Sterling Investments positioning to take advantage of market volatility

Durrant Pate/Contributor

As Sterling Investments anticipates further global political and economic uncertainty, the investment company is positioning itself to exploit the attractive investment opportunities that should present themselves this year.

The management reports that the company’s investment portfolio is well positioned to take advantage of the market volatility, as it has liquidity available and leverage that is below internal limits. “This process is unlikely to be linear and will likely be punctuated with periods of volatility,” the management details in its just-published March quarterly report to shareholders

During the period under review, Sterling managed to contain costs at a minimum with an impressive 67.4% decline in total expenses. This comprises a 15% decline in interest expense. 

There was a 3.5% increase in equity, with the management reporting a high liquidity consisting of a high-quality portfolio of US$ securities, which generates steady income. This is complemented by liquidity on hand to take advantage of market volatility.

Improvement in revenues

Revenue totalled J$23.2 million in the first three months of 2026. This was primarily the result of the Jamaican dollar appreciation in the first quarter of 2026 versus the 1.29% depreciation that occurred in the same period of 2025. 

This led to unrealised foreign exchange losses in Q1 2026 totalling (J$13.29) million compared with the unrealised gains of Q1 of the previous year of J$22.7 million, respectively. Management explains that short-term currency movements will create volatility in top-line revenue. Gains on sale of investments totalled J$3.43 million for the first 3 months of 2026 versus J$11.47 million for the same period in 2025.

Net profit declined considerably, moving from J$46.93 million in 2025 to J$16.08 million in 2026, despite a significant reduction in total expenses from J$21.9 million in March 2025 to J$7.1 million in March 2026. This decline was driven by unrealised foreign exchange losses and lower gains on the sale of investments, some patience in deploying additional capital, amidst the expectation that markets could fall further and assets could become cheaper. 

Management reports it, “remains focused on medium to long-term performance and is keenly managing duration while observing inflation and interest rate expectations. Short-term local currency movements should not alter the long-term value for shareholders or the US$ dividend payments that are made from cash flow each year.” 

Balance sheet highlights

Sterling recorded total assets as at March 31, 2026, of J$1.89 billion, roughly 3.8% more than the J$1.82 billion as at March 31, 2025. This partially covers some positions and waits to redeploy the proceeds. 

Total liabilities increased by 3.78% to J$285.03 million as at March 31, 2026, from J$274.64 million as at March 31, 2025. This was primarily the result of increases in the margin loan payable. 

Total equity increased to J$1.6 billion as at March 31st 2026, from J$1.55 billion at March 31st, 2025.