JAMAICA STOCK EXCHANGEJAMAICA STOCK EXCHANGE38A Harbour Street38A Harbour Street

Economic OverviewEconomic Overview

The challenges facing the Jamaican economy are: high debt, The challenges facing the Jamaican economy are: high debt, crime, high unemployment and slow growth.crime, high unemployment and slow growth.

Foreign exchange is derived mostly from tourism, remittances Foreign exchange is derived mostly from tourism, remittances and bauxite/alumina. Tourism revenues account for roughly 10% and bauxite/alumina. Tourism revenues account for roughly 10% of GDP, Remittances account for nearly 15% of GDP and Bauxite of GDP, Remittances account for nearly 15% of GDP and Bauxite and alumina account for about 10% of GDP.and alumina account for about 10% of GDP.

Jamaican dollar is relatively stable, in 2011, the dollar Jamaican dollar is relatively stable, in 2011, the dollar depreciated marginally by J$0.74 or 0.86%depreciated marginally by J$0.74 or 0.86%

Inflation rate in 2011 was 6.0%, which was a decline in Inflation rate in 2011 was 6.0%, which was a decline in comparison to the inflation rate of 11.7% in 2010.comparison to the inflation rate of 11.7% in 2010.

Economic OverviewEconomic Overview

Real GDP grew by 1.5% in 2011, the first full year of growth Real GDP grew by 1.5% in 2011, the first full year of growth realized since calendar year 2007.realized since calendar year 2007.

Total public debt is J$1.63 trillion or 131% of GDPTotal public debt is J$1.63 trillion or 131% of GDP

Interest rates continue on a downward trend as the average Interest rates continue on a downward trend as the average yields of the Treasury Bills rates in December 2011 were: 28-Day yields of the Treasury Bills rates in December 2011 were: 28-Day – 6.48%, 90-Day – 6.21% and 180-Day – 6.46%– 6.48%, 90-Day – 6.21% and 180-Day – 6.46%

Net International Reserves as at the end of January 2012 was Net International Reserves as at the end of January 2012 was US$1.88 billionUS$1.88 billion

Fiscal PolicyFiscal Policy

The government is committed to a fiscal adjustment and the The government is committed to a fiscal adjustment and the medium term programme projects a fiscal deficit of 4.6% of medium term programme projects a fiscal deficit of 4.6% of GDP towards a balanced Budget in FY2015/2016GDP towards a balanced Budget in FY2015/2016

Fiscal PolicyFiscal Policy

Reduce spendingReduce spending

Tax Reform – subsidies in health care and education along with Tax Reform – subsidies in health care and education along with other tax incentivesother tax incentives

As a result of the ballooning debt, in 2010, the Jamaican As a result of the ballooning debt, in 2010, the Jamaican government took the initiative to execute a liability management government took the initiative to execute a liability management exercise with the objective of realigning the domestic debt exercise with the objective of realigning the domestic debt portfolio in relation to the maturity structure, which involved a portfolio in relation to the maturity structure, which involved a voluntary debt exchange.voluntary debt exchange.

Jamaica Debt Exchange Programme (JDX)Jamaica Debt Exchange Programme (JDX)

The main characteristics of the JDX, which sought to exchange all market issuedThe main characteristics of the JDX, which sought to exchange all market issued

Jamaica and United States Dollar local securities were:Jamaica and United States Dollar local securities were: A par-for-par exchange offer with no “haircuts”;A par-for-par exchange offer with no “haircuts”; Voluntary exchange of over 350 market issued domestic bonds valued atVoluntary exchange of over 350 market issued domestic bonds valued at

approximately $701.5 billion for 25 new benchmark bonds;approximately $701.5 billion for 25 new benchmark bonds; Voluntary exchange of short dated high yielding interest bearing securities for Voluntary exchange of short dated high yielding interest bearing securities for

longer dated securities with significantly lower yields;longer dated securities with significantly lower yields; Extension of the maturity profile of the domestic debt portfolio in order to lower Extension of the maturity profile of the domestic debt portfolio in order to lower

the refinancing risks;the refinancing risks; Achievement of substantial cost savings;Achievement of substantial cost savings; Issue of an appropriate mix of fixed, variable and USD securities; andIssue of an appropriate mix of fixed, variable and USD securities; and The introduction of new CPI-Indexed Investment Bonds.The introduction of new CPI-Indexed Investment Bonds.

Following execution of the JDX, the results revealed a participation rate of 99.2% Following execution of the JDX, the results revealed a participation rate of 99.2% from investors. This included 100% participation from the financial institutions from investors. This included 100% participation from the financial institutions and represented $695.60 billion of the total eligible bonds.and represented $695.60 billion of the total eligible bonds.

Monetary PolicyMonetary Policy

The monetary based expanded by $11.2 billion or 14.0% during the December 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.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 30-Day Certificate of Deposit remained at 6.25% throughout the December 2011 quarterquarter

Cash Reserve and Liquid Assets requirements were maintained at 12.0% and Cash Reserve and Liquid Assets requirements were maintained at 12.0% and 26.0% respectively in December 2011 quarter.26.0% respectively in December 2011 quarter.

Monetary PolicyMonetary Policy

For the December 2011 quarter, broad Jamaica Dollar money supply (M3J) 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 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 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.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 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 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 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 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 increases of 7.9 per cent and 18.2 per cent in local currency deposits and currency in circulation, respectively. currency in circulation, respectively.

Monetary PolicyMonetary Policy

Government Policy’s and the JSEGovernment Policy’s and the JSE

Tax benefits – dividends (for residents) are tax freeTax benefits – dividends (for residents) are tax free

Tax benefits – capital gains are tax freeTax benefits – capital gains are tax free

Tax benefits – no transfer or stamp duty taxTax benefits – no transfer or stamp duty tax

Junior Market – corporate tax is zero for the first 5 Junior Market – corporate tax is zero for the first 5 years after listing and years 6 to 10, corporate tax is years after listing and years 6 to 10, corporate tax is 50% of the rate.50% of the rate.

Overview of JSEOverview of JSE

The Jamaica Stock Exchange began operations on The Jamaica Stock Exchange began operations on February 3, 1969February 3, 1969

Private company, full demutualization in 2008Private company, full demutualization in 2008 JCSD – subsidiary of the JSE, keeps the share JCSD – subsidiary of the JSE, keeps the share

certificates for investorscertificates for investors Junior MarketJunior Market US Dollar Equities MarketUS Dollar Equities Market

Overview of the JSEOverview of the JSE

JSE mandate is to provide a fair and efficient JSE mandate is to provide a fair and efficient and transparent stock marketand transparent stock market

JSE is obliged to protect the investorsJSE is obliged to protect the investors JSE operates and monitors trading activityJSE operates and monitors trading activity Responsible for ensuring that timely material Responsible for ensuring that timely material

information is disclosed to allow investors to information is disclosed to allow investors to make prudent decisionsmake prudent decisions

If listed companies fail to do so - the JSE will If listed companies fail to do so - the JSE will take action within the Rulestake action within the Rules

Overview of the JSEOverview of the JSE

The JSE:The JSE: Ensures brokers meet the fit and proper Ensures brokers meet the fit and proper

standard for operation of a brokeragestandard for operation of a brokerage Operate Compensation Fund to secure Operate Compensation Fund to secure

investorsinvestors Has regulatory responsibility to ensure that:Has regulatory responsibility to ensure that:

Companies meet basic criteria at the time of listingCompanies meet basic criteria at the time of listing Companies continue to meet these criteria throughoutCompanies continue to meet these criteria throughout Companies comply with Rules, includingCompanies comply with Rules, including Provision of timely information to investorsProvision of timely information to investors Encourage good corporate governance practicesEncourage good corporate governance practices

New ListingsNew Listings

YearNo. of

Listings Capital Raised Industry2002 1 1.02 Billion Finance

2003 1 626.14 Million Finance

2005 1 911.2 Million Finance

2006 2 519 Million Finance & Gaming

2008 6 4,266 Million Finance & REIT

2009 1 100 Million Finance

2010 10 1,302.6 MillionFinance, Manufacturing,

Retail & Tourism

2011 6 3,028.2 MillionFinance, Manufacturing,

Retail & Insurance

Additional Capital RaisedAdditional Capital Raised

YearRights Issues

Capital Raised Industry

2004 1 258.7 Million Communications

2005 3 1,823.8 MillionFinance, Retail &

Insurance

2007 1 501 million Finance

2008 1 127 Million Other

Benefits for ListingBenefits for Listing

Raise capital for refinancing of debts, Raise capital for refinancing of debts, expansion projects, development of new expansion projects, development of new products, etc.products, etc.

Enhance corporate profile, as such the ability Enhance corporate profile, as such the ability to secure additional financingto secure additional financing

Provide liquidity for shareholdersProvide liquidity for shareholders Share options are available to employees Share options are available to employees Market valuationMarket valuation

Movement in the IndicesMovement in the IndicesFrom 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.

Movement in the IndicesMovement in the Indices

The Business Insider ranked the JSE as The Business Insider ranked the JSE as one of the 11 Best Performing Stock one of the 11 Best Performing Stock Markets of 2011. Markets of 2011.

They calculated yearly returns for some 100 global exchanges to They calculated yearly returns for some 100 global exchanges to see how indexes compared to each other.see how indexes compared to each other.

Findings: less than 15% of markets are in positive territory.Findings: less than 15% of markets are in positive territory. JSE ranked 6JSE ranked 6thth, up 12.8%, up 12.8%

Read more: Read more: http://www.businessinsider.com/11-best-performing-stock-markets-2011-2011-12?op=1#ixzz1pyJLKd70

Top 20 Stocks for 2011Top 20 Stocks for 20112011 Top Twenty Price Appreciation

Winners Losers Company % Open Close Company % Open Close

Jamaica Money Market Brokers 210.00% 4.00 12.40Trinidad Cement Limited (65.45%) 53.00 18.31Barita Investments Limited 136.68% 1.99 4.71Cable & Wireless (Jamaica) (39.39%) 0.33 0.20Pegasus Hotel 87.26% 12.01 22.49Salada Foods Jamaica (31.77%) 13.00 8.87Ciboney Group 66.67% 0.03 0.05Guardian Holdings Limited (25.00%) 220.00 165.00Berger Paints (Jamaica) 59.20% 2.01 3.20Lascelles, deMercado & Co (4.10%) 305.00 292.50Kingston Wharves 48.00% 4.00 5.92Caribbean Cement Company (2.28%) 3.07 3.00National Commercial Bank Jamaica 45.24% 19.32 28.06Jamaica Broilers Group (1.50%) 6.01 5.92Desnoes & Geddes 42.90% 3.59 5.13      Supreme Ventures 38.25% 2.17 3.00      Sagicor Life Jamaica 38.12% 7.24 10.00       Capital & Credit Financial Group 37.88% 3.30 4.55       Pan Caribbean Financial Services 36.28% 19.49 26.56       

Mayberry Investments Limited 31.98% 2.47 3.26       Scotia Investments Jamaica 31.32% 22.00 28.89       Gleaner Company 29.41% 1.70 2.20       

Pan Jamaican Investment Trust 27.65% 47.01 60.01       Hardware & Lumber 26.88% 4.65 5.90       GraceKennedy Limited 23.51% 51.00 62.99       Jamaica Producers Group 18.57% 20.25 24.01       Carreras Limited 15.92% 53.07 61.52       

Performance of the Securities on the Junior Market in 2011Performance of the Securities on the Junior Market in 2011

SECURITIES % Change

Access Financial Services Limited (8.00%)

Blue Power Group Limited 29.57%

Cargo Handlers Limited 0.38%

Dolphin Cove Limited 68.51%

Jamaican Teas Limited 25.25%

Lasco Distributors Limited 284.29%

Lasco Financial Services Limited 140.93%

Lasco Manufacturing Limited 142.26%

Average Price Appreciation(%) 85.40%

Appreciation in Price Since ListingAppreciation in Price Since Listing

 SecuritiesYear

Listed% Change

in PriceJMMB Limited 2002 198.80%Mayberry Investments Limited 2005 -35.45%

Supreme Ventures Limited 2006 -37.63%Carlton Savannah REIT (Jamaica) Ltd. 2008 -23.52%

Access Financial Services Limited 2009 150.82%

Global VisionGlobal Vision

Trading Platform – Overview Trading Platform – Overview

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