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Watch the Ways You Use A Loan!

August 7, 2018August 7, 2018

In finance, a loan is the lending of money from one individual, entity or organization to another entity, organization and individual. It is otherwise classified as debt owed. Most times, the principal borrowed is repaid with a set interest rate for the lender to benefit while engaging in the loan agreement.

If someone acquires a loan through an institution, the interest rate is charged on the principal and has a specific payment date that is usually in equal increments.

The truth is that no one really likes owing anyone or any bank, but sometimes it is necessary. Arbitrarily taking a loan out for parties or clothes is definitely not wise, however, not much persons have the money upfront to pay for a house, car, to repay student loans or even pay for an emergency health issue.

As someone’s monthly income grows, so too their expenses, which is natural. Things you may not have been able to do when you were earning JMD$50,000.00 a month you are now able to do with JMD$100,000. The issue lies wherever you become unrealistic or greedy which can lead to living above your means.

However, there is nothing wrong with yearning for or living a lavish lifestyle; however taking a loan to do so isn’t the way.

Here at SSL we do not bash loans as this is a medium in which people can build their credit, however we do not encourage foolish borrowing. Just like our recent launch of the Everything Fresh IPO, it was a great opportunity for persons to make some money on their principal. Who wants to miss an opportunity as such?

Everyone has to start somewhere in life, but not everyone was born in a wealthy family where funds are readily available for investment. It is key to weigh your options and make the right decision when it comes on to your finances as it can be to your demise.

Borrow only what is needed, find out information from different institutions and choose the best option that suits your needs with the lowest possible interest rate and consolidate your loans if you can.

Lowering your monthly payment for many loans by transferring all loans for many agencies to one, can allow for increased disposable income on a monthly or yearly basis. Additionally, you can even invest in securities that give growth on your principal or income that you can have access to your own funds instead of taking a loan.

Come into SSL today and speak to one of our Financial Advisors so that they can help you make better financial decisions and help you to achieve your financial freedom. We do make investing easy!

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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New YouTube Algorithm Angers Users

August 7, 2018

Without getting the opinions of YouTubers, popular video app YouTube, began testing an algorithm which changed the chronological order in which videos appear in user subscription feeds. This is done on the reasoning that users are shown videos they would most likely watch instead of scrolling or searching for those videos. Before, once a user subscribes to a channel, the video would appear in the sub box and the user is able to browse through the videos and see every video offered by that particular channel so they can choose which one to watch.

Many persons would think that having a personalized feed would be better but history has shown it is not. Look at every social media network that tried the approach and the responses they received from users. Facebook, Twitter and Instagram has tried personalizing news feeds before and the backlash they received was negative.

YouTube users are livid. Many creators have since complained that because of the optimization, they have received fewer views, less traffic and less revenue. Subscription feeds allow youtubers to connect directly with their subscribers and ensures they see when new videos are posted. This will make it difficult for creators to stay relevant on a platform that is constantly changing.

YouTube has since responded to say the ‘personalized’ feed is optional and only appears for a few people. They went on to further state that so far people with personalized feeds are watching videos for longer. The company’s focus has now shifted from the number of views on a video to how long someone watches the video. YouTube says it will allow its users to decide whether they prefer to view subscription feeds chronologically or by preference.

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.

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Building Credit Without A Credit Card

August 7, 2018

You have probably come across the age-old question, “how do you build credit without the use of a credit card?”

Building credit as soon as you’re an adult is vital in avoiding financial snags as you move through everyday life. Using credit cards responsibly is one of the more popular ways to begin building credit. However, if you’re against credit cards or prefer not to get one, knowing how to create credit without a credit card is a necessary skill.

Building credit without a credit card is possible, it requires a different approach.

Note that not having a credit card could hold your credit score back; this shows institutions you can be responsible for both credit cards and instalment loans. Not having credit card experience on your credit history won’t cause you to have a poor credit score, but institutions may be hesitant to offer you the best rates/options.

The alternative to using credit cards to build your credit score is to use a loan. Your loan payment history must show up on your credit report to help you build your credit score. Some loans are more difficult to get than others, so it helps to know your options.

Start Repaying Your Student Loans

The Student Loans Bureau typically grants up to a certain amount as long as you’re enrolled at an eligible institution. You can start repaying your student loans while you’re in college to begin building your credit score. Waiting until you’ve graduated is also an option. Either way, be sure you pay on time each month to build your credit score without a credit card.

Repay a Mortgage or Car Loan

Since both mortgages and car loans report to credit bureaus, either of these will help you build your credit score. The tricky part is getting approved for either of these without an established credit history. With a steady income and proper down payment, you may be able to get approved. For mortgages, you may be able to get approved for a loan backed by the National Housing Trust and a bank, if you have made NHT contributions and made on-time rental and bill payments.

What has a tremendous impact on your credit score is cosigning for a family or friend. The downside is that cosigning is generally a bad idea. You could be held liable if the person you co signed for defaults on their loan payments. In the days of microloans, getting a loan is relatively easy, so if someone can’t get a loan by themselves, take this as a warning. Also, late payments affect the co signer’s credit just as much as they affect yours.

Pay Your Rent on Time

Your rental payments may help you build a credit history if your landlord reports payments through Rent Board. Although only a portion of landlord’s report this data.

What to Watch Out For

Beware of advance fee loans and other loan scams that prey on people with no credit or bad credit. These loans typically guarantee approval and ask for some upfront payment.

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.

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Tender Offers & the Effect on Investors

July 19, 2018

So what is a tender offer?

A tender offer is a public offer, made by a person, business, or group, to acquire a given amount of a particular security. The term is derived from inviting existing stockholders to “tender”, or sell, their shares. In effect, a tender offer is a conditional offer to buy. The question is posed by the individual or entity making the offer, “I am willing to buy your stock at $[x] if you tender (sell) it to me but only if a total of [y] shares are tendered to me by all stockholders.”

Usually, tender offers are proposed so that the acquirer can accumulate enough common stock to either get a significant presence on or completely take over the board of directors. A tender offer occurs as the acquirer owns a large percentage of the outstanding stock. Therein, he or she can force all remaining stockholders to sell out and take the company private or merge into an existing publicly traded business.

A tender offer is mainly used in cases where the management and board of directors does not believe the takeover would be in the best interest of the shareholder. As a result, the management team will oppose as they consider it incompatible with their fiduciary duty. This is also a means by which a hostile takeover can be accomplished by acquirers and/or investors who would like to take control over the objection and fight of incumbent directors and executives.

Tender offers are by far more common in the stock market than a so-called proxy war. A proxy war is another example of an attempt to take control of a business. A company’s annual proxy statement breaks out important information including matters on which stockholders must vote. In a proxy war, the individual, business, or group who wants to take over management tries to convince stockholders to vote for their slate of directors, effectively removing old directors and seizing control of the business.

Proxy takeovers are usually executed by corporate raiders, these corporate raiders will strip the company of its valuable assets and sell these assets piece-by-piece. In other instances, proxy takeovers are executed by well-meaning investors with the best interest of the company in mind. The investors will despite of mismanagement, argue with a slew of documentations citing delinquencies on the part of directors and the negative impact it has on shareholders. This battle is usually resolved via voting and oftentimes shares will be then managed and/or sold to the investor with the most compelling argument with documented proof.

How Tender Offers Work on Your End, as an Investor

Imagine you own 1,000 shares of Company ABC at $50 per share for a market valuation of $50,000. One day, you wake up, and your financial advisor says that Firm XYZ has made a formal tender offer to buy your shares at $65 per share but that the deal will only close if, say, 80 percent of the outstanding stock is tendered to the acquirer by stockholders as part of the transaction. You have a couple of weeks to decide whether or not you will tender your shares.

If you decide to accept your tender offer, you must submit your instructions before the deadline or else you will not be eligible to participate. It’s usually as simple as telling your broker, “Sure, I’ll sell out at $65 per share” and waiting to see what happens. (Of course, if you have physical stock certificates, it’s an entirely different procedure, but those are relatively rare these days.)

If the tender offer is successful and enough shares are tendered, the transaction is completed. You will see the 1,000 shares of Company ABC taken out of your account and a deposit of $65,000 cash placed in. If the tender offer fails because fewer than 80 percent of the shares were tendered to the would-be acquirer, the offer disappears. You are then left with your original 1,000 shares of Company ABC in your brokerage account.

If you reject the tender offer or miss the deadline, you will get nothing. You will have the original 1,000 shares of Company ABC and can sell to other investors in the broader stock market at the first available price. In some cases, persons from the initial tender offer will return for a secondary tender offer. This occurs in the event of not receiving enough shares or wanting to acquire additional ownership in which case you might have another bite at the apple.

Something to always note, if you don’t tender but enough people do, you’re probably going to be forced out of your ownership, as the enterprise may be taken private down the road.

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Investing in Marijuana

July 15, 2018

As the business world becomes less rigid about Cannabis (Marijuana/Ganja), organisations and countries alike are investing in the herb that has both medical, and recreation uses.

When states and countries legalise cannabis, new businesses appear out of nowhere. California legalised recreational marijuana at the very beginning of 2018. Within two weeks, two dozen Los Angeles businesses got approval to sell recreational products.

Gives a whole new meaning to the phase, “growing like a weed”. It’s a growing industry, and people are starting to see that there’s money to be made here.

So where does that leave you, the investor?

Well, you have many options. Both directly and indirectly, there are many ways you can turn cannabis into one of the more intriguing investments in your portfolio.

Cannabis Companies

Cannabis stocks are such a new and unusual investment that even compared to your usual investments; there’s no such thing as a “safe bet.” But should you choose to take a chance, medical marijuana presents you with more options. Far more states have legalised for medical use than recreational, and Canada has had medical weed for nearly two decades.

Jamaica is playing catch up with decriminalising marijuana and allowing businesses such Medicanja and Lasco Pharmaceuticals the leeway to explore. What is disheartening is that Jamaica should have been leading the charge with investing in marijuana as much as bauxite and tourism. While no company has been listed on the Jamaica Stock Exchange as yet, we do expect to see a few soon, however, there are companies with direct or indirect exposure to marijuana on the major stock exchanges both in the U.S. and Canada – for example, GW Pharmaceuticals, whose CBD-based epilepsy drug Epidiolex was recently approved by the U.S. Food & Drug Administration (FDA).

Some Canadian companies have shown themselves to be intriguing players in the market. OrganiGram (OGRMF), a licensed producer and grower of medical marijuana, is coming off a strong Q2. As the number of medical cannabis patients in the country grows, so have OrganiGram’s sales, in no small part due to their production of cannabis oil.

Canopy Growth Corporation (TWMJF) is another popular option, a Canadian company that not only produces but researches and studies cannabis. It was recently valued at around $4.35 billion, and Bank of Montreal helps finance it, giving it a competitive advantage.

The first cannabis company to trade on a major U.S. exchange was a Canadian company, Cronos Group Inc. (CRON), which trades on the NASDAQ. What has drawn some people toward it is what has scared others away: volatility. Its overall decline this year hasn’t stopped it from having random days of jumping up 14%. Another Canadian company, Canopy Growth Corp. (CGC), recently began trading on NYSE.

Medicinal cannabis companies will undoubtedly benefit from the new customers, but it would also require more expenses to keep up with demand. That’s important to remember; there’s money to be made, but there’s money that must be spent too. Not every weed stock is going to spit out profits just because it gets legalised.

Some companies, though, have been preparing for the event where recreational marijuana is legal and distribution needs to expand, and they may be worth looking into. Scott’s Miracle-Gro, Co. has acquired multiple companies over the years like General Hydroponics and Sunlight Supply – producers of cannabis growing supplies.

Cannabis ETFs

As marijuana stocks become more of a common occurrence, so do marijuana exchange-traded funds (ETF). ETFs allow for trading many different securities in one fund, bringing a diverse portfolio. They’re tempting, but they are also even newer than cannabis stocks. Moreover, if banks are still wary of individual cannabis stocks, they’re going to be wary of a fund with multiple.

So stay cautious.

Horizons ETFs has a cannabis fund, Horizons Marijuana Life Sciences ETF (HMMJ) is a popular choice that trades previously mentioned companies like Aurora and Canopy Growth. ETFMG Alternative Harvest ETF (MJ) is a fund that focuses exclusively on pot stocks, while the newer Evolve Marijuana ETF (TSX: SEED) is almost entirely Canadian stocks, trading on the Toronto Stock Exchange.

Marijuana stocks are more volatile than your average stock, and the legality of cannabis is always hard to define precisely. It’s a changing world for marijuana, and how you think it will continue to change will determine whether or not you want to invest.

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.

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Another Jamaica Public Service Rate Hike?

June 29, 2018July 29, 2018

As we enter the sweltering temperatures that signal of summer, it is safe to say that the Jamaica Public Service (JPS) is anticipating a spike in revenue from an increase usage of appliances. Typically, during the months of June to August, Jamaicans brave the heat with the use of air conditioning units and fans. Additionally with children being home for the holidays, parents receive higher than normal utility bills when compared to months where children are at school for five days per week.

In recent times, JPS has submitted a request for a new rate review to The Office of Utilities Regulation (OUR) on May 3, 2018. They are seeking to refinance USD$179.1 million of its existing long-term debt that is based on an interest rate of 11 per cent per annum. This review, if approved, will translate to a 1 percent increase in charges to customers. The Jamaica Public Service possesses this power under the Electricity License, 2016, which makes provision for “extraordinary rate reviews owing to exceptional circumstances that have a significant impact on the electricity sector/ or JPS”.

Being a pure monopoly in its field, JPS has the power to dish out rates that Jamaicans must accept or choose the alternative of solar power. JPS has been plaguing the country with high rates since its inception and being safe from competition, is able to project high costs on customers.

With the improvement in Jamaica’s business environment, is it time for another company to show their competence and offer their services? There is always the possibility that the Jamaica Public Service will be forced not only to reduce rates but increase their level of efficiency if they fear losing market share. Perhaps it is time for more options to present themselves, especially in light of the new rate review.

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.

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The era of the Millennials

June 23, 2018

The subject of millennials has been the topic of discussion in countless conversations across corporate boardrooms and social media platforms over the years. This term describes both Generations Y and Z, who are individuals born between the years of 1981 and 2001.

In recent times, there has been many negative connotations attached to the term that has brought about a stigma against millennials, which has had an adverse effect on the way they are viewed in society.

Time and time again Baby Boomers (individuals born between 1946-1964) have stressed how entitled millennials are; most often because of how drastically their lifestyles differ. Researchers deduce that the main difference between Baby Boomers and Millennials is the advancement of technology.

What individuals have access to today is light years away from what the generation before even dreamt about. This affects the way decisions are made by millennials as well as how they craft priorities.

Millennials are further criticized for not owning homes and starting families by a certain age while empirical evidence suggests that many cannot afford to do so. Additionally, it can be argued that the quality of job satisfaction has plunged since finding fulfilling employment has been more difficult.

There are Baby Boomers who may think they despise Millenial’s sense of entitlement. It should also be taken into consideration that bad economic decisions from decades ago continue to plague Jamaica which further deepens the financial burdens borne by the current workforce. Issues such as inflation, currency depreciation, perpetual debt and undesirable savings offerings are a few of the economic depressions that force young adults to alter priorities. The cost of living that previous generations enjoyed compared to the cost of living today.

Regardless of economic struggles, both the local and international financial markets have provided opportunities to gain wealth through buying, selling and holding equities and bonds. Instead of saving money in a commercial bank with subpar interest rates, millennials have found viable investment deals that may not have been available decades ago.

The discipline of investing is an important lesson that parents can teach children as well as their counterparts as it is becoming more and more trendy. Investing has proven to be even more profitable than playing it safe with a regular savings account.

We salute broker houses and securities dealers for playing the role of an efficient middleman in accommodating these investments. The highlight about broker houses is that a single individual is not required to have extensive knowledge about the workings of the stock market to realise valuable returns on investments. When you can receive up to 30 percent within a year in performances, there is no incentive to leave money idling in a savings account.

In the past, Millennials have been criticized for their lack of savings or making proper plans for retirement. Empirical research states that the current savings plans available are still under regulations that were implemented decades ago. Contributions to pension plans are voluntary, most times tied to employers, and is dependent on the discretion of your employer to contribute anything substantial.

Furthermore, the fraying of economic and social safety nets over the last 40 years has left pensions vulnerable to emergency withdrawals and subject to change in value based on interest rates and inflation. Economists have argued that the stipulations for retirement have to be changed or regulated for Millennials to have an ounce of benefit from them in the future.

Millennials have found that delaying traditional goals until their later years has created time to focus on career development and preparation for these plans they have stalled. The availability of new investments schemes has granted the opportunity to gain more in wealth in ways deemed unconventional.

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.

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Tax on Coffee May Reduce Profit for Salada

June 13, 2018

Many may think an 80 percent increase in profit and a 19 percent increase in revenue just halfway through the financial year would be reason to celebrate for a company, but that isn’t the case for Salada Foods Jamaica Limited.

The Company is anticipating a levy on coffee beans this year which may very well derail most of the gains the company has made so far. Salada is expecting a significant impact on operating revenue stemming from imminent government taxation and while the company cannot predict what may happen in the coming months, they are preparing for possible pitfalls ahead.

Effective April 1, 2018, Salada is expected to pay USD$1.41 per kilogram for imported green beans and USD$2.40 for value added products. Currently Salada pays USD$1.52 per pound for imported coffee in addition to USD$2.52 per pound for Jamaican coffee blended with the imports. The company already finds it difficult to get the grade of coffee needed to meet the 20 percent quota for local beans for coffee blends.

Initially, the company did not suspect they would be subjected to the coffee tax as part of an ongoing effort to protect local farmers. The assumption was that the tax would be on roasted and ground coffee sold to hotels. On the contrary, their assumptions were incorrect and despite instant coffee being of a different grade, it was also targeted.

For the six month period ending March 31, 2018, Salada reported an increase of JMD$77.89 million in sales of JMD$404.37 million in 2017 for the same period to JMD$482.27 million in 2018. While net profit increased from JMD$44.9 million to JMD$80.2 million, Salada saved 22 percent on expenses in order to achieve this result but the tax on coffee may very well thwart their efforts.

Salada is the sole manufacturer of instant coffee in the Caribbean region and currently trades at JMD$13.00 on the Jamaica Stock Exchange.

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Second Largest Jamaican Denominated Bond Issue For NWC

June 13, 2018

For years, privately owned companies have had many different channels through which they have access to much needed credit. Financial institutions have awarded eligible entities with loans to assist with several operational activities. Recently, with the evolution of how capital can be raised, many companies seek the help the public through the issuing of bonds or the help of an Initial Public Offering (IPO). These measures grant companies the opportunity to facilitate repayment of debt, infrastructure updates, expansions, among others.
The most recent, and second largest bond issue in Jamaica was done by the National Commercial Bank Capital Markets on behalf of The National Water Commission (NWC). Investopedia describes a bond as is a fixed income investment in which an investor loans money to an entity (corporate or governmental) which uses the funds for a defined period of time at a variable or fixed interest rate. Bonds are used to raise money and finance a variety of projects and activities. Owners of bonds are debtholders, or creditors, of the issuer.

The issue by NWC will be a total sum of $15 billion Jamaican Dollars. It will allow the company to finance the debt it has racked up attributed mostly to the depreciation of the foreign exchange rates, as their loans are foreign currency denominated. This will also assist with mitigating the currency risk they face without having to use most of their revenue (which is the case now) to finance debt. The bond will further be used to develop much needed infrastructure and network to regions across the island which don’t have access to consistent running water.

NWC is a private company which provides a necessary utility to Jamaica, this therefore makes them one of the country’s biggest assets and therefore needs to be protected. Prime Minister Andrew Holness aired his pride for the company in a press conference held on May 15, 2018 where details of the bond were provided. He believes that this bond is the first step to making the entity a publicly traded one, which will further benefit customers, as well as the economy as a whole.

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.

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Why is Nestle Spending over US$7 billion on Starbucks?

June 13, 2018

On Monday, Nestle announced that it will pay US$7.2 billion in cash for the rights to sell Starbucks coffee products in grocery stores and restaurants worldwide. The deal will allow Nestle to market, sell and distribute Starbucks brand. Many may ask why Nestle would spend so much on a segment which only generated US$2 billion in revenue about 9 percent of Starbucks total revenue. The deal is priced three times more than sales.

Nestle is the world’s leading coffee brand, however, in the U.S. it only accounts for 3 percent of the coffee industry. The company’s coffee brand, Nescafe, is viewed as boring by the younger generation and its other high end brand, Nespresso, has not garnered the appeal of many consumers.

The deal was made in an effort to recapture their appeal to trendsetters. Furthermore, Nestle is facing heavy competition from JAB Holding Company who has spent over US$30 billion to build its coffee empire. JAB Holding includes coffee brands such as Keurig Green Mountain and Peets. But the deal should help Nestle keep JAB at a distance.

Starbucks accounts for 15 percent of the coffee market in the U.S. According to market research firm Mintel, a jar of Nescafe and a bag of Starbucks coffee bean cost the same, but Nescafe makes more than three times the cups of coffee Starbucks beans make but despite this calculation, consumers prefer to use the more costly brand.

Starbucks plans to use the US$7.2 billion from the deal to fund stock buybacks and the deal would give them access to more markets. Currently Starbucks sells its products in 28 countries compared to Nestle which is operational in 190 countries. This expansion is something Starbucks would not be able to do on its own without spending a massive amount. The deal is said to prove profitable in the long term.

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Black Panther Boosts Walt Disney Co. Earnings

June 13, 2018

One of the most recent box office explosions, “Black Panther” has proven to be more than just excellent cinematic artistry, but a great profit boost for Walt Disney Co. [NYSE: DIS]. Their second quarter profits have soared past estimates predicted by Wall Street advancing to USD$1.84 in earnings per share, while sales rose to USD$14.5 billion, compared with predictions of USD$14.1 billion. The worldwide movie phenomenon boasted USD$1.3 billion in ticket sales since its release in February and is still playing in theatres across the globe. These numbers have caused a ripple effect for Walt Disney Co. through an increase in theme park visits during a typically slow season as well as the boost to a television business that’s being negatively affected from an overall decline in pay-TV viewership.

Additionally, more movie releases, such as “Avengers: Infinity War” and the upcoming “Solo: A Star Wars”, can assure the company’s profits for the first half of the year in their studio segment. Up to May 6, 2018, Disney is responsible for a third of the domestic movie business, as reported by Box Office Mojo.

Regardless, Walt Disney Co. faces an uphill battle with their cable division, as it portrayed a 4 percent loss is profits year over year. They are currently taking steps to boost earnings in this segment through the acquisition of 21st Century Fox Inc., but they face significant competition as U.S. cable company Comcast Inc. is rumoured to also place a bid for said company. This among other factors has propelled the company’s stock price to remain largely stagnant in recent years. Strong competition from companies such as Amazon.com Inc. [NASDAQ: AMZN] and Netflix Inc. [NASDAQ: NFLX] has ignited investor uncertainty, which caused the stock price to average about USD$100. This price has caused SSL to recommend it as a buy for clients. The company has the potential to increase share value if their current investments are successful along with the benefits they are set to reap with the present movie releases and increased ticket prices and sales to theme parks.

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Credit Card- A Blessing & A Curse

June 13, 2018June 13, 2018

Everyone knows that little rectangular piece of plastic that several individuals carry around in their purse or wallet. This is what we call a credit card, which is issued by a financial institution, most commonly banks, for consumers to purchase goods or services at the initial expense of the institution. This I like to call short term borrowing.

Do not get this confused with the other rectangular card called a debit card. They are two different types of spending, either spending your own money (debit) or spending the banks’ money (credit). The word credit merely means providing the resources or money to another party without immediate payment.

As Jamaicans, we can relate as many shops or wholesales offer regular customers the benefit of ‘Trust’, where they take the goods and pay at a later date. It is the same concept, just that a credit card allows you to purchase an item or service (the retailer gets their funds) but you pay the bank at a later date.

The phrase short term borrowing is used because minimum payments are due every month end at a specific date to lower the principal and interest and if those payments are not made, then the card is blocked from usage.

Based on a 2016 survey, over 67 percent of persons over the age of 65 was in possession of a credit card and in Q2 2017, there was about USD$ 780 Billion in credit card debt in the United States.

Credit cards can be a blessing, but how? When used responsibly and how they are slated to be used, there can be numerous advantages. Firstly, when making a reservation, for example at a hotel, a credit card is needed to either hold the reservation or be on file in case there has been any damage during your stay. Secondly, they are amazing for emergencies, when you don’t have ready cash to deal with medical bills, buying food etc.

Additionally, before the introduction of debit cards, credit cards were the only source available to allow online banking which is deemed more convenient to consumers and also provides security against fraud. Some banks ever offer bonuses, giving cash back and miles for travelling. However, one of the main uses of a credit card is to be able to have good credit history so that it is easier to get loans and even lower interest rates.

However! The Curse! – Most owners of credit cards do not use them properly or responsibly. What persons make the mistake of is making their credit limit higher than what they can afford or even higher than their monthly paycheck, which makes it difficult to repay when in debt and causes financial distress. Persons tend to even have 3 or 4 credit cards which may result in more debt and then is only able to make the minimum payment, fall short of it or even pay late. This can cause a problem.

To avoid getting bad credit and decreasing your chances of getting a loan, being able to rent or even getting employed, be smart about your credit cards, make on time payments, more than the minimum if possible, stay within your limit and have self-control.

If you generally cannot pay for an item or service that it is not an emergency or need, do not charge your credit card. If you know you have no self-control, do not get a credit card. Do not get another credit card if you don’t have to and always try to pay your bill on time.

Do not fall for the temptation of credit cards, they are there to give benefits not put you in debt. It is important to live within your means instead of finding a different source of income by loan.

Be smart and have good credit or stay away!

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Supreme Ventures Limited Testing Mobile Betting App

June 13, 2018

Supreme Ventures Limited (SVL) has reported that the company has made progress on its mobile betting app project but will not reveal all the details to the public until testing is complete. The company has partnered with Advanced Integrated Systems Limited to use its Quisk platform to roll out the app. The app is being tested with sports betting before any other game.

Advanced Systems Limited has however indicated that the patent is still pending and authorities have not yet implemented any legislation to regulate online gaming. Another ambiguity lies in the regulation for online payment in online gaming.

The Bank of Jamaica is responsible for the regulation, however, the bank’s oversight does not include online gaming on a mobile device. The Betting, Gaming and Lotteries Commission (BGLC) stated that they will accept any payment method the Bank of Jamaica approves.

According to SVL having a mobile online gaming app will make it easier for persons to place bets. The use of Quisk will allow for faster payouts and access for the funds to be used to place more bets throughout the day. Mobile money will provide automatic audit trail for each bet and the banking sector will still be able to monitor KYC data or know your customer data.

For the quarter ending March 31, 2018, Supreme Ventures Ltd (SVL) reported a 14 per cent increase in revenue from JMD$13.39 billion in 2017 for the same period to JMD$15.29 billion. Profits increased by an impressive 49 percent from JMD$418.3 million to JMD$618.4 million. Lottery games continue to show increased growth in profit compared to the previous year, from JMD$556 million to JMD$796 million, a 30 percent increase in growth. However, horse racing continued to lose even more than it did in 2017 form JMD$19 million to JMD$40 million this quarter.

Nevertheless, Supreme Ventures Ltd (SVL) continues to soar with an earnings per share increase of 49 per cent from $15.77 to $23.45 and we at SSL recommend our clients to include this stock in their portfolios. The stock is trading on the JSE at $12.20.

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At What Age is the Ideal Time To Buy A Home?

June 13, 2018

The answer?

There’s no right age to buy a home.

But what should be the determining factor is where you are in your own life. Purchasing a home is the most significant investment most owners make in their lifetime, and your status as a homeowner can help you or hurt you financially speaking.

Perhaps most importantly, it affects your quality of life.

When Should You Buy?

Buying a home can benefit you at any age, young or old, as long as the conditions are right. You might be ready to buy when, at a bare minimum, you:

Can afford the monthly payments and expenses of home ownership;
Can get approved for a good loan (or better yet, pay cash);
Plan to keep the home long enough to recoup transaction costs from buying and selling, as well as any price declines;
Can afford the risks, including surprise maintenance expenses or your home losing value in a weak market.

None of that is meant to suggest that you’re irresponsible if you don’t buy a house at a certain age. Owning a home can be an expensive, time-consuming, and frustrating endeavour. Renting comes with its own set of challenges, but it’s a lot easier to pack up and leave when the only thing holding you down is a one-year lease.

At What Age Do Most People Buy?

It’s important to live your own life, but it might be helpful to know when others typically buy. There may be good reasons behind the fact that homeownership rates increase with age. On average most become homeowners later in life.

Age Range Homeownership Rate

35 to 44 years old 58.9 percent

45 to 54 years old 69.5 percent

55 to 64 years old 75.3 percent

Age 65 and over 79.2 percent

Reasons for Buying Young

If you have the ability and desire to buy young, there are potential benefits to getting an early start.

Build wealth: Assuming things go well, owning a home is a route to increasing your net worth. The forced savings of your monthly payments help you build equity in the property, which you can use for another property or other goals.

Price appreciation: There is no guarantee that your home will gain value, but that is what happens in many cases—over the long term. Real estate can help hedge against inflation, assuming your property keeps pace with rising prices.

Reasons for Waiting

If you’re not feeling rushed, that’s okay. Waiting can pay off in several ways. Making a home your own and moving can be a pain, so you may prefer to minimise the number of times you buy and sell.

More certainty: As you get older, you develop a clearer picture of your ideal home. The future is always uncertain, but you gain more information about several factors as you age:

Your work location, or your ability to work remotely;
Your income available for housing payments;
The size of your family, if any;
Financial strength.

Instead of being house poor and dealing with your property in your 20s and 30s, you can spend those years saving for a significant down payment, travelling, or doing anything else you want. What’s more, you can build credit over the years to get the best loan possible.

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Record Profit for NCB

June 13, 2018June 13, 2018

For the half year period ending March 31, 2018, NCB has reported record profit of JMD$11 billion. Patrick Hylton, Chief Executive Officer of NCB, lauded the bank for being the first listed institution on the Jamaica Stock Exchange to exceed JMD$10 billion in earnings in six months. Hylton is optimistic that this will not be the last record profit set by NCB as he further boasted about the sustainability of the company’s business model which will push the bank to continue on this path.

NCB reported an increase in revenue of 25.2 per cent from JMD$36.8 billion in 2017 to JMD$46.1 billion for the same period in March 2018. JMD$1.5 billion has been attributed to the company’s acquisition of the Clarien Group. Net profit increased by 17 per cent from JMD$9.46 billion in 2017 to a record of JMD$11.04 billion in 2018. It has been reported that this is because of an increase in demand for investment securities as there is a reduced availability of government paper.

Wealth, Asset Management and Investment Banking performed exceptionally well and have proven to be the main contributor to the company’s operating profit with JMD$4 billion, an increase of 6 per cent from the previous year. Treasury and Correspondent banking is now the second largest contributor after only achieving JMD$3.96 billion in profit despite a 10 per cent increase from the same period in 2017.

NCB utilises advanced digital technology in order to provide enhanced solutions for customer experience. This has been well received by customers as is evidenced in its financial statements.

We at SSL continue to recommend NCB to our clients as we look forward to another stellar performance form the company in the coming quarter.

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Allergan Set to Release Game Changer Depression Drug

June 13, 2018

Allergan Plc [NYSE: AGN] is a multinational pharmaceutical company that produces both drugs and conducts research and development within the same industry.

It is no secret that AGN specializes in ophthalmology, women’s health and aesthetics products, one of which includes a well-known product and their best-seller, called Botox.

Botulinum Toxin, most commonly known as Botox, is a non-surgical cosmetic treatment which is used worldwide. It is a wrinkle treatment that cripples repressed muscles that is administered by injection through the skin at the site of fine lines and wrinkles.

Generally used by women, Allergan has started advertising a Botox treatment specific to men. This proves that men are starting to be more conscious about their physical appearances, just like women.

Botox’s reported sales has exceeded, fell just below or breaks even with estimated sales. The last two quarters however, sales reported exceeded that of estimated sales, with Q1 generating $817.3 million globally. The company usually has competitive advantage with the fact that Botox is hard to replicate, however, in recent times, Revance Therapeutics Inc announced that they were developing a carbon copy of the same product that research shows the possibility of it lasting longer than Botox.

This news of course places some concern of the longevity of the company and how much longer it would be able to be on top. However, competition is something that also drives growth, it pushes a company to ensure there is maintenance of quality and that research and development is invested in, to add more products and services which allows for the company to maintain and acquire more market share.

SSL posits that it was a good move for Allergan Plc to provide a product for men. Women too long have been looked down upon for trying to enhance what they were born with; times have changed and now men are looking for cosmetic enhancements too.

In recent times we have even realized that men don’t only wear toupees but are now gravitating to wearing wigs just like women. This is a way that Allergan has now not only grabbed the attention of women, but also that of men, broadening their market share and keeping their name above all others.

Additionally, the company has a new drug that analysts say could be a game-changer for depression. In Jamaica and many other Caribbean islands, mental health is something that is still taken lightly by many people; however, it is wide-spread and prevalent.

Information on both products are in the pipeline, so we will see where these products will take the company and continue to watch its growth.

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A Frank Look at Gender Disparity in Indian Culture

June 13, 2018

In countries such as India, traditional norms are still surpassing the ever-changing mechanisms of modern society. In particular, gender disparity within their workforce still mimics that of century old practices, where women are expected to take care of homes, rather than play the role of “breadwinner”. Though different in each caste, women have tried for years to push barriers and enter male dominated fields even when faced with severe backlash. Some have managed to succeed and create new norms for generations to come. Kundapur Vaman Kamath, founding chief executive of ICICI Bank Ltd., developed a generation of female bankers. Among them are Kalpana Morparia who now leads JPMorgan Chase & Co.’s Indian operations and Madhabi Puri-Buch, who is a stock-market regulator.

Regardless of Kamath’s guidance, Indian women are still facing difficulties in trying to actively participation in the workforce. Approximately 21 million women dropped out of the workforce in Indian villages between 2005 and 2012, while fewer took up employment in cities compared with the period 1994-2005. Because of these numbers, younger generations have opted to stay longer in school to grant themselves adequate bargaining power in the work world and increase their chances of employment. Regardless, older women still fall victim to the expectation of staying home because of lack of pressure to contribute income to households. This wasted labour supply drastically reduces India’s economic potential as labour capital is not being maximized or used efficiently. Many would argue that the male dominated culture of India is the main cause of gender disparities in jobs, but it is also mostly the result of a lack of opportunities that are available to women in both urban and rural areas that are safe, and socially acceptable.

According to a new study by McKinsey & Co., gender equality in the workforce could drive India’s business-as-usual GDP upwards of 18% by 2025. If this study stands true in practicality, then it proves that equality can drive efficiency. Many believe that the act of granting equality means only taking from the rich and giving to the poor, which lowers the incentive of the rich to produce at the capacity that it did before. However, in this case, the workforce would just be more accommodating to the participation of female labour supply so that they can also contribute something meaningful to society. Until policies are changed in the favour of female workers, India’s chance of a higher GDP is stagnant. Women have proved for centuries that they are capable of bringing forth fruitful returns in whatever seeds they sow. Having their talents and knowledge being put to use in a professional capacity can positively impact economic development and growth.

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Chukka Eyeing IPO as a Possibility Amidst Expansion

June 13, 2018

Chukka Caribbean Adventures recently disclosed its intention to list on the Jamaica Stock Exchange. The news came just as the company reported it will be expanding into two more regional markets as well as improving its service offerings in Jamaica.

Chukka recently issued a $2 billion dual currency bond in order to refinance its debt and fund its expansion. The bond was arranged by Sygnus Capital, who on Wednesday opened its own IPO, and Sagicor Investments Jamaica. The Jamaican dollar portion of the bond has a fixed coupon of 8.50 percent while the U.S. dollar portion has a fixed coupon of 6.50 percent and will mature in five years. There will be a quarterly interest payout on the bond. Chukka currently has a debt of just over 10 per cent and the company is hoping the bond will yield savings of 25 to 30 percent on interest costs.

Chukka is looking to expand its partnership with Carnival Cruise Line whose bigger ports will serve as an advantage to Chukka. Locally, Chukka has been improving its offerings at different locations. The company has adventure tours in St. Lucia, Belize, Turks and Caicos and Jamaica. Chukka Jamaica has seven locations across Jamaica’s North Coast including Negril. In recent times, there has been expansion of a water park, bar and restaurant at its Trelawny location late last year and the addition of a zip line at the Dunn’s River location costing USD$2 million and USD$1 million respectively.

Chukka expressed satisfaction stating that the demand for the bond on the market was high and the interest rate was even more competitive. The company hopes to forge meaningful and beneficial relationships with institutional investors as they continue to explore financing options for growth.

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Amazon Rollouts Could Harm More Companies

June 11, 2018

Amazon.com, Inc (NASDAQ: AMZN) has been rolling out new efficient measures, which have been threating to areas such as delivery affecting FedEx and UPS sales. In addition, Amazon intends to rollout a new payment system to offer retailers discounts from credit card fees, which could affect big names such as Paypal Holdings Inc., JP Morgan Chase & Co., Citi Group Inc., Mastercard Inc. and Visa Inc. to name a few.

Swipe fees are a USD$90 billion a year business for companies such as JPMorgan Chase & Co. , Citigroup Inc., and networks such as Mastercard Inc. and Visa Inc. and payment processors like First Data Corp. and Stripe Inc., who earn a portion when customer swipe their cards or click “buy now”. Furthermore, credit card transaction fees amount to about 2 percent and .24 cents for debit cards, but big stores such as Amazon and Walmart have negotiated for lower rates based on their large sales volume daily. However, Amazon is willing to forfeit profitability for a long-term gain acting as a so-called payments facilitator like Paypal by exporting or offering to pass this discount to its merchants who agree to take on the Amazon Pay service.

As a result, this means Amazon will group its smaller merchants to help them reduce the cost of accepting electronic payments. Furthermore, since Amazon’s announcement, Paypal shares dropped 4.1 percent on Wednesday, erasing most of its gains of 3.7 earlier in the year. Visa also fell 0.9 per cent.

Moreover, The drawback to this is that many small merchants are sceptical about divulging certain information with Amazon, which may compete with them to sell similar products on its own site. Amazon operations’ main intention is to get a piece of other retailer’s e-commerce revenue to becoming the ultimate one-stop shop.

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Cambridge Analytica Speaks Out Against Allegations

June 11, 2018June 11, 2018

Cambridge Analytica has finally stepped out to deny allegations made against them in the case of widespread misuse of data from millions of Facebook accounts. Cambridge Analytica held its first news conference since allegations surfaced that the Facebook data was used in the aiding of Donald Trump win in the 2016 presidential election, which was represented by Clarence Mitchell, the company’s publicist.

After months of allegations resulting in salacious scandals, Cambridge Analytica’s reputation is still being dragged through the dirt. This has resulted in even the CEO of Facebook Mark Zuckerberg, having to publicly apologise for his company’s wrongdoing especially where privacy policies being questioned.

Furthermore, Mitchell went on to say The company has been portrayed in some quarters as almost some Bond villain, in which he said, Cambridge Analytica is no Bond villain. Also, in denying the claims of having nothing to do with Facebook’s Data aiding Trump’s campaign and even Brexit campaigns, Mitchell stated that the data collected from Facebook was gathered by another company, who had contractual obligations but, deleted such data when the uproar started.

Facebook’s share price had been taking a head-on blow having gone down to as low as USD$150.00 per share and the losing almost USD$50 billion in value for its shareholders.

On the contrary, a former employee of Cambridge Analytica, Christopher Wylie also made claims that the company has connections to the successful campaign such as taking Britain out of the European Union.

Moreover, Mitchell is adamant that Cambridge Analytica did not break any laws, but has admitted to ordering an independent investigation because, he insists the company is being victimised with wild speculation based on misinformation, misunderstanding, or in some cases, frankly, an overtly political position.

Also, Mitchell stated that to think political consultancies can use data to influence votes is “frankly insulting to the electorates. Data science in modern campaigning helps those campaigns, but it is still and always will be the candidates who win the races”.

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