MJE Sees Bottom-Line Recovery Supported by Net Gains on Investments

• Mayberry Jamaican Equities Limited (MJE) reported a net profit of US $16.45Mn for its financial year ended December 31, 2021, which represents a significant improvement from the net loss of US$28.63Mn in the prior year. This performance mainly resulted from a recovery in the net gains on investments in associates and financial instruments as well as an increase in dividend income. 
• The company currently holds equities in 34 companies listed on the Main and Junior Markets of the Jamaica Stock Exchange (JSE). There was a favourable turnaround in stock prices for most of the securities in the portfolio, specifically in its top 10 stocks. Over the financial year, stocks in its portfolio saw improvements in their financial performance as the underlying entities across the financial and manufacturing industries rebounded in the last two quarters of 2021. 
• Further recovery is expected in the stock market in 2022, which should help to fuel additional gains on MJE’s portfolio. Listed companies, especially in the tourism and entertainment sectors, are set to benefit from increased demand and business activity stemming from the full withdrawal of lockdown measures. 
• Additionally, spillover effects on the agriculture and manufacturing industries, and higher private consumption should bolster growth in these industries.  However, commodity price shocks, and their impact on input costs, consumer prices, and profit margins, are major downside risks to this outlook. The rising interest rate environment and its effect on borrowing, investments, and stock valuations will also present downside risks. 
• MJE’s stock price has decreased by 0.10% since the start of the calendar year. The stock closed Tuesday’s trading session at $9.00 and currently trades at a P/B of 0.7x which is below the Main Market Financial Sector Average of 1.8x

(Source: Company Financials and NCBCM Research)