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A few weeks ago, 21st Century Fox announced its intentions to buy the remaining 61 percent of Sky it does not own. To add another layer to the media takeover, it was reported that Disney could possibly acquire 21st Century Fox which could result in Sky News ultimately being controlled by Disney, but the deal is yet to be approved by U.S. Regulators.

Fox is now faces regulatory pushback from the Competition and Markets Authority (CMA) in the UK. The CMA feels the proposed takeover of Sky is not in the interest of the public as the deal poses a real threat to media plurality. Fox currently owns 39 percent of Sky as well as newspapers in the UK including the Sun, the Times and the Sunday Times.

If this media takeover is completed, it is argued that the Murdoch family, who currently owns 21st Century Fox and all its businesses, would be given too much control over news in the country. If the Murdoch family has control across all media platforms in the UK, this would threaten the diversity of views that make up a healthy media landscape and give them the opportunity to have too much influence over public opinion and also an avenue to push their political agenda.

Based on the concerns of the CMA, Fox has already proposed solutions. Fox wants to make Sky News a distinct company within Sky, having an independent board.

But to what extent will the board be independent?

Rupert Murdoch and his son Lachlan Murdoch are already the Executive Chairmen of Sky. Additionally, the head of Sky would still be appointed by the head of 21st Century Fox; who would evidently have influence over editorial decisions.

In the end, if Fox acquires the outstanding shares of Sky and Disney acquires Fox, the end result will likely be similar. The threat to media plurality may very well come from Disney.

We will be closely watching the developments around these acquisitions and the effects it may have on the stock market.

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China Increases Investment in Jamaica

May 29, 2018

Since the presence of international entity, China Harbour Engineering Company (CHEC) in Jamaica, many residents are of the view that Jamaica’s government is slowly selling sections of the island to the Asian nation. It should be noted that CHEC has contributed invaluable infrastructure, through their work in developing the new North South Highway which has significantly reduced the travel time for residents driving to and from the south to the north coast.

Along with this development, Jamaica also has profited from increased employment in different departments that has resulted in consumption of local goods and services. Additionally, the company has embarked on projects to upgrade existing roads, alleviating perennial traffic issues plaguing drivers.

The most recent investment out of China is the establishment of Shacman’s regional headquarters. The heavy-duty truck company recently signed a deal with Tank Weld (TW) to distribute its trucks in Jamaica, where they will be setting up offices in Six Miles, St Andrew, close to Tank Weld’s main offices by the end of April, according to a recent news release. The deal is set to bring permanent employment to residents and offer an after service to customers who purchase Shacman trucks. Tank Weld has partnered with Jamaica National Bank to provide loans to small haulage contractors so that they can be in a position to purchase trucks from the company. The ripple effect throughout the economy should be significant, as this is a boost across different sectors.

The fact is that no one can confirm or deny the rumours behind China’s interest in Jamaica but the fact is we have seen changes and improvements in infrastructure that would not be possible using strictly local resources. CHEC has been a driving force in our economy creating job opportunities for individuals and increased foreign exchange through frequent travels to and from China.

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Duration – Friend or Foe?

Bond duration is an investment concept that average investors genuinely understand, yet it can have a meaningful impact on how your fixed income portfolio performs relative to the bond market as a whole.

Investors tend to shy away from discussions of bond duration because the underlying math is relatively tricky. The good news is that once you look past the math involved, the underlying concept of duration is easily understood.

To make good use of duration when investing in bonds, you don’t need to calculate it — you need to understand the concept. However, before discussing duration further, consider another bond term related to duration: present value.

Present Value

Present value is what an investment is worth at the moment of evaluation. It contrasts with the value that the investment may have at some future time after it has benefited from compound interest. It acknowledges that investors discount the future value of an investment. Although ten years from now a sum invested at 6 percent compounded annually will be worth much more than the initial investment, investors place a discount on money earned in the future. The basic idea is that money received next year is worth less than cash in hand now and money earned the year after that is worth even less.

Which would you prefer: $100 in your pocket now or the promise of $100 you’ll receive in three years?

Duration

For individual investors, the duration is primarily used as a measure of a bond’s sensitivity to prevailing interest rates. It’s defined as the weighted average of the payments an investor will receive over time, discounted to the bond’s present value.

Duration, which is expressed in years, measures how much a bond’s price will rise or fall when interest rates change. The longer the duration, the greater the bond’s sensitivity to interest rate changes. Duration, then, is a particular expression of volatility.

The Impact of Duration on Bond

Duration, which is expressed in years, is a term that investors will encounter when assessing fixed income investments. Typically, portfolio managers will say their portfolio is overweight or long duration, meaning that their duration is higher than that of the benchmark. Alternatively, the portfolio could be underweight or short duration.

A portfolio with a duration that is above its benchmark can be expected to outperform the benchmark if rates are falling, and underperform if rates are rising. Conversely, a portfolio with a below-benchmark duration will typically outperform when rates are rising, and underperform when rates are falling.

Other factors also impact portfolio performance; most notably, the specific market segments in which it is invested — durations of junk bond funds will exceed durations of treasury funds with similar maturities.

Note as well, that duration should be considered a snapshot rather than a permanent aspect of the fund’s strategy.

Investors need to be alert to the risk/reward trade-offs rather than merely using past performances as a gauge of quality.

Short duration funds can be expected to be lower risk / lower yield, while longer duration funds tend to feature higher risk and higher yields.

For investors, the takeaway is that duration – while just one of many factors that can impact the performance of a fixed-income portfolio – is something that nonetheless warrants attention since it is one of the most important factors in the risk profile of any bond investment you might consider.

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Insulating Your Portfolio from Inevitable Market Corrections

May 29, 2018

Naturally, investors get uneasy during times of volatility, but rather than see it as something to worry about investors should view volatility as an opportunity to pick up more shares at bargain prices. After most market corrections, clients typically ask how they can construct their portfolio to insulate from dramatic price movement. So here are a few recommendations if you find yourself wondering the same thing:

Consistent dividend-paying stock

The most powerful defence is a stock that has healthy earnings and a good dividend payout ratio and dividend yield, especially when compared to the return that is available on the risk-free treasury bond.

Here’s how it protects you during a down market: As the stock price falls, the dividend yield goes up because the cash dividend is a more significant percentage of the purchase price of each share. In the midst of a market crash, at some point the dividend yield becomes so high that investors with excess liquidity often sweep into the market, buying up the shares and driving up the price. That’s why you typically see less damage to high dividend paying stocks during down markets.

Go Blue Chip

Seasoned investors are interested in one thing and one thing only: Buying companies with stable earnings at the most attractive price possible. In difficult economic times, the stability of profits is crucial. Often, the most successful stocks are those that have durable competitive advantages.

Identifying these companies isn’t hard. They are often referred to as blue-chip stocks; for example: Coca-Cola, Johnson & Johnson, National Commercial Bank Financial Group, Jamaica Producers Group Limited, just to name a few. They often have extremely large market capitalisations.

Stocks Trading at Reasonable Valuations

Of course, diversifying your portfolio with stocks that traditionally have low price to earnings ratios, low price to book ratios, low price to sales ratios, and conservative balance sheets, the odds are good that you will emerge from the wreckage unscathed over the long-term.

This is why value-based money management have managed to return such impressive results to their investors for years. For investors lacking experience, this is best achieved through funds such as the Safe Solutions or Money Managers or Collective Investment Schemes.

A Few Other Thoughts

If you can’t analyse financial statements and calculate a conservative estimate of intrinsic value for the assets in your portfolio, it is a wise policy to maintain broad diversification.

Consider keeping a portion of your portfolio in international investments by investing in a highly rated, low-risk companies.

Never invest any capital in equities that you might need within the next five years.

If you can’t handle price volatility, consider reducing the overall gyrations of your portfolio by including a substantially fixed income component. Although this might lower your returns over subsequent decades, if it reduces the chances of you selling everything in a panic, it can provide a workable compromise.

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Pfizer Seeking another Miracle Pill after Two Decades

Major pharmaceutical company, Pfizer [NYSE: PFE], is seeking another miracle pill with similar earning potential as Viagra to boost revenue. Viagra, a brand name popular pill among men, is used to treat erectile dysfunction. However, it now faces heavy competition from the generic version of the drug, Sildenafil which is sold by the same company.

Back in 2000, 92 percent of the global market who used prescribed erectile dysfunction pills, chose Viagra. But that number has dwindled to 50 percent by 2007. In 2017, Pfizer lost the patent for Viagra, resulting in a lack of growth for the company. Pfizer is now seeking to create another miracle pill, however its efforts may be limited as the company recently announced cost cutting plans in Research and Development.

Pfizer plans to spend between USD$7.4 billion to US$7.9 billion in Research and Development when compared to USD$7.7 billion spent last year. Pfizer is facing competition from companies such as Johnson and Johnson and Merck, who are projected to spend USD$10 billion in that field.

Pfizer does not seem to be in good financial standing as evidenced in the 300 jobs that were cut in January. It has been reported that the company ended its research programs in the treatment of Alzheimer’s and Parkinson’s disease, to fund other projects. Pfizer also made it known that the company may sell its consumer healthcare business which owns over the counter drugs such as, Advil, Centrum multivitamin and Chapstick lip balm.

According to Tufts Center for the Study of Drug Development, it takes an average US$2.6 billion to bring a new drug on the market. That is considered a hefty sum as in 20 years there have been 19 treatments that have generated US$1 billion in annual revenue for the last 5 years. Because of this, Pfizer chose a model where it shares the risk and benefits with other companies such as Merck and Bristol Myers Squibb.

Pfizer has had other profitable drugs such as Lipitor for cholesterol, Zoloft which is an antidepressant and Celebrex an anti- inflammatory drug, but none has matched the selling power of Viagra.

In 2017, Pfizer made revenue of US$52.5 billion compared to US$52.8 made in 2016, a less than 1 percent decrease. Net income on the other hand, did not disappoint as the company amassed US$21.3 billion in 2017 compared to US$7.2 billion in 2016. Pfizer trades on the New York Stock Exchange at US$35.73.

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Boost for Lasco Distributors

May 29, 2018

Lasco Distributors Limited [JSE: LASD] have been experiencing tremendous business performance recently. So much so, that they have decided to pay out an interim dividend amounting to $406.35 million to their shareholders. An interim dividend is a distribution to shareholders that has been both declared and paid before a company has determined its full-year earnings. Such dividends are frequently distributed to the holders of a company’s common stock on either a quarterly or semi-annual basis. The shares will be approximately $0.12 per share and paid out on April 30, 2018. Not only have they experienced improved company performance, Lasco Distributors has been receiving funds through their ongoing court case with Pfizer. The American drug manufacturers paid a out a multimillion dollar lawsuit when Justice Vivienne Harris awarded special damages of USD$77,075 (just over JMD$5.32 million), to Medimpex (using the 2007 exchange rate of $69.06 to 1) and $155,738 to Lasco Distributors.

Lasco has also completed most of their planned major capital projects, such as the warehouse expansion and the upgrading of their business application software. Both of which has increased business efficiency and enabled the company to experience savings due to decreased operational costs. With their continual plans to improve software systems, Lasco is poised to further maximize on cost-savings and operational efficiency. This can raise the value of their stock, and then provide increased dividends for present shareholders. Lasco has set quite a precedence for other local public companies to follow. With the gradual advancements of technology, more specifically software systems, Jamaican companies have a greater capacity for business improvements. If other companies follow in Lasco’s footsteps, then we can expect greater returns in the future, along with a highly competitive market.

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Is Spotify a Good Buy?

The stock price of Spotify has increased by 12 percent at the close of trading, there is still some amount of doubt surrounding the success of the stock. SPOT was directly listed on the NYSE with a reference price of USD$132.00 but once trading started it quickly jumped to USD$165.90. However, the price fell and closed in its most recent trading session at US$149.01. The company is now worth around USD$26 billion, more than the value of Twitter.

The decrease in stock price is attributed to investors’ lack of confidence in the company’s business model. Spotify had no intentions of raising capital with this IPO and that is why the company opted to directly list the stock on the NYSE so shareholders can sell shares directly to the public instead of using an intermediary. This worked in Spotify’s favour as they did not have to pay hefty fees from investment banks.

Currently Spotify has an estimated 70 million paying subscribers and almost 90 million free listeners, however, the company is yet to turn a profit. The music streaming giant earns an estimated US$5 billion a year in revenue but pays out more than three quarters of that amount in royalties to music labels, songwriters, artists and producers.

Competition in the online music streaming industry is strong but Spotify has been finding ways to increase revenue from not only through paid subscriptions and advertisements but from original content and podcasts. Many analysts have already casted doubts on Spotify’s viability even though the music industry needs music streaming companies like Spotify.

Music streaming can be transformed into a profitable platform but Spotify needs to diversify its core offerings to increase its paying subscribers. Not to mention the company needs to turn a profit as it is competing against companies such as Apple, Amazon, Google, among others, which use the music streaming business to support their core product.

Spotify has already disrupted the entertainment market with its debut and may very well change the way people stream music online. Would you take a chance on Spotify?

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Ganja Company in Jamaica to List on Toronto Stock Exchange

Licensed ganja company, Kaya Inc, has announced that the entity will be releasing its IPO soon, which will be listed on the Toronto Stock Exchange (TSX) in Canada. Kaya also intends to do a ‘reverse takeover’ of Buzz Capital, a company already listed on the TSX. Buzz Capital was formed in 2017 and listed on the TSX that same year.

Kaya plans to raise CAD$8.5 million from the merge. CAD$5.5 million is hoped to come from institutional investors while CAD$3 million will be given by HIKU Brands, who has already committed to that agreement. The deal which should be completed by April 15, will see Kaya shareholders owning almost nine-tenths of Buzz Capital.

The takeover involves a series of transactions which includes Buzz reducing its ordinary shares by half from 8.2 million to 4.1 million units. After which, the company’s name will be changed to Kaya Inc. Following the name change will be an exchange of all issued and outstanding shares of Kaya for common shares of the resulting entity.

Subsequently, Kaya will warrant for shares of the new company. The resulting entity should have 43 million issued shares. Kaya shareholders will own 89 percent while Buzz shareholders will hold 11 percent.

Kaya made it clear that this transaction will be subjected to the oversight and approval of the Cannabis Licensing Authority in Jamaica. Kaya has announced that there will also be over 50 percent of Jamaican shareholders and Board Directors at all times.

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Stock Your ‘Barrel’ with Derrimon Trading

Do you remember ever following a family member to the wharf or having gone yourself, having to wait for hours to clear just one barrel? Better yet, have you been privy to the hefty service charges and customs fees you have to pay to clear a barrel of goods? If you have been among the unfortunate few, then Derrimon Trading [JSE: DTL] has a solution for you.

Derrimon Trading Company Limited seeks to make shopping and more importantly, the delivery of goods easier for Jamaicans. The company is hoping to get the attention of the Diaspora to use its services which will include an online shopping platform which will list ‘name brand’ items Jamaicans prefer. This method will save persons the hassle of packing barrels by reducing the sender’s labour to just clicks on a cell phone or laptop. The items will then be delivered within 48 hours.

Derrimon Trading will pack the ‘barrels’ from their warehouse; located on Marcus Garvey Drive, Kingston. The company started its online shopping quest with university students but admits the supermarket shopping online is not easy but they have figured out a way to complete the task.

But how will consumers be guaranteed that they are buying quality products?

CEO of Derrimon Trading, Derrick Cotterell, explained that it is in the best interest of the company to deliver quality goods. If not, then Derrimon will lose money as items returned will have to be disposed of.

Most business transactions in this generation are being done digitally and this venture is just one way in which Derrimon Trading is positioning itself to take part in the evolution.

For the financial year ending 2017, Derrimon Trading Company Limited made $6 billion in revenue and $281.7 million in net profit. A notable increase of 59.6 percent in revenue when compared to $953.9 million the company made in 2016. Net profit was also increased by a whopping 142.6 percent from $116.1 million.

The company has been doing well, and although we would not recommend adding the stock to your portfolio at the moment, we continue to monitor it carefully.

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Trump Shoots; China Fires Back

China’s response in imposing $3 billion tariffs on U.S. imports was seen as rather ‘modest,’ but it should not have been taken lightly, as the Chinese government on Friday announced its intentions to play hardball. China intensified the trade war with news that they will be raising tariffs on 128 U.S. products coming into the country.

These products included fruits, wines, pork, nuts and recycled aluminum. This development has not only affected the S&P 500 Index in the U.S. but has taken a toll on the stock market in Japan and China. On Friday, Tokyo’s Nikkei fell by 4.5 percent and China’s Hang Seng by 2.5 percent.

While it is clear President Trump has no intentions of squashing this impending trade war, China is actually open to resolving the friction. Clearly, China is not afraid to retaliate, however the country is giving the U.S. opportunities to reconsider its position.

China plans to raise tariffs in two phases. The first being an increased 15 percent on tariffs for 120 goods worth almost $1 billion only if the U.S. does not want to reach a ‘trade compensation agreement’ within a particular period of time. The second being a 25 percent tariff imposed on eight products from the U.S. with a market value of almost $2 billion after there has been an evaluation of the impact of the tariffs.

The World Trade Organization (WTO) is urging both countries to rethink their decision and come to an amicable solution to settle their differences using mechanisms specified by the WTO.

The bigger issue with this impending trade war is the effect it will undoubtedly have on a global scale. Trades, not to mention economies, to as far as the Caribbean will be affected.

However, Trump sought to quell fears that the increased tariffs will be imposed on other countries. But anything is possible with President Trump. He describes China as a ‘friend’ to the US but is still targeting that one country.

How do you think this impending trade war may affect Jamaica’s economy?

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What is New with Brexit?

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.

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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