Friday 25 September, 2020

Sagicor Select says market remains unpredictable

The Financial Select fund holds securities listed on the Jamaica Stock Exchange and the value of these stocks reflected the overall market conditions that prevailed during the quarter.

The Financial Select fund holds securities listed on the Jamaica Stock Exchange and the value of these stocks reflected the overall market conditions that prevailed during the quarter.

The management of Sagicor Select Funds Limited has said the central bank’s decision to place a hold on dividend payments and the poor performance of listed equities are behind its continued losses, year to date.

It was also noted that the gradual reopening of economies worldwide has brought some optimism, but there remain substantial risks to economic activities associated with the COVID-19 pandemic.

“A return to normalcy is primarily predicated on the discovery of a COVID-19 vaccine. While there are early positive indications, there is still some way to go before the vaccine is ready and safe for the public,” it was stated in Financial Select Fund of Sagicor Select Funds’ latest financial report. 

The Financial Select Fund of Sagicor Select Funds Limited recorded a net loss of $323.7 million as at June 2020.
The outturn was due to unrealised depreciation in value of investments of $334.9 million,according to the results.

The Financial Select fund holds securities listed on the Jamaica Stock Exchange and the value of these stocks reflected the overall market conditions that prevailed during the quarter.

For the June quarter, dividend income was $16.6 million, this was lower than previous quarters due to the impact of COVID-19, the funds' management said in its report.

Year-to-date losses are $1.7 billion, compared to $411.6 million in profit made as at June 2019.

It was noted, “The central bank’s decision to suspend dividend payments by deposit-taking institutions as well as companies reserving payments to buffer their cash holdings due to possible fall-out were among factors that led to reduced dividend earnings.”

The decline in the market started in March 2020, following the first confirmed case of COVID-19 in Jamaica.
Relative to a year prior, all JSE indices declined in value, with the JSE Main and Junior Market indices recording reductions of 18.0 per cent and 16.5 per cent, respectively.

Sagicor Select Finance Limited indicated that in addition to reduced dividend pay-out, the losses in the value of assets held by financial companies have negatively impacted financial performance and lowered investor confidence.

Stocks more aligned with consumer staples, health care and delivery traded higher in the quarter.

Fund managers said that Jamaica’s reopening of the local economy with sectors such as tourism and entertainment offers some positive indications.

“Projections indicate that the economy should record growth in 2021; however, a return to pre-COVID output level is still further out. As such, the earnings for most companies could continue to be depressed beyond the near-term,” it was stated.

Total expenses for June quarter amounted to $5.7 million. The cost was largely comprised of management fees and trustee fees of J$3.0 million and $1.6 million, respectively.

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