The recent heavy rains in Jamaica have caused significant challenges for many businesses, particularly in regions severely affected by flooding and infrastructure damage.
Speaking on Taking Stock with Kalilah Reynolds, Equity Trader at JMMB, Clive Charlton, said companies are openly discussing the toll this has taken on their operations.
“You can see how easily a company, any productive commercial entity, could have been impacted,” he said.
The prolonged rainfall, starting around June, increased costs for businesses, such as equipment repairs, damaged inventory, and downtime due to weather-related disruptions. Logistics were also impacted, as transporting goods became more difficult with damaged roads and power outages in affected areas. Charlton explained how many businesses couldn’t store goods because of power outages, leading to a drop in demand for some products in specific regions.
On the flip side some industries, like construction materials and utilities, benefited from increased demand for repairs and rebuilding efforts. Additionally, companies that focus on non-perishable and packaged goods experienced a rebound in sales post-disaster, though it wasn’t always enough to offset earlier losses.
Charlton highlighted opportunities in the Jamaican stock market, noting that many companies have become more resilient. “Over the last several years, companies have strengthened their balance sheets, even in the face of higher capital costs,” he said. This resilience is reflected in their ability to bounce back quickly after disasters.
Jamaica’s improving economic environment is also a positive sign. With inflation rates stabilizing and recent reductions in policy rates, consumers may have more disposable income, not only for goods and services but also for investments. According to Charlton, “Prices are still fairly cheap compared to several years back,” making it an excellent time for long-term investors to consider the stock market.
Even financial companies, which were previously struggling, are showing signs of recovery. Improved cash flow and better balance sheets suggest that opportunities abound for those willing to invest strategically.
While the rains have highlighted vulnerabilities, they also underscore the potential for growth and investment. For Jamaicans looking at the long term, the stock market presents a promising avenue amid rebuilding efforts and economic resilience.