Caribbean stock market report, July 11-15

Solid gains among retail and distribution stocks saw Caribbean stocks end the week of July 11 to 18 higher. For the week, 17,123,681 shares valued at $2,837,503 crossed the floors of the six stock exchanges across Caricom, with 27 stocks advancing, 43 declining and 53 remaining unchanged. Jamaica Broilers was the volume leader with 29,712,518 shares being traded. Capital and Credit Financial Group posted the largest gain for the week (25.0 per cent), while on the losing end, Pulse Investments fell 16.90 per cent. For the week, 14 of the CSX 30 stocks advanced, six declined and 10 were unchanged. The CSX 30 gained 2.85 points to close the week at 1,245.30, up 9.72 per cent year to date. On the junior market, three stocks advanced, five declined and three were unchanged as the CJSX gained 2.1 points to close the week at 1,319.70, up 14.63 per cent year to date. The group was led by a 22 per cent gain in new listing, AMG Packaging & Paper, a 7.09 per cent gain in Lasco Distributors, a 6.67 per cent gain in Dolphin Cove, and 4.01 per cent in Lasco Financial. Table 1 provides a summary of the broad market indices for the week as well as some international reference points.

Sector Analysis

Table 2 provides a summary of the sector indices, followed by details on the performance of the stocks in each sector.

The CRDX posted the strongest gain for the week, advancing 2.02 per cent as two retail and distribution stocks advanced, two declined and six were unchanged. The group was led by a 3.14 per cent gain for Carreras and a 2.72 per cent gain in Agostini's. The CCSX advanced 0.58 per cent as five conglomerate stocks advanced, two declined and three were unchanged. The group was led by a 1.85 per cent gain in Ansa Mcal shares and a 0.33 per cent gain in GraceKennedy, while on the losing end, Neal and Massy shares lost 1.85 per cent.

The CMSX fell 0.51 per cent as five manufacturing stocks advanced, 13 declined and 11 were unchanged. The group was led by Bico, which gained 24.9 per cent, Kingston Wharves with a gain of 7.68 per cent, and Desnoe & Geddes with a gain of 2.83 per cent. There were losses of 9.17 per cent for Jamaica Broilers, 8.64 per cent for Barbados Farms, 6.64 per cent for Trinidad Cement and 3.68 per cent for Caribbean Cement. The other sector indices were essentially flat for the week.

INVESTING SCHOOL (Principles To Invest By)

Be Prepared to Hold for a Long Time.

In the short term, stocks tend to be volatile, bouncing around every which way on the back of Mr Market's knee-jerk reactions to news as it hits. Trying to predict the market's short-term movements is not only impossible, it's maddening. It is helpful to remember what Benjamin Graham said: In the short run, the market is like a voting machine - tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine - assessing the substance of a company.

Yet all too many investors are still focused on the popularity contests that happen every day, and then grow frustrated as the stocks of their companies - which may have sound and growing businesses - do not move. Be patient, and keep your focus on a company's fundamental performance. In time, the market will recognise and properly value the cash flows that your businesses produce.

Tune Out the Noise

There are many media outlets competing for investors' attention, and most of them centre on presenting and justifying daily price movements of various markets. This means lots of prices - stock prices, oil prices, money prices, frozen orange juice concentrate prices - accompanied by lots of guesses about why prices changed. Unfortunately, the price changes rarely represent any real change in value. Rather, they merely represent volatility, which is inherent to any open market. Tuning out this noise will not only give you more time, it will help you focus on what's important to your investing success - the performance of the companies you own.

Likewise, just as you won't become a better cricketer by just staring at statistical sheets, your investing skills will not improve by only looking at stock prices or charts. Athletes improve by practising and hitting the gym; investors improve by getting to know more about their companies and the world around them.

You can view more tips and other information at our website: www.carifinanceonline.com/

Stocks On The Move

Tables three and four provide some widely used financial metrics on the biggest movers for the week. Prices are in US dollars.

- Prepared by the Department of Management Studies, UWI Cave Hill. Justin.Robinson@uwi.cavehill.edu