Expect big things from the Junior Market of the Jamaica Stock Exchange (JSE) in 2022, says financial analyst, John Jackson. 

The junior market closed in 2021 up by 30% according to the Managing Director of the JSE, Marlene Street Forrest. 

Speaking on Taking Stock with Kalilah Reynolds, Jackson said he is confident that the positive trend will continue into 2022. 

“Action for 2022 is likely to be on the junior market because that’s where the undervalued stocks are, that’s where the attractiveness is and the most growth of companies will come from,” he said. 

“When you do the projection of earnings for 2022, we see substantial potential gains for many of the stocks [on the junior market],” he added. 

Jackson noted that many of the companies listed on the Junior Market, that would have been negatively impacted by various COVID-19 protocols, have begun adapting to the pandemic and now are recovering sales. 

He pointed to stocks such as Honey Bun and Dolphin Cove as examples of stocks that have recorded growth. 

“Dolphin Cove ended 2021 at $15 and now it’s almost $20,” he noted. 

He said that a boost in the tourism industry would have helped the company. He noted that as the country continues to adapt and recover from the pandemic, companies will see improvement in their stock performance. 

However, Jackson was not so confident about the Main Market, which rose by only 2.4% in 2021.

He noted that the outlook for the market is relatively negative and it may take some time for it to trend up. 

He said that, in his opinion, this is due to the underperformance of financial institutions’ stock, which fell by 0.23% in December.

The analyst added that a carryover of bad debt by institutions and some financial instruments being under immense pressure likely contributed to the underperformance. 

He also said that institutions were also more hesitant in 2021 because of concern about potential bad debt as well as companies not being able to survive the problems the country has been facing. 

He said that improvement in the main market will require “financial institutions to generate that heat that will drive the market upward.”

Jackson added that until financial institutions, namely NCB and Scotia Bank, convince investors that they should be buying the stocks at higher prices, then there will be a weight on the market.