Maximize Your Christmas Bonus
How could an investor have turned J$80,000 into J$257,087.22 between January 2016 and November 30, 2017? This may seem like a Christmas miracle; however investors who would have invested J$10,000 in each of the eight initial public offerings (IPOs) listed on the Jamaica Stock Exchange Junior Market between, January 2016 and November 30, 2017, could have made a 221% return on their initial J$80,000 investment.
If you really want to make the best of your Christmas bonus or want to create a bonus for yourself, be sure to watch out for more IPOs, expected to hit the market from now to 2018.
What is an Initial Public Offering (IPO)?
An IPO is the first/initial sale of a portion of the shares of a private company to the general public, thus becoming a publicly listed company, that is listed and tradable on the stock exchange. As with any investment, there are some considerations.
Things to Bear In Mind
- You must act quickly: Your ability to act quickly is critical, as most IPOs are oversubscribed and therefore close shortly after opening, although their subscription period may be for a longer period. Therefore, create your stock account, the JMMB Equity Money Market Fund (EMMA) account to facilitate these transactions. Also ensure that JMMB or the respective broker, receives your application BEFORE the opening date for these offers.
- Gains are not guaranteed: The financial analysis of the company’s performance and growth prospect may indicate that a firm is an excellent investment. However, this may or may not translate into the greater market demand necessary to drive the stock prices up. Therefore, even though the prospect of quick returns are exciting, it is best to purchase companies that you are comfortable owning for 1 to 5 years, or longer, based on your financial objective.
- Fewer fees: When purchasing listed stocks the fees are higher than an IPO, which requires that only a small flat JCSD fee is paid.
- Benefit from fair or discounted price: Since IPOs are normally sold below or at their fair value, you have the opportunity to purchase the stock at fair price or a discounted price; which offers the opportunity for price appreciation.
- Great earning potential: Using the recent IPOs as a basis, this investment typically offers higher returns, when compared to other investments such as bonds. See the table below:
|
Company Name |
Listing (IPO) Price |
Close Price Nov. 30, 2017 |
Amount Invested |
Amount as at Nov. 30, 2017 |
% Return |
|
CAC 2000 Ltd. |
$4.89 |
$6.50 |
$10,000.00 |
$13,292.43 |
33% |
|
tTECH Ltd. |
$2.50 |
$7.00 |
$10,000.00 |
$28,000.00 |
180% |
|
IronRock Insurance Company Ltd. |
$3.00 |
$2.80 |
$10,000.00 |
$9,333.33 |
-7% |
|
JETCON |
$2.25 |
$4.50 x 3* |
$10,000.00 |
$60,000.00 |
500% |
|
ISP Finance Services Ltd. |
$2.00 |
$15.00 |
$10,000.00 |
$75,000.00 |
650% |
|
KEY Insurance |
$2.27 |
$3.68 |
$10,000.00 |
$16,211.45 |
62% |
|
Main Event Entertainment Ltd. |
$2.00 |
$6.00 |
$10,000.00 |
$30,000.00 |
200% |
|
Stationery and Office Supplies |
$2.00 |
$5.05 |
$10,000.00 |
$25,250.00 |
153% |
|
*This represents a 3:1 stock split for JETCON. All figures included in the table are in J$. |
$80,000.00 |
$257,087.22 |
221% |
||
Do you want to take up the challenge to create and or maximise your Christmas bonus? Please contact JMMB at 998-5662 and we will help you to give yourself a gift that keeps giving into 2018 and beyond.