JAM | Oct 20, 2022

Mayberry Jamaican Equities remains positive despite unstable stock market

/ Our Today

Reading Time: 4 minutes

After the pandemic’s detrimental effects on the stock market, Mayberry Jamaican Equities (MJE), in its third financial quarter, fought to gain stability with the aim of positioning itself for future growth and improved profitability.

For the nine-month period that ended September 30, MJE recorded earnings of J$4.1 billion, a 539 per cent increase over the corresponding period in 2021.

Further, MJE recorded a comprehensive income increase of J$3.9 billion for the nine-month period ended September 30, 2022 which represents an increase of 119 per cent over the same period in 2021. Total assets rose to J$22.8 billion as at September 30, 2022 an increase of 33 per cent over September 30, 2021.

MIL Senior Vice President of Investment Banking, Dan Theoc.

Despite the stellar performance for the nine-month period that ended September 30, 2022, the company noted a general decline in the local equity markets in the third quarter itself, primarily as a result of rising interest rates and falling PE ratios, which ultimately had a negative impact on MJE’s third-quarter results.

“Despite this small pullback in Q3, the overall results for the nine-month period to September 30, 2022, were quite impressive and MJE remains poised for exceptional growth in the future as interest rates eventually trend downwards and the PE ratios begin to rise,” said Dan Theoc, senior vice president of investments at Mayberry Investments Limited.

Gary Peart, asset manager of MJE.

Gary Peart, asset manager of MJE, lamented the market turmoil the pandemic has caused, which has resulted in numerous companies performing poorly.

“You have companies that are coming out of COVID and some of the results aren’t as great as you’d expect, so it’s always good to see the market pull back. It is an opportunity to reset and take advantage of the pullback in certain stocks,” he stated.

MJE ended the quarter with J$18.9 billion in shareholders’ equity, up 39 per cent or J$5.2 billion over Q3 2021. Additionally, compared to J$11.34 as at September 30, 2021, the net book value per share increased by 39 per cent to J$15.70 as at September 30, 2022.

According to the company, this increase was driven primarily by an increase in associate investments of J$6.2 billion, or 59 per cent, to J$16.9 billion. In the same period, the closing share price for MJE increased by 52 per cent year over year, closing at $13.20 per share as at September 30, 2022. According to Gary Peart, this share price is still trading at a 16 per cent discount to the net book value per share of $15.70, which means there is still a great opportunity to buy the stock.

“There are different ways in which we extract value, and it is appropriate to remind people that MJE has one of, if not the lowest, management and asset management fees in the entire Jamaican market.”

Gary Peart, asset manager, MJE.

Peart pleaded with people to buy equities (stocks), mainly because of MJE. He claims that by doing this, investors will be able to receive significant returns on their investments over the long term, noting that stocks are one of the best-performing asset classes to invest in over the long term.

“The fundamentals are indeed there. There are different ways in which we extract value, and it is appropriate to remind people that MJE has one of, if not the lowest, management and asset management fees in the entire Jamaican market. Incentive fees are only charged when we have made new highs in the portfolio. Not only are we giving outsized returns, but we charge one of the lowest fees in the industry,” Peart disclosed.

Mayberry Executive Chairman Christopher Berry. (Photo: Facebook @MayberryInvJA)

MJE Executive Chairman Christopher Berry shared that the decline in the main market stocks was an opportunity that the company can capitalise on.

“We like to buy when the prices get low, but you have to be patient because you don’t know how long the interest hikes will last. While the rate goes on, the prices, all things being equal, will keep falling,” he remarked.

Despite the current macro-economic challenges, the company is hopeful that there will be further growth in the remaining financial year. However, they remind folks that they are long-term investors and they remain confident in the Jamaican stock market, which will continue to provide the best opportunities for wealth creation over the medium to long term.


What To Read Next