Mayberry experiencing losses after sharp foreign currency movements
Published:Wednesday | August 11, 2010 | 12:00 AM
Impacted significantly by a strengthened Jamaican dollar that weakened, at least on the books, the value of the foreign currency assets, Mayberry Investments (MIL) reported a $10.9 million loss in the quarter to the end of June.
But with the cushion of a creditable first-quarter return, the investment house was still able to report a six-month profit of $46.7 million.
"During the quarter, the foreign-exchange market experienced a significant revaluation of the Jamaican dollar against the United states (US) dollar, as well as the devaluation of the Euro against the US dollar," said Mayberry's chief executive officer, Gary Peart.
"The sharp movement in these currencies, coupled with our decision to hold foreign-currencies securities in our portfolio, resulted in the loss being recorded," he added.
Strong currency inflow
In the case of the Jamaican dollar, it has revalued approximately five per cent in the face of strong inflows of foreign exchange from the international lending agencies, like the International Monetary Fund, the Inter-American Development Bank and the World Bank, and soft private sector demand for imports.
Net foreign-exchange loss for the quarter amounted to $95.5 million, compared to a gain of $19.5 million for the corresponding period in 2009. At the same time, unrealised loss on investments securities in the second quarter of 2010 increased to $24.7 million, more than seven times worse than the $3.2 million for the same period last year.
In the meantime, net interest income fell marginally for the three-month reporting period, while fees and commission income recorded a significant jump to approximately $60 million as MIL increased its level of fee-based transactions.
Growth in fees
"The growth in fees and commission resulted from the execution of more fee-based transactions being completed as compared to the corresponding period," said Peart's commentary.
In recent months, Mayberry has been active as lead broker and financial advisor to companies preparing to list on the Junior Stock Exchange. Two of them, Blue Power and Jamaican Teas Limited, listed three months up to the end of June. Mayberry is also expected to bring three of Lascelles Chin's Lasco-associated companies to market soon.
For the three- and six-month review periods, Mayberry's administrative expenses recorded upward movements to $126.9 million and $257.7 million, respectively.
The company with market valued at $2.4 billion for shares outstanding last traded at $2.01and has on-balance sheet assets totalling $29.6 billion.