On the money market, the one-year Treasury bill that was offered last week was oversubscribed by almost 76 per cent. The average yield was 17.48734 per cent with the full allotment yield of 17 per cent to 17.8399 per cent.

Maturity date will be October 8, 2010.

In making their bids investors appeared to have been guided by the 17.5 per cent coupon on the 15-month investment debenture which closed the day before the auction.

Local Bond Market

On October 6, the government closed two instruments to subscribers.

One was the Government of Jamaica (GOJ) Fixed Rate 17.50 per cent Investment Debenture 2011 (Series By) for 15 months, maturing on January 3, 2011.

Interest will become due and payable after six months on April 5, 2010, then October 5, 2010, and final interest payment on January 3, 2011, at a fixed interest rate of 17.5 per cent per annum.

The other opened and closed on the same day, namely the Government of Jamaica Fixed Rate 8.75 per cent US$-Denominated Local Bond due 2012. It will be for three years, at a fixed rate of 8.75 per cent per annum, with semi-annual interest payments. The first interest payment becomes due and payable on April 6, 2010.

Interest will be taxable at source.

For this coming week, the government is scheduled to issue a local variable rate bond. No term sheet was available at the time of writing.

GOJ Global Bond Market

Last week, a research report by an overseas brokerage house projected that the GOJ fiscal deficit could reach 20 per cent this year appeared to have been behind a fall-off in global bond prices.

As such, trading was fairly subdued when compared to the previous week.

Activities on the following GOJ Globals for the last week were:

GOJ 9 per cent Eurobond 2015 saw no demand but there were some small offers in the $100.25 to $100.75 range;

GOJ 10.625 per cent Eurobond 2017 had subdued trading with a few offers coming in at $100.75 to $101.75;

GOJ 8 per cent Eurobond 2019 had a fall-off in price to $85 compared to the previous week when it was in the $90-$91 range. It continues to show low demand;

GOJ 11.625 per cent Eurobond 2022 (tax-free) had some interest at a low price of $104 and offers were non-existent;

GOJ 9.25 per cent Eurobond 2025 had nil activity with indicative bids and offers at $86 and $88 respectively;

Government of Jamaica Guaranteed Air Jamaica Amortizing Note due in 2015 had some volumes traded at the start of the week around $94, but as the week closed the prices waned;

GOJ 8 per cent Eurobond 2039 demand was fairly low. A few investors were in the market to purchase at $74 but there no offers.

The euro-denominated GOJ 11 per cent Eurobond 2012 and GOJ 10.5% Eurobond 2014 saw a little action this week. Trading on the GOJ 2012 was subdued and the bond closed lower than last week at $101, while the GOJ 2014 closed at $101.75.

Regional Bonds

Demand for the Petroleum Corporation of Trinidad and Tobago (PetroTrin) 9.75 per cent Bond maturing in 2019 and PetroTrin 6 per cent Bond maturing in 2022 remained fairly strong, trading at $114.25 to yield 7.66 per cent and $94 to yield 7.18 per cent, respectively. Additionally, there was moderate demand for the Government of Barbados 2021 Bond with bids coming in at $101.75, but there were no offers.

Foreign-Exchange Market

Demand for hard currency was very high even as US$ supplies remained extremely tight. The weighted average selling rate for the US dollar was expected to close between J$89.15 and J$89.20.

Stock Market Report

Activity was low this week with the JSE Market Index advancing by 307.92 (0.39 per cent) points to close at 80,200.21 points. Overall activity resulted from 33 stocks being traded with 16 stocks advanced, 13 declined, and 4 traded firm.

Market volume traded amounted to 17.88 million units valued at $70.12 million. The Gleaner Company was the volume leader trading over 9.8 million units (54.93 per cent), followed by Mayberry Investments with two million units (11.26 per cent), and Desnoes and Geddes with 1.5m units (8.49 per cent).

The biggest winner was Trinidad Cement that increased by 26.32 per cent to close at $72, followed by Kingston Wharves, and Radio Jamaica that went up by 14.50 per cent and 12 per cent, to close at $2.29 and $2.80, respectively.

The biggest losers were FirstCaribbean International Bank closing marginally lower by -0.29 per cent at $118.54, followed by NCB Capital Markets Ltd 11.75 per cent Preference Shares, and Mayberry Investments at $2.60 and $1.79, respectively.

Company News

Mayberry has declared a monthly interim dividend of 12 per cent on its Redeemable Cumulative Preference Shares for the period September 24 to October 21, or 28 cents per share.

This will be payable to shareholders on record on October 21 with an X-date of October 16.

Goodyear Jamaica Limited, which is in liquidation, announced that shareholders can expect an interim payout at a date to be announced amounting to $3.75 per share. At the point of de-listing, the stock price was valued at $3.26.

Paula V. Brown is executive wealth aadviser at NCB Capital Markets Limited.