As the majority of persons would realise, especially as it relates to currency, the Jamaican dollar has been strengthening to the United States Dollar moving from JMD $130.00 to USD $1.00, to JMD $127.68 to USD $1.00 just last week. The appreciation of Jamaica’s currency merely shows that there is growth in the economy and that investing on the market would prove better than a savings account.
Many factors contribute to the strengthening of the economy. Some of these include:
- Optimistic projected earnings
- Falling interest rates
- Increase in employment
- Tourist sector growth
With positive projected earnings and falling interest rates, a company’s stock price can surge, bringing an overall gain of over 40 percent. Additionally, unemployment has decreased from more than 16.3 percent in 2013 to a little over 10 percent in 2017.
Newly reopened bauxite company, Alpart has resumed operations which allows for both increased employment and increased export which can result in growth in the overall economy. The more persons are employed, the more spending there will be, and hence the more taxes will be paid over to the government.
The market did very well in 2017, some stocks grew & rose by over 100 percent and for others between 50 and 81 percent. Therefore, this means that this year’s winners and last years may not necessarily be the same. Those booming companies on the main market in 2017 may find their growth rate slowing down when compared to newly listed companies.
We are expecting an active 2018 for all things IPO and have called it the ‘Year for IPOs’ in the Jamaican market based on record listings on the JSE last December. It is evident that Jamaicans love their IPOs and we expect the trend to continue as there are 10 new companies so far expected to list this year.