Republic’s Equity Fund stands @ $425M

The Caribbean Equity Fund, managed by Republic Trust & Asset Management Division, continues to do very well, according to Republic Bank. In its second quarter report the bank boasts, “investors continued to pour money into equity mutual funds as evidenced by the strong inflows into this Fund.” As of June 30 2004, the Caribbean Equity Fund stood at (TT)$425.21 million. In a quarterly report, the bank stated, “These inflows were invested primarily in the non-banking finance, banking and conglomerate sectors, where the greatest value is seen.” The report stated that the largest investment was made in Guardian Holdings Limited (GHL) “Strong growth in both the Trinidad and Tobago and Jamaica stock markets in the first quarter had a positive effect on the company’s earnings. This, together with healthy growth in premium income, led to the 400 percent increase observed in earnings per share (EPS) for the 1Q.

“The opportunity was also taken to increase the Fund’s shareholdings in national Enterprises Limited (NEL) as this share is considered to be a core holding in any portfolio,” added the report. In the banking sector, the report pointed out that the Fund increased its holding in RBTT Financial oldings Ltd and during the quarter RBTT reported Fiscal 2004 EPS was up 39.1 percent. As a matter of fact over the past year this share has experienced substantial price appreciation, but profit taking by investors during the quarter led to the share under-performing in the market. “Positions were also added,” continued the report, “in the Bank of Nova Scotia Jamaica Limited (BNSJ) and National Commercial Bank Jamaica Limited (NCBJ). BSNJ once again produced good results with first half fiscal 2004 EPS up 59 percent. NCBJ reported an increase in EPS of 13.24 percent within the first half of fiscal 2004. The Fund, the report said,  continued along its investment strategy by increasing its exposure to Grace Kennedy & Company Limited. Grace reported solid earnings growth, with first quarter EPS up by 17.6 percent.

Additions were also made to Barbados Shipping & Trading Company Limited, Neal & Massy Holdings Limited and ANSA McAL Limited. In its review of the stock market, the report pointed out that the local market, in the second quarter, had slowed down substantially from the rapid growth seen in the first quarter. The composite Index closed up 7.78 percent in the second quarter, to post a half year return of 30.34 percent and the All TT Index closed up 3.32 percent with a half year return of 26.70 percent. “The slow down,” stated the report, “can be attributed in part to profit- taking by investors.” Meanwhile the Jamaica stock market, apart from registering a record high April 29, 2004, pulled back and closed the quarter with the Composite Index down 4.93 percent and the All Jamaica Index up by 5.78 percent. For the first half of the year, the Composite Index was up 40.14 percent and the All Jamaica Index up 78.32 percent.

In its market outlook, Republic Trust & Asset Management stated that industrial unrest in the energy sector helped to hamper growth in the first quarter. The 10-week long strike halted construction of Atlantic LNG Train IV. Early figures show that the economy grew by 0.5 percent in the first quarter. With production at Atlantic LNG Trains I, II and III back to normal and construction work in Train IV resumed, growth is expected to accelerate in the coming months. Over in Jamaica the prevailing economic conditions have been characterised  by increasing levels of investor confidence, boosted by improvements in the fiscal position and strong foreign exchange inflows. This confidence has been manifested in sustained stability in the foreign exchange market and increased activity in the stock market. This positive economic environment should result in continued gains on the stock market.