Stock market advances
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Monday, August 28, 2006
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Stock market
The stock market rallied last week with all three market indices advancing. The advance to decline ratio was positive. Of the 35 stocks that traded, 16 advanced, 8 declined and 11 traded firm. The JSE Index gained 636.28 points (0.77%) to close at 82,284 points.The Jamaica Select Index advanced by 38.31 points (1.76%) to close at 2,178.74 points and the All Jamaican Composite climbed by 1,289 .33 points (1.63%) to close at 78,983.78 points.
Market volume was a respectable 37.6 million units valued at over $218 million. Berger Paints was the volume leader, trading 9.4 million units followed by Life of Jamaica with 8.1 million units and Cable and Wireless Jamaica Ltd trading 4.7 million units.
Foreign currency market
For the week ending August 25, 2006, the Jamaican dollar gained one cent. At the end of the week, it took $66.01 to purchase each US dollar in the cambio market. The market was characterised by low to moderate broker demand and adequate supplies. The Central Bank did not intervene in the foreign exchange market this week.
Money market
The money market was low to moderately liquid during the week with the 30-day dealer rate closing the week trading within the wider band of 12.55 per cent and 12.85 per cent per annum. In the overnight market, the rate band moved from six to eight per cent last week to close the week trading within a band of six to nine per cent.
Local company news
Scotia Bank Jamaica is reporting net profits of just under $1.7 billion for the quarter ended July 31, 2006. This represents a 17.6 per cent growth in profits relative to the third quarter in 2005. Top line revenues were up nine per cent with fee and commission, going by 30 per cent, being one of the star performers. Operating expenses were held at 8.8 per cent during the period under revenue relative to the same period in 2006.
Earnings per share for the quarter was 58 cents per share; representing an impressive 18 per cent over the corresponding period in 2005.
Local economic news
Jamaica's trade deficit widened by US$113.1 million for the first four months of 2006 when compared with the same period in 2005.
The trade deficit at the end of April stood at US$1.121 billion. This was due to the fact that imports grew by 15.5 per cent to register US$1.75 billion. Exports, increasing by 24 per cent, registered US$633.1 million or approximately 1/3 of the total value of the goods imported.
Caribbean news round-up
Trinidad & Tobago stock market
The All TT Index lost 16.41 points this week to close at 1,107.72 points, while the T&T Composite Index lost 9.17 points to close at 881.53 points. The week's activities resulted in trading of 15 stocks, of which three advanced and 12 declined. Market volume was 791,723 units valued at just over TT$17.3 million.
Caribbean business news
Officials from Alcoa in Trinidad and Tobago revealed that the company's employees have received death threats, as they began to prepare lands earmarked to build an aluminium smelter in the twin-island republic. They told a press briefing last Tuesday that they have had to retain the services of security personnel to protect their workers, according to a report in the Trinidad Express.
They also informed the meeting that a percentage of the aluminium smelted will be used for downstream products to be produced locally. They, however, refused to disclose the price they would be paying for the natural gas required for the smelting.
There remains a robust opposition to the smelter plant on environmental grounds.
Caribbean economic news
Arley Sobers of the Caribbean Tourism Organisa-tion (CTO) says increased cruise ship arrivals are being anticipated for the region during the upcoming Winter Tourist Season. According to the Barbados Advocate newspaper, Colin Veitch, of the Miami-based Norwegian Cruise Lines (NCL), has also predicted that with the approach of cooler temperatures more ships will be heading to the Caribbean.
While some destinations have seen a decline in cruise ship arrivals, such as Barbados, other countries like Jamaica, which are in closer proximity to the United States, have seen their cruise ship arrivals up by eight per cent as shipping lines respond to the high cost of fuel.
International news round-up
International economic news
China and Venezuela have just signed a major oil agreement. Under the new agreement, Venezuela will provide China with one million barrels per day by 2012.
Venezuela currently exports 155,000 barrels per day to China and will increase this to 300,000 by 2007. Under the deal, Venezuela will build a new refinery with Chinese technology and will also expand its own fleet of oil tankers with nearly half of its capacity being built in Chinese shipyards.
China needs huge oil supplies to fuel its rapid economic expansion, while the Venezuelans are seeking to reduce their reliance on oil exported to the US market. Although the relationship between the USA and Venezuela is strained, the USA still relies on Venezuela for 12 per cent of its oil imports.
US stock market weekly summary
All three US stock market indices declined this week following the news of lower-than-expected new and existing US home sales on Wednesday and Thursday. Fluctuating oil prices also helped to fuel investor uncertainty.
The Dow Jones lost 97.42 points (0.86%) to close at 11,284.05
NASDAQ lost 23.66 points (1.09%) to close at 2,140.29
Standard & Poor's lost 7.21 points (0.55%) to close at 1,295.09
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