The Statistical Institute of Jamaica reported an increase in inflation in the month of September to 1.7 per cent, up from 0.4 per cent the previous month.

Point-to-point inflation for September also rose 7.2 per cent, up from 6.1 per cent for the 12-months to August 2009.

This was primarily from increases in the prices of sugar, schoolbooks, education supplies, tuition fees and electricity rates.

Gas and other fuels showed the highest increase, by 5.3 per cent, followed by education (back-to-school expenses) at 3.9 per cent. The miscellaneous goods and services division saw an increase of 2.9 per cent and consumer prices rose by 1.7 per cent, the highest increase since the start of the year.

Local Money Market

The three-month and six-month Treasury bills were auctioned last Wednesday; the three-month T-bill was slightly undersubscribed by 8.27 per cent, resulting in a weighted average yield of 16.21 per cent.

The six-month Treasury was oversubscribed by 18.44 per cent, with a weighted average yield of 17.04 per cent. Both results continued to show downward trends in rates.

Local Bond Market

The finance ministry closed the GOJ Fixed-Rate 17.50% Invest-ment Debenture 2012 Series B on Friday, October 23. This fixed rate instrument will be for 30 months, maturing on April 16, 2012 with semi-annual interest payments.

The first interest payment will become due and payable on April 16, 2010; thereafter, interest will be paid semi-annually on October 16 and April 16 until maturity.

The finance ministry is scheduled to issue a variable-rate instrument October 28-30.

Global Bond Market

The Jamaican global bond market saw little activity last week with a few sellers but very few buyers. Activities and closing prices for GOJ globally traded bonds were:

1. GOJ 9% Eurobond 2015 had little activity with indicative bids coming in at $97 and offers at par ($100);

2. GOJ 10.625% Eurobonds 2017 saw no trading, even though there were several offers at $100, but there were no buyers;

3. GOJ 8% Eurobond 2019 saw very few trades being offered at a price of $87;

4. GOJ 11.625% Eurobond 2022 (tax-free) - a few brokers were looking to buy at a price of $108 but there were no offers;

5. GOJ 9.25% Eurobond 2025 had bids at $86, however, there were no offers;

6. Government Guaranteed Air Jamaica 9.375% Amortising Notes, due in 2015, saw minimal trading in the $91 price range;

7. GOJ 8% Eurobond 2039 saw several offers at $75, but there were no buyers;

8. GOJ Euro-denominated 11% Global Bond 2012 had a few offers at $101, but no buyers;

9. GOJ Euro-denominated 10.50% Global Bond 2014 had a couple of buyers at a price of $96, but no offers.

Regional Bonds

In the region, the demand for the Petroleum Corporation of Trinidad and Tobago (PetroTrin) Bonds remained moderate during the week.

The PetroTrin 9.75% 2019s were being offered at $114.50, while the PetroTrins 2022s at a coupon of six per cent were traded at $95.50.

The Government of Barbados 7.25% Global Bond, due in 2021, did not see much activity, but indicative offers remain in the $102.75 range.

Stock Market Report

Activity on the JSE was moderate this week, with the JSE Market Index declining by 161.92 points, or 0.2 per cent, to close at 80,481.97 points. Overall activity resulted from 5,491,544 units being traded valued at $62.230m, where 28 stocks traded, of which 13 advanced, 10 declined, and five traded firm.

The volume leader was Scotia Group Jamaica, trading 49.77 per cent of total volume, followed by The Gleaner Company and Radio Jamaica Ltd with 9.54 per cent and 9.10 per cent, respectively.

The biggest winner this week was Scotia Pan Jam Investments Trust, advancing by $1.50 to close at $33 followed by Mayberry Investments and Scotia DBG Investments Ltd at $1.88 and $16.53, respectively. The biggest losers were Bank of Nova Scotia Jamaica Variable Preference Shares, Jamaica Money Market Brokers and Caribbean Cement Company, closing at $1.25, $4.01 and $3.90, respectively.

Paula V. Brown is executive wealth adviser, NCB Capital Markets Ltd.