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Latest Rating Actions by CariCRIS
▪ Government of Barbados’ rating downgraded to CariC- ▪ Massy Holdings Limited’s rating reaffirmed to CariAA+ ▪ Venture Credit Union Co-operative Society Limited’s rating reaffirmed at CariBBB- ▪ Eastern Credit Union’s rating downgraded to CariBBB- ▪ Government of the British Virgin Islands’ rating reaffirmed at CariAA- ▪ Republic Bank Limited’s rating reaffirmed at CariAA+ ▪ The Pegasus Hotels of Guyana Limited’s initial rating assigned at CariBBB- ▪ Sagicor Life Jamaica Limited’s rating reaffirmed at jmAAA ▪ NCB Capital Markets Limited’s initial issue rating assigned at CariBBB- ▪ Government of Barbados rating downgraded to CariBBB- ▪ Saint Lucia Electricity Services Limited’s rating reaffirmed at CariBBB ▪ Endeavour Holdings Limited’s rating reaffirmed at CariA+ ▪ Gulf City Limited’s rating reaffirmed at CariA+
Please visit our website at www.caricris.com for the detailed Rationales on these and other ratings
Benefits of a CariCRIS Rating for a Bond Issue:
• Widen the range of possible investors to ensure success of the issue • Help investors to determine if the bond issue is a wise investment • Provide a clear understanding of the creditworthiness of the issuing firm and the factors that will impact its performance
• Utilise a standardised system in order to compare the credit quality of one bond issue relative to another
CariCRIS’ credit ratings and daily Newswire can also be found on the Bloomberg Professional Service.
REGIONAL
Trinidad and Tobago
Advances in Composite and Cross Listed Indices Overall market activity resulted from trading in 14 securities of which two advanced, three declined and nine traded firm.
Scotia income down by $24m Scotiabank T&T Limited reported income after tax of $309 million for the six months ended April 30. This is a decrease of $24 million or seven per cent over the comparative period last year.
Petrotrin pays consultants $63m State-owned Petrotrin has paid $63.6 million to consultants for services from July 2017 to date.
Barbados
Senate to meet on Friday The newly appointed Senate of Barbados will meet for the first time on Friday.
S&P downgrades Barbados Barbados has suffered another credit downgrade.
4.5% pay hike You can forget all about the National Union of Public Workers’ (NUPW) demands for a 23 per cent pay hike for its members. Those demands by this island’s largest public-sector union have apparently died with the last Government.
Jamaica
Holness To Make Historic Presentation at G7 Summit Prime Minister Andrew Holness has been specially invited to attend the G7 Summit, set for June 8 and 9 in La Malbaie, in the Charlevoix region of Quebec, Canada.
Guyana
$210M in contracts signed for countrywide development Six Regional Democratic Councils on Wednesday signed contracts to the value of $210M for the construction of new medical and educational facilities in their respective districts.
3000 acres of land for West Watooka farmers Over 3 000 acres of lands will soon be available for cultivation as the National Drainage and Irrigation Authority (NDIA) intensifies works within the West Watooka area.
Antigua and Barbuda
Gov’t releases PV Energy Contract The government has released a contract signed with the UK based renewable energy company, PV Energy Limited, as it promised.
Costa Rica
Taxation Closed 35 Businesses in The Last Week for Tax Irregularities Behind on your business taxes? The General Directorate of Taxation, of the Ministry of Finance (Ministerio de Hacienda), may be knocking on your door as it did this past week, yellow taping (closing down) 35 businesses for five calendar days in different parts of the country, for the breach of tax obligations.
Dominica
Gov’t pays all outstanding student fees at DSC The government on Wednesday presented a check to the Dominica State College (DSC) to settle all outstanding fees by students.
The Bahamas
$6m Tour Operator to Create 70 Jobs A $6m tour operation will create 70 jobs within its first year when it begins to expose Eleuthera to thousands of tourists from 2019 onwards.
Gov't Financial Systems 80% Below Maximum The government's financial management systems remain "below global standard" and have seen "limited improvement", scoring 80 percent below maximum in their last assessment.
The Bahamas continued
Vat Hike to Shut 40% Of Construction Sector The VAT rate hike will force 30-40 percent of Bahamian contractors out of business, the government was warned yesterday, while reducing this nation to “a tourism-only economy”.
St. Lucia
Ministry of Agriculture to improve livestock development A new policy and strategic plan is being developed for the livestock sub- sector in Saint Lucia.
Tourism Advisory Committee launched The recently-launched Tourism Advisory Committee (TAC), is expected to set the tone and new vision for the local tourism industry, in a thrust to ensure that tourism development is in sync with national and socio- economic development.
Venezuela
CARICOM Countries Divided in OAS Vote on Suspending Venezuela Caribbean Community (CARICOM) countries were split yesterday, when the Organization of American States (OAS) voted to pass a resolution that can initiate the process of Venezuela’s suspension from the organization.
Other Regional
ECCB issues warning to OECS nationals The Eastern Caribbean Central Bank (ECCB) is warning customers in the sub-regional Organisation of Eastern Caribbean States (OECS) to be cautious against using non-traditional financial services saying that they could suffer “financial losses by getting involved in initiatives which they do not yet understand fully”.
INTERNATIONAL
United States
Billions in U.S. solar projects shelved after Trump panel tariff President Donald Trump’s tariff on imported solar panels has led U.S. renewable energy companies to cancel or freeze investments of more than $2.5 billion in large installation projects, along with thousands of jobs, the developers told Reuters.
Futures inch higher as Allergan, banks gain U.S. stock index futures edged higher on Thursday, with Allergan and banking shares setting Wall Street up for another round of gains.
Fed on Track to Raise Rates Regardless of Emerging-Market Woes Emerging markets struggling with higher U.S. interest rates are likely to get little sympathy from the Federal Reserve.
United Kingdom
Sterling at two-week highs on broad dollar rout Sterling climbed to more than two-week highs on Thursday, helped by general dollar weakness thanks to a broadening rally in the euro currency, though concerns over Brexit negotiations capped gains.
Europe
Euro, bond yields extend gains on ECB while risk appetite grows World stocks hit a three-week high on Thursday and the euro and euro zone bond yields extended gains as investors priced in a potentially earlier-than-expected wind-down of ECB stimulus.
Euro rebounds to three-week high on bets ECB will signal stimulus unwind The euro climbed to a three-week high on Thursday as investors raised their bets that the European Central Bank will next week signal a winding down of its vast bond-buying program by the end of this year.
German bond yields march higher as markets wake up to ECB risk German government bond yields hit two-week highs on Thursday, leading top-rated bond yields in the euro area higher, a day after hawkish comments from top ECB policy makers turned investor focus to a looming central bank meeting.
Japan
Nikkei rises to more than 2-week high; non-ferrous metal stocks rally Japan’s Nikkei share average rose to more than two-week highs on Thursday morning to stay above a key technical level as it tracked Wall Street gains overnight, while non-ferrous metal stocks staged a rally after copper prices soared.
Global
South Africa's bonds still a favourite despite GDP setback South African bonds are set to outshine some of their emerging market peers even after the economy contracted in the first quarter, as investors bet the country’s new political leadership will adopt more business-friendly policies, analysts said.
Oil rises as reality dawns over Venezuela's export crisis Oil rose on Thursday on concerns about a plunge in exports from Venezuela, although surging U.S. production kept gains in check.
CARICOM Countries Divided in OAS Vote on Suspending Venezuela Wednesday 6th June, 2018 – Caribbean360
Caribbean Community (CARICOM) countries were split yesterday, when the Organization of American States (OAS) voted to pass a resolution that can initiate the process of Venezuela’s suspension from the organization.
The General Assembly voted with 19 member states in favour – including The Bahamas, Barbados, Guyana and Jamaica; four against – including Dominica and St Vincent and the Grenadines; and Belize, Grenada, Haiti, St Kitts and Nevis, St Lucia, Suriname and Trinidad and Tobago among 11 abstaining.
The resolution vote called for an extraordinary assembly to decide on whether or not to suspend Venezuela.
Venezuela rejected the OAS Assembly’s decision, with Foreign Minister Jorge Arreaza saying it would enable the United States to continue its economic war against the socialist country.
“Those that have supported this are supporting the possibility of a military intervention in Venezuela. Let that be on your conscious,” he said.
The vote comes on the heels of President Nicolas Maduro’s widely condemned re-election last month.
Maduro won a May 20 vote that the Venezuelan opposition, along with the United States and other Latin American nations, have decried as a sham cementing a dictatorship which has devastated a once-prosperous economy.
“I’m glad we are recognizing that democracy matters. We will not recognize illegitimate governments,” Carlos Trujillo, the US representative to the OAS, told the assembly after the vote.
The resolution declares that the electoral process “lacks legitimacy, for not complying with international standards, for not having met the participation of all Venezuelan political actors, and for being carried out without the necessary guarantees for a free, fair, transparent and democratic process”.
It urged the Venezuela government to: take steps to guarantee the separation and independence of the constitutional branches of power and restore the full authority of the National Assembly, the rule of law, and the guarantees and liberties of the population; and allow the entry of humanitarian aid and to implement epidemiological surveillance measures in its country to prevent the aggravation of the humanitarian and public health crisis, particularly against the reappearance of diseases such as measles, malaria, and diphtheria.
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Senate to meet on Friday Monday 6th June, 2018 – Nation News
The newly appointed Senate of Barbados will meet for the first time on Friday.
The main item for discussion will be the Constitution (Amendment) (No.1) Bill 2018 which was passed yesterday in the House of Assembly.
The motion was brought by Prime Minister Mia Mottley, clearing the way for Senators Rawdon Adams and Kay McConney to take their place in the Cabinet.
They were not resident on the island for 12 consecutive months prior to their appointments.
People who hold dual citizenship will also now be eligible.
Adams, a financial analyst, is the son of former Prime Minister Tom Adams, while McConney is a consultant and former consul general to Canada.
In tabling the motion, Mottley said the Constitution was framed in 1966 and it was time to make the changes so Barbados could "draw on our talent wherever it is found".
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S&P downgrades Barbados Thursday 7th June, 2018 – Barbados Today
Barbados has suffered another credit downgrade.
This time by Standard & Poor’s (S&P) which has lowered the island’s long- term foreign currency rating to “selective default” following the June 1 announcement by Prime Minister Mia Mottley that her week-old administration was suspending foreign debt service payments and seeking to make interest payments on its domestic debt while negotiating a restructuring agreement with domestic creditors.
As a result, Barbados failed on June 5 to make an interest payment due on its 6.625% notes due by 2035, and “we do not expect such a payment to be made”, S&P said.
“We also believe that Barbados will fail to pay its other outstanding external debt obligations as they come due while it negotiates a restructuring agreement with external creditors,” the United States-based ratings agency said in announcing its decision to reduce the island’s long- term foreign currency sovereign credit rating to selective default down from ‘CCC+’ and its long-term local currency rating to ‘CC’ from ‘CCC’.
“We are also lowering our long-term foreign currency issue rating on Barbados’ 2035 notes to ‘D’ from ‘CCC+’,” S&P said while announcing that “another four long-term foreign currency issue ratings and the local currency sovereign issuer credit and issue ratings are on CreditWatch negative, reflecting our view that the sovereign could miss payments on its foreign and local currency debt within the next three months”.
Mottley’s decision to suspend Barbados’ foreign commercial debt payments had earlier triggered a downgrade by the regional ratings agency CariCRIS, which dropped Barbados’ rating to ‘CariC’ on both its foreign currency and local currency rating.
In a further blow to the island’s credit worthiness, S&P is warning that it could lower the local currency sovereign issuer credit rating to selective default if Barbados fails to make debt service payments on its local currency debt or executes an exchange with bondholders.
“Our ratings on Barbados reflect its selective default on its external debt obligations and our view that a default on its local currency debt obligations is a virtual certainty,” the international ratings agency said, explaining that even though the Mottley Government has said it intends to meet its interest payment obligations on its domestic debt, “we would likely treat its request to roll over principal on this debt as a default given the nature of the request amid stressed financing conditions and limited options for bondholders.
“The Government’s next significant domestic bond maturity is its Barbados dollar (BB$) 100 million 4.375% Treasury notes due on June 30, 2018. Prior to this development, Barbados’ history of wider fiscal deficits and low growth since the global financial crisis has resulted in a significant increase in the Government’s debt burden,” S&P noted.
It also pointed out that net general Government debt reached nearly 95 per cent of GDP in 2017, one of the highest debt levels among Latin American and Caribbean sovereigns.
At the same time, it highlighted the fact that Government has not issued in the global capital markets since 2013 and that there has been a limited appetite for Government paper in the local market in recent years which has led to reliance on financing from public-sector entities, including the Central Bank.
Also, amid high current account deficits and limited external inflows, external liquidity has been weakening with reserves reportedly reaching US$220 million as of May 31, 2018, increasing the vulnerability of Barbados’ currency peg and heightening the risk of a balance-of-payments crisis.
S&P also noted that Government has been forced to turn to the International Monetary Fund for balance of payments support with a team from the Washington-based financial institution currently on island for talks with key stakeholders.
But though IMF financial support should strengthen the country’s external position, S&P said it was concerned that Barbados’ usable reserves have been negative since 2013, and the position continues to deteriorate, in part because of the Central Bank’s historical deficit financing, which has expanded the monetary base in the past.
It also pointed out that even in the face of these challenges, the Mottley Government, which came to power on May 24, has said that it intends to present a balanced budget by next year and is also sticking to election promises – including the elimination of the National Social Responsibility Levy, the resolution of the country’s sewage crisis, an increase in pensions, delivery of free university education, and improved transportation and trash collection – even though a comprehensive restructuring plan was yet to be formulated.
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4.5% pay hike Wednesday 6th June, 2018 – Caribbean News Now
You can forget all about the National Union of Public Workers’ (NUPW) demands for a 23 per cent pay hike for its members. Those demands by this island’s largest public-sector union have apparently died with the last Government.
Today, the NUPW, which had been holding the feet of the Freundel Stuart- led administration to the fire for more than a year in support of its demands for a double-digit pay hike, made a major about turn on the issue.
Barbados TODAY understands that after initially rejecting the significantly reduced offer from the new Government yesterday of a 4.5 per cent increase over three years, the union’s national council met today and approved the single digit salary offer, with only one council member abstaining and all others voting in favour of the proposed hike of two per cent in the first year, 1.5 per cent in the second and one per cent in the third for the 2016 to 2019 negotiating period.
At the same time, the NUPW has no intention of relinquishing outstanding backpay covering the period 2011 to 2016. However, informed sources say they are prepared to put those talks on hold for the time being, as Government begins formal negotiations on a balance of payments support programme with the International Monetary Fund.
Today, NUPW President Akanni McDowall was tight-lipped on the offer, saying he did not want to circumvent the ongoing negotiations with the Ministry of the Civil Service.
“We don’t want share the details until Government agrees to what exactly we are discussing because technically speaking we are still negotiating. So once Government accepts what the union is suggesting, which is in line with what they are offering, then we would explain to the public what the proposals are,” he said, while confirming that the union had accepted the latest pay offer from Government.
However, the NUPW president said there would be certain conditionalities attached to the wage increase, which amounts to a major step down by the union from its pre-election pay demands.
“We had a meeting this morning of the council to discuss the proposal presented to us by the Ministry of the Civil Service. Those discussions lasted for approximately an hour and we came up with a decision where we would look favourably on the proposal sent to us by Government. It is now up to the Government to determine whether or not they agree, but once it is finally agreed, public servants should be a little happier,” is all that McDowall would say on the current pay proposal.
It was last December that the then Stuart-led Government had offered the union a $49 million lump sum payment that would have seen civil servants at the higher end of the salary scale receiving a two per cent payment for one year and those at the lower end a five per cent hike, based on a sliding scale.
To sweeten the deal, the former Government had also proposed to make the payments tax free and devoid of any National Insurance deductions.
However, the proposal still did not sit well with the NUPW’s executives who said the payments would have amounted to less than $2,500 per worker.
This gave rise to demands by the union for $11 million more.
A breakdown of talks followed with the NUPW opting to embark on industrial action last January to little effect and following the dissolution of Parliament in March, the Stuart administration announced that it would be ceasing all salary negotiations with the union given the poor state of economy.
However, during the recent election campaign Mottley had promised that the first order of business would be to meet with the trade unions to secure a pay increase for the workers.
At that time, the then Opposition leader had also declared that if there was no agreement within three months of talks, a cost of living allowance would be paid to every public servant.
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Holness To Make Historic Presentation At G7 Summit Monday 4th June, 2018 – Caribbean News Now
Prime Minister Andrew Holness has been specially invited to attend the G7 Summit, set for June 8 and 9 in La Malbaie, in the Charlevoix region of Quebec, Canada.
Holness was invited by the Prime Minister of Canada, Justin Trudeau.
He has also been asked to make a special presentation to the global leaders at the G7 Outreach Session and will also participate in an exchange with the leaders at the Summit.
The historic invitation to Prime Minister Holness will make him the first Jamaican Prime Minister to speak at the Summit with the leaders of the seven most developed countries in the world.
The Summit will focus on issues such as building resilient coasts and communities, ocean knowledge and science, and sustainable oceans and fisheries.
The leaders will also explore how to best address pressing challenges, including plastics in oceans and illegal, unreported and unregulated fishing.
The (G7) is an informal grouping of seven of the world’s advanced economies consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.
The forum offers an opportunity for G7 leaders, Ministers and policy makers to come together each year to build consensus and set trends around some of today’s most challenging global issues.
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$210M in contracts signed for countrywide development Thursday 7th June, 2018 – Guyana Chronicle
Six Regional Democratic Councils on Wednesday signed contracts to the value of $210M for the construction of new medical and educational facilities in their respective districts.
Over 5000 residents from regions four, three, six, seven, nine and ten, will benefit from the projects, said Minister of Communities, Ronald Bulkan, prior to the signing of the contracts at the Ministry of Communities on Wednesday. Bulkan said the contracts were awarded to the lowest evaluated or responsive bidders after an open and competitive bidding process.
“Aside from our effort to maintain transparency and accountability, the projects are important because they will directly benefit persons from across six of the management regions and in four sectors of development which include education, health, transport and regional management,” the minister explained.
The projects that will be undertaken are the construction of a nursery school at Schoonord by KP Engineering for $28.9M; construction of Vryheid’s Lust North Nursery School by Simcon Engineering Co for $21.9M; construction of Strathspey Nursery School by Mojo’s General Construction for $20.9M;construction of a health centre at Supply, EBD by Navin and Sons Construction for $30.1M; construction of new Doctor’s Quarter in New Amsterdam by Simcon Engineering Co for $18.1M; construction of Kamarang Primary School by B&S Contracting Services for $28.9M; construction of Regional Administrative Annex building in Lethem by N&A Construction for $19.1M; construction of a health centre at Amelia’s ward by Simcom Engineering Co for $24.5M; and the rehabilitation of Ballfield Road, Wismar, Linden by Y. Bhola Construction Services for $17.5M.
Minister Bulkan said those projects are a testament of Government’s commitment to develop communities countrywide. Prior to the allocation of the contracts, the ministry had conducted discussions with the various RDCs to ascertain some of the critical issues and need in the six regions.
Based on how important the projects are to the communities, Bulkan said they should be completed in a timely and efficient manner so that the residents would not have to wait longer for the services they require. In order to ensure that the projects are done properly, the ministry and the RDCs will constantly monitor the sites. Finance Secretary, Hector Butts also stressed the need for the projects to be done in a timely manner and of a high quality.
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3000 acres of land for West Watooka farmers Thursday 7th June, 2018 – Guyana Chronicle
Over 3 000 acres of lands will soon be available for cultivation as the National Drainage and Irrigation Authority (NDIA) intensifies works within the West Watooka area.
The works which commenced over a year ago included the clearing and excavation of drainage and irrigation channels.
The excavation of canals which will allow for year-round access to irrigation water from a huge catchment area known as the ‘swamp’ was given the nod of approval by Minister of Agriculture Noel Holder will begin shortly.
These issues were among several which were discussed during an extensive meeting between farmers and Minister Holder who visited the West Watooka farming community recently.
West Watooka is home to some 87 farms, producing the majority of fruits and vegetables consumed by Lindeners. Farmers at the meeting were highly receptive of the minister and his team and spoke lucidly about their challenges.
The agricultural lands in that area are said to be approximately eight feet above the river which serves as a drainage outlet. Irrigation water is sourced from the swamp that lies somewhat uphill for the farms. However, access is constrained due to clogged or silted up canals.
According to the farmers, having the irrigation canals cleared and deepened means irrigation water would be available year-round.
Other issues raised included leases and land titles. Mark Benjamin, a farmer at the Watooka river area, called for the area to be regularised to ensure a reduction of squatting, which he said is now on the increase. Similar sentiments were echoed by several other farmers.
National Drainage and Irrigation Authority (NDIA), Chief Executive Officer Fredrick Flatts, announced that while the study has been completed by the independent consultant, a meeting set for June 13 will be conducted to ensure farmers are made aware of the required changes to ensure they are on board.
The meeting which will look extensively at irrigation will cater for work to be done which might require a re-alignment of existing farms.
“At this meeting, farmers will be given an opportunity to have a look at the maps generated by the consultation with a view to providing information that has so far been provided by the Lands and Surveys Department,” he said.
Suggestions from farmers will be addressed in the final composition of the report laying out the way forward.
Meanwhile, Minister Holder, in speaking about his visit, said the region remains a critical player in the move to take agriculture inland.
He told the farmers of West Watooka that his ministry understands and appreciates the challenges they face and will do everything within its mandate to ensure interventions for the maximisation of productivity and utilisation of all the available lands.
Farmers and residents of West Watooka also asked for assistance in the provision of potable water, Internet service, and improved road network. The problem of wild animals destroying crops was also raised with a plea for assistance.
The meeting was organised by APNU/AFC Member of Parliament Audwin Rutherford. The minister was accompanied by technical officers within the Ministry of Agriculture, including CEO of the GLDA Nigel Cumberbatch, CEO of the NDIA Frederick Flatts and Director of ASDU, George Jervis, along with other technical officials of the agencies mentioned.
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$6m Tour Operator to Create 70 Jobs Wednesday 6th June, 2018 – Tribune 242
A $6m tour operation will create 70 jobs within its first year when it begins to expose Eleuthera to thousands of tourists from 2019 onwards.
Tourism Adventures plans to launch a fast ferry that will take 500 guests per day from Nassau to Eleuthera in one hour.
Tyrone Sawyer II, the company's chief operating officer, said: "Tourism Adventures will provide an authentic out island experience to the island of Eleuthera. Tourists, especially cruise passengers, will have the opportunity to take a fast ferry able to travel at 48 knots per hour and still make it back to Nassau in one day.” Tourism Adventures plans to cater to children through partnering with Jemima's Playhouse, an education and entertainment company that was developed by Mr Sawyer and his wife, Jemima.
Jemima's Playhouse services pre-schools and elementary schools in Texas, Nebraska, Missouri, Kansas and Georgia, using characters such as BahamaMan, Señor Burro, Madame Belle and Waste-a-tron to teach students ethics and social responsibility.
"The children will be able to shoot marbles, spin the top, hop scotch, get fresh bread out the oven and dance with BahamaMan," Mr Sawyer said of Tourism Adventures.
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Gov't Financial Systems 80% Below Maximum Wednesday 6th June, 2018 – Tribune 242
The government's financial management systems remain "below global standard" and have seen "limited improvement", scoring 80 percent below maximum in their last assessment.
An Inter-American Development Bank (IDB) report on The Bahamas' "fiduciary systems", accompanying the 2018-2019 country strategy for this nation, backs assertions by KP Turnquest, the deputy prime minister, that a $33m project to overhaul an area overseeing fiscal consolidation efforts had been "floundering".
Using its PRODEV Evaluation Tool, the IDB said The Bahamas had secured "a marginal overall improvement" in the quality of its financial management systems between 2009 and 2013. However, this nation's score had only improved from 0.8 to 0.9 out of a maximum "five" based on its performance across five areas.
These were listed as Results-Based Planning; Results-Based Budgeting; Public Financial Management; Programme and Project Management; Monitoring and Evaluation. The Bahamas fared somewhat better on "public financial management", where its score improved from 1.9 in 2009 to 2.3 in 2013.
"The current Public Financial Management technological platform is outdated, lacks integration, and difficult to maintain," the IDB report said, while referring to the "new business model" that the government intends to adopt.
The Minnis administration has committed to transforming The Bahamas' governance and fiscal management systems through wide-ranging legislative reform, which includes the implementation of an e- procurement platform designed to address tendering system weaknesses identified by the IDB.
"Budget processing has seen limited improvement during the previous country strategies," the IDB report revealed. "The absence of a long-term vision articulated with medium-term fiscal framework, sector programmes and the Budget remain a concern as it is not suited to focus on results achievement.
"Ministries plan their expenditures with some certainty, but cash flow planning is limited. Payroll and personnel systems are not integrated.... Accounting and reporting systems, and practice, fall below international standards in terms of presentation and disclosure.
"Currently, the Government of the Bahamas has established a concept paper and road-map for implementing accrual accounting in accordance with international Public-Sector Accounting Standards (IPSAS), which envisions completion by 2023. Implementation is being incorporated within the [$33 million] loan operation."
As for public procurement, the IDB said: "The Bahamas does not have dedicated legislation that governs public procurement. The legal framework emanates from subsidiary legislation, in this case the Financial Administration and Audit Act (FAAA). This situation challenges a co- ordinated approach, as a set of suitable rules for planning, awarding and monitoring government contracts is missing.
"The Bahamas' current public procurement legislation and regulation is considered below international standards and practices. There is an absence of consolidated unifying instruments in public procurement at the statutory level with a clear hierarchical structure, able to promote uniform practices of high standards.
"Consequently, they do not cover a full range of issues needed for the functioning of a modern government public procurement system. Without a designated entity to take overall responsibility for the development and functioning of the system, and no feedback/reporting mechanisms, it is unclear how decisions with respect to rules and practices are made and informed."
Besides establishing a Public Procurement Unit, the Government is also implementing a public sector-wide e-tendering system from BIP Solutions, which the IDB branded as "robust" and in line with the legislative reforms. This should be completed in 2018.
Mr Turnquest reaffirmed the Government's commitment to modernise its financial and information management systems during the 2018-2019 Budget, while blasting the former Christie administration for failing to move the $33 million IDB-financed project forward.
Describing the initiative as "floundering up until last year, and producing meagre tangible results", Mr Turnquest said: "The objective of this exercise is to enhance the capacity of the Ministry to produce high quality information for evidence-based policymaking, as well as improve the ability to better allocate and track public funds.
"As well, the Ministry is moving to the adoption of new budgeting and accounting software and standards, and the introduction of accrual accounting and the systems that support it. Also, in development is the implementation of a new, modern Chart of Accounts that is fully compatible with international standards.
"As an initial step to avoid the build-up of future arrears, the Government is enabling accrual accounting with the planned introduction of International Public-Sector Accounting Standards (or IPSAS) for government bookkeeping and reporting that will provide increased visibility into outstanding cash requirements and facilitate cash planning. Here again, we are committed to bringing the Bahamian government up to modern and international standards."
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Vat Hike to Shut 40% Of Construction Sector Wednesday 6th June, 2018 – Tribune 242
The VAT rate hike will force 30-40 percent of Bahamian contractors out of business, the government was warned yesterday, while reducing this nation to “a tourism-only economy”.
Leonard Sands, the Bahamian Contractors Association’s (BCA) president, told Tribune Business that the 60 percent VAT rate hike would likely slash construction sector activity by 70 percent compared to when the tax was first introduced in 2015.
Warning that a 12 percent VAT would undermine an industry he described as the Bahamian economy’s “third pillar”, Mr Sands said the proposed increase threatens to have “a negative ripple effect” by increasing costs throughout the length of the construction industry’s supply chain.
Given that VAT is a regressive tax ultimately paid by the end-consumer, the BCA chief said increased construction costs would further reduce the number of qualifying buyers in an already-compressed mortgage market where banks remain reluctant to lend.
Pointing out that the Association had “charted” VAT’s impact since its arrival on New Year’s Day 2015, Mr Sands warned of a “chain reaction” from increased construction costs reducing mortgage access and real estate affordability - especially for new builds - and leading to a further slowdown in economic activity.
“The significant negative impact it will have is so much concerning,” the BCA president told Tribune Business of the proposed 60 percent VAT hike. “It will have a ripple effect. Going to 12 percent is going to reduce the number of people qualifying for mortgages to such a small number we could probably see 30-40 percent of contractors in the construction sector shut their doors because they don’t have enough activity to keep them in business.”
Mr Sands estimated that eight out of every ten persons in The Bahamas was “touched” by each dollar spent in the construction industry. “When you constrict that, that dollar will circulate to less than half of those people,” he said of a 12 percent VAT, “because it is no longer being spent as much. Less than half the people will be touched by that money.
“If we do this we can look forward to a really concerning situation where we have a level of inflation, less economic activity related to construction, and you will see more unoccupied homes on the landscape.... The landscape is going to look different because the level of construction is not going to be 65 per cent of what it was before the advent of 7.5 per cent VAT,” the BCA chief continued.
“VAT at 7.5 per cent pushed some people beyond the capability to get a mortgage. Now it’s going to 12 per cent, that group is going to expand. We’re going to get to a place where the level of construction activity in the country is as low as 30 per cent” compared to pre-VAT days.
Describing projections of such a decline as “real”, Mr Sands said higher construction costs would impact other key sectors - including real estate and foreign direct investment (FDI) - in what is already a high-cost economy.
Residential housing construction is the ‘bread and butter’ for most smaller Bahamian contractors and their sub-contractors, and the BCA president warned that the VAT hike’s impact on his industry alone may be enough to “stall” the economy given its importance as “the third pillar”.
“A lot of things ripple from that,” Mr Sands reiterated. “The only thing we’ll go back to is the 1980s when we were a tourism-only economy. That’s what we’re going to be staring at; a tourism-only economy.”
The Minnis administration came to office facing a difficult balancing act between trying to facilitate economic growth while, at the same time, eliminating annual fiscal deficits of more than $300 million. While many Bahamians, especially in the private sector, back the 2018-2019 Budget’s objectives, they feel the pendulum has shifted too much towards fiscal consolidation
Mr Sands’ concerns illustrate the extent of individual industry concerns over the proposed VAT rate rise, which is projected to suck an additional $400 million out of the economy in the upcoming fiscal year.
VAT is a regressive consumer tax, imposing a disproportionate burden on lower income Bahamians who spend a higher percentage of their income on consumption. Increasing the rate to 12 per cent has produced fears of a reduction in consumer demand, as persons adjust to higher prices and lower living standards and disposable incomes, resulting in lower economic growth - and possibly a new recession.
The Government, though, believes it has little choice but to increase VAT if it is to end 45 years of post-independence deficit spending in every Budget year. With the national debt now near $8 billion, it is caught between the ‘rock’ of $360 million in unfunded arrears and trying to meet the Fiscal Responsibility Bill’s target of a 0.5 per cent GFS deficit by 2020- 2021.
Amid private sector concerns that the magnitude of the fiscal correction is too much for the economy to bear, the Government appears to be banking on the Bahamas’ key external drivers - higher tourism numbers and the foreign direct investment (FDI) pipeline - combined with Baha Mar’s opening to keep the economy moving forward and offset the VAT rise.
Mr Sands, meanwhile, told Tribune Business that the Government was threatening to undermine its very own low-cost housing initiative, designed to enable more Bahamians to ‘own a piece of the rock’, with a 12 per cent VAT.
“I think it will have an extremely negative impact on the Government’s housing initiative,” he told Tribune Business. “With the cost of everything relating to construction going up. you can’t afford to get a lot of the materials and services.
“At 12 per cent you’re paying an additional 4.5 percentage points more. It doesn’t put you in a better position. This taxation, while grabbing more of the Bahamian people’s money, doesn’t bring more in.”
Mr Sands, who initially was the FNM’s Bain and Grant’s Town candidate for the 2017 general election before withdrawing, expressed scepticism that the VAT increase will deliver the $400 million revenue rise that the Government is seeking.
“More of your money is being diverted to pay taxes,” he explained. “This constricts your economy. It gets smaller. It doesn’t expand. The same thing that you’re trying to avoid you could achieve the wrong way by over- taxing.”
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Ministry of Agriculture to improve livestock development Wednesday 6th June, 2018 – St. Lucia News
A new policy and strategic plan is being developed for the livestock sub- sector in Saint Lucia.
Stakeholders from within the livestock industry met recently to discuss a new focus for livestock development for the next ten to fifteen years.
The discussions were spearheaded by the veterinary and livestock services division of the Department of Agriculture, with the assistance of the Food and Agriculture Organization (FAO) under a project sponsored by the India Brazil and South Africa trust fund entitled “Poverty Reduction in Saint Lucia through livestock development.”
Dr. Cedric Lazarus, FAO Livestock Development Officer, said the livestock policy and strategic plan will provide guidance to Ministry of Agriculture officials, as to the direction that the stakeholders of the livestock sector would like.
“It might include elements of how to develop the various livestock value chains, assess its weaknesses, and pinpoint areas where government should intervene in terms of eliminating gaps and strengthening value chains,” Dr. Lazarus said.
The new policy and strategic plan is the latest addition to the IBSA project and was included approximately one year ago. The plan will focus on a number of areas including developing value chains for each of the livestock products such as poultry, pork and egg production. The plan will focus also on strengthening animal health systems to prevent and control diseases and mortality in animals.
Vernon Valmont, National Consultant for the IBSA project in Saint Lucia, said the project centres on maximizing production.
“Saint Lucia’s consumption of meats is high and in the development of the strategy we focus on small ruminants and swine, but not so much on cattle because of our limited land space,” Mr Valmont said. “We’re also discussing land use and how to maximize production on the limited land space that we have. The policy focuses on intensive systems of production and how we can further develop standards of quality and food safety for the nation.”
A consultant was brought in to assist in developing the new policy and strategic plan. A draft of the policy has already been developed and will soon be tabled for discussion before submission to Cabinet. The same is being done for the livestock strategy.
The new policy and strategic plan will suggest to the government the direction for the sub-sector over the medium to long term. The meeting was held on Thursday, May 24.
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Tourism Advisory Committee launched Wednesday 6th June, 2018 – St. Lucia News
The recently-launched Tourism Advisory Committee (TAC), is expected to set the tone and new vision for the local tourism industry, in a thrust to ensure that tourism development is in sync with national and socio- economic development.
The TAC was launched on May 25 and established as a technical working group. Sanctioned by Cabinet Conclusion no. 138 of 2018, its overall objective is to improve the competitiveness of the tourism industry using a multi-stakeholder approach.
Minister in the Office of the Prime Minister with responsibility for Tourism, Hon. Dominic Fedee, is the TAC Chair. He described the new TAC as the “game changer.”
“Today is a transformative day and it is profound in what the TAC will do for the governance of tourism here in Saint Lucia,” he said. “It provides an opportunity to cast vision for the industry. We have a great opportunity to take our industry to the next level.”
Articulating the vision for the Tourism Advisory Committee, Prime Minister Hon. Allen Chastanet, said there must be a collective vision and understanding of the tourism product.
“The intention is to recognize that all of you are in [the field of] tourism. Customs, red caps, taxi drivers, immigration, gas station attendants, store keepers, police officers. I want you to appreciate that this is a business, and the job of the TAC is to understand that business, help define the branding position for Saint Lucia, and most importantly, ensure that everybody is living up to that brand promise,” he said. “I fully endorse this committee and I want you to know that at the highest level of Cabinet this is regarded with the greatest level of respect.”
The seventeen-member Tourism Advisory Committee has several functions, among them to maintain close ties with national and governmental agencies, statutory bodies, NGOs and other private entities, for the implementation of national tourism plans and policies.
The TAC will meet once monthly and will work closely with the Tourism Authority and Village Tourism Incorporated.
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ECCB issues warning to OECS nationals Wednesday 6th June, 2018 – Jamaica Observer
The Eastern Caribbean Central Bank (ECCB) is warning customers in the sub-regional Organisation of Eastern Caribbean States (OECS) to be cautious against using non-traditional financial services saying that they could suffer “financial losses by getting involved in initiatives which they do not yet understand fully”.
In a statement, the ECCB said that “these include but are not limited to peer to peer lending, digital wallets, crowd funding ventures, crypto- assets and initial coin offerings (ICOs) in the Eastern Caribbean Currency Union (ECCU)”.
The ECCB, which serves as a central bank for Antigua and Barbuda, Dominica, Grenada, St Lucia, St Vincent and the Grenadines, St Kitts- Nevis, Montserrat and Anguilla, said consistent with its growth and development mandate, it supports and encourages innovation and believes that financial innovation is essential as the Eastern Caribbean region forges a path to socio-economic transformation.
“Indeed, it is based on this conviction that the ECCB Strategic Plan 2017- 2021 provides for a FinTech pilot, which includes a digital EC currency and the modernisation of our payment systems,” it said, adding that the ECCB is equally committed to its mandate of financial stability which aims to ensure the soundness and stability of the financial system.
“In this context, the ECCB is deeply concerned about the real possibility that ECCU citizens could suffer financial losses by getting involved in initiatives which they do not yet understand fully and, more importantly, are not regulated. Some of these offerings appear to be investment or securities business and ought to be regulated properly,” the statement noted.
It said before involvement with these initiatives, citizens are advised to consider the following questions, what do they know about this service provider and the services being offered, whether they understand both the opportunities and the risks and whether the service provider is regulated and by whom.
Other questions include whether the service provider has appropriate anti-money laundering (AML) controls and what dispute resolution mechanisms exist if there is a dispute with this service provider.
The ECCB said that in in collaboration with domestic and other regional regulators, it is reviewing existing laws to identify changes which may be required to ensure adequate regulatory cover for these initiatives. In this process of review, the ECCB is also engaging service providers in the FinTech industry on how best to support financial innovation, it added.
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Jamaica supports suspending Venezuela from OAS Wednesday 6th June, 2018 – Jamaica Observer
According to Tuesday's voting at the Organisation of American States (OAS) to suspend Venezuela from the 34-member group, Jamaica was among 19 countries to support the resolution.
The others included Bahamas, Barbados, Guyana among others, while Dominica and St Vincent and the Grenadines voted against the measure.
Belize, Grenada, Haiti, St Kitts-Nevis, St Lucia, Suriname and Trinidad and Tobago, were among the 11 member states that abstained during the vote.
The resolution was spearheaded by the United States as it condemned President Nicolas Maduro's re-election last month.
OAS members have expelled only two nations in its history.
Cuba was forced out in 1962 and Honduras was suspended briefly following a 2009 military coup.
The ban of Cuba was lifted in 2009, but the island country rejected re- joining the organisation.
Venezuelan Foreign Minister Jorge Arreaza said Caracas rejected the OAS Assembly's decision and it would enable the United States to continue its “economic war” against the socialist government.
“Those that have supported this are supporting the possibility of a military intervention in Venezuela. Let that be on your conscious,” he said.
President Maduro has already described the OAS as a pawn of US foreign policy and last year his government said it had started the two-year process to pull out of the organisation.
But US representative to the OAS, Carlos Trujillo, said he was pleased with the vote, adding “I'm glad we are recognising that democracy matters. We will not recognise illegitimate governments”.
The resolution, adopted at the OAS' fourth plenary session, states that the elections did not comply with international standards, failed to meet the participation of all Venezuelan political actors, and were “carried out without the necessary guarantees for a free, fair, transparent and democratic process.”
The resolution reaffirms that “only through a national dialogue with the participation of all Venezuelan political actors and stakeholders can national reconciliation be achieved and the necessary conditions agreed upon for holding a new electoral process that truly reflects the will of the Venezuelan citizens and peacefully resolves the current crisis in that country.”
The OAS said the resolution reiterates that “an unconstitutional alteration of the constitutional order of the Bolivarian Republic of Venezuela has occurred,” as stated in an April 3, 2017 resolution.
The resolution urges Venezuela to take steps to guarantee the separation and independence of the constitutional branches of power and “restore the full authority of the National Assembly, the rule of law, and the guarantees and liberties of the population.”
It also urges Venezuela to allow the entry of humanitarian aid and to implement epidemiological surveillance measures in its country to avert “the aggravation of the humanitarian and public health crisis, particularly against the reappearance of diseases, such as measles, malaria and diphtheria.
The resolution instructs the OAS Permanent Council to identify, in coordination with the relevant inter-American and international institutions, the appropriate measures to support the member states that are receiving an increasing number of Venezuelan migrants and refugees.
In addition, the resolution calls on the member and permanent observer states to implement, in accordance with their respective legal frameworks and applicable international law, the measures deemed appropriate at the political, economic, and financial levels to assist in the restoration of democratic order in Venezuela.
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Euro, bond yields extend gains on ECB while risk appetite grows Thursday 7th June, 2018 – Reuters
World stocks hit a three-week high on Thursday and the euro and euro zone bond yields extended gains as investors priced in a potentially earlier-than-expected wind-down of ECB stimulus.
The selloff in safe-haven Bunds and U.S. Treasuries drove money into riskier assets, especially financial stocks, despite investors’ anxiety over how a G7 leaders summit that kicks off on Friday will pan out in view of global trade concerns.
Bank stocks, which tend to gain from higher bond yields, drove European shares up in early trade. The pan-European banks index .SX7P jumped 0.6 percent, supporting the STOXX 600 .
Banks remain the worst-performing sector in Europe year-to-date, however, having been dented by a selloff triggered by political risk in Italy.
MSCI’s index of world stocks .MIWD00000PUS rose 0.2 percent to its highest since May 14, helped by Asian shares which climbed to an 11-week high overnight.
European stocks pared gains by mid-morning, however, as the euro rose, weighing on exporting companies.
The single currency EUR= hit its highest level since May 15 at $1.1838 and traded up 0.5 percent at $1.1827 by 1033 GMT in its fourth straight session of gains. It helped drive the dollar index .DXY down 0.4 percent to 93.295.
Germany’s benchmark 10-year bond DE10YT=TWEB rose in step with the euro, breaching 0.50 percent for the first time in two weeks on signs that the European Central Bank could soon call an end to its stimulus program.
The selloff in German Bunds spread across the Atlantic as the U.S. benchmark 10-year yield US10YT=RR hit a 2-1/2 week high of 2.9940 percent, edging closer to the 3 percent level it breached a month ago.
The ECB’s Chief Economist Peter Praet said on Wednesday that robust growth made it increasingly confident inflation was on its way back to target, raising chances it may reveal more about the end of the bond- buying program at its meeting next week.
Praet’s comments took the market by surprise, given a recent slowdown in the euro zone economy.
Data on Thursday showed German industrial orders plunged unexpectedly in April, a fourth consecutive monthly drop.
“It’s a complex backdrop where ultimately the economy is not doing badly, but the economic surprises in Europe have not been to the upside,” said Antoine Lesne, head of EMEA strategy and research at State Street’s SPDR ETF.
“Bad momentum has eased the overall backdrop the ECB is navigating - but if you’re looking at the broader macro picture it is still positive for risk assets.”
Analysts at Bank of America Merrill Lynch said Praet’s speech showed the central bank was willing to look through the recent soft patch in data.
TOO BULLISH?
The risk-on moves across markets coincided with a calendar of potentially destabilizing political events.
The run-up to the G7 summit has been dominated by a widening divide over trade between U.S. President Trump and the club’s remaining six members.
But gauges of investor anxiety, including stock volatility, showed little sign of strain, flummoxing some investors.
The VIX, which measures volatility on the S&P 500 .VIX, was last trading at 11.79. It has fallen from more than 50 to less than 12 in just 83 days - a record decline, traders said.
“I am amazed to see everyone so bullish,” said Charles de Boissezon, deputy head of global asset allocation and equity strategy at Societe Generale.
“Everyone assumes that ...central banks will be behind the curve by default, but it’s not that obvious.”
Commodities continued to climb thanks to a still strong global economy and tight supply.
Copper CMCU3 hit its highest level this year at $7,295 per ton, driven up 0.8 percent by supply concerns over disruption at the Escondida mine in Chile. It was on track for its sixth straight day of gains, its longest run since December.
Oil prices also rose as plunging exports from OPEC member Venezuela crimped supply in the market.
Brent crude futures LCOc1 traded up 0.8 percent at $75.93 a barrel and U.S. West Texas Intermediate (WTI) crude CLc1 up 0.6 percent at $65.13.
Gold prices edged higher, with spot gold XAU= trading at $1,298.75 per ounce, up 0.2 percent.
In emerging markets, stocks .MSCIEF climbed 0.4 percent to a three-week high, supported by the weaker dollar. UBS analysts declared “buying time” for emerging stocks, upgrading Mexico, Poland and Colombia while downgrading Brazil.
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Billions in U.S. solar projects shelved after Trump panel tariff Thursday 7th June, 2018 – Reuters
President Donald Trump’s tariff on imported solar panels has led U.S. renewable energy companies to cancel or freeze investments of more than $2.5 billion in large installation projects, along with thousands of jobs, the developers told Reuters.
That’s more than double the about $1 billion in new spending plans announced by firms building or expanding U.S. solar panel factories to take advantage of the tax on imports.
The tariff’s bifurcated impact on the solar industry underscores how protectionist trade measures almost invariably hurt one or more domestic industries for every one they shield from foreign competition. Trump’s steel and aluminum tariffs, for instance, have hurt manufacturers of U.S. farm equipment made with steel, such as tractors and grain bins, along with the farmers buying them at higher prices.
White House officials did not respond to a request for comment.
Trump announced the tariff in January over protests from most of the solar industry that the move would chill one of America’s fastest-growing sectors.
Solar developers completed utility-scale installations costing a total of $6.8 billion last year, according to the Solar Energy Industries Association. Those investments were driven by U.S. tax incentives and the falling costs of imported panels, mostly from China, which together made solar power competitive with natural gas and coal.
The U.S. solar industry employs more than 250,000 people - about three times more than the coal industry - with about 40 percent of those people in installation and 20 percent in manufacturing, according to the U.S. Energy Information Administration.
“Solar was really on the cusp of being able to completely take off,” said Zoe Hanes, chief executive of Charlotte, North Carolina solar developer Pine Gate Renewables.
GTM Research, a clean energy research firm, recently lowered its 2019 and 2020 utility-scale solar installation forecasts in the United States by 20 percent and 17 percent, respectively, citing the levies.
Officials at Suniva - a Chinese-owned, U.S.-based solar panel manufacturer whose bankruptcy prompted the Trump administration to consider a tariff - did not respond to requests for comment.
Companies with domestic panel factories are divided on the policy. Solar giant SunPower Corp (SPWR.O) opposes the tariff that will help its U.S. panel factories because it will also hurt its domestic installation and development business, along with its overseas manufacturing operations.
“There could be substantially more employment without a tariff,” said Chief Executive Tom Werner.
LOST PROFITS, JOBS
The 30 percent tariff is scheduled to last four years, decreasing by 5 percent per year during that time. Solar developers say the levy will initially raise the cost of major installations by 10 percent.
Leading utility-scale developer Cypress Creek Renewables LLC said it had been forced to cancel or freeze $1.5 billion in projects - mostly in the Carolinas, Texas and Colorado - because the tariff raised costs beyond the level where it could compete, spokesman Jeff McKay said.
That amounted to about 150 projects at various stages of development that would have employed three thousand or more workers during installation, he said. The projects accounted for a fifth of the company’s overall pipeline.
Developer Southern Current has made similar decisions on about $1 billion of projects, mainly in South Carolina, said Bret Sowers, the company’s vice president of development and strategy.
“Either you make the decision to default or you bite the bullet and you make less money,” Sowers said.
Neither Cypress Creek nor Southern Current would disclose exactly which projects they intend to cancel. They said those details could help their competitors and make it harder to pursue those projects if they become financially viable later.
Both are among a group of solar developers that have asked trade officials to exclude panels used in their utility-scale projects from the tariffs. The office of the U.S. Trade Representative said it is still evaluating the requests.
Other companies are having similar problems.
Scott Canada, senior vice president of renewable energy at solar project builder McCarthy Building Companies, said his company had planned to employ about 1,200 people on solar projects this year but slashed that number by half because of the tariff.
Pine Gate, meanwhile, will complete about half of the 400 megawatts of solar installations it had planned this year and has ditched plans to hire 30 permanent employees, Hanes said.
The company also withdrew an 80-megawatt project that would have cost up to $150 million from consideration in a bidding process held by Southern Co (SO.N) utility Georgia Power. It pulled the proposal late last year when it learned the Trump administration was contemplating the tariff.
“It was just not feasible,” Hanes said.
STOCKPILING PANELS
For some developers, the tariff has meant abandoning nascent markets in the American heartland that last year posted the strongest growth in installations. That growth was concentrated in states where voters supported Trump in the 2016 presidential election.
South Bend, Indiana-based developer Inovateus Solar LLC, for example, had decided three years ago to focus on emerging Midwest solar markets such as Indiana and Michigan. But the tariff sparked a shift to Massachusetts, where state renewable energy incentives make it more profitable, chairman T.J. Kanczuzewski said.
Other developers are forging ahead, keen to take advantage of the remaining years of a 30-percent federal tax credit for solar installation that is scheduled to start phasing out in 2020.
Some firms saw the tariff coming and stockpiled panels before Trump’s announcement. 174 Power Global, the development arm of Korea’s Hanwha warehoused 190 megawatts of solar panels at the end of last year for a Texas project that broke ground in January.
The company is paying more for panels for two Nevada projects that start operating this year and next, but is moving forward on construction, according to Larry Greene, who heads the firm’s development in the U.S. West.
Intersect Power, a developer that cut a deal last year with Austin Energy to provide low-cost power to the Texas capital city, is also pushing ahead, said CEO Sheldon Kimber. But the tariff is forcing delays in buying solar panels.
The 150-megawatt project is due to start producing power in 2020. Waiting until the last minute to purchase modules will allow the company to take advantage of the tariff’s 5-percent annual reductions, he said.
‘A LOT OF ROBOTS’
Trump’s tariff has boosted the domestic manufacturing sector as intended, which over time could significantly raise U.S. panel production and reduce prices.
Panel manufacturers First Solar (FSLR.O) and JinkoSolar (JKS.N), for example, have announced plans to spend $800 million on projects to increase panel construction in the United States since the tariff, creating about 700 new jobs in Ohio and Florida. Just last week, Korea’s Hanwha Q CELLS (HQCL.O) joined them, saying it will open a solar module factory in Georgia next year, though it did not detail job creation.
SunPower Corp, meanwhile, purchased U.S. manufacturer SolarWorld’s Oregon factory after the tariff was announced, saving that facility’s 280 jobs. The company said it plans to hire more people at the plant to expand operations, without specifying how many.
But SunPower has also said it must cut up to 250 jobs in other parts of its organization because of the tariffs.
Jobs in panel manufacturing are also limited due to increasing automation, industry experts said.
Heliene - a Canadian company in the process of opening a U.S. facility capable of producing 150 megawatts worth of panels per year - said it will employ between 130 and 140 workers in Minnesota.
“The factories are highly automated,” said Martin Pochtaruk, president of Heliene. “You don’t employ too many humans. There are a lot of robots.”
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Euro rebounds to three-week high on bets ECB will signal stimulus unwind Thursday 7th June, 2018 – Reuters
The euro climbed to a three-week high on Thursday as investors raised their bets that the European Central Bank will next week signal a winding down of its vast bond-buying program by the end of this year.
The central bank’s chief economist Peter Praet, a close ally of President Mario Draghi, said on Wednesday that the ECB would debate at its policy meeting next week whether to end bond purchases later this year.
Jens Weidmann, the head of Germany’s central bank, said expectations the ECB would taper its bond-buying program by the end of this year were plausible while his Dutch counterpart, Klaas Knot, said there was no reason to continue a quantitative easing program.
The comments drove the euro to $1.1838 EUR=, up half a percent on the day and its highest since May 17.
Some analysts have taken the comments to suggest a decision is coming at the June 14 meeting but others saw it as the starting gun in a debate that will likely culminate in a decision in July.
Petr Krpata, currencies strategist at ING, said the most “realistically bullish” case was for the ECB to signal a one quarter extension of the bond-buying to end-December.
“If they say only one more quarter, that’s the biggest upside potential for the euro,” he said, adding that he was less bullish and expected the ECB to make the unwinding more open-ended and conditional on economic news.
He said the euro’s strength was limited given concerns about a trade war that could hit big euro zone exporters, and the possibility of a more hawkish Federal Reserve when it meets next week and is expected to raise interest rates for the second time this year.
Many market players were surprised by the flurry of ECB comments as they had thought uncertainty caused by a political crisis in Italy would stay policymakers’ hands.
Euro zone inflation will also need to stay close to the ECB’s target for several months before policy is tightened, analysts said.
“Our economists remain highly sceptical about the development of (core) inflation in the euro zone,” Commerzbank analysts wrote, describing some “normalization fantasies” as “too high-flying”.
LIRA JUMPS
In emerging markets, the Turkish lira was the big mover of the day.
The lira surged more than three percent TRY= to below 4.47 lira against the dollar after the central bank hiked the benchmark interest rate by 125 basis points, more than expected.
The dollar index .DXY slipped 0.4 percent to its weakest since May 17, helping currencies including sterling GBP= claw back some of their recent losses.
Despite the improving mood among investors on Thursday many remain cautious, especially ahead of a summit this weekend of the Group of Seven leaders when President Donald Trump looks set to clash with his counterparts over trade.
After a six-week long rapid rally the dollar has failed to break above key levels against some of its rivals, raising concerns the greenback’s weakness may have more room to run.
Against the yen JPY=, for example, it has failed to break above a 200-day moving average, potentially opening the door for more losses before a key G7 meeting this weekend.
The dollar fell 0.2 percent to 109.98 yen.
The Australian dollar dipped 0.2 percent against the dollar to $0.7652 AUD=, off a 1-1/2-month high touched on Wednesday, boosted in part by the country's strong economic data.
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South Africa's bonds still a favourite despite GDP setback Thursday 7th June, 2018 – Reuters
South African bonds are set to outshine some of their emerging market peers even after the economy contracted in the first quarter, as investors bet the country’s new political leadership will adopt more business-friendly policies, analysts said.
Local assets have rallied since Cyril Ramaphosa took over as leader of ruling African National Congress in December and as South African president in February. The trade union leader-turned-businessman is expected to bring more political stability than his scandal-plagued predecessor Jacob Zuma.
With policy changes by the new administration seen gaining speed over the course of this year, yield-hungry investors put off by stalled reforms in other emerging markets may find comfort in the high returns offered by South Africa’s bonds.
Emerging debt sold off heavily in May as U.S. Treasury bond yields rose sharply but flows out of South Africa were mild in comparison, with demand from institutional investors trumping any short-term panic.
Chief Africa economist at Standard Chartered Razia Khan said South Africa’s disappointing first quarter growth figures, which showed the largest quarterly contraction in nearly decade, were unlikely to deter investors.
“South African real interest rates relative to the rest of the world still look very compelling,” said Khan in Johannesburg on Wednesday. “We are already seeing a lot of analysis saying if you see emerging markets as providing a buying opportunity, look to South Africa first. The positivity will come back.”
Gabriele Foa and David Hauner, strategists at Bank of America Merrill Lynch, said recent improvements in South Africa’s budget, high real interest rates and a relatively steep curve made local bonds even more attractive.
“10-year ZAR bonds yield 8.7 percent, while we forecast inflation at 4.6 percent for 2018. A 4 percent real rate is high compared to what South Africa usually offers and versus emerging market peers too,” they said.
ROTATION OF RISK
South Africa’s benchmark bond yields slightly more than similarly-rated Indonesia’s 7.2 percent and Russia’s 7.4 percent, but much less than Brazil’s 12 percent and Turkey’s 13.7 percent.
“There is of course a fairly decisive reason for this, being the lack of political instability, which has led to a strong rotation of risk out of other more volatile countries and into our markets,” Standard Bank’s chief trader Warrick Butler said in a note, also comparing South Africa favourably to Argentina.
The calm is also reflected in one-month implied volatility for the rand, a gauge of expected swings in the currency, which is near its historic average and lower than for many key emerging currencies, such as Turkey’s and Indonesia’s.
Craig Botham, emerging markets economist at Schroders, which manages over $500 billion worth of assets globally, said the independence of South Africa’s central bank and lower inflation, seen averaging 4.9 percent in 2018, would steel local bonds against the recent EM turbulence.
Botham said reforms at state firms — including sole power utility Eskom, where the government has made executive appointments since Ramaphosa became president — were sending positive signals to investors.
“It’s also a sentiment thing. Reforms around state-owned companies and moves to remove some of government’s intervention in the economy are really helping,” he said. ($1 = 12.6900 rand)
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German bond yields march higher as markets wake up to ECB risk Thursday 7th June, 2018 – Reuters
German government bond yields hit two-week highs on Thursday, leading top-rated bond yields in the euro area higher, a day after hawkish comments from top ECB policy makers turned investor focus to a looming central bank meeting.
More than 13 billion euros of new bond supply from France and Spain added to upward pressure on yields, which were 3-5 basis points higher across much of the bloc.
The ECB remained in focus after ECB chief economist Peter Praet said on Wednesday the central bank would next week debate whether to gradually unwind bond purchases.
That came as a surprise to markets, as last week’s rout in Italian bonds, alongside softer data, had cast some doubt on whether the ECB would signal any policy shift so soon.
“Faced with the Italian mini political crisis in May, the thinking was the ECB would postpone any communication on ending bond purchases until after the summer months,” said KBC rate strategist Mathias van der Jeugt.
“But talk that the ECB will use next week’s meeting to discuss ending bond buys means that, from markets’ point of view, the ECB is back on the radar.”
In Germany, the euro zone’s benchmark issuer, 10-year bond yields rose more than 5 bp to 0.517 percent DE10YT=RR - a two-week high. The yield has risen almost 14 basis points over the last two days — the biggest two- day jump since October 2016.
France’s borrowing costs FR10YT=RR rose to a three-week high at 0.86 percent.
Indeed, upward pressure on bond yields remained even as data showed German industrial orders had plunged due to weak demand from domestic and euro zone clients in April, posting their fourth straight drop on the month.
France meanwhile sold 9 billion euros of bonds through an auction, including a new 10-year issue, while Spain sold 4.5 billion euros of debt.
Thursday’s core euro zone bond yields were well above troughs hit last week when German 10-year yields dropped as low as 0.19 percent and French 10-year yields dipped to 0.70 percent due to political uncertainty in Italy.
The threat of a new election — seen by some as a proxy referendum on Italy’s membership of the euro zone — has been averted, at least for now.
That has calmed markets to some degree, though trade in Italian government bonds remained volatile. At 1056 GMT, 10-year yields were down 2 bp on the day at 2.91 percent IT10YT=RR, having risen sharply the day before on prospects of ECB tightening.
“Bond markets had perhaps thought there was a growing chance of this process being delayed,” David Page, senior economist at AXA Investment Management told Reuters’ Global Markets Forum, referring to the debate on ending quantitative easing.
“The ECB message yesterday was that this was not the case.”
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Futures inch higher as Allergan, banks gain Thursday 7th June, 2018 – Reuters
U.S. stock index futures edged higher on Thursday, with Allergan and banking shares setting Wall Street up for another round of gains.
The S&P 500 .SPX was set for its fifth day of gains, while the technology- heavy Nasdaq .IXIC closed at a record high for the third-straight day on Wednesday, as investors focused on strength in the U.S. economy and solid earnings reports, putting aside trade concerns.
At 7:25 a.m. ET, Dow e-minis 1YMc1 were up 72 points, or 0.29 percent. S&P 500 e-minis ESc1 were up 3.25 points, or 0.12 percent and Nasdaq 100 e- minis NQc1 were up 1.5 points, or 0.02 percent.
The CBOE Volatility index, a gauge of stock market volatility, eased to levels before the early February sell-off, last trading at 11.74 points.
Investors are likely to get more clues on trade, with top U.S. allies set to meet at the G7 summit in Canada.
The two-day meet starting Friday will be the first chance for world leaders to confront Trump in person, since U.S. tariffs on steel and aluminum imports from Canada, Mexico and the European Union were imposed last week.
All six of the other G7 countries — Britain, Canada, France, Germany, Italy and Japan — are now paying the tariffs.
Canada and Mexico have retaliated against a range of U.S. exports and the EU has promised to do so as well.
White House economic adviser Larry Kudlow said on Wednesday that Trump will meet French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau during the G7 summit.
While Kudlow said Trump is not backing down from the tough line he has taken on trade, the comments appeared to calm investors.
Among stocks, Tesla (TSLA.O) dropped 0.5 percent after Morgan Stanley analyst Adam Jonas said it was unlikely that the electric car maker would reach its Model 3 production target of 5,000 per week, before the first half of 2019.
Tesla added about $5 billion in market value on Wednesday after billionaire Chief Executive Officer Elon Musk gave encouraging comments about Model 3 production.
Allergan (AGN.N) jumped 2.7 percent following reports that billionaire investor Carl Icahn acquired a small stake in the company.
Shares of Bank of America (BAC.N), JPMorgan (JPM.N) and Citigroup (C.N) were up nearly 0.5 percent in premarket trading.
The S&P bank index .SPXBK rose 2.3 percent on Wednesday, helped by rising U.S. yields and an increase in mortgage applications for the first time in seven weeks.
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Nikkei rises to more than 2-week high; non-ferrous metal stocks rally Thursday 7th June, 2018 – Reuters
Japan’s Nikkei share average rose to more than two-week highs on Thursday morning to stay above a key technical level as it tracked Wall Street gains overnight, while non-ferrous metal stocks staged a rally after copper prices soared.
The Nikkei gained 0.8 percent to 22,815.43 in midmorning trade, hitting as high as a two-week high of 22,839.41 earlier, comfortably trading above its 25-day moving average of 22,579.88.
U.S. stocks rallied overnight with help from financial stocks as investors eyed strong economic data while the Nasdaq posted its third straight record closing high.
Meanwhile, analysts said that investors are focused on Friday’s settlement of Nikkei futures and options contracts expiring in June.
“The market is focused on whether the Nikkei futures and options will settle above 23,000... it looks positive as the Nikkei has traded above a key technical line,” said Yutaka Miura, a senior technical analyst at Mizuho Securities. “If they settle above that level, the next resistance will likely be at 23,200.”
The nonferrous metal sector surged 1.5 percent and was the second best sectoral board after copper hit a 3-1/2 month high on Wednesday as concerns lingered over possible supply disruptions in Chile.
Sumitomo Metal Mining surged 3.4 percent, Mitsui Mining & Smelting soared 2.4 percent.
Copper has risen nearly 4 percent this week after the union at BHP’s, Escondida mine in Chile, the world’s largest, said on Friday it had started the latest round of wage negotiations.
Other winners included tech shares such as high-purity silicon maker Sumco Corp surging 2.6 percent, and TDK Corp gaining 2.2 percent.
On the flip side, mining stocks weakened after oil prices fell on Wednesday on worries that global supply is climbing, before shaking off some of the losses during Asian trade.
Inpex Corp was flat, while Japan Petroleum Exploration Co declined 1.0 percent.
The broader Topix advanced 0.6 percent to 1,788.29.
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Sterling at two-week highs on broad dollar rout Thursday 7th June, 2018 – Reuters
Sterling climbed to more than two-week highs on Thursday, helped by general dollar weakness thanks to a broadening rally in the euro currency, though concerns over Brexit negotiations capped gains.
British ministers will meet on Thursday to try to hammer out an agreement over a “backstop” plan for the Irish border after concerns were raised by the Brexit minister that a current proposal would keep Britain tied to the EU indefinitely. [nL5N1T91AN]
“I don’t think the market is focused on the underlying Brexit issues at the moment but going along with the general dollar trend,” said Neil Mellor, a senior currency strategist at BNY Mellon in London.
Sterling rose to $1.3472 per dollar in early London trading, its highest levels since May. 22 as the dollar’s run higher in recent weeks peaked.
Against the euro, sterling was broadly flat at 87.81 pence. The dollar’s rally in recent weeks has squeezed out long sterling positions with net long bets on the British pound falling to a quarter from a four-year high in April.
But after falling to around $1.32 at end-May, sterling has rebounded somewhat thanks to a pick-up in data.
Data this week, including a widely watched survey of the dominant services sector on Tuesday, suggest weaker economic momentum in the first quarter was temporary and the economy is recovering. [nL9N1QN07S]
Investors would also need to see more than one month of solid economic data before expecting the BoE to raise rates. Money markets are now pricing in a 60 percent chance of a 25-basis point rate rise in September.
A trade-weighted index for the British currency has tiptoed higher to 78.69 after hitting a near-three month low in end May.
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Oil rises as reality dawns over Venezuela's export crisis Thursday 7th June, 2018 – Reuters
Oil rose on Thursday on concerns about a plunge in exports from Venezuela, although surging U.S. production kept gains in check.
Brent crude futures LCOc1 were up 23 cents at $75.59 a barrel by 0900 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 was 14 cents higher at $64.87 a barrel.
Venezuela, which faces the threat of U.S. sanctions and is in the midst of an economic crisis, is nearly a month behind delivering crude to customers from its main oil export terminals, according to shipping data, and chronic delays and production declines could breach state-run PDVSA’s supply contracts if backlogs are not cleared soon.
Tankers waiting to load more than 24 million barrels of crude, almost as much as state producer PDVSA shipped in April, are sitting off the OPEC member’s main oil port, according to shipping data.
“Troubles over supply from Venezuela come at a time when OPEC is considering easing supply cuts which have been in place since 2017 and were implemented to support the price,” London Capital Group head of research Jasper Lawler said.
“The big question for oil is whether or not OPEC decides to ease the production cuts, with the meeting still some two weeks away, oil traders could be in for an increased bout of volatility.”
Venezuela’s supply problems have materialised while the Organization of the Petroleum Exporting Countries has voluntarily cut output since 2017 to help bring global output in line with demand.
The group, led by Saudi Arabia, has complied with its commitment to limit production, but not every member has cut voluntarily. Aside from Venezuela, Angola has also seen output decline rapidly from its ageing fields.
The group meets in Vienna, together with top non-OPEC producer Russia, on June 22 to discuss its supply policy.
OPEC-member Iraq said on Wednesday a production increase was not on the table.
This followed an unofficial request from the United States asking OPEC’s effective leader Saudi Arabia to boost output.
Outside OPEC, however, crude output continues to rise, especially in the United States, which is fast closing in on Russia’s position as the world’s largest producer, as supply approaches 11 million bpd.
U.S. crude inventories rose by 2.1 million barrels in the week to June 1, to 436.6 million barrels, the Energy Information Administration said on Wednesday.
Surging U.S. production has pushed the discount of WTI futures to Brent to more than $10 a barrel CL-LCO1=R.
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Fed on Track to Raise Rates Regardless of Emerging-Market Woes Thursday 7th June, 2018 – Bloomberg
Emerging markets struggling with higher U.S. interest rates are likely to get little sympathy from the Federal Reserve.
Currencies of such nations have been hammered in a spreading selloff amid worries that their economies won’t cope with higher U.S. borrowing costs. That’s prompted central bankers in India and Indonesia to raise interest rates and urge Fed caution, while officials in Brazil are bracing for challenging times too.
There are few signs such concerns will steer the Fed away from its course for at least two and possibly three more rate hikes this year, including a move at its policy meeting next week.
Chairman Jerome Powell explicitly pushed back against criticism early last month in Zurich, saying the role of U.S. monetary policy on foreign domestic financial conditions was “often exaggerated.” His colleague, Governor Lael Brainard, mentioned emerging markets in a May 31 speech, but spent far more time discussing the upside risks posed by fiscal stimulus.
“I don’t think they can change policy based on fear,” said Bricklin Dwyer, senior economist at BNP Paribas in New York. Emerging-market turmoil “is noise right now, justifiable noise. But does it shift the outlook for the U.S? The answer is, not yet.”
The U.S. economy is powering ahead, adding over a million jobs in the first five months of 2018. Inflation is at the central bank’s 2 percent target, and the Atlanta Fed’s gross domestic product tracking model suggests the economy grew a strong 4.5 percent in the second quarter.
‘Huge Tailwind’
Even if exports are tempered by foreign economic woes, trade fights, and a somewhat stronger dollar, some $1.5 trillion in fiscal stimulus and a $300 billion increase in federal spending are supporting domestic U.S. demand with “a huge tailwind,” said Torsten Slok, chief international economist at Deutsche Bank AG in New York.
The Fed is tasked with achieving stable prices and full employment. At 3.8 percent in May, unemployment is already well below estimates of full employment and recent forecasts show officials expect a modest overshoot of their 2 percent inflation target.
Meanwhile, the Fed’s benchmark lending rate is still low enough to stimulate growth, according to some measures, leaving officials with little choice but to keep raising it to a level that is more neutral in its impact on supply and demand.
Carry Costs
It has also gone out of its way to communicate the plan for gradual rate increases and a shrinking balance sheet to avoid repeating the 2013 taper tantrum, when then-Fed Chairman Ben Bernanke surprised investors by suggesting the central bank might slow bond purchases.
Delaying policy tightening could also carry costs for emerging markets if it led to higher inflation that forced the Fed to act more aggressively, said Nathan Sheets, chief economist for PGIM Fixed Income.
“The Fed’s got to move,” said Sheets, a former U.S. Treasury undersecretary for international affairs. Officials are probably asking themselves, “over time, are we going to serve the global economy well by not responding to inflation?”
There have been occasions in the past when the Fed has paused in response to international developments. In 1998, for example, then- Chairman Alan Greenspan led the committee to cut rates three times to offset effects of spreading financial turmoil.
Greenspan warned during that period that “it is just not credible” that the U.S. remain “an oasis of prosperity.”
Greenspan ‘Wrong’
“He was wrong,” said Joe Gagnon, a senior fellow at the Peterson Institute for International Economics in Washington and a former Fed economist. “He eased 75 basis points and the economy, if anything, accelerated and the tech economy really took off.”
The bubble in technology stocks eventually burst at high cost to the U.S. economy.
In 2016, Fed officials set aside plans to raise rates four times over the year in reaction to financial-market turmoil triggered by concern over slowing Chinese growth. They hiked just once but could also point to U.S. inflation that was running too low as a reason for their caution.
The Fed’s preferred gauge of price pressures averaged just 1.2 percent that year, while it hit 2 percent on a 12-month basis in both March and April 2018.
Fed officials do have an eye on Europe and emerging markets, “but at the end of the day, look at the employment report” in May, when the U.S. economy added 223,000 jobs, said Deutsche Bank’s Slok. “If anything, we should be worried about overheating, not a recession.”
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Advances in Composite and Cross Listed Indices Thursday 7th June, 2018 – Trinidad and Tobago Guardian
Overall market activity resulted from trading in 14 securities of which two advanced, three declined and nine traded firm.
Trading activity on the First Tier Market registered a volume of 36,856 shares crossing the floor of the Exchange valued at $398,938.11. GraceKennedy Limited was the volume leader with 21,000 shares changing hands for a value of $63,000, followed by Sagicor Financial Corporation Limited with a volume of 5,637 shares being traded for $44,814.15. First Citizens Bank Limited contributed 2,894 shares with a value of $100,996.19, while Calypso Macro Index Fund added 2,122 shares valued at $33,952.
NCB Financial Group Limited registered the day’s largest gain, increasing $0.22 to end the day at $5.49. Conversely, Massy Holdings Limited registered the day’s largest decline, falling $0.19 to close at $47.21.
On the Mutual Fund Market 14,840 shares changed hands for a value of $290,855.60. Clico Investment Fund was the most active security, with a volume of 12,718 shares valued at $256,903.60. It remained at $20.20.
In Wednesday’s trading session the following reflect the movement of the TTSE Indices:
• The Composite Index advanced by 4.90 points (0.40 per cent) to close at 1,241.42.
• The All T&T Index declined by 0.67 points (0.04 per cent) to close at 1,720.15.
• The Cross Listed Index advanced by 1.45 points (1.43 per cent) to close at 102.59.
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Scotia income down by $24m Thursday 7th June, 2018 – Trinidad and Tobago Guardian
Scotiabank T&T Limited reported income after tax of $309 million for the six months ended April 30. This is a decrease of $24 million or seven per cent over the comparative period last year.
This reduction in profitability was mainly due to increased corporation tax rates levied on commercial banks at 35 per cent, combined with higher levels of loan loss provisioning. However, earnings per share at 175.2 cents, return on equity at 15.82 per cent and return on assets at 2.55 per cent highlighted the group’s strength.
As a result, the board of directors has approved a second quarter dividend of 50 cents per ordinary share payable on July 12 to shareholders on record as at June 13.
In commenting on the results managing director Stephen Bagnarol said: “The bank continues to perform in challenging economic circumstances. Our retail loan portfolio continues to grow and has resulted in three per cent growth in total revenue.
“Scotiabank remains committed to working with the Government and other stakeholders during this period of economic uncertainty to ensure the well-being of our customers and the country as a whole.
“The Honourable Colm P Imbert, Minister of Finance visited our Shared Services centre based in Trinidad. He commended Scotiabank for establishing our regional hub in this country, employing 750 local citizens, providing banking and back office support to Scotiabank entities in over 15 Caribbean countries.
“In the last quarter, Scotiabank launched a new customer experience system—called The Pulse or El Pulso. The Pulse is a powerful digital system that allows us to continuously gather feedback from our customers. It enables us to better understand our customers’ needs and prioritise investments to improve their banking experience.”
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Petrotrin pays consultants $63m Thursday 7th June, 2018 – Trinidad and Tobago Guardian
State-owned Petrotrin has paid $63.6 million to consultants for services from July 2017 to date.
The information was given by the Energy Ministry in Parliament via written reply to questions from United National Congress MP Suruj Rambachan. He’d asked the names of all individuals/companies retained by Petrotrin as consultants from July 2017 and total amounts paid to them.
The ministry’s reply stated that the total cost of the services from July 2017 to date was $63,610,158. 23.
The highest amount - $28 million - was paid last November to McKinsey and Company Inc (a US company) for a strategic review and transition. The lowest figure - $100,000 - was paid to HRC associates for executive recruitment. Petrotrin also paid Swiss executive recruitment experts Egon Zehnder $3.7m for services.
RECIPIENTS
W. Paul Charles - $120,600 (communications) Caribbean Corporate Clinic Ltd - $573,750 (legal/management consultants) Kroll Consulting - $1.3m (consulting services) Egon Zehnder - $ 3.7m (executive recruitment) Gafney Kline and Associates - $1.4m (consultancy oil production) HRC associates - $100,000 (executive recruitment) HSB Solomon Associates - $7,430, 855.54 (company optimisation) McKinsey and Company Inc - $28, 057, 147.50 (strategic review and transition) SAP Puerto Rico GBMH LLC - $4,389, 545.23 (Success factors and software installation) SGS Trinidad Ltd - $370,04.39 (consultancy services) Bacon Woodrow and de Souza - $397,320 (actuarial services) Medical Diagnostic Technologies and Supplies Ltd - $2,031, 168 (radiology services) DeGolyer and McNaughton Corp Ltd - $12,669, 570 (crude and gas resource evaluations) Energy Solutions Group Ltd - $230,969 (engineering services for south west Soldado)
iSIMS Trinidad Ltd-System - $212,246 (designs for well modification and repairs) Environmental Sciences Ltd- $455,600 (forensic fingerprinting and interpretation of chromatograms)
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Gov’t releases PV Energy Contract Wednesday 6th June, 2018 – The Antigua Observer
The government has released a contract signed with the UK based renewable energy company, PV Energy Limited, as it promised.
An official in the prime minister’s office sent a copy of the document to media houses this morning (Wednesday).
The document describes the agreement between Antigua and Barbuda and PV Energy for the installation of 10 megawatts of solar power in the country.
It covers the routine disbursement of funds to PV Energy from an escrow account based on its performance throughout the business relationship.
The copy our newsroom received is signed by the Prime Minister Gaston Browne and by the then Energy Minister Asot Michael. But it is not signed by the then principle of PV Energy, Peter Virdee.
Another document was also provided and this was an agreement under the original contract for the first 3-megawatt solar plant to be installed on Sir George Walter Highway.
This document too, is not signed by a PV energy representative and only by a government representative.
Members of opposition parties called on the government to launch a review of the agreement it had with PV Energy and to make public the details. The calls came in the wake of fresh corruption allegations against former Energy Minister Asot Michael in May.
Michael is alleged to have demanded kickbacks and gifts from the principles of PV Energy in return for the successful negotiation of projects in Antigua and in St. Kitts. Michael has denied the allegations.
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Gov’t pays all outstanding student fees at DSC Wednesday 6th June, 2018 – Dominica News Online
The government on Wednesday presented a check to the Dominica State College (DSC) to settle all outstanding fees by students.
Prime Minister, Roosevelt Skerrit, presented the check of over one million dollars to the institution during a ceremony at Stock Farm.
“The government took a decision to write off and pay off the outstanding fees of everyone in the country who owes the college, irrespective of who the person is,” he stated.
He said the presentation is important in the wake of Hurricane Maria when many people in Dominica lost everything.
“But we cannot stop education,” he stated. “We cannot close the college, we cannot close the school. These things are too important in a society to close it. And this is why one of the firm commitments this government gives to the citizens of Dominica is that no matter how difficult things are with the government where money is concerned, no matter how many demands are at the feet of the government especially after Maria we are not going to cut one dollar from education…”
The Prime Minister pointed out that keeping students in school “is critically important.”
“We have always maintained that in order for us to build a prosperous country, we must have a skilled workforce,” he said. “And it does not mean academic pursuits; it means a skill of any kind because we need all kinds of skills at the service of the country to build this country and to make this country a prosperous nation.”
He said changes will be made to ensure that students sit exams in spite of outstanding fees.
“Once a child is in school, you must not deny that child from sitting an exam,” he stated. “What universities and colleges do is that they will hold from you your transcripts until you pay but they must make you sit the exam. So this is really my real beef with the college.”
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Taxation Closed 35 Businesses in The Last Week for Tax Irregularities Thursday 7th June, 2018 – Qcostarica
Behind on your business taxes? The General Directorate of Taxation, of the Ministry of Finance (Ministerio de Hacienda), may be knocking on your door as it did this past week, yellow taping (closing down) 35 businesses for five calendar days in different parts of the country, for the breach of tax obligations.
In the first months of the year, another 67 were sanctioned, bringing the total to more than 100.
Of the total closures made this year, seven are due to reoccurrence not issuing or not submitting invoices for the sale of goods or services; 33 due to for not submitting statements on time; and 62 for not paying the taxes within the period stipulated by law.
In the list of the 35 businesses closed at the end of May are suppliers, beauty salons, hotels, restaurants, retailers of cellular phones, accessories or repair; among others.
Carlos Vargas, general director of taxation, said that his office will continue to carry out more closures and other controls throughout the year, in order to reduce levels of non-compliance and tax evasion.
On the other hand, Nogui Acosta, Deputy Minister of Revenue, called on all business managers to comply with their tax duties on time and thus avoid affecting their business.
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