Barita Insights: Weekly Newsletter January 11, 2020

Local Equities Market

For the week ended Thursday January 8th, our local stock market closed lower week-over-week. The Main Market Index decreased by 0.39%, the JSE All Jamaican Composite Index declined by 0.34%, the JSE Junior Market Index increased by 0.08%, the JSE Combined Index decrease by 0.35%, and the JSE USD Equities Index increased by 3.92%.

K.L.E. Group Limited was the largest gainer, rising by 19.13% W/W to close at J$1.37. The biggest loser was CAC 2000 Limited which fell -18.08% to close at J$10.65.

Overall Market activity resulted from trading in 100 stocks of which 46 advanced, 40 declined and 14 traded firm.

Market volume amounted to 97,423,186 units valued at over $266,396,687.22. QWI Investments Limited was the volume leader with 34,917,703 units (35.84%) followed by TransJamaican Highway Limited with 15,033,577 units (15.43%) and Derrimon Trading Company Limited with 8,650,008 units (8.88%) .

First Rock Cayman has secured financing in the amount of US$1.619 million dollars towards the acquisition of the units in Grand Cayman. The total cost of the acquisition is US$3.1 million. See Article Here

The cigarette distributing company, Carreras, said that this move forms part of its strategic plan, which will see it venturing into the sale of cigarette lighters, rolling paper, shavers and razors among other paraphernalia.  See Article Here

Despite the economic disruption caused by the novel coronavirus pandemic, Pulse Investment Limited was able to repay a $250-million bond four years ahead of time.  See Article Here

Nearly two-and-a-half years after entering a transaction with Playa Hotels and Resorts in a deal that was supposed to give parent company Sagicor Group Jamaica (SGJ) greater latitude to regional growth in tourism, Sagicor Real Estate X-Fund is disposing of its stake in the Dutch- based hotel company as the fallout from the novel coronavirus continues to ravage the tourism industry.  See Article Here

 

Unit Trust Performance

The Money Market Fund increased 0.23% YTD (as at January 8,2021). The FX Bond Portfolio produced a yield of 1.90%, the F.X. Growth Portfolio decreased by 0.23% year to date, and the Real Estate Portfolio decreased by 4.59% YTD. The Capital Growth Fund declined by -0.40% YTD compared to the JSE Combined Index which declined by -0.35% over the same period.

Barita’s Collective Investment Schemes (“CIS”) offer the opportunity for investors to remain invested in the market at this delicate stage of the market cycle; moreover, there is a diversification benefit and opportunity to have a professional portfolio manager make the best-in-class professional judgements on your behalf.

The F.X. Growth Portfolio, which is benchmarked against the S&P 500, has appreciated by 11.21% as at December 28, 2020 relative to S&P 500’s performance of 16.26% . This fund helps investors to gain exposure to the U.S. equities market, without taking on the risk of directly investing in a single company.

The Capital Growth Fund suffered the same fate as our local equity market but remains above the year to date performance of the combined index. This is as attractive as securities were also sold significantly during the March sell-off and represented an attractive entry point to be capitalized on. The FX Bond Portfolio remains an attractive fixed- income portfolio, especially taking into consideration the large retreat from emerging market (E.M.) securities. With investors seeking “safe haven” in a more developed market (D.M.) securities and essentially selling down their positions in E.M. securities, opportunities were exposed for our fund managers to capitalize on.

Unit Trust Fund 8/1/2020 28/12/2020 Week/Week Return Year-to-Date Return 1 Year Return Yield
Capital Growth 84.5314 84.18 0.42% -0.40% -11.73% -
Money Market 14.8112 14.7770 0.23% 0.24% 2.98% 2.07%
Income Portfolio 100.00 100.00 - - - 1.69%
FX Bond Portfolio (US$) 1.3544 1.3537 -0.05% -0.13% -1.32% 1.90%
Real Estate Portfolio 5,566.95 5,586.70 -0.35% -4.59% 5.83% -
FX Growth Portfolio 0.9925 0.9961 -0.36% -0.23% 11.17% -

Conclusions

Despite the economic disruption caused...

Despite the economic disruption caused by the novel coronavirus pandemic, Pulse Investment Limited was able to repay a $250-million bond four years ahead of time.

The cigarette distributing company, Carreras, said that...

The cigarette distributing company, Carreras, said that this move forms part of its strategic plan, which will see it venturing into the sale of cigarette lighters, rolling paper, shavers and razors among other paraphernalia

Top 5 Things to Watch in US Markets in the Week Ahead.

Top 5 Things to Watch in US Markets in the Week Ahead.

  1. Vaccine rollout
  2. Political Development regarding efforts to impeach Trump
  3. Stimulus hopes, namely, President-elect Joe Biden’s proposals for increased fiscal stimulus and higher taxes.
  4. Economic Data, The U.S. is due to release data on consumer price inflation on Wednesday, while retail sales figures for December are due out on Friday.
  5. Big Banks Kick off earnings

Stocks move to new highs on stimulus hopes...

Stocks move to new highs on stimulus hopes. The major indexes continued to march to record highs despite one of the most tumultuous weeks in the nation’s political history. Small-caps outperformed large-caps by a wide margin, and value stocks outpaced growth shares. Energy stocks led the gains within the S&P 500 Index, after Saudi Arabia made a surprise announcement that it was unilaterally cutting oil production by 1 million barrels per day.

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