By Dr Rawle Lucas
Trading Frequency
The stocks of seven of the nine companies that make up the LSI were active during the month of June. The graph at Figure 1 below shows that stocks of DDL, DIH and DTC traded every trading period during the month of June. This was followed by the stocks of RBL which traded during three of the four trading periods. Trading less frequently during the month were the stocks of BTI, DBL and SPL. BTI traded for two periods while DBL and SPL each traded just once during the month. The laggards for the month were stocks of CBI and CCI which saw no trades.
Average Quantity Traded
The number of stocks changing hands were also dominated by DIH which accounted for 91 percent of all trades. Of the active stocks shown in Figure 2, a weighted average of 436,860 of DIH shares changed hands weekly, over 14 times more than RBL, the second highest with an average of 30,437 shares and over 24 times more than DDL which had a weighted weekly average of 18,095 traded shares. Lesser weekly trading quantities were exhibited by BTI, DBL, DTC and SPL which had weighted averages of 895; 1,000; 352 and 339 respectively.
Liquidity
A total of 1,915,669 shares was swapped at a value of G$195,993,550. As one would expect, the bulk of the liquidity, 70 percent, was generated from the sale of DIH shares. RBL accounted for 23 percent of the liquidity generated by the stock market during the month of June. The remaining seven percent was distributed among DDL, which accounted for 4.61 percent of the liquidity, while BTI, DBL, DTC and SPL collectively accounted for the remaining 2.39 percent of the transferred liquidity.
Tax Advantage of Stock Trades
Stock trades this week continued to advance the tax benefits of investors who sold stocks. The stocks of the four companies that were traded in the fourth week of June have resulted in an additional estimated G$12 million in tax savings. There was a more balanced distribution of stocks traded this week. RBL topped the list with 39 percent of the traded quantity and was followed by DIH which accounted for 33.7 percent of the quantity of stocks traded. Sales of DDL stocks amounted to 26.5 percent of the trades while those of DTC recorded less than half of one percent of the trades. Persons selling RBL stocks would have enjoyed 75 percent of the tax gains for this week. Those selling DDL stocks would have enjoyed 13 percent of the tax benefits while those selling DIH stocks would have enjoyed 10 percent of the tax benefits. Sellers of DTC stocks gained two percent of this week’s tax benefit. The half-year tax gains amount to an estimated G$250.407 million.
Growth in Market Capitalization
Four stocks in the Lucas Stock Index (LSI) traded this fourth week of June 2021 with all of them registering no gain. The market capitalization of the index remained unchanged even as 228,487 shares changed hands. The active and inactive stocks of the manufacturing companies account for G$179.275 billion or 41 percent of the market cap while the active and inactive stocks of the banks account for G$226.092 billion or 52 percent of the market value.
Stocks in the index are now being classified by the size of their market capitalization and are displayed in tabular form below. Since there was no change in the value of the index, there was no change in the market cap this week.
