Barita Insights: Weekly Newsletter October 26, 2020

Local Equities Market

For the week ended Friday, our local stock market closed slightly lower week-over-week. The Main Market Index decreased by 0.36%, the JSE All Jamaican Composite Index decreased by 0.38%, the JSE Junior Market Index decreased by 1.74%, the JSE Combined Index decreased by 0.46%, and the JSE USD Equities Index decreased by 8.13%.

The biggest winner this week is Palace Amusement Company Ltd. rising by 27.81% to close at J$1,480.00. The biggest loser was Proven Investments Limited (USD) falling by 23.85% to close at US$0.21.

Year to date, all the major equity indexes are still down by high double digits (see, the table below); and three months since March, has been relatively flat.

Overall Market activity resulted from trading in 102 stocks of which 43 advanced, 47 declined and 12 traded firm. Market volume amounted to 132,719,280 units valued at over $511,682,602.28. Wigton Windfarm Limited Ordinary Shares was the volume leader with 72,564,857 units (54.68%) followed by Radio Jamaica Limited with 20,185,072 units (15.21%) and Jamaica Broilers Group with 8,312,882 units (6.26%).

Stanley Motta Limited, the owner of the 58HWT tech park in Kingston, has come out of negotiations with more breathing room on financial obligations to creditor Development Bank of Jamaica, DBJ, as a safeguard against the disruptions caused by the coronavirus.

http://jamaicagleaner.com/article/business/20201025/stanleymotta-restructures-debt-dbj-ends-payment-plantenants

Renewable energy company Wigton Windfarm Limited intends to tap the market for funds to finance an ambitious expansion and diversification programme but is timing the trigger.

The wind farm is operating at near maximum levels in terms of equipment efficiency and production capacity, according to Managing Director Earl Barrett.

http://jamaicagleaner.com/article/business/20201025/wigtontap-market-expansion-cash-timing-undecided

A COVID-19 study conducted by the Statistical Institute of Jamaica, Statin, has found that 57 per cent of Jamaican households saw a reduction in income between the onset of the coronavirus in March and September.

The data affirms the results of a more informal online survey done by the Inter-American Development Bank in Jamaica and the region to get a snapshot of the pandemic’s impact.

In the Statin study, the decline was most prevalent in ‘other urban centres’ – inclusive of areas generally populated by tourists – where 63.3 percent of households indicated that they had a reduction in income, followed by rural communities which experienced a 60 per cent decline.

http://jamaicagleaner.com/article/business/20201023/covidpressuring-household-incomes-unemploymentrate-jumps-126-new-jobs

 

Unit Trust Performance

The Money Market Fund increased 0.06% week-on-week, the FX Bond Portfolio had decreased by 0.06%, the F.X. Growth Portfolio decreased by 1.75% in value, and the Real Estate Portfolio increased by 0.62% in value. The Capital Growth Fund increased by 1.44% week over week.

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 Fund, which is benchmarked against the S&P 500, has been in-line with it’s benchmark with a 5.49% year to date performance relative to S&P 500’s performance of 7.26% . 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 oversold 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 fromemerging 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 21/10/2020 15/10/2020 Week/Week Return Year-to-Date Return 1 Year Return Yield
Capital Growth 81.5906 80.4298 1.44% -15.70% -11.52% -
Money Market 14.7803 14.7705 0.06% 2.88% 2.87% 2.14%
Income Portfolio 100.00 100.00 - - - 1.88%
FX Bond Portfolio (US$) 1.3128 1.3137 -0.06% -2.18% -1.11% 1.98%
Real Estate Portfolio 5,413.1692 5,379.73 0.62% 5.22% 15.68% -
FX Growth Portfolio 0.9449 0.9617 -1.75% 5.49% 9.45% -

Conclusions

A COVID-19 study conducted by the Statistical...

A COVID-19 study conducted by the Statistical Institute of Jamaica, Statin, has found that 57 percent of Jamaican households saw a reduction in income between the onset of the coronavirus in March and September. The data affirms the results of a more informal online survey done by the Inter-American Development Bank in Jamaica and the region to get a snapshot of the pandemic’s impact.

The number of workers receiving and applying...

The number of workers receiving and applying for unemployment benefits declined significantly last week, according to Labor Department figures issued Thursday. That’s good news for workers and the U.S. economy — thousands of people are returning to work and coming off unemployment rolls. But the headline numbers don’t give the full picture. Some labor-market dynamics mask concerning trends under the surface.

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