THE JAMAICAN dollar fixed income market experienced relatively high liquidity levels this week. There were inflows of $4.41 billion from BoJ COSH maturities, coupon payments on US dollar indexed bonds and LRS coupon payments. There were also inflows from salary payments during the week. Outflows from the market to purchase the newly issued Treasury Bills (see details below) were low in comparison to the inflows. On Monday, the 30-day secondary market repo rates traded within a band of 22 per cent to 25 per cent. However, by Thursday, the rates trended down to within a band of 18 per cent to 21 per cent. The overnight secondary market repo rates also trended downward, trading within a band of 10 per cent to 25 per cent on Monday and four per cent to four per cent on Thursday of this week.
In the coming week, approximately $4.41 billion is expected to enter the system from coupon payments on LRS VR: 2005/2006, 2012/2013H, 2027/2028A, 2012/2013F Tr.1-3 and 2004C, FR: 16.00 per cent 2032, 14.75 per cent 2004AA, 14.50 per cent 2008AF, 14.375 per cent 2011AC and 15.00 per cent 2010AA. (The total inflow from BoJ COSH maturities was not available at the time of writing).
Please note that the last 364 day Treasury Bill auction was in May 2002 and hence not suitable for comparison with the recent one-year Treasury Bill.
US DOLLAR FIXED INCOME MARKET
The US dollar fixed income market experienced relatively tight liquidity conditions this week. On Monday, the 30-day secondary market repo rate traded between 7.50 per cent and 7.75 per cent. However, by the end of trade on Thursday, rates climbed up to between 7.75 per cent and 8.00 per cent. This was as a result of increasing demand for U.S. dollar funds due to the Government of Jamaica borrowing through several private deals locally.
The Government of Jamaica Eurobond market continued to experience low trading activity this week, partly due to the Thanksgiving Day holiday in the U.S. on Thursday, resulting in the bond market there being closed on that day. In addition, many traders were out of office before and after the holiday. All GoJ global bond prices remained firm throughout the week.
MOVEMENT OF INDICES
All three market indices advanced this week over the period Monday to Thursday (see table). The major contributors to the movement in the main Jamaica Stock Exchange index were Cable & Wireless Jamaica Limited, Bank of Nova Scotia Limited and Courts Jamaica Limited, which advanced by 129.04, 87.91 and 51.20 index points respectively.
UNITS TRADED
During the week 10,557,280 units traded with a market value of $86,406,948 representing a 64 per cent decrease in market volume and a 40 per cent decrease in market value over the previous week (close of trading on Thursday). Cable & Wireless Jamaica Limited, Jamaica Broilers Group Limited and Life of Jamaica Limited accounted for the largest volume of transactions. Fourteen stocks advanced, eight declined, ten traded firm and seven did not trade. At the close of trading on Thursday, total market capitalisation was $476.14 billion, a 0.63 per cent increase compared with the previous week.
TOP PERFORMERS
Cable and Wireless Jamaica Limited, Gleaner Jamaica Limited and Salada Foods Limited were the top performers, gaining 17.46 per cent, 8.00 per cent and 7.25% respectively, to close at $0.74, $1.35 and $18.50. The main losers were Ciboney Group Limited, Desnoes and Geddes Limited and Kingston Wharves Limited down 10 per cent, 3.67 per cent and 3.45 per cent respectively to close at $0.09, $5.51 and $1.40 respectively.
The Finance, Conglomerate and Manufacturing sectors dominated trading this week, accounting for 59.9 per cent, 21.2 per cent and 12.6 per cent respectively, of the total value traded in the market.
In the Finance sector, the shares of Royal Bank of Trinidad and Tobago Limited and National Commercial Bank Jamaica Limited (17.16 per cent and 14.60 per cent of market value respectively) dominated trading.
In the Conglomerate sector, Grace Kennedy and Company Limited (17.36 per cent of market value) dominated trading.
The shares of Jamaica Producers Limited (8.66 per cent of market value) dominated trading in the manufacturing sector.
CROSS-LISTINGS
At the close of trade on Wednesday, Capital and Credit Merchant Bank (CCMB), Grace, Kennedy and Company (GKC), Guardian Holdings Limited (GHL), Jamaica Money Market Brokers Limited (JMMB), National Commercial Bank Jamaica Limited (NCBJ), Royal Bank of Trinidad & Tobago (RBTT), and Trinidad Cement Limited (TCL) closed at TT$0.90, TT$5.45, TT$31.50, TT$1.00, TT$1.60, TT$32.86 and TT$5.48 respectively on the Trinidad Stock Exchange (TTSE).
Three stocks advanced and three traded firm. The advancing stocks were GKC, GHL and RBTT which increased by TT$0.04, TT$0.25, and TT$0.06 respectively. TCL, CCMB and JMMB traded firm. National Commercial Bank Jamaica Limited (NCBJ) was listed on the Trinidad Stock Exchange on November 21, 2003.
The TTSE does not trade on Mondays and Thursdays. TT$6.30 is equivalent to US$1.00. Foreign Exchange MarketThe Jamaican dollar opened the week trading at J$60.55 to US$1.00.
However, with the high liquidity levels in the Jamaican dollar fixed income market, brokers and financial institutions sought to cover previously taken US dollar short positions. This led to an increased demand for US dollars and resulted in the Jamaican dollar depreciating to as low as US$1.00 to J$60.65 during the week. On Wednesday and Thursday the central bank intervened by selling US dollars to the market at a rate of US$1.00 to J$60.51 for resale at J$60.56. This helped to offset the end-user demand somewhat.
However, continued demand from brokers and financial institutions resulted in the Jamaican dollar continuing its downward slide. On Thursday the US dollar closed at US$1.00 to J$60.66.
DISCLAIMER:
All information contained herein is obtained by JMMB's Investment Research Group from sources believed by it to be accurate and reliable. All opinions and estimates constitute the Analyst's judgment as of the date of the report. However, neither its accuracy and completeness NOR THE OPINIONS BASED THEREON ARE GUARANTEED. As such NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS OR COMPLETENESS OF THIS REPORT IS GIVEN OR MADE BY JMMB IN ANY FORM WHATSOEVER.
Note: JMMB may make markets and effect transactions, or have positions in securities mentioned herein. In addition, employees at JMMB may have positions and effect transactions in the securities mentioned herein. Unless otherwise stated, all rates quoted are indicative and do not constitute an offer to buy or sell. All rights reserved 2003 by JMMB. Additional information is available upon request. JMMB is a registered trademark of Jamaica Money Market Brokers Limited.
