Volume Low, Profits Slow: JSE 4th Quarter Earnings Dip

  • Despite a strong start to the year, with earnings climbing 14.3% to $416.49M over the first nine-months (9M 2025), the Jamaica Stock Exchange Limited (JSE) reported an 11.3% decline in earnings to $440.08Mn for the financial year ending December 31, 2025 (FY2025). A weak fourth quarter, as revenues softened and operating expenses rose, fueled the downturn.
  • Fourth quarter revenues fell 12.3% year-over-year to $615.86Mn, impacted by a sharp 54.7% drop in Cess1 income, reflecting dampened market activity in the wake of Hurricane Melissa. Notably, market volume tumbled by 32.4% to 1.72Bn units during the period.
  • Meanwhile, operating expenses (Opex) rose by 14.0% for the quarter, primarily driven by higher personnel costs. These increases were attributed to inflationary adjustments and the onboarding of new resources to support growth and improve service delivery. Additionally, property expenses climbed due to rising maintenance costs and necessary building repairs.
  • With lower revenues and higher Opex in the quarter, operating profits declined by 73.6%, and operating margins narrowed from 30.0% to 9.0%. When added to its 9M earnings, operating margin slipped from 27.2% to 20.7%.
  • Given that JSE regulates and operates the local stock exchange, its outlook will be intrinsically linked to activity in the primary and secondary markets. The Bank of Jamaica’s recent rate 25 basis point rate cut to 5.50%, and stabilising inflation could support a rebound in stock market activity. Moreover, the demand for building materials, consumer staples and logistics (BMCL) as well as financial services stocks post-Melissa could also contribute to greater trading activity as investors rebalance their portfolios. However, such a pivot will be gradual as investors still weigh the impact of the hurricane on their investment decisions.
  • This, coupled with the anticipated launch of the new Micro Market in Q2 2026, and prospects of additional primary/secondary market activity, particularly with the new $750.00Mn capital threshold for junior market listings, could contribute to higher Cess and Fee income.
  • JSE’s stock price has declined by 5.4% since the start of the year to close at $11.06 on Monday, March 2, 2026. At this price, it trades at a P/E of 17.6x, which is above the Main Market Financial Sector average of 15.2x.

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1Cess income on the JSE refers to the revenue generated from a 35-basis point fee applied to all stock exchange transactions.