By Fortress Mutual Fund, Contributor
FOR THE first half of 2002, the composite index in Barbados is up 7.1 per cent, Trinidad is up 10.8 per cent and Jamaica is up 14.1 per cent. The Caribbean markets have done commendably well compared to the International markets where, for example, the S&P 500 and the London Stock Exchange's FTSE are down 13.8 per cent and 10.8 per cent, respectively, for the year to June 30, 2002.
The Fortress Market Update shows the returns investors would have realised by investing in the Top 10 performing companies in each stock market. The analysis evaluates the movement in the share price from the beginning of the year to the end of the above-mentioned month and converts the return to US $. The returns do not include dividends or transaction costs.
BARBADOS
Top 5 performers on the Barbados Stock Exchange for the last six months were Life of Barbados (88.9 per cent), Barbados Dairy Industries (20 per cent), West Indies Rum Distilleries (18.2 per cent), Barbados Farms Limited (10.5 per cent) and RBTT Financial Holdings (4.4 per cent). Within the last quarter, the index has increased by 9.94 per cent mainly due to the increase in the Life of Barbados shares.
The battle for the Life of Barbados shares was successfully won by The Barbados Mutual with their offer of $5.10 per share, which now has put some $160 million back into the hands of the investing public. The ultimate question at the moment is to see where the cash will end up. Treasury Bills in the country are still paying extraordinarily low rates where, as at March, they were around 2.9 per cent. As at the end of February, there was $4.5 billion in deposits with $2 billion of it in savings accounts and the banks only pay 3 per cent. The excess liquidity ratio stood at 13.7 per cent at the end of March. There is hope that some of the money will end up directly in the stock market or if not, indirectly through mutual funds.
Stocks to watch for the remainder of the year are Banks, B'dos Shipping & Trading and West Indies Rum.
TRINIDAD
Trinidad's Top 5 for the first six months of the year was topped off with Trinidad Cement up 83.3 per cent, Life of Barbados up 74.4 per cent, Grace, Kennedy up 52.6 per cent, LJ Williams A up 31.6 per cent and National Enterprises Limited up 25.3 per cent.
On the last few trading days of June, Trinidad Cement was targeted once again by Cemex with an offer to buy all shares at TT$7.15. The price just before the offer was TT$5.03 and immediately shot up the 10 per cent daily threshold for each of the three trading days subsequent to the offer. This story is bound to be fairly interesting much like the Mutual/LOB take-over with the exception that there is only one party bidding but the battle itself will be between the TCL directorship and its shareholders. Stocks to watch in Trinidad are RBTT, Neal & Massy, Guardian Holdings, WITCO, National Enterprises, Ansa McAl and CCN.
JAMAICA
Top 5 performers for the year were Courts Jamaica up 93.5 per cent, Jamaica Broilers up 87.9 per cent, Seprod Group up 84.2 per cent, Pegasus Hotels up 81.8 per cent, and Jamaica Producers up 77.8 per cent.
TREASURY BILLS
Treasury Bill rates in Jamaica are currently just under 14 per cent down from the corresponding year's yields of over 16 per cent. The government is still able to raise funds successfully in the international markets and is still doing relatively well with the local registered stocks. The stock market had a tremendous three to four months of gains in every sector but began to sag during May and June. Some analysts believe that many of the stocks had become too overpriced and this necessitated a correction in the market. Others are of the belief that the bond floated in the international market temporarily distracted investors from stocks. The currency has depreciated by just over 3 per cent for the year trading at near $49.
Stocks to watch in Jamaica are Grace, Jamaica Broilers, Seprod, DB&G and possibly Lascelles.
Fortress Mutual Fund is a Barbados based unit trust.
