The Jamaica Stock Exchange (JSE) gained some 3.0 per cent in 2024, pushing the market to a $2.1 trillion valuation.
“I expect that the trend, though marginal for 2024, will continue into 2025,” said JSE managing director Dr Marlene Street Forrest in response to Financial Gleaner queries on Friday.
The JSE Combined Index, which includes the Main, Junior and US-denominated markets, closed the year at 347,896.22 points after starting at 341,093.80 points, according to JSE data.
Looking closer at the Main Market, it closed up 3.1 per cent to 335,795 points, the Junior Market closed up 2.9 per cent to 3,735 points, and the US-Denominated market gained 9.0 per cent to close at 252 points. Locally, up to November, the JSE Index was flat but heavy gains in December drove it into positive territory.
She cited negative economic impacts, whether local or external, as factors that could inhibit the market’s takeoff in 2025, including climate-induced calamity. After all, it was negative factors, led by the COVID-19 pandemic, that caused the market to plummet despite being one of the world’s fastest-growing at the time.
It’s the second year since the 2020 pandemic that the Main Market Index, which comprises large companies, has made gains. This followed a marginal rise of 0.1 per cent in 2021. However, it was the third time that both the Junior Market Index and the US-denominated Market Index have gained ground since the pandemic.
“We have noted an increase in the levels of reviews for listings on the Exchange in the last quarter which can be attributed to businesses wanting to access more patient capital,” she said.
Last month, Street Forrest went to the USA to market the JSE to mostly overseas Jamaicans. She told them that, despite the lukewarm performance of the market since the pandemic, many stocks continued paying dividends.
Two-thirds of the companies listed on the JSE had paid dividends to their shareholders this year, she told the Consul General’s Distinguished Lecture Series in Plantation, Florida. In general, stocks that pay dividends during market downturns provide a measure of stability because the implied dividend yield moves inversely with the stock. The more the stock price falls, the more attractive the dividend yield becomes in theory.
There are some 105 companies listed on the market representing 152 securities, Dr Street Forrest stated. She added that, since 2017, the Jamaican stock market outperformed the markets in the USA.
“Over the past seven years, your return on investment, despite the fact that we are in a bear market, has been 20 per cent per annum, if you were to annualise it,” Dr Street Forrest told the audience.
In 2024, major US markets rose despite global uncertainty. The NASDAQ, a marketplace for mostly tech stocks, grew by one-third in the year, mainly because of the rise of artificial intelligence. The stock Nvidia gained 185 per cent and, in the process, ballooned to over US$3.4 trillion (J$530 trillion). Another key US market, the S&P 500 index, which tracks 500 leading companies and brands, grew by one-quarter in the year.
Locally, the top gainers were Blue Power Group, up 79.5 per cent to $4.79, Wigton Energy, up 76 per cent to $1.39, LASCO Manufacturing, up 75 per cent to $7.85, Transjamaican Highway, up 70 per cent to $4.63, and Carreras, up 58 per cent to $13.05.
The top declining stocks were Edufocal Ltd, down 76 per cent to $0.36, MFS Capital Partners Ltd, down 73 per cent to $0.52, CAC 2000 Ltd, down 56 per cent to $2.10, Pulse Investment, down 45 per cent to $1.15, and Radio Jamaica, down 35.5 per cent to $1.25.
In 2021, the Bank of Jamaica (BOJ) began a 14-fold rise in the policy rate from 0.5 to 7.0 per cent to curb inflation, which peaked at 11.8 per cent in April 2022. Last year, experts anticipated that the combined indices would likely struggle until late 2025. This timeline coincided with the expected period for the BOJ to begin cutting interest rates, which had been raised to curb inflation. The central abnk started reducing rates gradually in August, ending the year at 6.0 per cent, down by 1.0 percentage point. The BOJ noted that inflation was largely contained, with the 12-month inflation rate at 4.3 per cent in November, well within the BOJ’s target range.
In 2018, when the BOJ policy rate was in the 2.0 per cent region, the JSE topped the world as the best-performing stock market among 90 markets. Similarly, in 2015, when the JSE first topped the world, the BOJ benchmark rate stood at 5.0 per cent. During both periods, investors needed riskier instruments to beat inflation.
JSE Main Market performance over a decade:
2024 up 3.1%
2023 down 8.5%
2022 down 10%
2021 up 0.1%
2020 down 22.4%
2019 up 34%
2018 up 31.7%
2017 up 49.9%
2016 up 27.6%
2015 up 97.4%
2014 down 5.3%
JSE Junior Market performance over a decade:
2024 up 2.9%
2023 down 3.5%
2022 up 16%
2021 up 29.7%
2020 down 21.1%
2019 up 3.1%
2018 up 18.8%
2017 up 5.34%
2016 up 44.8%
2015 up 160.3%
2014 down 9.2%
JSE USD Market performance over a decade:
2024 up 9.0%
2023 down 1.25%
2022 up 19.6%
2021 up 4.9%
2020 down 16.7%
2019 up 41.74%
2018 down 3.95%
2017 up 1.02%
2016 up 2.1%
2015 up 18.9%
2014 up 4.8%