Amidst the significant decline in market prices of stocks on the Jamaica Stock Exchange, several companies have begun to work on executing share buy-back programmes to unlock additional value for shareholders.

The latest positive signal came yesterday as JMMB Group Chief Executive Officer (CEO) Keith Duncan confirmed that the Trinidad and Tobago Securities Exchange Commission approved its share buy-back programme. The programme was announced in December 2021 and was expected to start on April 1, 2022, which was the start of JMMB Group Limited’s (JMMBGL) 2023 financial year (FY). Initially $300 million was allocated for the programme, which was set to last for a one-year period.

“We are happy to say that our buy-back programme was approved by the Trinidad and Tobago Securities Commission. We will now be kicking off that programme of looking on weakness of the share price or on opportunities to be able to ensure that we pick our spots to ensure that we can protect the downside on the share price. That is the objective, and this is an ongoing programme and we have allocated funds to it,” said Duncan at the JMMBGL investor briefing on Tuesday.

JMMBGL’s stock price had an intraday peak of $61.24 on April 5, 2022, days after the buy-back was expected to have begun. However, the company, which is cross listed on the Trinidad & Tobago Stock Exchange (TTSE) has to receive an exemption from the securities regulator there, while no such restriction exists on the Jamaica Stock Exchange (JSE). JMMBGL’s stock price trended up to $29.32, which leaves it marginally above its book value of $27.27, but down 11 per cent year to date on the JSE. The TTSE price is down 29 per cent to TT$1.35.

Another local company which is facing a similar hurdle is GraceKennedy Limited (GK), which announced in March that its board of directors had approved a share buy-back programme subject to regulatory approval. This would be GK’s second share buy-back programme in recent years after it repurchased 4.12 million shares for $245.46 million between 2013 to 2014.

“We wrote to the TTSEC seeking approval. They have responded and so we will respond to their queries. I’m really hoping that we can put our buy-back scheme in place. When you look at the current PE ratio of GraceKennedy, it’s 10.46 to be exact. That’s very, very low and when you talk about a book value of one, it’s very low and we feel very strongly that the GraceKennedy stock is valued significantly more than it is trading now,” added GK CEO Donald Wehby at the company’s May 31 annual general meeting (AGM).

GK’s stock price has trended down amid the high interest rates and has gone from triple digits to $77.33 on Tuesday, a seven per cent year-to-date (YTD) decline on the JSE. Its TTSE price is down 24 per cent YTD to TT$3.43.

Sygnus Credit Investments Limited (SCI) began its share buy-back programme days after its fifth anniversary of being listed on the JSE. It purchased 2,478,274 Jamaican dollar (JMD) shares between June 23 and June 30 and 136,525 United States dollar (USD) shares on June 26 and June 27. The buy-back cost US$246,000 relative to the US$9 million to be repurchased over the next three years.

SCI’s buy-back was executed as per its commitment included in its 2018 prospectus and has been seen as a way to enhance shareholder value for shares that are substantially undervalued. SCI’s buy-back sent its JMD share price to a new 52-week high of $16.37, while its USD shares hit US$0.1149. Both have since retreated to $12.15 and US$0.1099.

Eppley Caribbean Property Fund Limited SCC – Value Fund (CPFV) repurchased 1,044 shares between June 27 and July 3 for $43,752 as part of its ongoing programme. This purchase resulted in it purchasing 2,104,801 shares relative to its current target of 3.8 million shares. The programme began in 2020 with an initial target of 300,000 shares and has since been expanded twice. CPFV closed Tuesday at $39, which leaves it down 17 per cent YTD.

First Rock Real Estate Investments Limited began its share buy-back programme last September with an intended target of repurchasing up to 10 per cent of its issued ordinary shares. The last buy-back occurred on January 26 when it repurchased 400,000 shares each of its JMD and USD shares. The stock has since fallen from $13.97/US$0.0763 to $8.92/US$0.0393, with new 52-week lows of $7.57/US$0.0380 being hit on Monday.

“So we commenced the share buy-back programme in Q3 of 2022. That went pretty well and the market responded favourably. At one point, for the USD and JMD, there were increases of 97 per cent and 22 per cent, respectively. Since that high, there’s been some cooling generally and Ryan mentioned it in his presentation about some softening in the general stock market. So quite a lot of that gain has been curtailed. However, going forward, as liquidity allows, we’ll be looking to continue with that buy-back strategy,” said vice-president of finance and planning, First Rock Capital Resources Limited at First Rock Real Estate’s June 27 AGM.

Kingston Properties last reported share buy-back was on December 29 for 66,673 ordinary shares, while Community & Workers of Jamaica Co-operative Credit Union Limited reported its last share repurchase of 188,490 deferred shares at $1.78 on May 5 before it delisted on June 15. The share buy-back occurred below the $2 issue price for CWJ, which benefited it ahead of redemption.

“We need to ensure that whatever we can do, that we get the right value for the GraceKennedy stock. Obviously, the first thing is for management to produce more profits on a sustainable basis and execute on our strategy, but when you have these numbers here, I’m even more convinced that the buying back of shares is the right thing to do to reward the shareholders,” Wehby closed.