ItsMoneyMark Newsletter #2

Hey – It’s Money Team! We’re back with our weekly updates!

This is a quick and easy read during these Covid-19, #NewNormalTimes.

THE FUNK – “Tourism”

We recently learnt that the Tourism Sector has large debt exposures, potentially J$ 50 Billion – J$ 55 Billion, per independent and banking reports. We are placing a range to be safe. It’s Money will assume, this encompassing, hotels, DMCs, attraction companies, etc.

Where can we get some public information and facts on operating companies?

Dolphin Cove recently reported quarterly results on the JSE. US$ 1,000,000 Loss for Quarter and Negative Revenue.

We haven’t seen other Tourism Companies report as yet, but they will be doing so shortly. A line can then clearly be drawn to see the expected trend, how bad the losses are, can the costs be contained or not, what the cash burns (if any), are in the sector and then make some assumptions for the private companies within Tourism. 

Practically, what don’t we have listed as yet? Well, we don’t have a DMC, but we got Knutsford Express (different but we can make some assumptions here), we don’t have a hotel/hotel chain, but we can find a few globally on Bloomberg, we do have an attraction company, and we see how that went above! 

So calendar Q4 should be exciting, as Jamaica needs this potentially Equity Fund more than ever from the Government and so does the Financial Sector, clearly you avoid significant impairments/provisions. Perhaps, instead of a long winded plan, and many agencies, and a public – private partnership which is an excellent idea, why not just once and for all start a sovereign fund, for the same purpose? It may be easier to brand, explain and it’s practically want is needed right now for Tourism… and Jamaica…

So, when does 33% or more (40% of GDP) come 100% back? Practically, let’s not even go here as yet. When does it actually realistically start to come back? 

Let’s be realistic and say March 2021 we start to see a scenario that we can even say it has “started” and we are not on pause… Starting means hitting 25% of previous Peak by the Way… then you ladder, best case from there to December 2021 or March 2022… at those dates, it’s anyone’s guess whether that is 75% or 100%. 

THE FUN – “Pivoting”

Today I saw many of these pedal and wheel re chargeable bikes with ladies driving and they seemed so efficient and food on the back and front – it was like amazing! Efficient, cost effectiveness, innovative, a smile, the ROI without knowing just seemed to be there… Wow! 

Felt like Uber Eats happening!

So maybe someone or a company pivoting.

Now, we know a country or a economy can’t pivot as fast as that, but what happens if tourism does go back to 100%. If there is a new normal if that sector? Is there a pivot that should be happening now as well on a bigger scale? 

QUICK MARKETS – “Derrimon Trading”

Keep following out It’s Money Super 6 – it’s on our IG and Twitter platforms.

Derrimon is one of them.

While we await the outcome, we know from previous debt/preference raises, that when Derrimon come to raise funds, and if they get it, they don’t romp with it, they do serious deals, M&A or growth and we expect as said before to see this sector consolidate and reflect in their share price… One to Watch for the rest of 2020 and 2021. 

These opinions and thoughts are solely of ItsMoneyMark and does not constitute investment advice.
Ensure to always speak to a Licensed Financial Advisor.

Thank you for reading!

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