As at December 2011, the market capitalisation of shares on the Guyana Stock market (GASCI) was G$89.48 billion. This valuation improved to G$123.41 billion as at December 2012, or by a margin of almost 38 per cent. Briefly, as at the end of October 2012, the valuation was even higher at G$125.84 billion.
Two of the shares that produced the strongest gains were Caribbean Containers Inc and Demerara Tobacco Company Ltd. Caribbean Container advanced from its December 2011 price of G$4.80 to end 2012 at G$10.00, delivering a price improvement of G$5.20 or 108 per cent. In a similar vein, Demerara Tobacco (DTC) also delivered a triple digit gain of 101 per cent; in this case, DTC's share price improved by G$414.00 to end 2012 at G$825.00.
Guyana Bank for Trade and Industry also produced a strong performance. In this case, BTI's price advanced by 67 per cent to end at G$460.00. This represented a gain for the year of G$185.00 over the December 2011 price of G$275.00.
Banks DIH Ltd share price showed a healthy improvement of 39 per cent for 2012. This share started the year at G$12.20 and closed 2012 at G$16.90, delivering a price appreciation of G$4.70. Meanwhile, Sterling Products Ltd rose by G$25.00 to end at an even G$100.00; in this case, the appreciation in price was an even 33 per cent.
The subsidiary of the Trinidad-based bank, Republic Bank (Guyana) Ltd (RBL) also saw its share price move in an upward direction. RBL advanced from G$95.00 as at December 2011 to G$122.00 as at December 2012, delivering a gain of 28 per cent.
Positive gains were also recorded by Demerara Distillers Ltd, which was up by 19 per cent to G$12.70, Citizens bank Guyana Inc, which gained 8 per cent to close at G$70.00 and Demerara Bank Ltd was up by 7 per cent to end the year at G$27.90.
Two companies had unchanged share prices. These were Guyana Stock feeds Inc, which closed both periods at G$20.00 and Rupununi Development Company Ltd, which ended at G$500.00.
The lone share that experienced a price decline was Property Holdings Inc, which fell by G$0.10 to G$8.70 from its opening quote of G$8.80. Price quotes for Trinidad Cement Ltd, Globe Trust and Investment Company Ltd and JP Santos and Company Ltd were not available.
Price increases continue into early 2013
How has this market fared in the early weeks of 2013? As at February 25, 2013, the market capitalisation was G$137.1 billion. This represents a gain of 11.1 per cent over the December 2012 closing valuation.
The price of Demerara Tobacco has increased by a further G$175.00 and its share price is now at G$1,000 (approximately U$5.00 or TT$32.00); this represents a further gain of more than 21 per cent over its December 2012 close of G$825.00.
Citizens Bank Guyana Ltd has also seen its share price advance. In this case, the increase was by G$30.00. Its price closed at G$100.00, which represents an improvement of almost 43 per cent over the G$70.00 at which it closed at the end of 2012.
Republic Bank (Guyana) Ltd has registered a 23 per cent increase in its share price, closing at G$150.00 from the G$122.00 that is closed on December 31, 2012. Also registering a healthy 10 per cent price rise was Sterling Products Ltd; its price closed at G$110.00.
The price of Demerara Distillers Ltd closed at G$14.00, from G$12.70 as at December 2012. Meanwhile, Demerara Bank Ltd's share price inched up to G$28.70 from G$27.90 last December.
Surprisingly, Guyana Bank for Trade and Industry recorded the only price decline for the current year. Its share price fell by G$60.00 to G$400.00 from G$460.00 as at the end of December 2012.
Comments on the winners
Let us see what drove the price increases for the two largest winners for 2012, Caribbean Containers Inc (CCI) and Demerara Tobacco Company Ltd (DTC).
Caribbean Container Inc (CCI) is a manufacturer of paper and corrugated packaging, primarily for companies and exports 40 per cent of its production to Caricom customers. In 2011, CCI registered sales of G$1,005 million, which was an improvement of more than 13 per cent from the G$887 million recorded for 2010. While CCI recorded a gross profit of G$172 million, expenses were slightly ahead of this figure and the company registered a loss for 2011 of G$5 million.
CCI had a very strong balance sheet. As at the end of 2011 its long-term assets were G$2,027 million, while net current assets were G$2,012 million and equity was G$2,013 million. Even though the company had G$66 million in retained earnings and G$43 million in cash in the bank, it decided not to pay a dividend for 2011. Shareholders only return was the issue of a "bonus share" in the ratio of one new share for every fifty previously held.
CCI was a former subsidiary of the ANSA McAL Group, but it is now controlled by Demerara Holdings Inc, which owns 129 million out of the 152 million of the company's outstanding shares.
The rise in the company's share price has probably been fuelled either by the expectation that the company will eventually earn a reasonable profit and start paying a dividend or, perhaps, that it will become the subject of another takeover move.
Demerara Tobacco Company Ltd (DTC), like the locally operated Witco, is a subsidiary of British American Tobacco Group. DTC had a net assets base of G$545.6 million as at December 2011. In that year, it generated a gross turnover of G$5.92 billion and delivered an after-tax profit of G$1.35 billion.
This profit figure translated into earnings per share of G$57.80. On that basis, shareholders received total dividends of G$55.90. At its recent price of G$1,000.00, this dividend translates to a dividend yield of 5.6 per cent.
Based on increased revenue and profit in 2012, dividends payments have continued to improve. In May 2012, DTC paid an interim dividend of G$12.72. This was followed by a second interim dividend of G$19.08 and, in November 2012, a third interim dividend of G$17.13 was paid.
The most recent dividend of G$15.53 was paid in February 2013. In total, G$64.46 has been distributed to shareholders in relation to the 2012 fiscal period. Given this pattern of steady returns to shareholders, it seems likely that the share price would continue to improve.
Unlike the Jamaican and Trinidad stock markets, investing in the Guyana stock market poses multiple challenges. These include a limited number of share issues. At last count, there were only 15 companies listed. Also, trading occurs only on a weekly basis. When we combine this with limited access to company's reports and infrequent analyses, investing in Guyana stock markets can be a difficult proposition.
One hopes that the recent strong growth in the country's economy can, very soon, be accompanied by an expansion in the opportunities for investors to participate in that development.
More importantly, the supply of financial information and analysis must increase exponentially so that investors (both local and foreign) can have a sound basis for making more informed decisions; these developments will lead to greater confidence in the companies, the financial and share market and the country generally.