Equity Investment Recommendations

Making Money Work For You! November 19, 2012

Indices Close At YTD

Change

JSE

INDEX

91,721.26 -3.75%

JSE ALL

JA

90,412.42 -11.52%

JSE

SELECT

2,463.32 -14.29%

JSE

CROSS LISTED

875.49 10.19%

JSE

JUNIOR

645.74 -13.77%

JSE

USD

INDEX

53.57 -31.82%

Outlook The Jamaican stock market main index is currently down approximately

3.75% since the start of the year, while for the same period, the JSE junior

index and US Dollar index is down 13.77% and 31.82%, respectively. We

acknowledge that in the face of continued weakness in the domestic economy,

slower global growth & tight fiscal policy, the market will continue to be

volatile in the coming months. Nevertheless, as more light is cast on the

future direction of fiscal and economic policies, we anticipate many

opportunities in the equities markets. We have already seen a report

undertaken by the Jamaica Conference Board showing there has been a rise in

business and consumer confidence, with most of the uptick concentrated in

firms' optimism. Consumer sentiment is a key factor in determining the tone

of the equities market as positive sentiments would give an indication of

investors’ willingness to add to their existing holdings, and acquire new

positions.

We would like to also point out that valuations (such as price relative to

earnings) remain the key variable in long-term stock performance, as utilizing

such measures in one’s investment decisions remain generally favourable on a

historical basis. Given the current environment we encourage you to position

their portfolios in a mix of stocks as listed below with strong management

credibility, good earnings prospects and the potential for continued long-term

growth.

Recommended Stocks Company (click ticker

for details)

Price

(19.11.12)

YTD

Change

Price to

52 wk

low

P/E P/BV Div.

Yield

ROE Buy

Price

JMMB $8.30 -33.06% 10.67% 3.88 0.84 1.33% 21.63% ≤$8.00

SGJ $21.57 -10.16% 11.76% 6.62 1.01 5.15% 15.20% ≤$21.00

PJAM $57.01 -5.00% 0.02% 5.76 0.61 2.63% 10.58% ≤$57.00

CAR $56.66 -7.90% 13.34% 5.30 4.90 16.22% 92.44% ≤$54.50

GENAC $1.74 -30.40% 2.35% 6.00 1.51 5.75% 25.24% ≤$1.71

We believe the recommended stocks will give you a good mix of growth

stocks that also have attractive dividend yields.

We must reiterate that stocks bought at low price to earnings (P/E) ratios and

price to book value (P/BV) generate higher returns over the long run as

compared to stocks with higher ratios. When using this approach, irrespective

of the environment you will be able to identify some stocks that are trading

cheap vis-à-vis their peers. All the stocks we have recommended for your

portfolio in one way or the other fit this criteria, as many of these securities

have been sold off during the year and would be now considered undervalued.

Disclaimer: Projected earnings and stock prices if present were derived using stock extrapolations based off statistical averages derived from prevailing trends in equity prices with minimal consideration given to

statistical aberrations. Several conditions can affect the mathematical results of the evaluation including local, regional and global macroeconomic impacts along with managerial strategic and tactical execution.

Investors should be aware that past results are no guarantee of future performance. Consult the appropriate professional advisor for more complete information. Barita makes no representations or warranties about

the accuracy or completeness of the information contained herein. Opinions and recommendations (if any) are given in good faith but without legal responsibility and are subject to change without notice. Barita

Investments Ltd. and/or companies connected with it, its clients and officers may have a position in or engage in transactions in any of the securities mentioned. The interest of Barita Investments Ltd., its

representatives and its officers are available on request in accordance with Sec. S.39(1) of the securities act of 1993.

My dream home.

By starting with $50,000 per month, and investing steadily in the Barita Money Market Fund

for 6 years, my dream became a reality.

Barita Money Market Fund ...makes it happen.

Barita Investments Ltd. 15 St. Lucia Way Kingston 5, Jamaica Phone (876) 926-2681

Jamaica Money Market Brokers Ltd. JMMB’s recent acquisition of Capital & Credit has already started to reap

benefits to the Company’s profitability as seen in its most recent

financials. The Group posted profits of J$2.54 billion which included a one-

off gain of J$1.61 billion from the acquisition. (CCFG) represent a J$1.18

billion or 86.4% improvement over the prior period.

Despite these positive results the stock is still attractively priced at a P/E

of 3.88X, well below the industry average of 10.23X and is well below the

price it traded at the beginning of the year.

With a current ratio of 1.12 the Group continues to remain liquid and

should have no problem meeting any of its short-term obligations.

Scotia Group Jamaica Ltd. As interest margins have contracted due to significantly lower market

interest rates subsequent to the JDX, SGJ has still managed to show

strong growth in earnings assets.

The group continues to cut and manage their interest costs and operating

costs while increasing revenues in their non-interest activities (including

increased trading and fees). The bank has sought to grow its core

business, by growing its deposits and leading the charge to lower interest

rates to grow its loan business.

Scotia Group Jamaica has an above average dividend and has a historically

high return on equity (5 year average of approx. 23.19%). Having a

strong and prudent management team is one of the company’s greatest

strengths.

Pan-Jamaican Investment Trust Ltd. As inflation and devaluation continue to pose a challenge to the economy,

PJAM has postured itself well, as much of their assets are denominated in

USD and are invested in prime real-estate positions.

The company also continues to benefit from its 33% share in Sagicor Life

Jamaica and helps to diversify this Company’s earnings.

The Company also has a low debt/equity ratio of 0.22 and boasts an

attractive liquidity ratio (current) of 6.02 based on its most recent results.

Carreras Ltd. Carreras is recommended mainly for income purposes. Carreras continues

to generate a good dividend payment record; their most recent div. yield

was a staggering 16.22% (mostly due to some pension payouts) and its

normal payout ratio is usually above repo rate (currently at 6.25%).

Incidentally their last financial results posted strong increase in profits.

General Accident Insurance Co. Ja. Ltd. The company has been able to grow its gross premiums written and pre-

tax profits over the past 5 years and continues to show strong

performance in its most recent results.

The company has demonstrated superior underwriting; this is evidenced

by the company achieving 4 underwriting annual profits in the last 5

years. This compares with 5 underwriting annual losses for the industry as

a whole over the same period.