From inside the markets
Published:Sunday | May 16, 2010 | 12:00 AM
Apart from heavy trading in blue-chip stocks, NCBJ, 63 million units, and JBG, 11 million units on Tuesday and Wednesday, respectively, trading activity continued to be low-key.
With some key major companies reporting declines in year-over-year quarterly financial results, the prospect for increasing market apathy could remain, despite the outlook for further lowering of local interest rates. This was most noticeable on Friday, when there was marked increase in the number of declining trades - 147 from a total 178.
Thirty-three stocks traded this week with an advance-to-decline ratio of 9:17, and the Main JSE index declined 1.35 per cent, or 1,196 points to 87,386 points. The highest declining stock was Jamaica Producers, which fell by $3.12 or 13.5 per cent.
Market volume amounted to 100.017 million units, which had a corresponding market value of roughly $1.56 billion.
NCBJ was the volume leader, with 64.24 million units (64.21 per cent), followed by Jamaica Broilers Group, 16.46 million units (16.46 per cent) and Sagicor Group, with 5.65 million units (5.65 per cent).
The shares of GraceKennedy and Jamaica Broiler traded at 52-week highs of $68.05 and $7.50, respectively, during the week.
Global Bonds
Despite a marked increase in the number of sellers of GOJ Eurobonds this week, potential buyers were few.
Prices continue to soften, and this was especially evident on Friday, when traders reported low to no existing bids right across the curve. Early in the week, there was some interest in the eight per cent 2019s, but this also dissipated by Friday.
The extent to which the market remains in this bearish mood will depend heavily on the outcome of results of the first International Monetary Fund (IMF) tests for the March 2010 quarter. The results are expected later this month.
A passing grade for the country's first test under the IMF Standby Agreement should impact GOJ Eurobond prices positively, as local rates are still expected to fall further in next week's Treasury Bill tender and investors will continue to find the yields on the euros more attractive.
Summary of overall trading in the Eurobond market:
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 had very limited bids (a bid of $100 was reported), while offers closed lower to $113.
The eight per cent Euro 2019 traded early in the week at $98.75, but closed without a bid and reported offers, with heavy increased volumes, $98.50.
The tax free 11.635 percent GOJ 2022s did not trade. The closing bid was $137 and offers were $141.
9.25 per cent GOJ 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 slipped to $104, while the 10.50 per cent GOJ 2014 closing offers declined also to close at $105.
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 $115.75 (7.36 per cent), however, there were no offers, while the 2022s were being bid at $95 (7.06 per cent).
Foreign Exchange
Demand for US dollars remained fairly subdued owing to weakend-user demand, coupled with moderate inflows that spread across several sectors. The JMD traded at a high of $89.10 during the week and fell as low as $88.85. On Thursday, the weighted average selling rate closed at $89, three cents lower than the previous week's close.
Written for Sunday Business by Vivian Bedassie, executive wealth adviser at NCB Capital Markets Limited.