Jamaica’s top performing stock of 2023 gained a massive 6,000% last year!  You’ll be very surprised what it is.

I’m not gonna beat around the bush.  It’s JPS 7% preference shares. 

Now JPS doesn’t have any ordinary shares listed on the JSE yet, but it does have five classes of preference shares, a 7% class, two 5% classes, a 6% and a 9.5%.

Preference shares are different from ordinary shares because they pay shareholders dividends at a fixed rate, and their payment takes priority over ordinary share dividends. 

The company still has ordinary shareholders, it’s just not the general public – yet! The government has been talking about listing its ordinary shares for a while now, just as they did with TransJamaican Highway and Wigton.

Now the preference shares have been listed on the stock exchange for a while now and have always traded pretty consistently without any huge spikes or dips.

But the breakout star this year was JPS 7%.

The stock started the year at 64 cents and ended at $41.86. That’s over a 6,000% increase… in just one year. Crazy, right? It even traded as high as $400 at one point in March before falling.

But what caused the stock to soar like that?

Well, truthfully your guess is as good as mine. Like I said before, the stock has always traded consistently around the 50 to 60 cent range. So it kind of took everyone by surprise when it suddenly started surging. There could be a couple of explanations behind this.

Like I said before, there’s been talk about listing JPS ordinary shares on the stock market for a few years now. The company is, after all, Jamaica’s only electricity distributor and largest producer.  Being on the stock market would give Jamaicans a chance to own a piece of the company and share in its success.

So maybe investors figured that coming out of the pandemic, the JPS IPO was imminent, so they wanted to be on the preference list before the general public got shares.

Also, in 2022 JPS brought in more than US$1 billion in revenues, and shareholders get a piece of that.  Preference shares are a great way for people to get exposure to companies whose ordinary shares are not listed.

And remember summer 2023 was the hottest on record, leading JPS to set a record for high energy usage across the island. Plus the Russia/Ukraine war was still going on, affecting oil prices and in turn electricity prices. All these factors combined mean that electricity bills went up, which meant more money for JPS and those preference shareholders.

And that’s the bottom line.