Quiet 2005 for SPSE, but liquidity still a problem CEO Sharma says exchange in far better shape now than five years ago

Dionisia Tabureguci
Things were quiet at the South Pacific Stock Exchange (SPSE) during its 2005 financial year, which ended June 30.

Despite a number of activities like the listing of two new companies, a merger, disciplinary actions against some companies and SPSE members (brokerage houses), and a generally good year of operation for the exchange, actual trading data shows less activities recorded during the year compared to 2004.

When releasing the financials, SPSE chief executive officer Sanjay Sharma noted that a total of 2.3 million shares were traded in 960 transactions, which translated to a 68 percent drop compared to the same period last year.

Consideration therefore dropped 57 percent to just $4.9 million.

“The volume of trade declined for most companies when compared to the previous year, except for Fiji Television Limited, VB Holdings Limited, Amalgamated Telecom Holdings and Fiji Sugar Corporation Ltd,” Sharma said.

Supply was still a problem for the exchange, which mostly contributed to the slow movement of shares as low liquidity still posed a major problem at the exchange.

Other signs were good however, with market capitalisation increasing by 11 percent to $883.6 million, continuing an upward trend that reflected the increasing demand for shares in the market. This led to a significant rise in share prices for a number of listed companies.

Leading the dividend return star list were Toyota Tsusho South Seas Limited, RB Patel Group Ltd and Amalgamated Telecom Holdings (ATH) among the highest 12-month rolling dividend yield.

Market capitalisation increased for all companies except ATH due to declining share prices.
SPSE core operation went well for the entity, which put in place a few expenditure control measures.

This helped cushion costs and pushed SPSE's net profit after tax to a record $74,507 for the financial year.

Consolidated group revenue increased by 21 percent while expenditure increased by only four percent, Sharma said.

The better performance was attributed mainly to a 40 percent increase in revenue from listing fees, the 67 percent increase recorded in the number of new companies using SPSE's central share registry services and the 134 percent increase in government grant.

“The overall performance of SPSE has improved significantly over the past five years from an operating loss position to a current sound financial position,” Sharma added.

At the unexecuted order board (Trading at SPSE between September 16 and October 15)

The unexecuted order board keeps the same straight face after each trading day: some
companies are in demand and some are not, something which can be judged from
the number of pending buy or sell orders whose prices could not bematched during the day.

Flour Mills of Fiji Group Limited, Fiji Television Ltd, Fosters Group (Pacific) Ltd (FGP), Communications Fiji Ltd, RB Patel Group Ltd and Fijian Holdings Ltd are among the companies whose stocks are in demand. FHL and Fiji TV stocks, in particular, have a long list of interested buyers.

“They are two of the most sought-after stocks because FHL is a good dividend stock and FTV is a good growth and dividend stock,” one broker commented.

Among the blue chips, FGP was climbing steadily to settle at $15 per share at mid-last month and was performing very well.

The Hari Punja-owned companies were also in demand and it was a very busy period for Flour Mills of Fiji Ltd, with institutional transactions taking place.

Over half a million FMF shares worth over $2.2 million changed hands during the period, boosting total trade volumes.

Total share turnover for the period was 758,008 with a transaction value of $2.804 million.

Other active stocks included FHL, ATH, KGF, FMF. RBG, Yaqara Group Ltd, Atlantic & Pacific Packaging Limited and Fiji TV.

ATH, the biggest listed company by way of market capitalisation, had been a mixed bag at the unexecuted order board with a ready supply matched by an equally high demand.

Both buyers and sellers are looking at making a good deal at the market, judging from the level of optimism shown by both sides on their asking prices.

Some big interests are certainly in the pipeline for FMF with large orders pending at the board. A recent institutional participation may see more investor intentions being chalked up at the board for FMF.