JAMAICAN DOLLAR FIXED INCOME MARKET
THERE was a relatively low level of liquidity in the Jamaican dollar fixed income market this week. Cash inflows of approximately J$6.4 billion were offset, at least in part, by outflows used to purchase U.S. dollars. The low level of liquidity was reflected in the overnight secondary market, in which rates increased by approximately two per cent during the week to end between eight per cent and 10 per cent yesterday. Thirty-day secondary market repo rates also increased, ranging between 14.30 per cent and 14.50 per cent yesterday, from between 14.20 per cent and 14.30 per cent on Monday.
Last week the Government of Jamaica issued Variable Rate Investment Bond 2007/2008 (Series G). Issuance of this bond raised a total of J$1.6 billion for the Government's coffers. The bond offers a coupon rate of 15.05 per cent for the first six months, then pays interest at a variable rate of 1.50 per cent above the weighted average yield applicable to the Government of Jamaica six month Treasury bill tender held prior to the commencement of each quarterly interest period. In the coming week, approximately J$10.14 billion is expected to enter the system from coupon payments on LRS VR: 2012/2013A, 2005/2006K, 2006C and FR: 36.25% 2004 Series Z, 16.25% 2032A, 15.50% 2004, 22.125% Series Ae, 13.875% 2005AL,14.00% 2007 AH, 14.375% 2012AC, 18.125% 2004, 13.875% 2005AH, 34.25% 2005, 14.25% 2013AC, 14.375% 2014AD, 15.00% 2032AA, US$ Indexed Bond 11.625% 2004, US$ Indexed 11.625% 2006 and BoJ COSH maturities, as well as from the maturity of US$ Indexed Bond 11.625% 2004
US DOLLAR FIXED
INCOME MARKET
The level of liquidity in the U.S. dollar fixed income market increased during the week as (1) a number of investors purchased U.S. dollars, and two coupon payments on the GoJ 2011 eurobond flowed into the market. As a result, U.S. dollar 30-day secondary market repo rates trended downwards during the week by approximately 0.25 per cent to range between 6.50 per cent and 6.75 per cent at the end of trading yesterday. Last week, Government of Jamaica Eurobond prices slumped resulting from anxiety worldwide about how impending interest rate increases in the U.S. would impact Emerging Market bonds. However, this week, demand for Government of Jamaica eurobonds increased, leading to a recovery in prices. Current indicative prices for these bonds are shown below. See Table 1.
FOREIGN EXCHANGE MARKET
At the beginning of the week the Jamaican dollar was trading at J$60.63 to US$1. However, strong demand for the greenback, largely due to speculation, led the local currency to depreciate to J$60.83 to US$ 1 by the close of trade yesterday. See Tables 2 and 3.
MOVEMENT OF INDICES
All three Jamaica Stock Exchange market indices fell this week over the period Friday to Thursday (see table). The major contributors to the movement in the main Jamaica Stock Exchange index were Bank of Nova Scotia Limited (up 582 index points), Lascelles deMercado Ltd., (down 288 index points), and Life of Jamaica Limited (down 176 index points).
UNITS TRADED
During the week 63,972,203 units traded with a market value of $913,993,122.63. Jamaica Broilers Group Limited, Capital and Credit Merchant Bank Limited and the Gleaner Company Limited had the largest volume of transactions. Nine stocks advanced, seventeen declined, nine traded firm and four did not trade. At the close of trading on Thursday, total market capitalisation was $760 billion.
TOP PERFORMERS
Ciboney Group Limited, Kingston Wharves Limited and Capital and Credit Merchant Bank Limited were the top performers, gaining 80.00 per cent, 22.86 per cent and 8.28 per cent respectively, to close at $0.09, $4.30 and $19.49 respectively. The main losers were Dehring, Bunting and Golding Limited, Lascelles deMercado Limited and Carib Cement Company Limited, down 15.79 per cent, 15.54 per cent and 13.51 per cent respectively to close at $16.00, $125.00 and $8.00 respectively. See Table 4.
The Finance, Conglomerate and Manufacturing sectors dominated trading this week. The shares of Bank of Nova Scotia Limited and Capital and Credit Merchant Bank (22.49 per cent and 11.27 per cent of market value) dominated trading in the finance sector. The shares of Grace, Kennedy Company Limited (5.94 per cent of market value) dominated trading in the Conglomerate sector. In the Manufacturing sector, the shares of Carib Cement Limited (3.50 per cent of market value) dominated trading.
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$1.75, TT$9.20, TT$34.50, TT$2.13, TT$2.80, TT$44.70 and TT$6.15 respectively on the Trinidad Stock Exchange (TTSE). Two stocks declined and five traded firm. The declining stocks were GKC and RBTT which decreased by TT$0.20 and TT$0.60 respectively. The TTSE does not trade on Mondays and Thursdays. TT$6.30 is equivalent to US$1.
