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BOJ: Equities not as bullish but still popular bet

Published:Wednesday | February 21, 2018 | 12:00 AMAvia Collinder/Business Reporter
The Jamaica Stock Exchange building at Harbour Street, downtown Kingston.

Despite the big appetite for initial public offerings, which heated up last year end, the Bank of Jamaica reports that performance of the stock market continued to soften, coming from its high in 2015 when the indices registered more than 90 per cent growth.

The BOJ said in its Quarterly Monetary Policy Report for the December 2017 quarter that investments in equities continued to provide greater returns relative to foreign currency and domestic money market investments.

In particular, equities offered a quarterly return of 6.5 per cent while foreign currency investments offered a quarterly average loss of 2.4 per cent. Furthermore, the average quarterly return on the 30-day private money market was 1.1 per cent.

For the December quarter, the indices on the Jamaica Stock Exchange (JSE) with the exception of the junior market Index, recorded increases ranging between 4.8 per cent and 9.8 per cent. Specifically, the JSE Main Index increased by 9.8 per cent in comparison to growth of 11.8 per cent and 10.7 per cent for the previous quarter and the average quarterly growth for 2017, respectively.

The junior market Index declined by 6 per cent for the review quarter, relative to a decline of 9.8 per cent for the previous period.


Positive results


The BOJ said market activity indicators for the JSE Main Index showed positive results for the quarter ended December 2017. In particular, the value and volume of stocks traded increased by 149 per cent and 223 per cent, respectively, relative to a decrease of 25 per cent and 35 per cent for the previous quarter.

As for the number of transactions on the stock market, trades increased by 13.5 per cent to 11,124 for the review period, relative to a decline of 2.5 per cent for the previous quarter.

There were four IPOs during the final quarter of the year - Wisynco Group Limited and Victoria Mutual Investments Limited on the main market; and FosRich Company Limited and GWest Corporation Limited on the junior market.

During all of 2017, some 16 securities listed on the JSE, growing the total listings to 96. The year also marked the two largest IPOs in the country's history - Wisynco and Productive Business Solutions Limited.