From inside the markets
Published:Sunday | May 9, 2010 | 12:00 AM
The market continues to exhibit some signs of weakness as evidenced by the relatively weaker ratio of advancing to declining stocks.
Most of the volume traded this week was executed closer to the bids rather than offer prices.
This could be attributed in part to profit taking on the part of some investors, as some stocks appear expensive at current valuations.
The advance to decline ratio for the week was 15:13, suggesting that the decline in market interest rates in the previous week did very little to spark further interest in the stock market.
Despite this weak performance, the main JSE index advanced a marginal 0.28 per cent, or 250.14 points, to close at 88,582.38 points.
This advance was due in part to gains in two of the more heavily capitalised stocks, Scotia Group and NCB Jamaica Ltd.
Market volume amounted to 47.87 million units, which had a corres-ponding market value of roughly $ 704.16 million.
NCBJ was the volume leader with 16.78 million units (35.06 per cent), followed by Supreme Ventures, with 6.012 million units (12.56 per cent), and Scotia Group, with 5.93 million units (12.39 per cent).
The shares of GraceKennedy and Jamaica Broilers traded at 52-week highs of J$68.05 and J$7.50, res-pectively, during the week.
Fixed-income market
The results of the most recent Treasury bill auction showed yields declined below the 10 per cent mark for both the 91-day and 182-day instruments.
Yields on the 91-day T-Bill declined by 39 basis points to 9.97 per cent, while the average yield on the 182-days instrument fell 50 basis points to 9.99 per cent.
Investors appeared to have shown more interest in the longer-tenure instrument evidenced by a higher oversubscription. With just a two-basis-points difference between yields, the objective of investors may have been to lock in current rates for a longer period, given the likelihood of rate reductions in the near term.
Global bond market
GOJ Eurobond prices have remained relatively stable despite ongoing profit-taking and increasing disquiet in the wider international Eurobond market due to the worsening fiscal conditions in Greece.
Investors fear the likelihood of a major sell-off of emerging market bonds and the negative impact that would have on the prices of GOJ Eurobonds.
Local Eurobond holders, though should note that in the past, GOJ Eurobond prices have generally demonstrated greater resilience than many of its peers in times of a fallout and, therefore, ought to remain cautiously optimistic should any such occurrence materialise.
GOJ nine per cent 2015 had no reported trades but closed with bids at $105 and offers $107.50.
GOJ 10.625 per cent Euro 2017s traded small volumes at $114.50. There were no bids at the close of the week, however, offers closed lower than the last trade at $114.
The eight per cent Euro 2019 traded early in the week at $99 but closed without a bid. Closing offers were accompanied by heavy volumes that were being offered at $99.30.
The tax-free 11.635 per cent GOJ 2022s did not trade. Closing bid was $138, however, there were no offers.
GOJ 9.25 per cent 2025s were being offered at $105.50, with no corresponding bids and no reported trades.
The Air Ja 9.38 per cent 2015 did not trade. Closing indicative bids and offers were at $102 and $104, respectively.
No trades were reported on the eight per cent GOJ 2039. There were no closing bids, but offers were at $96.
There were no trades on the 11 per cent GOJ 2012, but closing offers were at $106.50, while the 10.50 per cent GOJ 2014 had only closing offers at $106.50.
There were no reported trades on the Government of Barbados Global 2021, but indicative bid was at $106, while indicative offer closed at $108.
Petrotrin 2019s were being bid at $118 (7.07 per cent yield), however, there were no offers, while the 2022s were being bid at $97.25 (6.52 per cent yield).
Foreign-exchange market
After remaining flat for much of the week, the demand for US dollars improved, particularly towards the close of weekly trading activity.
In light of the general weakness in demand, USD supplies remained adequate.
The range for the selling rate of the hard currency was $88.95 on the low end, and J$89.05 for the high. On Thursday, the weighted average selling rate looked set to record another week-over-week decline as it closed at J$89.06, compared to J$89.07 the previous week.
Written for Sunday Business by Vivian Bedassie, executive wealth adviser at NCB Capital Markets Limited.
Vivian Bedassie, Guest Writer