Industry analysts believe shareholders of Guardian Holdings Limited (GHL) stand to benefit greatly from cross-listing on the Jamaica Stock Exchange (JSE).
GHL relisted on the JSE by introduction on May 5, 2021, after a seven-year absence. Listing by introduction is a way of listing shares without raising new capital. It provides existing shareholders with a ready market to buy or sell shares.
GHL listed 232,000,000 ordinary shares. It had originally listed on the JSE in 2000; however, the company voluntarily delisted in 2013 due to illiquidity in its stock. It had a nominally high price of JM$270 at the time.
The company opened trading on May 5 on the JSE at JM$582.48, making it the second-most expensive stock on the JSE, after Palace Amusement. On the previous day, it had closed trading on the Trinidad and Tobago Stock Exchange at TT$25.51 (around JM$574.43).
According to JSE Managing Director Marlene Street Forrest, the company is now the third-largest company on the JSE as measured by market capitalisation. She said GHL’s market cap stood at JM$135 billion upon listing. That pushed the combined market’s capitalisation up by seven per cent.
The listing increased the Main Market’s cap to JM$1.73 trillion and the overall market cap to JM$1.88 trillion.
“I think that’s significant so we’re really happy for this listing,” said Marlene Street-Forrest during the listing ceremony.
Speaking on Taking Stock with Kalilah Reynolds, business writer at the Jamaica Observer, David Rose, said that the listing will open opportunities for shareholders, especially the National Commercial Bank Financial Group (NCBFG), which is the largest controlling shareholder in GHL.
NCBFG had acquired a majority 62 per cent stake in Guardian Holdings in 2019. Shortly after that, it sold its insurance portfolio to a GHL subsidiary to streamline its insurance business in Jamaica.
“Guardian just had a very strong quarter and doubled profit. It will be interesting to see what happens in the coming weeks,” said Rose.
He added that pension funds and other institutions may also take an interest now in GHL due to their alignment with NCB.
Assistant general manager of trading and treasury at Jamaica Money Market Brokers (JMMB) Greig Lindo agreed that the cross-listing will allow GHL to provide more liquidity to shareholders that own the stocks. He said it’s also an opportunity for the company to open up its operations to potential investors.
During the listing ceremony, CEO of GHL Ravi Tewari hinted at a possible activity, saying that he was looking forward to joining forces with the thousands of investors active in the dynamic Jamaican environment.
Meanwhile, Lindo had also predicted on the business programme that GHL’s stock would open in the JM$500 region. He said the listing would most likely get heavy interest and affect the stock’s performance in the Trinidad and Tobago market.
“If you look at how our market is, retail investors, in particular, tend to have an affinity for the stocks that have a low nominal price so it will be interesting to see once that cross[-listing] system takes effect and how the market is going to respond,” he said.
Investment analyst at PROVEN Wealth, Julian Morrison, said he’s expecting more investors to buy GHL shares over the year as people become more familiar with the company.
Interest in the stock is already growing with more than 20 joining the line to cash in on its first day. However, there were no trades on May 5 due to the stock triggering the JSE’s circuit breaker.
“Their financials are out now so things could change over the next two quarters,” said Morrison.
GHL’s relisting brings the number of securities now trading on the JSE to 130. The listing gives local investors the opportunity to participate in a company with a footprint in 22 countries across the Caribbean.