They say a picture tells a story better than any article every could. The Main JSE Market has a market capitalization of approximately J$1.215Trillion. Three out of the 33 securities on the Main JSE Market occupy just less than 49.7% of the market capitalization. Putting that into perspective, 3 companies are worth J$603Bln, almost as much as the next 30 companies on the stock exchange combined.
All three companies, as expected, are financial entities, with NCB Financial Group occupying nearly 23% of the market capitalization of the entire exchange. As expected, the other two are Scotia Bank Jamaica and Sagicor Jamaica.
NCB’s market capitalization alone is greater than the combined market capitalization of companies 10 through 33 on the Main Exchange – companies such as Caribbean Cement, Jamaica Broilers Group, Wisynco, Seprod and Jamaica Producers.
Taking this concept a step further, we looked at 98 securities on the combined market – Main Market, US Market, Junior Market and Preference Share listings.
Interestingly, in this scenario, there are now 4 stocks to rule them all. The usual 3 financial stocks with the addition of Kingston Wharves Ltd., a security which has seen its share price (and market capitalization) double in 2018. The largest stocks are still very large though, as NCBFG alone has a bigger market capitalization than the bottom 82 securities.
Are these valuations justified? We’ll dig a little deeper to find out. However, it is intriguing to think that possibly there are other companies in Jamaica that the public would love to invest in and that would really move the needle on capital formation in Jamaica.
Content Provided by: Mdk Advisory & Consulting Ltd., a strategic advisory firm offering a wide range of services to a cross-section of clients in the private, public and non-profit sectors