AIC offloads 19.8 million NCB shares
published:
Friday | February 22, 2008
Michael Lee Chin (left), chairman of AIC Limited and National Commercial Bank (NCB) is seen in this January 24, 2007 Gleaner photo with NCB group managing director Patrick Hylton, at an NCB Client Appreciation breakfast, Terra Nova Hotel, St Andrew. - File
National Commercial Bank of Jamaica's parent AIC has disposed of just under 20 million of the bank's shares in the past year, in what the Canadian company has said are routine trades.
The last sale was executed this week, a Financial Gleaner review of filings with the stock exchange shows.
The transactions, at first blush, appear to be a redistribution by Michael Lee Chin of ownership rights among AIC related Jamaican entities.
Based on the average trading price of NCBJ over the period, the trades would have been valued at just about $440 million.
Market analysts have said the trades were 'nothing major', but seemed to follow a pattern - occurring in the periods after NCB had posted its earnings reports.
Kevin Donaldson of Pan Caribbean Financial Services acknowledged, however, that brokers were curious about how many more shares AIC intended to offload and over what period.
A week after Donaldson's comment, notices indicating that the Canadian company owned by billionaire Michael Lee Chin had offloaded another 4.8 million units were posted by the Jamaica Stock Exchange.
The largest single trade in the past year was on February 27, 2007, when AIC Barbados Limited sold 10 million shares, a transaction valued at around $220 million based on market prices then. Between November 16, 2007 and February 20, 2008, AIC Barbados and AIC Finance Limited sold a combined 9.78 million
shares, but the mutual fund company which owns the majority of NCB declined comment on the reason for the sales.
A regular transaction
Jean Lowrie-Chin, managing director of ProComm, to whom the Financial Gleaner was referred as local media liaison for AIC, said the trades were "a regular transaction in the general course of business."
Lee Chin bought up 75 per cent of NCB in 2002 from the government. Ownership of the bank is now distributed among AIC subsidiaries and associates, with two-thirds of the near 2.47 billion issued shares held by AIC Barbados.
It's not clear whether the current trades have placed the shares outside the group, and might in fact have patterned a 2006 transaction that placed Advantage General, an insurance company that Lee Chin acquired from Neville Blythe, at No. 3 in the list of top ten shareholders.
On April 3 of that year, AIC Barbados sold 49,051,668 units; at September 30, it was disclosed in the bank's annual report as the holder of 49.43 million NCBJ shares, while Jamaica National which then held some 20.92 million NCBJ shares fell from the top 10.
JN confirmed to The Financial Gleaner that it had sold a substantial block of its holdings but refused comment on how much of NCB it retained in its investment portfolio.
The upshot of the transactions is that AIC Barbados, whose holdings were 1.637 billion at the end of September 30, 2007 - reducing its holdings from 66.99 per cent to 66.36 per cent - has since divested another 18.6 million.
The Barbados subsidiary now holds just under 1.618 billion shares, or 65.6 per cent of NCB. It is on the basis of the slight adjustment in ownership - less than one point - that has brokers have said the trades are "nothing major".
Mark Croskery, CEO of brokerage Stocks and Securities Limited, said the sell-off had depressed the price of the stock over the short term, but that the market was unlikely to read it negatively.
Trend
"It has been a trend now for the past few quarters where the company sells some volumes of NCBJ shares after results are released," said Croskery.
"We expect this selling to continue in the interim, and we cannot project when it will cease, but the company continues to perform strongly."
NCBJ is now trading at $23.50, below its one-year high of $24.95.
