3 months ago
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Faced with declining net asset values, QWI Investments Limited is looking to boost its prospects through portfolio expansion and further risk diversification.
The company is 46 per cent owned by Jamaican Teas Limited, which basically curates its investments.
Chairman John Jackson said QWI was mulling a further approach to the equities market.
“At some point in time, we’ll probably go back to the market and raise additional funds,’ Jackson told shareholders at the company’s annual general meeting on Tuesday, but said no hard decision has been taken yet.
The board would be meeting soon “to have a strategic look at the operations” as QWI charts its way forward, he indicated.
Since listing on the stock market in September 2019, and in the face of a persistently bearish market, QWI has been financing its investment programme using margin loans provided by VM Wealth Management, with overdraft support from Scotiabank and Sagicor Bank.
Jackson said that for the time being, such loans are the best option for QWI.
“We are limited to how much we can borrow as a percentage of the portfolio, and we look at it on an ongoing basis,” Jackson told shareholders.
When QWI came to market six years ago, it did so at $1.87 per share, but the stock has failed to improve on that price. At midweek, the shares closed at 76 cents, albeit still above its one-year low of 64 cents. As for the company’s NAV, or net asset value, at $1.25 per share as at July 18, it is currently on the upswing, but is also slightly below the levels reported a year ago.
Jackson said QWI’s fund managers are assessing whether there’s a need to shift money around. The portfolio is 60 per cent invested in the Jamaican market, which has mostly been meandering southwards and was down nine per cent year to date at midweek.
“The Jamaican market has not really delivered for us the way we expect it to. We keep our fingers crossed that will change later in the year. We see some signs, but they are embryonic at this point in time,” Jackson told shareholders.
He added QWI was not wedded to holding a stock forever. The company has backed out of certain stocks and reinvested the proceeds in other stocks, where the thinking is that there are better prospects going forward.
“What we have recognised, for example, is that while the junior market companies offer good prospects, they are going through a sticky period currently, and therefore we have modified our portfolio when it comes to certain junior market companies,” Jackson said. The junior market index is down 9.55 per cent year to date.
Jackson also noted that while QWI itself is making losses, they will ameliorate as the company puts focus on enhancing investor value.
English (US) ·