CARIBBEAN WEEKLY STOCK REPORT - February 13-17, 2012

Caribbean stocks ended lower for a second consecutive week as 16,179,627 shares valued at US$4,644,902 crossed the floors of the six stock exchanges across Caricom, with 68 stocks advancing, 18 declining and 40 remaining unchanged.

Gains in manufacturing and conglomerate stocks were offset by continued weakness in the performance of financial stocks.

Scotia Group Jamaica was the volume leader with 5,632,090 shares being traded, Pan Caribbean Financial posted the largest gain of 12.27% for the week, while on the losing end, Sagicor fell 14.59%.

For the week, nineteen of the CSX 30 stocks advanced, seven declined and four were unchanged. The CSX 30 gained 0.54 points to close the week at 1,293.93, down 1.60% year to date.

On the junior market, seven stocks advanced and five declined. The CJSX lost 7.31 points to close the week at 1,692.67, down 6.84% for the year.

There were gains for Caribbean Producers (11.49%) and Honey Bun (1.23%), however, these were overpowered by losses for Lasco Financial (6.97%), Lasco Manufacturing (5.56%), Blue Power (1.41%), Lasco Distributors (1.41%) and General Accident (1.27%).

Table 1 provides a summary of the broad market indices for the week as well as some international comparisons.

Table 1: Broad Market Indices February 13-17

Sector Analysis

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

Table 2: Sector Indices February 13 to February 17 2012

Stocks On The Move

Tables three and four provide some widely used financial metrics on the biggest movers for the week. Readers should note that prices are in US dollars.

Table 3: Advancing Stocks: February 13-17

Investing School (Income Investing)

The art of good income investing is putting together a collection of assets such as stocks, bonds, mutual funds, and real estate that generates the highest possible annual income at the lowest possible risk. Most of this income is paid out to the investor so he or she can use it in their everyday lives to buy clothes, pay for the mortgage, take vacations, cover living expenses, give to charity, or whatever else they desire.

The rule of thumb for income investing is that if you never want to run out of money, you take 4% of your account balance out each year. This is commonly referred to on Wall Street as the 4% rule. (Why 4%, you ask? If the market crashes, 5% has been shown in academic research to cause you to run out of money in as little as 20 years, whereas 3% virtually never did.). Put another way, if you manage to save $350,000 by retirement at 65 years old (which would only take $146 per month from the time you were 25 years old and earning 7% per year), you should be able to make annual withdrawals of $14,000 without ever running out of money. That works out to a self-made pension fund of roughly $1,166 per month pre-tax.

Prepared by the Department of Management Studies, UWI Cave Hill.

justin.robinson@cavehill.uwi.edu

Table 4: Declining Stocks: February 13 to February 17 2012

Department of Management Studies, UWI Cave Hill. Please send comments and queries to Justin.Robinson@cavehill.uwi.edu.