Month: May 2018

The decision to leave the European Union has dominated the new cycles since June 2016 highlighting that no matter the strides made to respect people’s differences in backgrounds, economics and geography prejudice remains. Some people wished Brexit would happen faster. Some didn’t want it but will get on with it anyway. Others were waiting for a chance to stop it from happening at all. And there were those who said Britain is being upended, for better or worse, by a decision they shouldn’t have to make.

The formal departure date is slated for March 29, 2019, and one thing is consistent when you bring BREXIT into any conversation – a sense of frustration.

The most prominent concern for people on both sides of the argument?

The size of the divorce bill, getting a fair deal from the EU and the prospect of rising food prices and living costs.

So the question is if given a chance to vote BREXIT again, would people change their vote?

British Prime Minister Theresa May has not gotten the traction she would like since the vote, but finally agreed to keep EU laws in place until 2020. With 2019 right around the corner she needs to finalise the terms of the U.K.’s exit and work out what the future relationship with EU.

One concern stands out to citizens and investors alike, how would Brexit affect trading ?

Either way both sides want to wrap up a deal by the end of the year.

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Financial Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

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Mayberry Subsidiary to List IPO

Mayberry Jamaica Equities Limited, formerly known as Mayberry West Indies Limited, has its eyes set on releasing an initial public offering (IPO) hopefully next month. The company is now awaiting regulatory approval as shareholders already welcomed the move. The company’s portfolio will only contain stocks listed on the Jamaica Stock Exchange. The listing of the company is targeted towards millennials between the ages of 18 – 29 years, giving them the opportunity to start investing at an early age rather than to rely on saving.

Mayberry hopes the stock will be valued based on the net book value of the company as they argue that the stock currently trades below its market value. This was blamed on the fact that the accounting valuation technique being used to determine Mayberry’s stock price does not take into account its equity portfolio; which holds 80 percent of the company’s assets. Therefore, Mayberry sees the listing of its subsidiary as a smart move which will allow the market to better value its stock portfolio.

Mayberry’s revenue for the financial year of 2017 increased by 83 percent, from $1.20 billion to $2.20 billion. This was attributed to gains on investment revaluations, foreign exchange gains, gains in corporate financial advisory fees and commissions. While net profit for 2017 was $475.2 million compared to $172.1 million the previous year, a rather impressive increase of 147 per cent.

Mayberry Investments Limited currently trades at $6.25, however, the company claims the stock price should be between $10 and $20 based on its earning per share. The company’s book value is $7.80 but clearly trades below it.

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Who is a Whistleblower?

Whistleblowing is the act of drawing the public’s attention to corruption or any other lawlessness that took place, usually within a company. The term is referred to colloquially as ‘informa’ but the standard name for them is known as a whistleblower.

Publicly shunning a whistleblower is a cultural practice that seems to continue for generations, where the backlash that follows is sometimes more severe than the crime. This is not a good practice as oftentimes, it is to the demise of a person’s life and property.

This is evident in the recent scandal surrounding Facebook, where user information was passed on to data research firm Cambridge Analytics and misused to lobby persons to vote for Donald Trump. The whistleblower that revealed this information, had the public’s interest at heart, wanting others to be aware and cautious when using or providing information on this social media platform. As a result, shares in Facebook have plummeted, reflecting that investors have lost confidence in the company. Whether temporary or not, Facebook Inc has taken a hit.

In 2012 a Protection Act was implemented in Jamaica to encourage a culture of whistleblowing. This would allow employees to disclose information about their employers or colleagues, if they have any reason to believe that misconduct occurred or will occur. Here, the identity of the person will be withheld, and the process sped up to allow for quick turnaround time. This therefore shows that the company must have efficient systems that allow for this culture to be adopted and staff members that are able to keep information among those who should know.

Jamaica has even implemented an anonymous tip hotline, Crime Stop, that secures the user’s phone number, to disclose any information about anyone they have suspected or know has conducted illegal activities.

Companies can discuss adding incentives for those persons who have spoken out about wrong doings and caused action to be taken, as a way of encouragement.

Stop the informa culture! Let us get in the habit of speaking up for the betterment of our people, companies and country!

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Amazon’s Alexa is Heading to the Stock Market

JPMorgan & Chase Co. [NYSE: JPM] in collaboration with Amazon.com [NYSE: AMZN] are working to bring Alexa to the trading floor. Alexa would be able to send reports and allow users to communicate directly with JPMorgan’s systems for questions like Alexa, ask JP Morgan what the price target for Tencent Holdings [OTC: TCHEY] is.

As technology integrates itself into everyday life, there is little surprise that one of the largest banks in the U.S. would capitalize on infusing technology to inch ahead of competitors. Taking information that the bank has available that is time-consuming for individuals to look up and putting it on an easy to use the format that clients can access.

As clients’ habits evolve, it is essential that firms amalgamate technologies into their businesses and with JPMorgan at the helm, expect to see more entities utilizing tools like Alexa.

JPMorgan’s automated service, known in Amazon verbiage as a skill, is the latest shared project for the biggest U.S. bank and the world’s largest online retailer. Amazon already leases cloud computing power to JPMorgan and has asked the bank to compete in creating new products including a small-business credit card for its customers. The companies are also collaborating on a healthcare venture.

JPMorgan has seen that clients are open to new ways of interacting with technology. Not long after the bank created mobile apps for its trading business, it was recording large trades, including a $400 million currency bet last year.

So allowing Alexa users to access JPMorgan data from wherever they choose to work — home, office or on the go — makes sense.

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Caribbean Cement Repurchases Assets from Parent Company

Caribbean Cement recently signed a Memorandum of Understanding (MOU) to terminate its lease agreement with parent company, Trinidad Cement Limited. The lease was first signed in July of 2010 and covers two of Caribbean Cement’s facilities; the Clinker Kiln 5 and Cement Mill 5.

Shareholders welcomed the news as for years they have been complaining that the arrangement has been inefficient and caused the company to lose money. In 2016, Caribbean Cement paid $3.3 billion to its parent company in operating lease and for 2017 it was projected that the company would have paid another $2.8 billion. Caribbean Cement admits that the lease arrangement is in deed nonsensical as the company is now able to finance its assets compared to five years ago when they could not.

The MOU will see Caribbean Cement amassing US$118 million in assets previously owned by Trinidad Cement Limited. But that’s not all. Caribbean Cement did not stop there. The company plans to repossess 52 million preference shares given by Caribbean Cement to Trinidad Cement in 2010 and 2013, which cost US$40.5 million. This amount should be paid over a period of nine years starting from this year and will be financed using at least one third of available funds from Caribbean Cement’s profit from the previous year.

The end of these transactions will only be complete when certain conditions have been met. First being the approval from the corporate body of both companies, then the procurement of financing options by Caribbean Cement and the absence of any material tax or accounting effect which may arise once the transactions go through.

Caribbean Cement Limited has been trading on the Jamaica Stock Exchange for close to five decades. The stock currently trades at $40.

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IBEX Holdings to List IPO

IBEX Holdings Limited will be releasing its IPO on Thursday, March 29, 2018. The company plans to raise US$60 million from 4 million shares. Each share will be sold between US$14 – US$16. Of the 4 million shares available for the IPO, IBEX will be allowing Amazon to secure 10 percent of the offer.

IBEX Holdings was founded in 2004 and provides outsourced customer support and marketing services for clients, including a few Fortune 500 companies based in the U.S. The company has 25 service delivery locations in seven countries including Jamaica. There are two IBEX centers in Jamaica located in the heart of Downtown Kingston and the other in Portmore. Both centres employ up to 2500 employees as reported by IBEX up to January 2018. So far, IBEX has invested US$5.9 million in capital expenditure in Jamaica over 6 months. The company benefits from reduced income tax between 8 to 10 percent until the year 2027 as per conditions under the Special Economic Zone regulations.

IBEX Holdings has recently secured a non-revolving credit of US$1.4 million from First Global Bank. The loan secured by all the assets of the company and has a fixed interest rate of 7 percent annually. For the financial year ending 2017, IBEX made revenue of US$334.5 million, a 3.4 percent increase from the US$323.6 million in revenue made in 2016. However, the company made an operating loss of US$2.3 million which saw their operating margin being in the negative for 2017. As of December 31, 2017, IBEX had US$12 million in cash but has a debt of US$131.5 million.

For a promising company, do you think IBEX is an IPO worth buying?

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Great Performance by Jamaica Producers Group

Jamaica Producers Group reported an increase in profits for 2017 compared to the company’s performance in 2016. The company earned gross operating revenues of $16.15 billion for 2017 compared to $12.08 billion in 2016, while gross profit was $5.14 billion in 2017 and $3.24 billion in 2016.

Net profit for 2017 was $1.62 billion and for 2016 it was $4.31 billion. It may appear that Jamaica Producers Group’s performance for 2017 was a significant decline from the previous year; in fact, one off gains accounted for majority of 2016’s figure. Without those gains, there was a 16 percent increase in net profit for 2017.

In 2016, Jamaica Producers Group gained $2.91 billion from the acquisition of Kingston Wharves Limited and $650 million from the sale of its 50 per cent joint venture in the Mavis Bank Coffee Factory Limited. The company’s investment in Kingston Wharves has effectively grown with the additional shares JP has acquired from the Shipping Association of Jamaica Property Limited, which also has shares in Kingston Wharves.

Jamaica Producers Group also benefited from Kingston Wharves new logistic facilities which serve as warehouses for general cargo and stores bulk cargo such as cars for transshipment markets.

We strongly recommend for our clients to purchase Jamaica Producers Group as the company continues to perform favourably each year.

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Oil as an Exception to the Rules about Demand and Supply

The first principle a student learns in their beginner economics lecture is that people’s wants and needs are infinite, while the resources needed to satisfy these needs are limited in nature. This concept is formally known as scarcity. Scarcity has plagued nations for centuries forcing countries like Jamaica, to import significantly more than they export in order to feed the nation. Scarcity is the premise on which prices are set which then drive the laws of demand and supply. It is imperative that everyone understand how these two concepts interact and extends to different economic principles. One worldwide commodity that defies the laws of economics is oil.

Oil has become a necessity in today’s economy like water and air. Basic supply-and-demand theory states that the more of a product is produced, the more cheaply it should sell. The reason more oil was produced in the first place is because it became more economically efficient to do so. Companies created techniques to double supply with only small increments in cost. Since the output of oil has increased over the years along with demand staying static, prices, based on the law, should fall. However, that is not what has been taking place on the world market. What has been happening is the influence of cartels within the industry. OPEC controls 40 percent of the world’s oil supply and are so able to impact the price per barrel. What most of the population doesn’t know is that OPEC was founded in the 1960s to fix oil and gas prices. They achieved this by restricting production, and were then able to force prices to rise, and thereby enjoy greater profits than if its member countries had each sold on the world market at the going rate. Throughout the 1970s and much of the 1980s, it carried out this unethical strategy, possibly out of greed for money and power. We view oil as the exception to the price-demand-supply rule. These economic factors only have strength in determining price when it influences oil futures contracts. Regardless of how the price is ultimately determined, based on its use in fuels and countless consumer goods, it appears though that oil will continue to be in high demand for the foreseeable future.

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Decline In Stock Prices Might Be A Hidden Investment Opportunity

Following the market sell off earlier this year in February, there was a more specific sell off experienced yesterday, concentrating on the Technology industry, and of course people are panicking. There is no need. Stock will be stocks, they will grow in price and they will also fall. Therefore, we suggest 100% equities to aggressive client, because stocks are volatile.

Stock indexes, including the Dow Jones Industrial Average, felt the impact of the fall in prices, where millions of US dollars in market value was lost, causing the Dow to lose over 300 points (the lowest since March 1), S&P 500 to lose over 39 points and the Nasdaq Composite falling more than 137 points (both at its lowest since February 8).

Amidst the increase in interest rates and the slow pace in which the market is building back up its momentum, technology stocks like Facebook [NASDAQ: FB], Netfilx [NASDAQ: NFLX], Amazon [NASDAQ: AMZN] and Google [NASDAQ: GOOGL] are generally all solid companies, some being more aggressive than others.

Facebook stock fell just short of a 7 percent decline, the largest decline in over 4 years, Google fell a little over 3%, closing at USD $1,100.07, Netflix just below 2% and Amazon 1.7%. What does this mean?

BUY MORE!

Purchasing these stocks as the prices go down, will benefit you whether you already hold the stock or not. How?

It will either lower your average cost or put in you a position to make gains when the stock prices increase. Isn’t making money the aim?

Keep in mind that having a portfolio full of technology stocks is however not wise. Diversification is always stressed to balance a portfolio.

Can you imagine if you had all technology stocks during this sell off? Your total portfolio market value would be in the negative!

Avoid this by diversifying and remaining confident in solid companies. GOOGL, AMZN & FB are stocks we at SSL strongly recommend.

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Quick Tips on Making Sensible Investment Goals

Welcome to the world of investing! Learning to set investment goals is crucial especially as a new investor, because it helps you keep track of where you have been, where you are, and where you are going as it pertains to your finances on your journey to financial independence.

The best investment goals typically have three things in common:

Good investment goals are measurable.

This means they are clear, concise, and definite. Saying to yourself, “I am going to set a goal of saving J$1,000 per week” is useful because you can evaluate your finances and determine whether you succeeded or not. Either you did, or you did not, save J$1,000 per week. In contrast, saying something like, “I am going to set a goal of saving more money each year” is vague because it doesn’t hold you accountable to a specific target.

Good investment goals are reasonable and rational.

If you say that you want to reach US$1 million in personal net worth by the age of 40, you can use things like the time value of money formula to test whether or not your present rate of saving is sufficient. You aren’t going to get there by putting aside J$5,000 a year between the age of 18 and 40 at a historically, reasonably probable rate of return. This means you need to either lower your expectations or increase the amount of money you are putting to work each year.

Good investment goals are compatible with your long-term objectives.

Money is a tool that should exist to serve you.

Nothing more. Nothing less.

The sole purpose of money is to make your life better; to give you the things that allow you to experience more happiness and utility. It doesn’t do you a bit of good to end up with an enormously large balance sheet if it means you have to sacrifice everything of value in your life and end up dying, leaving behind the fruits of your labor for heirs or other beneficiaries who are irresponsible or who have no gratitude for the labour you gifted them.

Sometimes, it is better to have a lower savings rate and enjoy the journey more than you otherwise would have. The trick is to make sure you’re wisely balancing your long-term desires and your short-term wants in a way that maximises joy. There is no formula for that as only you can determine which trade-offs you are willing to make; which sacrifices pay bigger dividends for you down the road.

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Why Are Financial Reports Important?

As an investor, it is essential for you to understand how to read, and analyse financial statements so you can get a full and accurate understanding how much money there is, how much debt is owed, the income coming in each month, and the expenses going out the door before investing in any stocks. To help you do that, here is a general look at financial statements.

The Annual Report

At the end of a company’s financial year, which may or may not follow a calendar year, the company will publish their financials.

Many of the financial statements you need to understand a company are contained in the annual report. These reports are free and can easily be accessed on the company’s website or the stock exchange site on which it trades.

Sheet #1: Balance Sheet

Of the three important statements, the balance sheet is the one that provides a snapshot in time of what is owned (assets), what is owed (liabilities), and what is left over (net worth or book value).

Sheet #2: Income Statement

The second of the three statements is the income statement. Sometimes called the profit and loss, the income statement shows you money coming in the door (revenue), money going out the door (expenses), and what’s left over afterwards (income, or profit). The income statement is important because you can use it, along with the balance sheet, to calculate the return you are earning on your investment.

Sheet #3: Pro Forma Financial Statements

If you read an annual report and you see something called “Pro Forma” reports, you should stop, take a moment, and seriously consider whether or not you can trust management. Pro forma means that the financial statements do not comply with the GAAP rules.

Financial Ratios

The main reason to learn how to read financial statements is so that you can calculate financial ratios. Financial ratios let you know how a company is doing, how profitable it is, whether management is taking on too much debt, potential problems investors could face down the road, and much more.

Looking Beyond

Sometimes, you need to look beyond the financial statements to understand what is going on and the dangers threatening your investments. Imagine, for a moment, that you are looking at the financial statements of a horse and buggy manufacturer in the early 20th century. No matter how cheap the business appeared, you wouldn’t want to buy shares because the automobile was going to decimate the entire industry soon.

If you liked this article and want to read other great stories, try our Archives. Also if you are new to investing you can try our Investment Basics Blog.

If you want to start investing with SSL but don’t have the time to monitor the market or to conduct the trades yourself then you can choose one of SSL’s managed Planning products. We offer a variety of products for every type of investor and if you are interested in managing online trades yourself and having complete control over your investment portfolio then you can try SSL’s Brokerage account.

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Investment Banking in Plain English

From time to time we’re asked the questions What is Investment Banking and how does it differ from a commercial bank?

Unless you work in finance, the term investment banking likely did not present itself in your day-to-day life until the 2008-2009 global meltdown began.

So let’s break it down.

What Is an Investment Bank?

To put it simply, an investment bank is nothing like the corner institution you’re used to dealing with to get a business loan or deposit your account. Instead, an investment bank is a particular type of financial institution that works primarily in high finance by helping companies access the capital markets (stock market and bond market) to raise money for expansion or other needs.

Sometimes, investment banks come up with novel solutions to solve difficult problems.

Years ago, Berkshire Hathaway had only a single class of stock. Because its controlling shareholder, billionaire Warren Buffett, had refused to split the capital, the shares had grown from $8 to $35,400; far out of the reach of the typical investor.

Money managers were creating mutual fund-like structures to buy these shares and then issuing shares in themselves, taking a fee, to make the firm accessible to ordinary families. Buffett didn’t like these middlemen making wild promises about the potential returns he could generate when he had nothing to do with it, so to take away their business, he worked with his investment firm to create a dual-class capital structure.

Therefore, on May of 1996, Berkshire Hathaway had an IPO for the Class B shares, which traded at 1/30th the value of the Class A shares (the old stock) but had only 1/200th the voting rights and the rest is history.

The Two Sides of Investment Banking

Investment banks are divided into two segments: the buy side and the sell side. The sell-side typically refers to selling shares of newly issued IPOs, placing new bond issues, engaging in market making services, or helping clients facilitate transactions.

The buy side, in contrast, works with pension funds, collective investment schemes and the investing public to help them maximise their returns when trading or investing in securities such as stocks and bonds.

Typical Investment Bank Activities

A typical investment bank will engage in some or all of the following activities:

Raise equity capital (e.g., helping launch an IPO or creating a special class of preferred stock.)

Raise debt capital (e.g., issuing bonds to help raise money for a factory expansion)

Launching new products (e.g., such as credit default swaps).

Engage in proprietary trading where teams of in-house money managers invest or trade the company’s own money for its private account.

Is investment banking an option you would consider for your business?

Let us know.

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Will Jamaica Keep Making Money Moves?

Money is a medium of exchange or any generally accepted form of payment for goods, services and debt.

The earliest representation of money was portrayed in the barter system. Merchants exchanged goods for other goods whenever there was a double coincidence of wants. Obviously, this posed a huge problem as items were being used as payments for goods or services below its value. People began to use gold as payment, which proved inefficient as the value of gold wasn’t easily divisible and was difficult to carry around. With the emergence of the financial system, markets adopted paper notes which carried intrinsic value, representing wealth in the form of gold. This solved the problem of carrying the commodity around but did not do justice for the lack of divisibility.

The use of banknotes issued by private commercial banks as legal tender, has gradually been replaced by the issuance of bank notes authorized and controlled by national governments. The Bank of England was granted sole rights to issue banknotes in England after 1694. In the United States, the Federal Reserve Bank was granted similar rights after its establishment in 1913. This is what most markets have come to know and use as money.

What the advancement of technology has done is given societies a new tender, in the form of credit cards, debit cards and cryptocurrency. Many don’t trust the concept of cryptocurrency as it has proven to be highly volatile. While several digital currency systems were proposed since the 1980’s, the first successful decentralized peer-to-peer cryptocurrency, bitcoin, was proposed in 2008 by an unknown author or authors under the pseudonym of Satoshi Nakamoto. The protocol proposed by Nakamoto solved what is known as the double-spending problem without the need of a trusted third-party. Since bitcoin’s inception, thousands of other cryptocurrencies have been introduced.

Money has evolved to the point where Sweden is close to becoming a cashless society. They mostly use cards or digital currency for payment methods. It is important to note the contrast of this phenomenon when only 14 percent of Jamaicans have access to credit cards.

Will our country find the momentum to push towards being a society like Sweden? Or will we stick to the evil we know?

There are still many business places across the island who refuse to accept cards because they want to avoid the bank charges associated with it. However, the convenience of cashless payment methods far outweighs pulling money from an ATM. Jamaicans must acknowledge the benefits of these new forms of money, in order to upgrade our financial status.

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Caribbean Cement Looks to Expand Quarries

Low levels of raw material have prompted Caribbean Cement Company Limited to increase its gypsum and limestone quarries. The company is now in talks with the National Environment and Planning Agency (NEPA) to more than double its quarry operations.

Caribbean Cement currently has a quarry in close proximity to its plant in Rockfort, Kingston, which is the Halberstadt Gypsum Quarry. Plans are being put in place to expand that quarry from 2.0 kilometers to 6.7 kilometers. Additionally, Caribbean Cement hopes to establish a limestone quarry at Harbour Head across 50 acres of land.

Supplies at both quarries are described by Caribbean Cement as being critically low. Therefore, the expansion is needed. However, low defined by the company is as much as 20 years.

The 6.7 hectares of land at the Halberstadt quarry will process 200,000 tonnes of gypsum per year while the 20 hectares (50 acres) of land from the Harbour Head quarry will process 800,000 tonnes of limestone. Both quarries are 8.5 kilometers apart.

Halberstadt is the only known location of gypsum in Jamaica of such vast economic quantity while the limestone found in Harbour Head quarry was selected based on the chemical composition of the material.

Caribbean Cement recently released its financial statement for 2017 which indicated that the company pays approximately $700,000 annually to the government of Jamaica for leased lands used for limestone mining. Revenue for 2017 was $16.5 billion compared to $15.7 billion the previous year. While net profit for 2017 was $1.15 billion compared to $1.3 billion in 2016. Caribbean Cement is currently trading on the Jamaica Stock Exchange at $32.60.

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Scotiabank Most Online Transactions in Company’s History

As part of Scotia Group’s vision for 2018, the company plans to increase its loan book and invest more in technology. This was announced shortly after Scotiabank released its financial report for the first quarter of 2018.

For the three months ending January 31, Scotia Group Jamaica reported a $0.40 increase in earnings per share to $1.10. Net income increased by 54 percent from $2.2 billion to $3.4 billion this year, which included a $753 million gain from the sale of Scotia’s microfinance business, CrediScotia, to Lasco Financial Services. Total revenue for the 2018 first quarter was $11.59 billion, up from $10 billion for the corresponding period in 2017.

However, Scotia’s loan book decreased from $168.2 billion last year to $167.5 billion, but the company is optimistic that they can improve. Whilst not releasing a loan growth target, Scotiabank believes there are various opportunities to take advantage of in the banking industry for improved performance next year.

Additionally, Scotiabank is looking to move more service offerings to its online platforms to avoid constructing physical locations. Plans are being put in place to improve branch networks. This decision was made as the company reported that online transactions surpassed in- branch transactions for the first time last year.

We strongly recommend investors to buy Scotia Group as the company continues to boast the number 2 spot in the local banking industry.

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PanJam Buys Out Foreign Investor to Fully Acquire Oceana Hotel

Having bought out its Canadian partners for $403 million, PanJam Investments Limited has now fully acquired the Oceana Hotel project located by the Waterfront Downtown. PanJam made this decision in light of the fact that Downtown Kingston is slowly transforming into a hospitality market and soon significant revenue can be made from the hotel and condo complex. Additionally, the company sees the complex as their contribution to the revitalization of the city.

PanJam recently completed the first phase of the Oceana project which includes commercial spaces on the ground floor which will be leased and a parking garage. The company is looking to start the second phase of the project as soon as they receive the necessary funds to do so and the approval.

Oceana was acquired by PanJam and the Canadian company in 2014 for $385 million but the continuation of the project will see PanJam spending up to $6 billion for its redevelopment. PanJam is optimistic that with the restoration of Downtown Kingston, this will be a worthwhile investment.

In its financial report for 2017, PanJam noted that investment properties represented 20.9 percent of total assets. Revenue for 2017 increased by a whopping 38 per cent from $1.74 billion to $2.41 billion. While net profit for 2017 was $4.19 billion compared to $4.35 billion in the previous year, a 3.6 percent decrease.

Currently we do not recommend PanJam to our clients but we continue to watch the stock as a possible buy option. PanJam is now trading at $41.21.

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Are the Curtains Closing on Toys “R” Us ?

May 27, 2018May 27, 2018

In recent times, Toys “R” Us’ reputation has many questioning if play time is almost over. The company filed for Bankruptcy in September of last year and has missed paying their debts to their suppliers.

With a private company, information can be withheld and not shared with the public although at times, it is in their supplier’s best interest to do so.

These payments to suppliers stopped abruptly, not giving any real explanation as to why it has happened. They have even stopped trying to retrieve money from vendors before filing for bankruptcy.

Could this mean that the company plans on closing?

When companies struggle, they usually seek another company to acquire it, issue bonds or preference shares or even speak to lenders for refinancing debt. However, Toys “R” Us has a defaulted bond that was slated to mature October of this year with its current price at $14.38, when being issued at $98.40.

With this bad news, two of the United States largest toy markers Mattel Inc. and Hasbro, Inc. has felt the impact as it relates to their stock prices.

MAT dropped 3.4 percent to $14.49 yesterday and closed lower today at $14.47 per share, with their day low of $14.44. Additionally, HAS fell a little below 1 percent to $89.32 yesterday and closed today at $89.35, with a day low of $89.15.

All these signs point to the direction of the closure of the business, however we will watch this company a little more to see what their strategies will be.

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Trump’s Tariffs May Thwart Exxon’s Investment Plans

May 27, 2018May 27, 2018

President Donald Trump’s move to impose an import tariff of 25 percent on steel and 10 percent on aluminum, will significantly push back Exxon’s investment plans. The plan was to spend US$20 million to 2022 in order to expand chemical and oil refinery plants along the Gulf Coast. This plan would have been more easily facilitated by the lowered tax rates imposed recently.

This has caused Exxon to increase their annual earnings goal by 2025. Exxon plans to invest US$24 billion in capital expenditures this year, US$28 billion in 2019 and another US$30 billion between 2023 and 2025. Even though Exxon announced that the increase in spending will not boost production in the short term, the company hopes to increase oil production from 1 million barrels a day to 5 million barrels per day in 2025.

Following news of Exxon’s announcement that the increased expenditure would not boost production in the short term, Exxon shares fell to their lowest in two years. This comes in light of the fact that Exxon failed to announce the opportunity for investors to participate in large share buybacks.

Analysts are researching Exxon’s ability to rejuvenate its portfolio and how they will turn increased investments into higher profits, revenue and cash flow. Exxon’s operating margins, which is profit after expenses, decreased by 5.1 percent in 2017, significantly below industry median of 13.5 percent.

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Netflix to Implement Mobile previews

Netflix (NYSE: NFLX) wants to incorporate a round icon on its mobile app that vaguely gives the customer a preview of movies or series on Netflix. This will be executed by the customer who taps the icon of those previews and then swipes through them to explore more.

Todd Yellin Vice President of Product said previews would be available “many hundreds of titles,” including both originals and licensed shows. According to NASDAQ Yellin also stated the 30-second previews would be a massive part of the Netflix catalogue.

These new previews were shared at Netflix’s two-day event, Lab Day’s, which is used by the company to showcase some of its technology. According to NASDAQ Yellin said that the company was looking at the further expansion into mobile innovations as it has proven to be an integral part of viewing for Netflix’s user base.

The company has made recent enhancements to its viewing capabilities such as the launch of mobile downloads as well as codec optimisation to enable higher-resolution viewing with as little as 200 kilobytes per second (kbps). This move was because of Netflix reporting a 20 percent viewing on mobile devices while half of Netflix members access the mobile services month over month.

Netflix (NFLX) has been leading the way for digital content since 1997. Netflix is the world’s leading internet entertainment service with over 117 million members in over 190 countries enjoying more than 140 million hours of TV shows and movies per day, including original series, documentaries and feature films. Members can watch as much as they want, on nearly any Internet-connected screen at anytime. Members can play, pause and resume watching, all without commercials or commitments.

Currently, the stock is being traded at $316.10, and analysts at SSL recommends a hold on this stock at the moment.

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