More IPOs on the way

Observer writer

Wednesday, April 25, 2018

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The initial public offer (IPO) market in Jamaica continues to be in full swing with several companies getting themselves ready to raise funds from investors.

According to sources, the brokerage community is working assiduously to have two to four IPOs on offer each month for investors. That means discernment is key and having an investment broker who can provide the right advice to help investors sort out which IPO will bring the best returns over the long run.

That said, several brokerages have already put it to the market as to what is next.

Stocks & Securities Limited is expected to have Everything Fresh ready within the next few weeks.

The market says that Mayberry Investments Limited (MIL) is expected to offer as many as six IPOs in the coming months. MIL is slated to offer their own subsidiary, Mayberry West Indies, which has been rebranded to Jamaican Equities. Then MIL could also offer Wigton Windfarm, Caribbean Assurance Brokers and Neveast Supplies.

According to investment anaylst, John Jackson, other IPOs that are expected include Jamaica Plumbing and Supplies, Jamaica Public Service Company, with the government wanting to dispose of its share in the power company and KIW International that has taken the decision to have the shares relisted.

Jackson also shares that UCC Online, a segment of University College of the Caribbean, is expected to come to market, and Sygnus Capital Investments should also.

Jackson states, “Sygnus is a relatively new company, established to undertake loans or make medium-term investments in medium-sized businesses. The company which is registered in St Lucia will be managed by Sygnus Capital Management, a Cayman Island-based corporation. The company raised US$15 million in capital and is aiming for another US$5 million when they come to market. According to our source, they have so far lent out US$11 million and generated a higher rate of return originally expected. The company has a good stream of potential users of its funds.”

However, for investors who are more comfortable with the more established companies on the market, the team at Sagicor Investments offers these tips.

National Commercial Bank — Robust growth in deposits and loans despite the competitive environment. Additionally, the regional expansion in Barbados and Trinidad and Tobago, including the 29.99 per cent stake in Guardian Holdings Ltd should add value to the company.

Scotia Group – The entity continues to produce solid results given the improving economic environment. The company continues to grow core business while prudently managing risk and improving operating efficiencies.

Jamaica Producers (JP) is Jamaica's leading private investor in Logistics infrastructure primarily through its significant control of Kingston Wharves Ltd (KWL). The company has over 50 per cent of the controlling interest of KWL. The earnings reflect strong performances from KWL and JP Shipping Services both showing a significant improvement.

GraceKennedy — Dominant presence in the remittance business will enable the company to increase its foreign exchange earnings. This is in addition to the divestment of less profitable business lines and seeking more profitable opportunities, primarily in external markets, to improve shareholders' value.

Jamaica Broilers Group current market price does not reflect the earning potential of the business. The US operation has been growing and should continue to provide modest growth over the medium term. This is in addition to the local poultry and agricultural raw material business which is expected to continue to perform.

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