Jamaica Stock Exchange Presentation London March 2012

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JAMAICA STOCK EXCHANGE
38A Harbour Street
Economic Overview

The challenges facing the Jamaican economy are: high debt,
crime, high unemployment and slow growth.

Foreign exchange is derived mostly from tourism, remittances
and bauxite/alumina. Tourism revenues account for roughly 10%
of GDP, Remittances account for nearly 15% of GDP and Bauxite
and alumina account for about 10% of GDP.

Jamaican dollar is relatively stable, in 2011, the dollar
depreciated marginally by J$0.74 or 0.86%

Inflation rate in 2011 was 6.0%, which was a decline in
comparison to the inflation rate of 11.7% in 2010.
Economic Overview

Real GDP grew by 1.5% in 2011, the first full year of growth
realized since calendar year 2007.

Total public debt is J$1.63 trillion or 131% of GDP

Interest rates continue on a downward trend as the average
yields of the Treasury Bills rates in December 2011 were: 28-Day
– 6.48%, 90-Day – 6.21% and 180-Day – 6.46%

Net International Reserves as at the end of January 2012 was
US$1.88 billion
Fiscal Policy
The government is committed to a fiscal adjustment and the
medium term programme projects a fiscal deficit of 4.6% of
GDP towards a balanced Budget in FY2015/2016
Fiscal Policy

Reduce spending

Tax Reform – subsidies in health care and education along with
other tax incentives
As a result of the ballooning debt, in 2010, the Jamaican
government took the initiative to execute a liability management
exercise with the objective of realigning the domestic debt
portfolio in relation to the maturity structure, which involved a
voluntary debt exchange.
Jamaica Debt Exchange Programme (JDX)
The main characteristics of the JDX, which sought to exchange all market issued
Jamaica and United States Dollar local securities were:
 A par-for-par exchange offer with no “haircuts”;
 Voluntary exchange of over 350 market issued domestic bonds valued at
approximately $701.5 billion for 25 new benchmark bonds;
 Voluntary exchange of short dated high yielding interest bearing securities for
longer dated securities with significantly lower yields;
 Extension of the maturity profile of the domestic debt portfolio in order to lower
the refinancing risks;
 Achievement of substantial cost savings;
 Issue of an appropriate mix of fixed, variable and USD securities; and
 The introduction of new CPI-Indexed Investment Bonds.
Following execution of the JDX, the results revealed a participation rate of 99.2%
from investors. This included 100% participation from the financial institutions
and represented $695.60 billion of the total eligible bonds.
Monetary Policy

The monetary based expanded by $11.2 billion or 14.0% during the December
2011 quarter, relative to $9.4 billion or 20.8% in the December 2010 quarter.

30-Day Certificate of Deposit remained at 6.25% throughout the December 2011
quarter

Cash Reserve and Liquid Assets requirements were maintained at 12.0% and
26.0% respectively in December 2011 quarter.
Monetary Policy

For the December 2011 quarter, broad Jamaica Dollar money supply (M3J)
increased by 9.3 per cent. This expansion was well above the increase of 3.4
per cent in the corresponding quarter of 2010 as well as the average growth of
6.0 per cent for the last five December quarters.

The main source of expansion in M3J for the review quarter was a net unwinding
of BOJ Certificates of Deposit (CDs) of $22.6 billion, or 18.6 per cent, relative to
the net unwinding of $7.0 billion or 5.2 per cent in the December 2010 quarter .

The acceleration in the money supply during the review quarter was reflected in
increases of 7.9 per cent and 18.2 per cent in local currency deposits and
currency in circulation, respectively.
Monetary Policy
Government Policy’s and the JSE

Tax benefits – dividends (for residents) are tax free

Tax benefits – capital gains are tax free

Tax benefits – no transfer or stamp duty tax

Junior Market – corporate tax is zero for the first 5
years after listing and years 6 to 10, corporate tax is
50% of the rate.
Overview of JSE
 The Jamaica Stock Exchange began operations
on February 3, 1969
 Private company, full demutualization in 2008
 JCSD – subsidiary of the JSE, keeps the share
certificates for investors
 Junior Market
 US Dollar Equities Market
Overview of the JSE

JSE mandate is to provide a fair and efficient
and transparent stock market

JSE is obliged to protect the investors

JSE operates and monitors trading activity

Responsible for ensuring that timely material
information is disclosed to allow investors to
make prudent decisions

If listed companies fail to do so - the JSE will
take action within the Rules
Overview of the JSE
The JSE:
 Ensures brokers meet the fit and proper
standard for operation of a brokerage
 Operate Compensation Fund to secure
investors
 Has regulatory responsibility to ensure that:





Companies meet basic criteria at the time of listing
Companies continue to meet these criteria throughout
Companies comply with Rules, including
Provision of timely information to investors
Encourage good corporate governance practices
New Listings
No. of
Year Listings Capital Raised
Industry
2002
2003
2005
1
1
1
1.02 Billion
626.14 Million
911.2 Million
Finance
Finance
Finance
2006
2008
2009
2
6
1
519 Million
4,266 Million
100 Million
Finance & Gaming
Finance & REIT
Finance
2010
2011
10
Finance, Manufacturing,
1,302.6 Million
Retail & Tourism
6
Finance, Manufacturing,
3,028.2 Million
Retail & Insurance
Additional Capital Raised
Year
Rights
Issues
Capital
Raised
Industry
2004
1
258.7 Million
Communications
2005
3
1,823.8 Million
Finance, Retail &
Insurance
2007
1
501 million
Finance
2008
1
127 Million
Other
Benefits for Listing
 Raise
capital for refinancing of debts,
expansion projects, development of new
products, etc.
 Enhance corporate profile, as such the ability
to secure additional financing
 Provide liquidity for shareholders
 Share options are available to employees
 Market valuation
Movement in the Indices
From 2006 to 2011, the JSE Index depreciated on average by 0.09%.
However, from 2008 the JSE Main Index has gradually increased by
6.02% on average.
JSE Index
120,000.00
110,000.00
Points
100,000.00
90,000.00
80,000.00
70,000.00
60,000.00
2006
2007
2008
2009
2010
2011
Movement in the Indices
 The
Business Insider ranked the JSE as
one of the 11 Best Performing Stock
Markets of 2011.



They calculated yearly returns for some 100 global exchanges to
see how indexes compared to each other.
Findings: less than 15% of markets are in positive territory.
JSE ranked 6th, up 12.8%
Read more: http://www.businessinsider.com/11-best-performingstock-markets-2011-2011-12?op=1#ixzz1pyJLKd70
Top 20 Stocks for 2011
2011 Top Twenty Price Appreciation
Winners
Company
Jamaica Money Market Brokers
Barita Investments Limited
Pegasus Hotel
Ciboney Group
Berger Paints (Jamaica)
Kingston Wharves
National Commercial Bank
Jamaica
Desnoes & Geddes
Supreme Ventures
Sagicor Life Jamaica
Capital & Credit Financial
Group
Pan Caribbean Financial
Services
Losers
%
Open
Close
Company
210.00%
136.68%
87.26%
66.67%
59.20%
48.00%
4.00
1.99
12.01
0.03
2.01
4.00
12.40Trinidad Cement Limited
4.71Cable & Wireless (Jamaica)
22.49Salada Foods Jamaica
0.05Guardian Holdings Limited
3.20Lascelles, deMercado & Co
5.92Caribbean Cement Company
45.24%
42.90%
38.25%
38.12%
19.32
3.59
2.17
7.24
28.06Jamaica Broilers Group
5.13
3.00
10.00
37.88%
3.30
4.55
36.28%
19.49
26.56
Mayberry Investments Limited
Scotia Investments Jamaica
Gleaner Company
31.98%
31.32%
29.41%
2.47
22.00
1.70
3.26
28.89
2.20
Pan Jamaican Investment Trust
Hardware & Lumber
GraceKennedy Limited
Jamaica Producers Group
Carreras Limited
27.65%
26.88%
23.51%
18.57%
15.92%
47.01
4.65
51.00
20.25
53.07
60.01
5.90
62.99
24.01
61.52
%
Open
Close
(65.45%)
(39.39%)
(31.77%)
(25.00%)
(4.10%)
(2.28%)
53.00
0.33
13.00
220.00
305.00
3.07
18.31
0.20
8.87
165.00
292.50
3.00
(1.50%)
6.01
5.92
Performance of the Securities on the Junior Market in 2011
SECURITIES
Access Financial Services Limited
Blue Power Group Limited
Cargo Handlers Limited
Dolphin Cove Limited
Jamaican Teas Limited
Lasco Distributors Limited
Lasco Financial Services Limited
Lasco Manufacturing Limited
Average Price Appreciation(%)
% Change
(8.00%)
29.57%
0.38%
68.51%
25.25%
284.29%
140.93%
142.26%
85.40%
Appreciation in Price Since Listing
Securities
JMMB Limited
Mayberry Investments Limited
Supreme Ventures Limited
Carlton Savannah REIT
(Jamaica) Ltd.
Access Financial Services
Limited
Year % Change
Listed
in Price
2002 198.80%
2005
-35.45%
2006
-37.63%
2008
-23.52%
2009
150.82%
Global Vision

GlobalVision Features
Support for trading in multiple asset classes
• Equities
• Equity Derivatives
• Fixed Income (Government and Corporate Bond)
• Currencies e.g. forward FX, options
• Credit Derivatives
• Asset-Backed Securities
• Property Derivatives
• Soft Commodities
Feature-rich Front-End, Rules based
Direct Market Access
• Fix Gateway
• An API for straight through processing to back office systems
Trading Platform – Overview
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