After delisting seven years ago from the Jamaica Stock Exchange (JSE) due to high illiquidity in the company’s stock, Trinidadian-based Guardian Holdings Limited (GHL) has approved the cross listing of the company following a record setting 12 per cent jump in net profit attributable to shareholder of TT $774.5 million ($16.9 billion) for its financial year (FY) ending December 31, 2020.
GHL had originally listed on the JSE on September 20, 2000, which was less than two years after it formed Guardian Life Limited (GLL) from the insurance portfolios of several insurance companies during the FINSAC era.
Despite obtaining higher profits each year and expanding its reach, GHL’s stock price suffered from a lack of trading and had a nominally ‘high’ price of $270 at the time of its delisting in December 2013.
With the Jamaican equity markets now setting new records for capital raises and there being greater opportunities for price discovery, GHL’s board believes cross listing on the JSE will garner strong interest by the Jamaican public. The notice posted on the Trinidad and Tobago Stock Exchange (TTSE) stated that the JSE has become increasingly dynamic over the years, with a relatively large number of new listings and increased public enthusiasm towards equities. GHL didn’t state if they’d do a secondary capital raise or list by introduction to the JSE.
This would be the latest cross listing after Barbadian-based Eppley Caribbean Property – Value Fund listed on the JSE with a TT$140.8 million ($3.07 billion) secondary listing. GHL posted a 2020 earnings per share of TT $3.34 with the share price rising five per cent to TT $23.05 for a price to earnings ratio of 6.90 times.
GHL listed its Tranche B and D portions of its 10-year bond valued at $7 billion on the JSE’s newly established Private Market which was created to facilitate the listings of private securities for institutional investors who had to hold certain securities at par due to the absence of a market for the assets. GHL raised $13.4 billion in September to support GLL’s acquisition of NCB Insurance Company’s (NCBIC) TT $1.68 billion ($35 billion). GHL is a 62 per cent owned subsidiary of the NCB Financial Group.
GHL DIVIDENDS HALTED DUE TO CENTRAL BANKS
Although the company had initially decided against paying dividends in August to preserve liquidity at a time of heightened uncertainty, GHL’s board decided at its board meeting last week against paying a final dividend with respect to the 2020 FY due to the restrictions by various central banks on the outflow of dividends. Despite the GHL Group having cash resources of TT $3.4 billion ($74.9 billion), the holding company relies on the dividend inflow it receives from its various subsidiaries in order to pay out dividends to shareholders.
The Central Bank of Aruba and European Central Bank had applied restrictions on dividend outflows from the respective territories while the Bank of Jamaica (BOJ) had only placed such restrictions on deposit taking institutions and financial holding companies. However, there has been some limitation by the BOJ with respect to United States dollar capital raises while there has been some difficulty for businesses in Jamaica to convert certain amounts of JMD to USD due to limitations placed by some commercial banks and cambios.