As NIF retreats, VM and Mayberry snap up Wigton shares

Mortgage provider Victoria Mutual Building Society, VMBS, and equity fund Mayberry Jamaican rapidly acquired shares in Wigton Windfarm in the past quarter, resulting in both becoming the top two owners of the stock.

Those purchases happened at a time when another brokerage house, NCB Capital Markets, was labelling the stock as overvalued, and it followed the disposal of some of holdings by the National Insurance Fund, NIF, a state-owned pension fund manager, which sold down a portion of its 706 million shareholdings and now holds 298 million shares.

VM declined to comment on its reasons for buying up the wind farm shares, into which it pumped over $300 million during the quarter, but Mayberry says it sees Wigton as a stock with room to grow.

â??We think it is a growth story and as such, is one of the cheaper stocks on the market,â? said Gary Peart, CEO of Mayberry Investments Limited, in response to Financial Gleaner queries. â??Thatâ??s why we are buying,â? he said.

Mayberry Investments was the arranger and lead broker for the Wigton initial public offering of shares and listing on the JSE earlier this year. The IPO garnered more than 30,000 subscriptions for the 11 billion shares on offer at 50 cents per unit. Wigton is currently trading at 93 cents, but NCB Capital Market believes its true value is around 83 cents, at least over the short term.

Mayberryâ??s equity fund, Mayberry Jamaica Equities Limited, acquired a large chunk of Wigton in the quarter, moving from eighth-largest to second-largest shareholder. Mayberry now holds 304 million shares, up from 40.5 million.

VMBS held 591.7 million units up to June but has increased its holdings to 976.3 million units, making it the single largest holder of Wigton shares. An additional 18.7 million units is held by another group company, Victoria Mutual Investments Limited.

The share acquisitions, which largely occurred over the past two months, pushed the mortgage provider towards the limit of ownership. Based on its articles of incorporation and as disclosed in its prospectus, no single entity can own more than 10 per cent of Wigton during its first five years of listing. This limit is governed by a golden share held by the Government of Jamaica, through the accountant general, which gives it power to restrict ownership in Wigton within the five-year period.

VMBS now owns 8.8 per cent of the Wigton stock and Mayberry Jamaican owns 2.7 per cent. A number of prominent Jamaicans line the list of the top 100 Wigton owners, including business owners, executives and celebrities.

The Wigton stock hit an all-time high of $1.14 in mid-August following the release of favourable financial results. For the June first quarter, Wigton reported net profit of $366.4 million, which doubled earnings relative to its prior-year results.

In mid-September, NCB Capital Markets changed its rating for Wigton from a buy to a sell, saying the renewable energy company was overpriced at anything above a fair value of 83 cents. Shortly after NCBâ??s analysis, there was heavy volume trading in the stock and a dip in its price to 80 cents. Since then, Wigton has recovered ground and was trading this week at 92 to 93 cents per share, valuing the company above $10 billion.

steven.jackson@gleanerjm.com