Investing guru John Jackson says there are 10 stocks poised to return in excess of 100 per cent to investors in 2018. On his ICInsider.com blog, Jackson makes the case that as the Jamaican economy turns around, investors who put their money on the Jamaica Stock Exchange rather than savings accounts will be well rewarded.
“Based on projected earnings for 2018, the average prices/ratio suggests that the main market stock prices should grow by 26 per cent. Falling interest rates could add another 20 per cent to gains during the year, bringing overall gains to be in excess of 40 per cent.”
Other good news that will impact the market include: “Increasing employment is taking place with the highest number of persons employed in the country’s history. Attendant with that is the sharp fall in unemployment from more than 16.3 per cent in 2013, to just over 10 per cent in 2017. The annual net employment is growing around 30,000 people per year and that could rise as the economy gains steam. This will mean more spending and increased tax collection for government. Alpart’s resumption of alumina production is a big positive for the overall economy, for increased government revenues and more demand for local goods and services, some of which are provided by listed companies. The tourism sector is enjoying strong growth, apart from increasing foreign exchange intake for the country.”
Jackson predicts that the market will be in a holding mode for the next couple of months. However, Jackson says that the market will break out in positive territory.
He reports, “Last year was a great one for Jamaican stocks, with 14 of the 64 ordinary shares of companies that were listed prior to the December new listings, rising 100 per cent or more and 16 rising between 50 and 81 per cent.”
That said, Jackson doesn’t beleive that the 2018 winners will not be the same winners as last year.
Writing on his blog, he reports, “Many of the main market heavyweights will find it tough to repeat the strong gains they enjoyed in 2017, if that is the case, their impact on the market index is likely to be less than for 2017. Another factor that could make a repeat of 2017 tough, is the movement of interest rates. Last year, Treasury Bill rates fell 29 per cent from 6.56 per cent to 4.83 per cent; that level of decline is unlikely to happen in 2018, even as some of the decline in the latter part of 2017 is yet to be fully reflected in the prices of stocks to date and should positively affect prices in 2018. IC Insider.com is forecasting rates on 182 days Treasury bill hitting three per cent by the end of the 2018 first quarter. New listings could help move the indices in 2018, the likely impact is unknown at this point.