumer confidence but has remained higher during the first three quarters of 2016 than in any comparable period during the past fifteen years. According to Mr. Anderson, “the recent sustained strength in confidence has been widespread across the current and expected components as well as all regions of the country. The summary of indices and components have averaged gains of 50% compared with a year ago. Although consumers may have overestimated how much the economy and job prospects would improve in the past few quarters, causing consumers to form more realistic expectations in the latest survey.” Mr. Anderson further noted, “the data provided compelling evidence that consumers have accepted the logic and the promise of the new polices. Consumers have expressed the greatest degree of satisfaction with the quality of their lives since the survey first began in 2001.” The survey also hinted at an advancement in job and wage growth as Mr. Anderson stated, “the fewest consumers since 2008 reported jobs were now scarce. Future job growth was anticipated by an average of 40% of all consumers in the past three quarters. An adequate numbers of jobs represent a critical component of all successful economies and provide the means for successful societies.”

There has been an improvement in the purchase plans of consumers as home buying plans were expressed by 16% up from last year’s 8%, the second highest level ever recorded in the past fifteen years. Vehicle buying intentions were expressed by 22%, up from last year’s 15%, the highest level in five years, while vacation plans were up to 43% from 29% in the previous corresponding period. This improvement is likely to reflect in modest gains in spending. Don Anderson stated, “given the improving economy, consumers have expressed their desire to increase their spending. While there are many headwinds, such as slow growth among Jamaica’s trading partners as well as the impact of Brexit on remittances, and pension flows, it is more important than ever for the Government to support the emerging upward momentum to reestablish economic growth.”

A breakdown of the Consumer Confidence Index components is as follows, reported as the third quarter of 2016 relative to the second quarter:

Current Business Conditions decreased to a reading of 90 from 97.
Current Job Prospects increased to a reading of 26 from 23.
Expected Business Conditions fell to a reading of 112 from 118.
Expected Job Prospects slid to a reading of 108 from 113.
Expected Change in Income climbed to a reading 140 relative to 138.

Kindly see below highlights of the Bank of Jamaica Quarterly Press Briefing

Today the Bank of Jamaica released its Quarterly Monetary Policy Report For the quarter January to March 2016.

Governor Bryan Wynter opened the briefing acknowledging the unusual timing of the meeting which he attributed to the conclusion of the budget debate (May 25^th) and the significance of that even on the duties of the bank.

The Governor began with developments on inflation which has fallen to historic lows of 3.0% flat for March 2016; lower than 3.7% for December 2015, and lower than the 4% recorded for March 2015. This is well below the BOJ’s target range of 5.5 – 7.5% for FY2015/2016 and the lowest fiscal outturn since FY1966/1967. The inflation rate of 3.0% is a result of a 1.3% fall in the CPI for the month of March due primarily to low energy, transport and agro food prices; this despite a 1.4% depreciation in the J$ against the US$ in March. The decline continued in April by 0.4%, pushing the annual rate down to 2.4%. The Governor stated that “while some of the slowdown was caused by lower international oil prices, the lower level of inflation is the result of Bank of Jamaica’s monetary policy supported by the strong fiscal policy stance of the government. The fiscal anchor has proven to be a powerful force for macroeconomic stability”. According to the Governor, the latest inflation survey conducted in February indicated a slight fall in expected 12 month inflation to 4.3% against 4.7% recorded for December 2015. It is in this context of low inflation over the near to medium term, that the Bank maintained an accommodative monetary stance; keeping the signal rate (30-day certificate of deposit) unchanged at 5.25% during the quarter.

The Bank’s inflation target has been lowered to 4.5% to 6.5% and the impact of the recently announced tax measures on inflation are “ not expected to be significant, although there is some risk arising from second round effects”. According to the Governor during the Q&A, Jamaica finds itself in the very unusual environment of falling prices and revisions for key indicators have been falling. He continued to state that the likely outcome for inflation is below the 5.5% (forecast used in the budget) influenced by unusually low prices. When asked to decompose the contribution of the tax package on the inflation target the Governor responded with the following estimates all things being equal:

Gas tax – 0.2 percentage points
Departure tax – less than 0.1% points
HFO/LNG – more complicated to quantify, however not much impact
The tax relief – The challenge, he adds, with assessing the impact of the tax relief itself is that it is difficult to model how economic actors will utilize the additional funds. Individuals can choose to spend, deleverage or invest. According to the governor we will have to “wait and see”. The overall impact of the tax relief is not significant enough to overwhelm other factors regarding inflation.

Governor Whyter addressed the “notable pick up” in the pace of exchange rate depreciation since the middle April. The exchange rate depreciated 0.9% in April and 1.8% in May. According to the governor, the rate of depreciation was “excessive and is not supported by the prevailing economic conditions.” The Governor stated that the increased rate of depreciation was influenced by specific financial transactions that influenced not only market prices but expectations of further depreciation. As a result the BOJ intervened on April 28^th with US$95M in the market; the largest intervention value which according to the governor signals the Bank’s commitment to ensure foreign exchange market stability. There was another intervention on May 20^th of US$63M. The Bank’s assessment is that the Jamaican dollar is fairly valued and the exchange rate can be expected to move in line with the difference between our inflation rate and the inflation rate of our main trading partners.

After the Governor reassured that the sharper than usual exchange rate was not supported by fundamentals and the Bank will continue to intervene where necessary within the context of a flexible exchange rate, he moved on to note the positive trends in other key macroeconomic indicators. According to the Governor unemployment declined, private sector credit is expanding, confidence is high, the government bond market has reopened and the stock market is buoyant. These developments, according to the Government, “are conducive to a pickup in economic growth, which the Bank expects in FY2016/2017.”

The Governor concluded with positive outcomes from the recent 11^th and 12^th reviews of Jamaica’s economic reform programme, “The mission chief indicated that that all quantitative targets and structural benchmarks have been met, pending Board approval.” According to the Governor Wynter, “ Jamaica needs to press ahead with fiscal consolidation, structural reforms and actions to improve competitiveness so as to promote sustainable growth and job creation.”

Kindly see below highlights of the Planning Institute of Jamaica Quarterly Press Briefing for April – June 2016 held on August 24, 2016.

According to reports from the PIOJ, “the economy continued to record growth during the 1st quarter of the fiscal year. The improved economic performance during the April to June period was driven by the performance of key industries; Agriculture, Hotel & Restaurants, and Electricity & Water.” Real GDP grew by an estimated 1.1%, which was reflected by increases in the Goods Producing Industry (up 2.3%) and the Services Industry (up 0.8%).

Within the Goods Producing Industry, Agriculture continued to perform favourably, recording the strongest growth up 7.0% . Increases were also registered for Manufacturing up 0.7% and Construction up 0.4% . Mining & Quarrying, however, experienced a decline of 1.3% , representing the 4th consecutive quarterly decline. Under Services, all industries registered increases with the exception of Government Services (down 0.2% ) with the Electricity & Water industry, (up 5.5% ), and Hotel & Restaurants, (up 1.6% ), due primarily to increases in stopover arrivals.

Percentage Change in Gross Domestic Product and Percentage Contribution to Growth at Constant Prices, April – June 2016

	% Change	% Point Contribution
Total GDP	1.1	1.1

Goods Producing Industry	2.3	0.6
Agriculture, Forestry & Fishing	7.0	0.5
Mining & Quarry	-1.3	0.0
Manufacture	0.7	0.1
Construction	0.4	0.0

Services Industry	0.8	0.6
Electricity & Water Supply	5.5