Business
Jamaica stock market posts tremendous growth in 2015
The stock market in Jamaica has had a better year than any other across the globe.
Amidst the middling returns of the world’s best known indexes – the Dow Jones Industrial Average dipped about 1 percent; the Euro Stoxx 50 lost 6 percent in dollar terms – foreign acquisitions, stronger investor safeguards and a rebounding economy helped the Jamaica Stock Exchange surge more than 80 percent in 2015.
With a market capitalization of about US$5.3 billion (the Dow has US$5.23 trillion), Jamaica lives on the fringe of frontier status. And although the exchange’s benchmark index lost 5 percent last year and 13 percent in 2013, investors should pay attention, according to Carl Bennett, a vice president of investor relations at Bank of New York Mellon.
“I am really impressed with what they have done to attract capital to the market,” he said, pointing to new measures to combat insider trading and market manipulation.
With economic growth forecast to accelerate for a third straight year, reaching 1.4 percent in 2015 according to estimates compiled by Bloomberg, Jamaica is slowly emerging from recession while struggling with one of the world’s highest debt burdens. The Simspon-Miller administration has restructured local bonds twice since 2010, accepting an International Monetary Fund (IMF)-led financing package in 2013. That did not deter individual Jamaicans and institutional investors from pouring money into local stocks this year, said Jovano Johnson, an equity trader at Kingston-based Mayberry Investments Ltd.
Twenty-nine of the 57 stocks traded on the main and junior markets in Jamaica saw year-over-year post-tax profits rise 10 percent or more. Eight of those saw profits spike more than 100 percent, led by the Jamaica Stock Exchange Group’s 1,658 percent growth for a US$1.2 million profit for the 12 months that ended in September.
Strong earnings reports helped push up shares of companies like Caribbean Cement Co., which manufactures Portland cement and reported a 969 percent increase in profits, while shares of modeling agency and marketing company Pulse Investments Ltd., which said it would pay a dividend for the first time since 1994, surged 557 percent.
As of November, 23 stocks had more than doubled in value this year.
Roughly US$700,000 a day in securities were traded in the first 11 months of the year, according to exchange figures. While that’s up nearly 40 percent from last year, it is still a fraction of the US$7 billion average daily volume for members of the Dow Jones Industrial Average or US$833 million for Mexico’s stock market.
“It is an emerging market and the fact is that you want to be in on the ground when we are growing,” said Marlene Street-Forrest, general manager of the Jamaica Stock Exchange.
