Victoria Mutual Investments Analysis

Outlook and Recommendation

Since listing in December 2017, VMIL has demonstrated continued growth in core Revenues and Earnings. This growth has been due largely to a shift in the Company’s focus toward fee based business lines such as Investment Banking & Fund Management and away from primarily reliance on Net Interest Income in the face of decline interest rates. The buoyancy in the local capital markets, the current expansionary monetary policy being pursued by the Bank of Jamaica and the material growth seen in the local investment community in recent years have all served the Company well as they have been able to convert this to increased business activity.

We believe key risks to the company’s continued growth include uncertainty in international markets which may eventual migrate to the local market and Jamaica’s general vulnerability to exogenous shocks. Competition from local and international players is also a key risk factor to VMIL’s continued success. In recognizing the threat of disruption to financial services by technology, VMIL has demonstrated innovation through their 30% acquisition in Carilend Caribbean Holdings Ltd. Based on our outlook for VMIL’s performance to the end of FY 2019, we recommend VMIL as a HOLD at the current market price as we believe the stock is trading close to its fair value. We however advise you to consult an investment advisor at Barita Investments Ltd. to discuss your individual circumstances before making any investment decision.

Market Statistics (Oct 23, 2019)
Price 7.84
52 Week High 9.00
52 Week Low 3.50
EPS 0.38
Sector P/E 21.36
P/E 20.63
BV/Share 2.73
P/BV 2.87
Sector P/BV 1.67

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