Demerara Tobacco Company (Demtoco) has been named in the 2012 Caribbean Community Stock Market Review as the company whose shares posted the largest gain – 117.32% — for the year among the six stock exchanges in the region.
According to the report, published by the Department of Management Studies of the Cave Hill Campus, University of the West Indies, the value of shares in the Guyana Bank for Trade and Industry (GBTI) and Banks DIH Ltd, named among the 30 most influential stocks in the region, also increased with GBTI’s shares advancing last year by 71.41% and Banks DIH shares gaining 42.95% on its value in 2011. Meanwhile, shares in another Guyanese company, the Rupununi Development Company were listed for the first time in March last year. This is the report’s second year of publication.
The gains for share values in local companies were recorded in a year which the report described as a “challenging” one for equity investors, though it alluded to “solid gains in manufacturing, conglomerate and banking stocks.” Returns were depressed by declines in tourism, real estate, insurance. Investments and retail stocks were among the more depressed stocks in 2012. Overall, the 30 most influential stocks in the region posted a modest gain of 7.27% for the year.
During 2012, 1,991,884,759 shares valued at US$400,107,790 crossed the floors of the six regional stock exchanges, with 50 stocks advancing, 74 declining and 8 remaining unchanged. The report named the Jamaican company Sagicor Life as having “the most active stock of the year”; with 358,057,483 shares being traded. While on the losing end, Trinidad and Tobago’s Caribbean Cement Company fell by 66.51%.
Last year, 15 of the region’s most important stocks advanced and 15 declined. Overall, the 30 most influential stocks gained 95.62 points to close the year at 1,410.60, up 7.27% over the previous year.
Among the other major regional companies named in the 2012 Review whose shares appreciated in 2012 were Scotia Bank, Trinidad and Tobago (32.67%), Ansa McAl (22.15%) and Republic Bank (12.54%). On the losing end, the shares in the Jamaican media company Gleaner and Lime, Jamaica fell by 37.16 % and 30.12%, respectively.
According to the report, stocks in the manufacturing sector generated the best returns in 2012, while tourism, real estate and retail stocks were the weakest performers. The Caricom Manufacturing Share Index (CMSX) gained 184 points to close the year at 1,476.5, up 14.29% for the year while the Caricom Conglomerate Share Index (CCSX) gained 99.45 points to close the year at 1,294.2, up 8.32% for the year. The Caricom Banking Share Index (CBSX) gained 66.3 points to close the year at 1,321, up 5.29% for the year. The Caricom Communications and Utilities Share Index (CCUX) gained 12.9 points to close the year at 1,118.5, up 1.16% for the year.
The Caricom Retail and Distribution Share Index (CRDX) posted the largest decline of the year, declining 103.5 points to close the year at 1,090.4, down 8.67% for the year. The Caricom Tourism and Real Estate Share Index (CTRX) lost 136 points to close the year at 1,464.1, down 8.50% for the year. The Caricom Insurance and Investments Share Index (CIIX) lost 50.8 points to close the year at 1,120.8, down 4.33% for the year.
Meanwhile, according to the report, an increase in share trading around the end of the year has led to the suspicion that some investors might have been liquidating their shares to help finance Christmas and New Year holiday expenditures. “In general,” the report cautions investors against utilising investment funds to finance consumption, pointing out that if such funds are being held “as a means of financing some future expenditure like retirement or education” then they should not be liquidated to finance holiday-related consumption expenditure. The report adds, however, that “liquidating shares to help finance Christmas and New Year expenditures is generally a better financial decision than undertaking expensive hire purchases or neglecting to pay other bills.”