Wednesday, August 27, 2008

Brand Jamaica stocks price gains beat returns from alternative investment schemes

Published: Wednesday August 27, 2008

Brand Jamaica stocks are posting gains over 300 per cent outperforming the returns offered by alternative investment clubs.

Those who invested in fashion, coffee, rum, real estate or hotel stocks since August last year are now reaping the highest capital gains on the market.

Up to Monday, coffee maker Salada saw its stock price reach 278 per cent higher than last August; Pulse, which profits are underpinned by its success in the fashion industry, reached 180 per cent; Real estate company CMP reached 160 per cent (52-week high); Pegasus Hotel reached 119 per cent; and Lascelles, the rum maker and conglomerate reached 98 percent.

Alternative investment schemes offered returns of some 10 per cent a month. However, since earlier this year investors have not been able to gain easy access to their money following the restructuring or fall-out of these institutions.
Gains by these stocks on the market, signifies that despite the tough economic times, opportunity still exists in the formal investment environment.

In fact, Monday's stock prices are not the highest these stocks traded over the year. For instance, Salada reached 354 per cent from $33 to $150 in May; Pulse reached 300 per cent from $2 to $8 in April; Lascelles reached 128 per cent from $266.50 to $610 in February; and Pegasus reached 124 per cent from $10.01 to $22.50 in June.

These stocks' core activities are associated with Jamaica's cultural enterprises - the Jamaica brand. A notable exception in performance is Red Stripe, the brewer whose stock has been stagnant over the year affected by waning profits. It posted a $853-million profit after tax for nine months or three per cent less than the previous year.

Apart from those stocks, other big winners are FirstCaribbean Jamaica, Gleaner, Goodyear, Palace, Supreme Ventures Ltd, Trinidad Cement and Seprod.

Currently nine stocks are trading close to 52-week lows offering an opportunity for investors looking to buy cheap.

Source: Jamaica Observer

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