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REGIONAL
Trinidad and Tobago
TTSE Indices end week lower Overall market activity resulted from trading in 12 securities of which four advanced, four declined and four traded firm.
NIB officials tell JSC: Higher retirement age by 2060 National Insurance Board (NIB) officials have been taken to task for the length of time they are projecting to increase the retirement age to 65. Before a Parliamentary Joint Select Committee (JSC) on Finance yesterday, they projected an incremental increase starting in 2025 and spanning a 35-year period to 2060.
Barbados
Expert Says Blockchain Technology Could Help Barbados Out of Foreign Reserves Slump A regional technology industry expert is suggesting that Barbados’ dwindling foreign exchange reserves could receive a much needed boost if the island were to increase its use of blockchain technology.
Jamaica
JSIF spearheads national risk information platform The Jamaica Social Investment Fund (JSIF) is spearheading the development of a National Risk Information Platform (NRIP), which will allow all risk data to be located and updated in a centralised platform that is available to government agencies and the public.
Stakeholders working to ready labour force for BPO demand ATTORNEY General Marlene Malahoo Forte says the Government is projecting 200,000 jobs in the business process outsourcing (BPO) sector over the next three years.
Jamaica close to signing air service agreement with Chile Jamaica and the Republic of Chile are close to signing an air services agreement.
Jamaica Continued
Household debt on the rise - Personal loans climb to $308b Jamaican households are increasingly living beyond their means as more than half of their disposable income goes towards paying back loans, a trend that concerns the financial stability committee enough for it to consider studying its drivers.
JMMB Securities arranges iPrint acquisition of outdoor sign company Large print advertising firm, iPrint Digital has acquired billboard advertising agency National Outdoor Agency with the assistance of JMMB Securities as financial advisors to the deal.
Guyana
GuySuCo under Holder’s control, Jordan clarifies THE Guyana Sugar Corporation (GuySuCo) does not fall under the remit of the Ministry of Finance but under that of Agriculture Minister Noel Holder, Finance Minister Winston Jordan has said.
Guyana guarding against Dutch disease AS Guyana prepares for oil production in 2020, Finance Minister Winston Jordan has said it would have to guard against the Dutch disease by using economic and financial policies to prevent any major appreciation of the local currency.
Safe, efficient payment system launched GUYANESE will soon be expected to adopt more modern, safe and efficient means of monetary transactions following the launching of the National Payment System (NPS) development plan.
Guyana lacks laws to govern electronic payment services - Bank of Guyana Report While there are specific legal provisions for international remittance services, there are no statutory or regulatory provisions to govern a range of other payment services and payment mechanisms in Guyana.
The Bahamas
Bahamas First's 'Banner Year' As Profits Up 548% BAHAMAS First's chief executive yesterday hailed 2017 as "a banner year" where profits increased almost seven-fold, adding: "Everything we needed to go in our favour did."
Bpl Urged: ‘Ramp Up Quickly’ To Get $500m Shell Saving BAHAMAS Power & Light (BPL) was yesterday urged to “ramp up very quickly” on its generation deal with Shell, amid hopes it could result in $500 million of annual economic savings.
Antigua and Barbuda
Possible sale of Tranquillity Bay The operators of financially-troubled Tranquillity Bay, a timeshare property located at Jolly Beach, are exploring their options after closing for almost a year with no re-opening date scheduled.
St. Lucia
First Taiwan-Saint Lucia joint venture company to be launched H.E. Douglas Shen, Ambassador of the Republic of China (Taiwan) to Saint Lucia, accompanied by officials from the Taiwanese Embassy visited the Paradise Foods Ltd. in Fond Assau on April 12, 2018.
Other Regional
USVI open for business, says tourism commissioner US Virgin Islands Commissioner of Tourism Beverly Nicholson-Doty continues to make audiences across the US mainland and the globe aware that the territory is open for business.
ECLAC Wants Region to Reinvigorate Integration and Bolster Intraregional Trade The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, has called on the region’s countries to reinvigorate the process of integration and bolster intraregional trade to confront new global challenges.
Other Regional Continued
Commission says Caribbean economies will grow by average 1.4 per cent in 2018 The Economic Commission for Latin America and the Caribbean (ECLAC) has updated its economic activity growth projections for the region this year, keeping its estimate for average regional expansion at 2.2 per cent, after growing 1.2 per cent last year.
INTERNATIONAL
United States
BofA's profit rises on higher interest rates, loan growth Bank of America (BAC.N) reported a 34 percent rise in first-quarter profit on Monday as it benefited from higher interest rates and loan growth.
Futures rise on hope Syria conflict will not escalate U.S. stock index futures rose on Monday as investors bet the weekend’s U.S.-led missile attack on Syria would not escalate into a broader conflict.
Dollar heads towards two-week lows as short bets hit seven-year highs The dollar weakened on Monday and headed towards a two-week low against a basket of rivals on growing signs of relief that a U.S.-led strike on Syria would not escalate further at a time when concerns over a trade war has rattled global markets.
United Kingdom
Sterling rises despite Syria intervention as investors eye data+ The pound rose on Monday despite Britain’s military intervention in Syria, as investors focused on data that could help shore up expectations of a May interest rate hike.
China
Hong Kong plows $1.7 Billion into Defending Currency to Little Effect The Hong Kong dollar remains stuck at the weak end of its currency band, even after the monetary authority plowed $1.7 billion into defending the peg.
China Continued
China first-quarter GDP growth seen easing only slightly as trade tensions mount China likely carried most of its strong economic momentum from last year into the first quarter of 2018, with government crackdowns on financial risks and industrial pollution dragging less on activity than earlier expected, a Reuters poll showed.
Japan
Nikkei up slightly, defensive shares shine as trade war worries, Syria in focus Japanese stocks rose modestly on Monday on relief that U.S.-led strikes on Syria appeared to be a one-off event though lingering concerns about a trade war had investors flocking to defensive shares.
Global
Bond yields rise, oil prices drop after Syria strikes Oil prices fell sharply and government bond yields rose on Monday on expectations that the weekend’s missile attacks on Syria would not mark the start of greater Western involvement in the conflict.
Sanctions threat keeps rouble cautious, China stocks tumble Nervousness about new Western sanctions on Russia kept the rouble and Moscow stocks on the back foot on Monday, while emerging markets were weak generally after the latest clamp-down on risky lending in China hit its markets.
GuySuCo under Holder’s control, Jordan clarifies Monday 16th April, 2018 – Guyana Chronicle
THE Guyana Sugar Corporation (GuySuCo) does not fall under the remit of the Ministry of Finance but under that of Agriculture Minister Noel Holder, Finance Minister Winston Jordan has said.
“At no time did you hear the President or anybody say Minister of Finance will be responsible for GuySuCo or the agricultural sector. The official gazette clearly outlines my responsibilities and the Ministry of Agriculture’s responsibilities,” Jordan told reporters on Friday.
Jordan’s statement follows a letter to the editor dated April 12, 2018 from GAWU’s General-Secretary Seepaul Narine headlined, “Stop playing musical chairs with sugar”. The letter suggested that Jordan has taken over responsibility for the sugar industry.
But the finance minister explained that since the government decided to close the operations earlier this year, the National Industrial and Commercial Investments Limited’s (NICIL) Special Purpose Unit (SPU) took control of the Skeldon, Rose Hall, Enmore and Wales estates to maintain viability of the sugar industry.
“What you have now is a rump GuySuCo; that is a GuySuCo that has been stripped of all of the estates that will not form part of it anymore. All of the NDIA, health and welfare matters belongs to the Minister of Agriculture. What has been sent to NICIL belongs to me via NICIL-SPU,” explained Jordan.
The finance minister made it clear that the $30B syndicated bond secured by the SPU is essentially to keep “rump GuySuCo” afloat through re- investing in the factory and field to earn monies to keep its operations going and become competitive.
“A small part will be used to keep the other estates under NICIL in operation in time for the buyers. Monies that will come from the sale of these estates will be used to meet some of GuySuCo’s current or continuing operations, as well as pay off debts and other liabilities that are owed by GuySuCo,” he added.
Jordan made it clear that at no time will he be taking on responsibilities that are not his, stressing that the lines are not blurred as to his responsibilities and that of the agriculture minister.
“Absolutely what I am responsible for through NICIL and absolutely clear what Mr Holder is responsible for under what has been left back in GuySuCo,” he added.
He noted that through SPU’s head Colvin Heath-London, a silver lining is in sight where sugar is concerned.
“There is no fight for responsibilities and there are no differences in the Cabinet where these matters are concerned,” the finance minister assured.
Additionally, Jordan explained that prior to NICIL’s establishment, the Guyana State Corporation (GUYSTAC) had existed. GUYSTAC was a group set up to manage a set of corporations and with GUYSTAC there were a few independent corporations.
Among the independents were GUYMINE, GuySuCo and the Guyana National Newspapers Limited (GNNL).
“They were not under any arrangement – as more of those corporations were sold, GUYSTAC disappeared,” Jordan said.
He explained that NICIL was not established to take over GUYSTAC. The NICIL legislation, he explained, indicates that its role is to hold all government shares or other equities wherever they are.
“NICIL has been doing just that with the exception of GuySuCo. GuySuCo continues to remain independent,” said the finance minister.
He added: “Under NICIL are all the other corporations that may still exist. So, GNNL’s balance sheet is consolidated under NICIL, but I am not responsible for GNNL. Guyana National Printers is consolidated under NICIL’s balance sheet, but the definitive policy minister for National Printers is Dominic Gaskin [Minister of Business].”
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Guyana guarding against Dutch disease Monday 16th April, 2018 – Guyana Chronicle
AS Guyana prepares for oil production in 2020, Finance Minister Winston Jordan has said it would have to guard against the Dutch disease by using economic and financial policies to prevent any major appreciation of the local currency.
Speaking Friday with reporters, Jordan said it is accepted that with the budding industry and the expected large inflows of US dollars from oil on the horizon, there could be appreciation of the Guyana dollar, but noted that it all depends on the pace of development and how much of the oil money seeps into the formal economy.
He made the statement against the backdrop of establishment of the Sovereign Wealth Fund (SWF) which is geared at holding revenues derived from the oil and gas sector.
“It is like the special account for the signature bonus… but it will seep into the economy, but it depends on what rate—what rate depends on our capacity to absorb,” Jordan explained.
He noted that with a population of 750,000 people, there is a great need for capacity-building. He said oftentimes, there is money available to be spent, but cannot [be spent] because there is a lack of capacity to do so.
“I want us to guard against, in that case, people wanting to consume it as opposed to having it invested in the public sector and other investment programmes. We don’t have the capacity, we need to start building it — not only in the public sector but also in the private sector,” the finance minister said.
He gave the example of when Guyana celebrated its 50th independence anniversary in 2016. Then, there was a large influx of foreigners to Guyana and a high circulation of foreign money (US dollars). During that period, he said the rate appreciated.
“The rate appreciated, because you have far more supply of US dollars than people are demanding, so to get rid of the US dollar or for the market to clear the rate appreciated [price had to drop]. Appreciation in small economies like ours is not very good, because it has issues of competitiveness of products that you sell,” Jordan explained.
But with the country’s oil and gas sector expecting to take off in 2020, the value of the Guyana dollar will increase against the US dollar.
However, while he made this clear, the minister was not prepared to provide an estimate of that increase.
He also declined to state what the country’s net earnings are likely to be during the first year of oil production.
RUNNING MODELS
“There have been various runs on that. I don’t at this stage want to disclose what it is. Right now, we are running some models,” he stated.
Asked whether he believes there will be a need for subsidies to cushion some sectors, the minister said he personally dislikes subsidies as they (subsidies) in his opinion distorts resource allocation, has the potential to result in mismanagement, and the people who should be the beneficiaries are oftentimes not.
Meanwhile, asked what plans Guyana has to avoid falling victim to the Dutch disease and the depreciation of the local currency, Jordan said this has a lot to do with what the government is doing legislatively and otherwise to ensure that Guyana does not suffer from the Dutch disease.
He pointed to the SWF where all the money that comes from oil will be placed.
“We get out of that fund, based on the rules we are putting in place, enough to drive our developmental agenda,” he stated.
According to the finance minister, to avoid the Dutch disease “we have to make certain that the dependence on oil is not a new dependence” as was the case with sugar and bauxite at one point.
In neither of those cases (sectors) was a SWF created, but Guyana was receiving premium prices for its products.
Jordan also pointed to the Green State Development Strategy, his government’s blueprint for development over the medium term.
CAPACITY-BUILDING
That aside, he said tremendous focus must be placed on capacity- building and currently, efforts are being made to create units to build capacity for macro-economic analyses, statistical development and management by the Bank of Guyana in relation to the SWF and monies that would be coming to reserves itself.
“Quite a bit of work that is taking place. Personally, I would love it to go faster, but that happens when you don’t have money and you have to depend on arrangements like multi-lateral lending [of] money and so forth,” said Jordan.
Additionally, the minister pointed to the unit being established within the Guyana Revenue Authority (GRA), pieces of petroleum legislation, fiscal legislation, as well as local content all being in place “so we can move to the next stage”.
“It is a process and there is still some time, we have the whole of this year and the whole of next year at least before we get oil. Within that space of time, we will have to build capacity.”
In the case of GRA, some work has already begun to put the unit together. The said unit he said, has received technical assistance from the World Bank as well as support from the International Monetary Fund (IMF).
“… it will take some while to get up and running,” he told reporters, while noting that some persons have already been identified for the unit, but many have to be found from outside of the revenue authority because those there do not have the skills set required to run such a unit.
“They have people they have targeted and who could be sent off for training [and] who could be part of that,” he stated.
All in all, the minister said he does not fear the Dutch disease. “I am not afraid of Guyana being prone to Dutch disease, some of our industries are fairly well established so to speak and many of them require significant injections of funding to really become competitive.
Bauxite industry is not going to close overnight – agriculture has not reached the stage where people will walk away from it—[and] we have commitments for sugar, rice.”
Additionally, Jordan said he is continuously engaging the IMF and other stakeholders and examining all recommendations put to Guyana.
“I have in front of me a Petroleum Fiscal Regime which they would like to see us put in place,” he said, adding “Yes, we must work on the other pieces of legislation— I am talking to the IMF and I am relaying to Cabinet what they are requesting.”
He said too that Guyana will benefit from a US$20M loan for oil and gas development. One aspect of the loan, he said, will be to look at the pieces of legislation that are required to be put in place to improve the country’s architecture for the oil and gas sector.
“Right now, we have, except for the existing piece of legislation; we have no legislation like the local content, the SWF, Petroleum Commission, the Petroleum Fiscal Regime legislation — all of these different pieces of legislation. Plus, we don’t have people to draft them, so under this loan we have to bring people to draft… to help us draft the different pieces of legislation,” Jordan stated.
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Safe, efficient payment system launched Monday 16th April, 2018 – Guyana Chronicle
GUYANESE will soon be expected to adopt more modern, safe and efficient means of monetary transactions following the launching of the National Payment System (NPS) development plan.
The plan is being spearheaded by the Bank of Guyana (BoG) and was launched by Minister of Finance Winston Jordan at a press conference on Friday.
The BoG said that the change is necessary to meet the economy’s current and future needs through the upgrading of laws, regulations and infrastructure.
According to the NPS plan, the proposed target for the realisation of the payment system is 2030, while a 2017-2021 medium-term action plan will serve as the first phase towards this achievement.
Guyana’s current state of payment experiences challenges with electronic transactions; high cost and limited accessibility to remittances; an absence of major-risk mitigation; a lack of legal clarity and certainty, and limited stakeholder engagement.
These and more, the document indicated, will be pursued over the four- year period.
Within that time, the bank will work to pass a National Payment System Act with supporting legislation, which will address the finality of payments and the legality of electric signatures and documents.
The strategy and action plan are organised around nine pillars of a conceptual framework which the World Bank developed.
It includes legal framework; large-value payments; retail payments; government transactions; security depository, clearing and settlement; money markets; international remittances; oversight and cooperation.
The success of the strategy will be measured against the achievement of a range of factors, some of which include the public’s adoption and use of cashless payment, fraud prevention and data confidentiality.
In addition, the government is expected to play an active role through the Ministry of Finance and other agencies, mainly by setting the example in transitioning from paper-based to electronic-based instruments.
Likewise, private sector Payment Service Providers (PSP) and Payment System Operators (PSOs) are expected to lead in the implementation.
The BoG has observed that for consumers and small and medium-sized businesses, cash and other paper-based instruments remain heavily relied upon.
Additionally, only a handful of electronic and remote payment services are available.
However, in mid-2018, the bank intends to introduce an Electronic Funds Transfer (EFT) system which will ensure increased efficiency, reduced administrative costs, simplified book-keeping and greater security.
The bank will need to build customer confidence and awareness in electronic payments through collaboration with the government and the private sector.
A preliminary draft of the strategy was issued to stakeholders for their input in 2016.
The Bank of Guyana has broad regulatory and supervisory responsibilities and was established under the Bank of Guyana Ordinance No.23 in 1965, just seven months before the country gained political independence.
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Guyana lacks laws to govern electronic payment services - Bank of Guyana Report Monday 16th April, 2018 – Kaieteur News
While there are specific legal provisions for international remittance services, there are no statutory or regulatory provisions to govern a range of other payment services and payment mechanisms in Guyana.
This was outlined in a critical report that looks at the implementation of the National Payment System Plan which was prepared by the World Bank in partnership with the Bank of Guyana.
In that report, the Central Bank notes that there are no statutory provisions on electronic transactions, including the electronic processing of cheques and the use of truncated or electronic cheques.
The Bank said, too, that there are no provisions on credit transfers, either paper-based or electronic, or on electronic debit transfers. It outlined that no secondary measures exist on cards, either credit or debit, or on e- money instruments.
Apart from the specific provisions on international remittances, Bank of Guyana officials said that the law is silent on whether non-banks are allowed to offer other payment services.
In the absence of such provisions, the officials said that the provision of domestic remittances and bill payment services by Money Transfer Agents (MTA) falls completely outside legal and regulatory framework, and thus, outside the reach of Bank of Guyana oversight.
NATIONAL PAYMENT SYSTEM
Finance Minister, Winston Jordan officially launched the implementation plan for the National Payment System (NPS) last week.
The economist announced that the plan and its execution will be led by the Bank of Guyana.
According to the document, the Bank recognizes that Guyana’s National Payments System falls short of meeting the needs of the economy and financial markets for efficient, safe and sound means to conduct transactions and transfer funds.
To overcome these shortfalls, the Central Bank is undertaking the leadership role in a comprehensive and strategic modernization of Guyana’s NPS. With the active participations and cooperation of all NPS stakeholders, the Bank intends to undertake a comprehensive initiative to modernize the NPS and advance the use of electronic payments.
It was further noted that the broad purpose of the NPS Plan is to state an agreed vision and strategies by all stakeholders in a broadened context based on the findings and conclusions of the Bank and World Bank diagnostics.
The final report provides key stakeholders with the policies, and organizational, technical and operational issues as discussed that are being undertaken as the Bank progresses with the successful implementation of the NPS in Guyana. The Bank noted that a successful initiative requires active participation from key stakeholders at both the policy and the operational level.
Furthermore, the National Payment System Strategy which was released by the Finance Minister consists of four chapters and five annexes.
Chapter One examines the current state of payment in Guyana. It notes that the Bank of Guyana is the institution responsible for payments. Be that as it may, the document makes clear that there is need to upgrade the laws, regulations and infrastructure for a safe, efficient and modern payment system. The chapter analyses the role of the main players in the current payments arrangement.
Chapter Two examines how the Bank will lead the development of the NPS Strategy. It defines the role of a National Payment System as a series of layers in an inverted pyramid in which each layer is supported by layers beneath it.
Chapter Three explores Guyana’s vision to build a safe, robust, sound, efficient and inclusive payment system that meets the current and future needs of the economy. It proposes the year 2030 as a realistic target for full realization of the NPS vision. However, in the medium term it proposes a 2017-2021 action plan as a first phase on achieving that vision.
The fourth chapter concludes with a highlight of the 2017 – 2021 NPS Development Strategy and plan of actions. The Strategy also has attached five annexes.
The preparation of the payment strategy has been a joint effort of the Bank of Guyana and a team from the World Bank. A preliminary draft of the strategy was issued to stakeholders for their comments in August 2016.
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Bahamas First's 'Banner Year' As Profits Up 548% Friday 13th April, 2018 – Tribune 242
BAHAMAS First's chief executive yesterday hailed 2017 as "a banner year" where profits increased almost seven-fold, adding: "Everything we needed to go in our favour did."
Patrick Ward told Tribune Business that the "buildings blocks" laid by the property and casualty insurer in prior years had paid off by producing net underwriting income of $34 million, a 93 per cent increase over a prior year dominated by Hurricane Matthew claims payouts.
Conceding that Bahamas First and its competitors were "a little bit lucky" that Hurricanes Irma and Maria did not strike this nation's major population centres, Mr Ward said their severity - and the ever-increasing threat from natural catastrophes - had already forced adjustments to the underwriter's business model. These changes, he explained, have required a "deepening" of Bahamas First's product offering and geographical diversity through operations in the Bahamas and Cayman Islands. Mr Ward said the general insurer had also altered how it buys reinsurance, and become "a bit more selective" over the risks it agreed to insure.
He emphasised that while Bahamas First was not seeking to abandon homeowners, those in flood and storm surge-prone areas were likely to experience increased premiums and stricter terms that are better aligned with risk.
And, with total comprehensive income up 548 per cent year-over-year, Mr Ward said it was critical for Bahamas First and other property and casualty underwriters to use such profits to insulate their balance sheets against future hurricanes.
Expressing optimism over the health of both the Bahamian and Cayman Islands economies, the Bahamas First chief predicted the company was on track to enjoy "a repeat performance" on net underwriting income depending on the upcoming storm season.
"Everything that we needed to go in our favour did work in our favour and, as a result, we had a banner year," he told Tribune Business of Bahamas First's 2017 performance.
"On the one hand I think we were a little bit lucky in the sense that the Bahamas did not get a direct hit on a high population centre, like we did in 2016. We benefited from focusing on products in prior years, ensuring we were pricing the product correctly, and we enjoyed some organic growth while maintaining underwriting discipline."
Writing in Bahamas First's annual report, Mr Ward said the insurer's top-line gross written premium income had increased "for the first time in a number of years", rising 3 per cent from $138.686 million to $143.177 million in 2017.
This brought 'revenue' back close to 2015 levels, with Bahamas First's chief executive attributing the improvement to "positive rate movements and strong organic growth". He added that it "restored us to a path of prudent growth" without sacrificing underwriting performance.
Mr Ward, in particular, played up the near-doubling in Bahamas First's net underwriting income, which jumped from $17.599 million in 2016 to $33.909 million. While 2016 comparatives were impacted by Hurricane Matthew, the 2017 figure was still 18.9 per cent ahead of the $28.5 million recorded for 2015.
"As the year progressed it became clear that our core earnings were trending in the right direction and, in many respects, we were 'firing on all cylinders'," Mr Ward told shareholders.
"During 2017 we earned an underwriting profit in every line of business across the group, and this is reflected in the record level of net underwriting income total of $34 million, which is almost twice the level achieved in 2016. The most recent result is also higher than any of the prior years without a major loss event."
Net underwriting income is a key indicator of an insurance company's performance, as it measures how well it has done in assessing, pricing and managing the risks it covers to ensure sustainable profitability.
Underpinned by the improvement in its core business, Bahamas First's total comprehensive income jumped almost seven-fold from $2.543 million to $17.247 million year-over-year. The 2017 figures were also 92 per cent ahead of the $8.982 million 'bottom line' performance produced in 2015.
"As a consequence of this stellar outcome, the group's return on equity (ROE) increased to 25 per cent for 2017, with the rolling three-year average improving to 16 per cent," Mr Ward wrote in the annual report.
"For the first time in our existence, the group's total equity has eclipsed the $70 million mark, and supports a book value of $1.74 per common share compared to $1.41 in 2016. As we previously reported, dividends paid during 2017 amounted to $0.12 per share or $4.4 million, compared to the 2016 payout of $2.9 million, or $0.08 per share."
Although the Bahamas largely escaped the wrath of Irma and Maria, Mr Ward told Tribune Business the increased severity and frequency of storms had already prompted Bahamas First to adjust key aspects of its operations.
"We've done a number of things," he said. "We've ensured we deepen the diversity of our product offering and geographical footprint. We've made some changes to how we buy reinsurance to allow for the increased frequency and severity of these storms, and we're a bit more selective with the underwriting approach in both the Bahamas and Cayman."
Asked whether this meant Bahamas First is dropping and/or rejecting coastal-based risks, Mr Ward said that while the underwriter will never abandon clients such properties could see tougher "terms and conditions" apply.
"We try not to walk away without providing some level of protection, but if you are exposed it's going to come at a cost," he warned.
Mr Ward added that generating high earnings in non-hurricane years was critical to enabling Bahamas First to 'buffer' its balance sheet against future multi-million dollar claims payouts, such as those incurred in Hurricane Matthew's wake.
"We've been laying the building blocks for a number of years," he said. "One of the things that's very important to our business, given the threat of big catastrophe losses, is to make sure revenue and income levers are in place to take advantage of when there are no losses."
Expressing optimism that Bahamas First can repeat its underwriting performance in 2018, Mr Ward said the company was "very hopeful and very encouraged by early signs of improvement in the overall economic environment in the Bahamas" and continued growth in the Cayman Islands.
"We're very optimistic about the outcome of this year," he told Tribune Business. "Certainly, from the underwriting perspective, we think the building blocks are in place to have a repeat of the underwriting performance. We think there's an opportunity to have another really good year; I wouldn't necessarily say better."
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Bpl Urged: ‘Ramp Up Quickly’ To Get $500m Shell Saving Friday 13th April, 2018 – Tribune 242
BAHAMAS Power & Light (BPL) was yesterday urged to “ramp up very quickly” on its generation deal with Shell, amid hopes it could result in $500 million of annual economic savings.
Private sector chiefs, while hailing the Government’s approval of Shell North America as BPL’s long-term generation partner, called for the two sides to execute swiftly and lower one of the costliest, longest-running burdens on Bahamian businesses and consumers.
Michael Maura, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, told Tribune Business: “From the Chamber’s perspective we’re happy to hear that Bahamas Power & Light has made a decision, and we look forward to much cleaner energy and a much lower cost. We hope things ramp up very quickly, as we’ve been paying far too much for energy for too long.”
His sentiments were echoed by Robert Myers, the Organisation for Responsible Governance’s (ORG) chairman, who suggested that the Bahamian economy could receive a half a billion dollar annual boost if the Shell deal slashes electricity rates by around 50 per cent.
“It’s fantastic news, but it’s a shame they didn’t do it sooner,” he told Tribune Business after Shell’s selection was confirmed. “The sooner the better, as it’s currently a complete waste of money.
“We hope this is going to drive our power prices down to the anticipated 20-21 cents per kilowatt hours (KWh), which includes both generation and transmission and distribution costs. This is a big one.”
While the Bahamas was unlikely to ever match Florida’s energy costs dollar-for-dollar, Mr Myers said the promise of reduced energy costs was especially timely given the need to improve this nation’s economic competitiveness ahead of its planned accession to full World Trade Organisation (WTO) membership.
Both Mr Maura and Mr Myers’ comments also hinted at likely widespread private sector relief that at last a decision has been taken, and a tangible step towards energy sector reform has been taken, following a decade of ‘false starts’ that has spanned three generations.
Apart from the environmental and health benefits of moving to a cleaner fuel such as liquefied natural gas (LNG), which will be burned at the new Shell-constructed power plant at Clifton Pier, the promised lower energy bills will remove a major weight from the backs of Bahamian businesses and households.
Any reduction in household energy bills will free up disposable income for increased consumer spending in an economy where, University of the Bahamas (UoB) studies have shown, around two-thirds of economic activity is driven by consumption.
As for businesses, reduced energy costs could allow some companies to move from a loss position to profit. It will also free up capital for investment in job-creating expansion opportunities, helping to reduce unemployment while also paving the way for the Bahamas to attract new industries.
Mr Myers told Tribune Business that BPL’s deal with Shell should “narrow the gap” between energy costs in the Bahamas and its main competitors, including south Florida.
“The net effect of bringing power costs down to 21 cents per KWh is close to half a billion dollars a year,” he said, recalling studies conducted for the Coalition for Responsible Taxation (CRT).
“That goes straight to everyone’s bottom line. It’s a huge plus, a big win. The faster we do that, the better. It’s positive for our competitiveness in the region, and the savings become disposable income for anyone wanting to expand, create a new business, make new hires, upgrades.
“It stimulates the economy, and is a big step for the Government as it narrows their deficit. The Government consumes a tremendous amount of power, so to lower their cost lowers their cost of operations. K P Turnquest should be really happy about that.”
BPL has provided few details apart from confirming Shell has been selected to lead development of New Providence’s new power plant, and that construction of its LNG-fuelled solution will be completed in 2021 and provide up to 270 Mega Watts (MW) of capacity.
BPL’s statement said: “Nineteen companies passed the vetting process but, in BPL’s Board’s opinion, Shell NA provided the best solution for the company’s new direction and its commitment to renewable energy.
“In the Board’s opinion, Shell NA’s commitment to power generation with the inclusion of LNG in BPL’s fuel mix will provide long-term energy security, new employment opportunities for Bahamians, stimulate economic growth and the stabilisation of customer rates.”
It added: “Shell NA has proposed an integrated ‘gas to power’ solution that would include construction of an LNG plant at Clifton Pier and enable BPL to produce up to 270 MW of power generation.
“This will have a positive impact on consumers and the environment. The LNG project is scheduled for completion in 2021. Shell NA has committed to continue providing HFO (heavy fuel oil), diesel or other interim fuels until LNG and the necessary power infrastructure is operational.”
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First Taiwan-Saint Lucia joint venture company to be launched Friday 13th April, 2018 – St. Lucia News
H.E. Douglas Shen, Ambassador of the Republic of China (Taiwan) to Saint Lucia, accompanied by officials from the Taiwanese Embassy visited the Paradise Foods Ltd. in Fond Assau on April 12, 2018.
Ambassador Shen’s delegation was warmly welcomed by Chairman of the Board / Managing Director Hubert Emmanuel and his entire staff. Paradise Foods is a food processing company jointly started by Saint Lucia and Taiwanese businessmen, and it is the first-ever private sector business venture between the two countries.
Chairman Emmanuel led the delegation to tour the facility which is producing chocolates, juice and pulp from local ingredients daily. Chairman Emmanuel said, when he was serving as Saint Lucian Ambassador to Taiwan, he had the opportunity to see first-hand the advancement of Taiwan’s food processing industry, and it inspired him to start Paradise Foods after he returned home. The company imported all of its machinery and packing materials from Taiwan. Its operation manager, Mr. Albert Hsu, and two of his senior specialists were also recruited from Taiwan.
Manager Hsu said that he is eager to introduce Taiwanese expertise to help Paradise Foods develop value-added agricultural products; with chocolate, ice cream and fruit juice now in the pipeline, he is looking forward to start the production of dried fruits. Chairman Emmanuel added that the first batch of chocolates has been shipped to duty-free shops in Pointe Seraphine, and fresh juices will soon be available for purchase at local super market and gas stations.
Ambassador Shen commended the company for utilizing Taiwan food- processing technology to develop Saint Lucia’s food-processing industry, and hence creating more jobs and business opportunity for local farming communities.
Ambassador Shen pointed out that since Taiwan and Saint Lucia resumed diplomatic ties in 2007, the two countries has cooperated to organise the annual trade show at Rodney Bay, showcasing the best products from both countries; with the visit of Honourable Bradley Felix, Minister of Commerce to Taiwan in 2017, the two sides established a firm platform for business contacts. Ambassador Shen hoped that Paradise Foods will set a good example to attract more Taiwanese businesses to invest in Saint Lucia soon.
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TTSE Indices end week lower Saturday 14th April, 2018 – Trinidad and Tobago Guardian
Overall market activity resulted from trading in 12 securities of which four advanced, four declined and four traded firm.
Trading activity on the First Tier Market registered a volume of 159,389 shares crossing the floor of the Exchange valued at $998,772.33. GraceKennedy Limited was the volume leader with 106,000 shares changing hands for a value of $333,900, followed by NCB Financial Group Limited with a volume of 30,158 shares being traded for $179,438.62. One Caribbean Media Limited contributed 5,000 shares with a value of $62,150, while Guardian Holdings Limited added 3,922 shares valued at $61,979.30.
JMMB Group Limited registered the day’s largest gain, increasing $0.04 to end the day at $1.90. Conversely, NCB Financial Group Limited registered the day’s largest decline, falling $0.05 to close at $5.95.
The Mutual Fund Market did not record any activity.
In Friday’s trading session the following reflect the movement of the TTSE Indices: • The Composite Index declined by 0.89 points (0.07 per cent) to close at 1,245.44. • The All T&T Index declined by 0.26 points (0.02 per cent) to close at 1,697.20. • The Cross Listed Index declined by 0.21 points (0.20 per cent) to close at 106.95.
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NIB officials tell JSC: Higher retirement age by 2060 Saturday 14th April, 2018 – Trinidad and Tobago Guardian
National Insurance Board (NIB) officials have been taken to task for the length of time they are projecting to increase the retirement age to 65. Before a Parliamentary Joint Select Committee (JSC) on Finance yesterday, they projected an incremental increase starting in 2025 and spanning a 35-year period to 2060.
JSC Chairman Sophia Chote, who noted that other Caribbean countries are changing the age in 8-12 years, expressed concern that based in those projections, “we are looking at 45 years to implement this part of your policy.”
She asked: “That is a lifetime. Why is it so long?”
NIC Executive Director Naila Persad-Poliah explained that the projection began in 2015 on the understanding that there will be a ten-year period to allow people to plan.
“In 2025 it begins incrementally and does not go straight to 65, it goes to 61 and thereafter taking it to 65 in the year 2060, so it allows for planning,” she said.
Poliah argued that the incremental move is “about planning and allowing the population to plan their retirement” and the NIB is hoping the tenth actuarial review, which is due by June, will shorten the time for the retirement age to change. She said the NIB wants to ensure “monies will be paid for generations to come.”
Chote asked about the financial impact if the NIB used a ten-year period instead of 35 years. NIB’s Fyard Khan said that is kind of information they are hoping to get from the actuarial review.
NIB Chairman Jacqueline Quamina admitted T&T is lagging behind many of its Caribbean counterparts on the retirement age but said the NIB is working with the timeline proposed by actuaries. She said the NIB is “getting less money every year and has been paying out more because people over 60 are living longer.”
The NIB currently pays a pension of $3,000 to retirees. The JSC heard that the system is designed so that that the existing pool of workers pays the benefits of past workers.
Poliah said income from contributions is no longer sufficient to cover expenses. Last year, the NIB used $700 million from its investment income to support benefit payments and for the 2018 financial year they will use $1.2 billion to support benefit expenditure.
Annually the NIB collects $4.5 billion but payments are higher than that. In 2017 they paid out $4.7 billion and this year they are projecting to pay out $4.8 billion.
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Possible sale of Tranquillity Bay Monday 16th April, 2018 – The Antigua Observer
The operators of financially-troubled Tranquillity Bay, a timeshare property located at Jolly Beach, are exploring their options after closing for almost a year with no re-opening date scheduled.
Jolly Beach Vacations Limited, which operates the timeshare, advised owners last week that they were in negotiations with two overseas companies that have expressed an interest in taking over the hotel.
In the letter dated April 12, William Cooper, chairman of Jolly Beach Vacations limited, said that they are in talks with a U.S. timeshare company interested in leasing the hotel and signing a management contract.
In addition, the local company said that it was also negotiating the sale of the hotel with a Canadian hotel management company and a U.S. marketing company.
Cooper said that the negotiations were ongoing at the moment with both companies completing their due diligence.
Whether the hotel is leased or sold, the timeshare owners will be protected and their investment secured, according to Cooper.
The owners were also advised that the hotel will remain closed until further notice, and no reservations for the timeshare units can be made and no maintenance fees will be due.
OBSERVER media first reported on the troubles plaguing Tranquillity Bay in December 2017, when a timeshare owner reached out to us saying that he was getting little or no information from the owners, and he had hoped to get some answers by coming to the media.
Fifty-plus former workers were trying to get what is due to them, including vacation pay with help of the bargaining agent, the Antigua Barbuda Workers Union (ABWU).
David Massiah, general secretary of the ABWU, said he will provide an update on the progress of the matter of outstanding monies due at a later date.
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USVI open for business, says tourism commissioner Sunday 15th April, 2018 – Caribbean News Now
US Virgin Islands Commissioner of Tourism Beverly Nicholson-Doty continues to make audiences across the US mainland and the globe aware that the territory is open for business.
Addressing a broad range of consumers and industry stakeholders over the past week in Atlanta, Chicago and New York, Nicholson-Doty thanked partners for their support of the US Virgin Islands during the ongoing recovery process and suggested that the best way to continue helping the USVI is to visit the territory.
Last weekend, the commissioner addressed close to 200 delegates attending the National Association of Black Journalists (NABJ) Region III Conference in Atlanta, Georgia, and thanked the media for keeping St Croix, St John and St Thomas in the spotlight since last September’s storms.
While in Atlanta, Nicholson-Doty participated in a live on-air segment with Lynda Kinkade on CNN International’s CNN Newsroom, where she gave a comprehensive update on the US Virgin Islands’ recovery.
“We have several hotels that have reopened … our yachting industry is absolutely glorious and we have wonderful villas. However, it is a journey … we will have more hotels opening at the end of the year and as we look towards the future we really feel that we’re going to have an even better tourism product,” the commissioner told national and worldwide listeners tuned into the popular news program.
During her in-market travels she also met with journalists from the Chicago Sun-Times, the New York Daily News, and TravelPulse.
At a meeting with United Airlines in Chicago, the commissioner, who was accompanied by David Mapp, executive director of the Virgin Islands Port Authority (VIPA), provided updates on the territory’s accommodations and tourism offerings. She reconfirmed that United resumes service to St Thomas this weekend from Newark, New Jersey and Washington, DC. The airline will recommence flights to St Thomas from Houston later this month, and provide daily flights from Washington Dulles International Airport this summer between early June and late August.
The commissioner and executive director held similar talks with JetBlue Airways in New York and attended an airline training program in the city.
“As we bounce back, it’s critically important that we update our partners on the significant progress we are making, while taking the necessary steps to ensure that flights return as more accommodations become available,” Nicholson-Doty said.
“Power has been restored across the territory, our beaches and attractions have reopened, cruise lines and airlines have returned and a wide variety of accommodations are available even as our rebuilding and resiliency work continues,” she reported, affirming that the “USVI is Still Nice”.
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ECLAC Wants Region to Reinvigorate Integration and Bolster Intraregional Trade Friday 13th April, 2018 – Caribbean 360
The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, has called on the region’s countries to reinvigorate the process of integration and bolster intraregional trade to confront new global challenges.
The most senior representative of the United Nations regional organization says Latin America and the Caribbean has reacted to a complex trade scenario by intensifying its ties with partners outside the region, in particular with China and other economies in Asia, highlighting for example the recent signing of the CPTPP, which she described as positive.
However, she said, reinvigorating integration and trade with partners inside the region is much better, because it integrates small and medium- sized enterprises in value and export chains, even if this continues to be a pending matter.
Bárcena underscored the great potential of a regional market with more than 630 million people, which nonetheless continues to be underexploited. She recalled that, while some important progress has been made, in particular the agreements reached within MERCOSUR to define common systems for foreign investment, in April 2017, and for public hiring, in December 2017, the region still has much to do in terms of deepening its economic integration.
“Unfortunately, intraregional trade continues to be very low in comparison with international standards, representing just 17 per cent of the region’s total exports,” she specified.
The ECLAC official indicated that these low levels of intraregional trade can be explained by the region’s vast size, covering more than 20 million square kilometers, and its difficult geography; by a deficient transportation infrastructure; overlapping endowments of natural resources in many South American countries; and the gravitational pull that the United States’ economy has on Mexico and Central America.
“However, all of these difficulties are aggravated by the great fragmentation of the regional market. Several integration agreements coexist, each one with its own rules on issues from production standards to public procurement and the handling of foreign direct investment. The integration schemes still lack measures that favor the mobility of people, of their capacities, talents and their insertion in labor markets from one country to another,” she stated.
Bárcena added that these regulatory discrepancies impose high costs on companies, especially the small and medium-sized ones that export or invest in regional markets, and also hinder the development of regional value chains.
“Latin America has to turn toward diversifying its trading partners within this very region and strengthening initiatives for trade facilitation and for the development of regional digital markets. In this sense, the convergence between MERCOSUR and the Pacific Alliance is very good news and we must continue fostering it,” she stated.
She highlighted that 80 per cent of Latin America’s exports come from South America, but that they are basic products lacking much value- added. For that reason, she said, “it is very important that we see the complementarities between countries, but also the capacities that we have to add value to what we are doing, the incorporation of greater levels of knowledge and technology."
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Commission says Caribbean economies will grow by average 1.4 per cent in 2018 Saturday 14th April, 2018 – Jamaica Observer
The Economic Commission for Latin America and the Caribbean (ECLAC) has updated its economic activity growth projections for the region this year, keeping its estimate for average regional expansion at 2.2 per cent, after growing 1.2 per cent last year.
It said that this regional projection is the same as what was published in December 2017, when ECLAC released its annual report, Preliminary Overview of the Economies of Latin America and the Caribbean 2017.
As in previous years, during 2018 growth will show heterogeneous dynamics between countries and subregions, ECLAC said, noting that for the English- and Dutch-speaking Caribbean, average growth is projected at 1.4 per cent for 2018, above the 0.1 per cent recorded in 2017.
According to ECLAC, economic activity projections for Latin America and the Caribbean are being made in a more favourable international context than that of the last few years, but significant uncertainties persist regarding protectionist trends, the financial dynamic and geopolitical risks.
ECLAC said during 2018 greater dynamism in external demand is seen helping stimulate the economic activity of Latin America and the Caribbean.
Likewise, domestic demand will play an important role in the acceleration of growth, although with differences among components, ECLAC indicates. In particular, and even while continuing to be low, investment is expected to make a greater contribution than in previous years, while private consumption will remain a relevant driver of domestic demand, it said.
ECLAC said that in some cases the rise in real wages and the expansion of credit, along with growth in remittances, in the case of the Central American region, are factors that explain the increase in consumption.
With regard to public spending, ECLAC indicates that fiscal consolidation is expected to remain on average during 2018, meaning that public investment and spending will make a lower contribution to growth.
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Bond yields rise, oil prices drop after Syria strikes Monday 16th April, 2018 – Reuters
Oil prices fell sharply and government bond yields rose on Monday on expectations that the weekend’s missile attacks on Syria would not mark the start of greater Western involvement in the conflict.
European shares were broadly flat, however, adding to a mixed picture in Asian stock markets and suggesting that a degree of caution prevails.
While last week’s bid for investment safety in top-rated government bonds unwound, other traditional havens in times of global political tension held firmer. Gold prices were little changed, while Japan’s yen and the Swiss franc were higher than levels late on Friday.
“There is some relief that a direct confrontation between the U.S. and Russia over Syria has been avoided,” said DZ Bank rate strategist Daniel Lenz after Russian President Vladimir Putin warned on Sunday that further Western attacks in Syria would bring chaos to world affairs.
Saturday’s strikes marked the biggest intervention by Western countries against Syrian President Bashar al-Assad and his ally Russia, which is facing further economic sanctions over its role in the conflict.
The United States, Britain and France said the missile strikes targeted Syria’s chemical weapons capabilities and were not aimed at toppling Assad or intervening in the civil war. U.S. President Donald Trump tweeted “mission accomplished” after the attack, underlining expectations that Western action would be limited.
However, while President Putin warned on the potential impact on world affairs if there were further Western strikes on Syria, U.S. ambassador to the United Nations, Nikki Haley, said the United States would announce new economic sanctions on Monday aimed at companies “dealing with equipment” related to Syria’s alleged chemical weapons use.
European and U.S. government bond yields — which move inversely to prices — rose across the board. That was partly as attention turned to what is expected to be a robust first-quarter U.S. corporate earnings season, which begins in earnest this week.
The yield on both German and U.S. 10-year government bonds, seen as among the most liquid and safe assets in the world, were at their highest levels in three weeks.
Oil prices, meanwhile, dropped sharply. Brent crude LCOc1 shed more than 1.5 percent to $71.45 a barrel, with a rise in U.S. drilling for new production also dragging on prices.
MSCI’s world equity index .MIWD00000PUS, which tracks shares in 47 countries, was flat on the day and a pan-European stock index was marginally lower.
U.S. stock futures were pointing to a higher opening on Wall Street. ESc1 First quarter earnings for U.S. companies will be very important after February’s sell-off, said Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers.
“If there is a genuine dent in earnings, people will sit up and take notice,” he said, adding that regulation will be a powerful driver for the technology sector, citing the example of Facebook, as well as the banking industry.
EYEING ABE
The dollar failed to hold its early gains on the yen and eased to 107.20 JPY=, though that was still up on last week's low around 106.62.
Dealers were keeping a wary eye on Japanese politics after a survey showed support for Prime Minister Shinzo Abe had fallen to 26.7 percent, the lowest since he took office in late 2012.
Abe’s sliding ratings are raising doubts about whether he can win a third three-year term as ruling Liberal Democratic Party (LDP) leader in a September vote, or if he might even resign before the party election.
“For markets, the question is whether this matters for economic policy,” said Paul Donovan, global chief economist at UBS Wealth Management. “A change in leadership may matter if the next prime minister has a radically different agenda.”
Japan's Nikkei .N225 rose 0.3 percent while MSCI's broadest index of Asia- Pacific shares outside Japan .MIAPJ0000PUS slipped 0.4 percent as Chinese blue-chips .CSI300 skidded 1.7 percent.
The euro was a touch higher at $1.2357 EUR=, while the dollar index eased to 89.621 .DXY.
For Reuters Live Markets blog on European and UK stock markets open a news window on Reuters Eikon by pressing F9 and type in ‘Live Markets’ in the search bar
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BofA's profit rises on higher interest rates, loan growth Monday 16th April, 2018 – Reuters
Bank of America (BAC.N) reported a 34 percent rise in first-quarter profit on Monday as it benefited from higher interest rates and loan growth.
The second-largest U.S. bank by assets said net income attributable to shareholders rose to a record $6.49 billion in the three months ended March 31 from $4.84 billion a year earlier. Earnings per share rose to 62 cents from 45 cents.
Analysts on average had expected 59 cents per share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the reported figures were comparable.
Total revenue, net of interest expense, rose about 4 percent to $23.28 billion.
In the bank’s biggest business - consumer banking - revenue rose 9 percent to $9.03 billion, helped by strong deposit and loan growth.
“Strong client activity, coupled with a growing global economy and solid U.S. consumer activity, led to record quarterly earnings,” Chief Executive Brian Moynihan said in a statement.
Higher interest rates helped BofA charge more for loans while keeping deposit rates low. The lender relies heavily on higher interest rates to maximize profits as it has a large stock of deposits and rate-sensitive mortgage securities.
JPMorgan Chase & Co (JPM.N) and Citigroup Inc (C.N) last week also reported rise in quarterly profit, helped in part by higher interest rates.
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China first-quarter GDP growth seen easing only slightly as trade tensions mount Monday 16th April, 2018 – Reuters
China likely carried most of its strong economic momentum from last year into the first quarter of 2018, with government crackdowns on financial risks and industrial pollution dragging less on activity than earlier expected, a Reuters poll showed.
Beijing is looking to keep the economic balancing act intact even as it faces rising trade tensions with its largest trading partner, the United States, that could impact billions of dollars in cross-border trade.
A poll of 60 economists showed growth in gross domestic product likely eased marginally to 6.7 percent in the first quarter from a year earlier, compared with the 6.8 percent clip in the previous two quarters.
At the start of the year, analysts were penciling in a first-quarter slowdown to 6.6 percent.
The consensus forecast indicates growth remained comfortably above the government’s target of around 6.5 percent for the full year, which could give policymakers more confidence to step up efforts to reduce risks in the financial system and clean up the environment.
China’s economic data so far this year has pointed to steady if slightly slower growth from 2017, with factory output holding up despite smog controls and consumer spending still relatively resilient.
Central bank governor Yi Gang said on Thursday that first quarter economic data has so far been slightly better than expected.
China will release first quarter GDP on Tuesday, along with March industrial output, retail sales, property sales and investment, and fixed asset investment data.
Economists in the poll estimated GDP grew 1.5 percent quarter-on- quarter, easing from 1.6 percent in the fourth quarter, though only 15 analysts gave sequential forecasts.
Data on Friday showed export growth slowed in the first quarter in yuan terms, indicating overseas demand may not provide the same boost to overall GDP as it did last year, when the economy posted its first pick-up in growth since 2010.
Analysts say the main risk to China’s economy is now centered on the escalating trade dispute with the United States.
Washington and Beijing have threatened tit-for-tat tariffs in recent weeks, stemming from U.S. accusations of unfair Chinese trade practices.
But no hard timeline has been set by either side for implementation, offering hope of a compromise that would reduce the fallout for both sides and collateral damage for other trade-reliant Asian economies plugged into China’s supply chains.
“Both the choice of Section 301 and the number of products included in the list under investigation point to the U.S. protectionist wind against China being very different, and frankly much more worrisome, than past ones,” Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis, said in a note on Monday.
A researcher with China’s state planning agency said last week that China’s economy will see little impact from the trade dispute, as the country’s vast domestic market can compensate for any external impact.
Separate data on Friday showed China is making solid progress in reining in off-balance sheet lending that largely prompted the sweeping crackdown by regulators.
Total credit in the economy in the first quarter fell nearly 20 percent on- year, though some economists think Beijing will not tap the brakes too hard and risk a sharper economic slowdown.
The “sharp decline in March is unlikely to be sustained over (an) extended period of time”, economists at China International Capital Corporation said in a note Friday.
China “will still strive to strike the balance between the medium-long term goal of financial deleveraging vs. maintaining relatively stable liquidity conditions and growth momentum,” they wrote.
While economic growth could bounce back in spring due to seasonal factors such as a pick-up in construction, analysts still maintain that activity in China will start to cool eventually, weighed down by a cooling property market and rising borrowing costs.
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Futures rise on hope Syria conflict will not escalate Monday 16th April, 2018 – Reuters
U.S. stock index futures rose on Monday as investors bet the weekend’s U.S.-led missile attack on Syria would not escalate into a broader conflict.
The focus was back on earnings, with Bank of America (BAC.N) reporting a 34 percent rise in quarterly profit. Its shares were up 0.84 percent in premarket trading.
JPMorgan (JPM.N), Wells Fargo (WFC.N) and Citigroup (C.N) kicked off the quarterly earnings season on Friday, although their performances failed to excite investors.
Thomson Reuters data is expecting S&P 500 companies to report an 18.6 percent rise in profits in the first quarter, their biggest rise in seven years.
Many traders say that reactions to results could be muted as market participants have already priced in benefits from corporate tax cuts, reflected in the stock market’s strong rally in 2017 and early 2018.
At 7:01 a.m. ET, Dow e-minis 1YMc1 were up 154 points, or 0.63 percent. S&P 500 e-minis ESc1 rose 16.25 points, or 0.61 percent and Nasdaq 100 e- minis NQc1 gained 41.5 points, or 0.62 percent.
On Saturday, the United States, France and Britain launched 105 missiles on Syria in retaliation for a suspected poison gas attack. Bank of America Corp
The countries said the missile strikes targeted Syria’s chemical weapons capabilities and were not aimed at toppling Syrian President Bashar al- Assad or intervening in the civil war.
President Donald Trump tweeted “mission accomplished” after the attack, underlining expectations that Western action would be limited.
Russian President Vladimir Putin warned that further Western attacks on Syria would bring chaos to world affairs, as Washington prepared to increase pressure on Russia with new economic sanctions.
Retail sales data for March is scheduled for release at 8:30 a.m. ET. Sales are expected to have increased 0.4 percent after falling for the previous three months that prompted analysts to downgrade their first-quarter economic growth forecasts.
Among other stocks, General Electric (GE.N) shares were down more than 1 percent after the company said it took a $4.24 billion equity charge and reduced earnings for the last two years by 30 cents a share.
Netflix (NFLX.O) shares rose 1.44 percent ahead of its results expected after market close on Monday.
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Nikkei up slightly, defensive shares shine as trade war worries, Syria in focus Monday 16th April, 2018 – Reuters
Japanese stocks rose modestly on Monday on relief that U.S.-led strikes on Syria appeared to be a one-off event though lingering concerns about a trade war had investors flocking to defensive shares.
“Assuming that it was a one-off attack and there will be no additional strikes, I think Tokyo market reaction will be limited. It was within expectations and was already priced in the market,” said from Itsuo Toshima, market analyst at Toshima & Associates.
Nikkei rose 0.26 percent to 21,836 while the broader Topix gained 0.40 percent to 1,736.22.
Defensive and domestic demand-oriented shares led the gains as investors are not fully convinced that a trade war can be avoided in the wake of the U.S.-China tariff standoff, and as Japanese Prime Minister Shinzo Abe sets off to Washington this week to discuss trade and North Korea.
Drugmakers rose 2.1 percent while retailers gained 1.1 percent. Food companies were up 1.0 percent.
On the other hand, non-ferrous metal companies both fell 0.3 percent and steelmakers dipped 0.1 percent while shippers dropped 0.2 percent.
The Nikkei volatility index fell to a 10-week low, with investors showing little signs of concerns over the plunge in Abe’s ratings.
Many investors still think Abe is likely to survive although some now question whether he can win his third term as the head of the main ruling party in September, and thereby remain in office.
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Sanctions threat keeps rouble cautious, China stocks tumble Monday 16th April, 2018 – Reuters
Nervousness about new Western sanctions on Russia kept the rouble and Moscow stocks on the back foot on Monday, while emerging markets were weak generally after the latest clamp-down on risky lending in China hit its markets.
A host of stories were unfolding, including Hong Kong dollar pressure, political strains in Kenya and Zambia, and a surprise ratings upgrade for Poland, but it was the swings in Russia that again dominated the markets’ focus.
Relief that Western missiles fired at Syria at the weekend over a suspected poison gas attack had steered clear of Russia’s troops, making any escalation less likely, was balanced by U.S. talk on Sunday of more sanctions and a sharp drop in oil prices.
The rouble had recovered most of its early losses against the dollar but was still slightly weaker against the euro, trading at 61.92 and 76.52 respectively.
Moscow’s dollar-denominated RTS share index fell 0.6 percent to 1,098.26 points and the rouble-based MOEX index dropped 0.2 percent to 2,171.28 points.
Aluminium giant Rusal, which was the main victim of the latest sanctions, saw its shares shed another 6 percent too, though sovereign bond markets were notably calmer after their recent lurches.
“There are still a lot of uncertainties, there are still sanctions to come out and we don’t know where it ends, but it feels like the market reaction was a little bit over done,” Standard Life Aberdeen portfolio manager Viktor Szabo said.
“Thinking beyond the nuclear option of (sanctioning) sovereign debt, all the other options are uncomfortable for Russia but are probably manageable,” he said, noting that the country’s authorities could support firms hit by the sanctions.
Russia is eyeing retaliatory measures of its own. Deputy Foreign Minister Sergei Ryabkov was quoted on Monday as saying it would not delay adopting legislation allowing it to respond to U.S. sanctions.
In central Europe meanwhile, Poland’s zloty hit an 8-week high against the euro after S&P Global unexpectedly lifted the outlook on the country’s sovereign rating on Friday.
It added to hopes that Warsaw’s relations with Brussels are improving after the lower house of parliament, the Sejm, approved moves last week aimed at addressing EU criticism about changes to its judicial system.
“Our decision to revise the outlook to positive from stable reflects our view that Poland’s economic expansion will last longer than we had previously thought,” S&P said after its rating move.
The Czech crown and the Hungarian forint also tested 10-week highs versus the euro though pressure remained on Turkey’s lira. Its recent drop to an all-time low was a “negative” for its sovereign rating Moody’s said on Monday.
CHINA FALLS
It had also been a mixed day for Asia’s main markets.
China’s major stock indexes posted their worst day for three weeks on worries that slowing credit growth and tightening regulation will start to weigh on the economy this year.
The blue-chip CSI300 index ended down 1.6 percent at 3,808.86, led by real estate and banking firms , while the Shanghai Composite Index slid 1.5 percent to 3,110.65 points.
First-quarter Chinese GDP data on Tuesday is expected to show the economy carried most of its growth momentum from last year into early 2018. Analysts predict an expansion of 6.7 percent on-year, only marginally softer than the 6.8 percent reported in the fourth quarter.
That resilience could give authorities’ confidence to intensify their regulatory crackdown, now in its second year.
There was also plenty to digest in sub-Saharan Africa.
Kenya’s currency held its ground after three election board commissioners announced their resignation, citing failure of the body’s leadership and dysfunction in the organisation.
One of the three officials was the vice chairman of the body. The commission was frequently at the centre of controversy during Kenya’s extended election season last year, in which about 100 people were killed.
“The institution has continued to be dysfunctional, with arbitrary decision- making, leaking of internal documents ... and pursuing of personal interests,” they said in a statement.
Zambia’s bonds, which have fallen in recent weeks, were in also in focus after its finance minister sent a lengthy statement rebuffing claims that its foreign debt may be higher than stated.
In the statement it said the International Monetary Fund (IMF) had not Zambia undertake an independent debt audit and that it had also not defaulted on any of its eurobond payments.
“There have been insinuations in some quarters that the IMF requested the Zambian government to carry out an independent audit of its debt. We are not aware of such a request,” Finance Minister Margaret Mwanakatwe said.
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Sterling rises despite Syria intervention as investors eye data+ Monday 16th April, 2018 – Reuters
The pound rose on Monday despite Britain’s military intervention in Syria, as investors focused on data that could help shore up expectations of a May interest rate hike.
Britain struck Syria with cruise missiles on Saturday in partnership with Western allies, targeting chemical weapons facilities. But the military action did not appear to hurt risk appetite as bond yields rose and the dollar fell.
Sterling on Monday rose 0.1 percent to $1.4250, continuing a two-week rally against the dollar that on Friday saw the pound push towards a new post-Brexit referendum high.
Data on British unemployment, wages and inflation numbers are due this week.
Markets expect the Bank of England to raise rates by 25 basis points next month as it tries to curb inflation and with Brexit-related risks having subsided for now and wage data still pointed upwards.
“With markets almost fully discounting a BoE rate hike, this week’s run of monthly indicators are anticipated to give the hike a green light,” Marc Ostwald, a global strategist at ADM Investor Services International in London, said in a note.
Against the euro, sterling fell 0.1% to 86.69 pence per euro, but remained at its highest against the single currency since late May 2017.
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Dollar heads towards two-week lows as short bets hit seven-year highs Monday 16th April, 2018 – Reuters
The dollar weakened on Monday and headed towards a two-week low against a basket of rivals on growing signs of relief that a U.S.-led strike on Syria would not escalate further at a time when concerns over a trade war has rattled global markets.
Investors returned to the familiar theme of adding short bets against the dollar, as a return in appetite for risk manifested itself through higher bond yields and softer oil prices.
Despite widening interest rate differentials in its favor and the widest yield gap between two-year U.S. and German debt for nearly three decades, the dollar’s performance in recent months has been closely correlated to swings in risk appetite.
That is because though the U.S. central bank has kept on track in raising interest rates, broader financial conditions remained loose.
“Unless we see the geopolitical concerns and trade war fears showing up in hard data, currency markets seem to be broadly immune to the headlines,” NN Investments chief investment officer Valentijn van Nieuwenhuijzen said.
A weaker dollar has broadly coincided with a pick-up in demand for riskier assets and vice versa and the Syria strikes underlined that trend.
Against a broad basket of its rivals .DXY, the dollar edged 0.3 percent lower at 89.54. It has weakened 0.6 percent so far this month, taking its year-to-date losses to nearly 3 percent, extending a theme firmly in place since last year.
The dollar hit a two-week low of 89.36 last week.
“The military strikes were well telegraphed and we are seeing a continuation in the broad market theme from last week of a weaker dollar and favorable conditions for risk taking,” said Credit Agricole currency strategist Manuel Oliveri.
In a wider measure of dollar positioning NETUSDALL= that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian rouble, the U.S. dollar posted a net short position valued at $27.21 billion, its biggest since August 2011.
Other major currencies also remain trapped in trading ranges, with the euro starting the week around $1.23, a level around which it had traded all last week.
The U.S. Treasury semi-annual report didn’t jolt the currency markets, with the Trump administration again refraining from naming any major trading partners as currency manipulators as it pursues potential tariffs and negotiations to try to cut a massive trade deficit with China.
Although the Japanese yen usually draws demand in times of political tension and market turmoil due to its perceived safe-haven status, the dollar’s losses against it were small.
“The reaction in currencies has been limited as President Trump had provided advance notice about a possible strike on Syria, giving speculators ample time to brace for the actual event,” said Yukio Ishizuki, senior forex strategist at Daiwa Securities in Tokyo.
“Many speculators are showing less of a response to yen-supportive factors lately, after the Bank of Japan made clear it was not going to normalize policy soon. This goes for domestic factors as well, like falling support ratings for (Japan Prime Minister Shinzo) Abe.”
Support for Abe, who is plagued by accusations of cronyism and cover- ups, fell to 26.7 percent in a survey by private broadcaster Nippon TV released on Sunday, the lowest since he took office in December 2012.
Sterling was the big outperformer in currency markets with the British currency vaulting half a percent above the $1.43 line GBP=D3 as investors focused on data that could help shore up expectations of a May interest rate hike. [GBP/]
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Hong Kong plows $1.7 Billion into Defending Currency to Little Effect Monday 16th April, 2018 – Bloomberg
The Hong Kong dollar remains stuck at the weak end of its currency band, even after the monetary authority plowed $1.7 billion into defending the peg.
The city’s dollar traded at HK$7.8499 per greenback at 5:31 p.m. local time, near the level that can spur buying by the de facto central bank. The Hong Kong Monetary Authority has spent HK$13.3 billion ($1.7 billion) mopping up local dollars since the weak end of the band was reached on Thursday for the first time since 2005. The speed of intervention shows outflows are bigger than people had thought, according to China Everbright Bank Co.
“The pace of HKMA’s buying is a bit faster than we expected,” said Ngan Kim Man, deputy head of treasury at China Everbright Bank’s Hong Kong branch. Outflows are likely to accelerate as the U.S. further tightens monetary policy, which will finally boost short-end rates in Hong Kong, Ngan said.
Hong Kong interbank rates have lagged behind their U.S. counterparts thanks to an abundance of liquidity -- something HKMA tightening may change. The aggregate balance of the city’s interbank cash supply will fall to HK$167 billion on Wednesday from the pre-intervention level of about HK$180 billion, according to the de facto central bank. One-month Hibor, as the local rate is known, stands at 0.85 percent, about 1 percentage point less than similar maturity Libor.
Hong Kong residents “shouldn’t expect that the environment of super low interest rates will persist forever,” Paul Chan, the city’s financial secretary, wrote in a blog Sunday. Investors “have to consider the possibility of a rise in the borrowing costs, and the impacts of higher interest rates on asset prices and their investments.”
The government has the capability of dealing with large capital outflows, and investors shouldn’t be too worried, Chan said. But the derivatives market is flashing signs of higher rates, with the Hong Kong dollar’s one- year interest rate swaps spiking 12 basis points, the most since December 2016, to 1.89 percent on Monday. That’s the highest since 2008, and suggests traders are pricing in higher borrowing costs. Also, analysts are flagging risks to the city’s home prices, which are among the least affordable in the world.
“If the downward pressure on the Hong Kong dollar persists, policy makers are likely to step up its intervention over the coming months,” Chang Liu, China economist at Capital Economics, wrote in a note dated Friday. “A bigger concern is that the rise in market interest rates precipitates a collapse in the property market, which causes wider problem in the economy, including a slump in consumption and a sharp rise in non- performing loans.”
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Expert Says Blockchain Technology Could Help Barbados Out of Foreign Reserves Slump Friday 13th April, 2018 – Caribbean360
A regional technology industry expert is suggesting that Barbados’ dwindling foreign exchange reserves could receive a much needed boost if the island were to increase its use of blockchain technology.
Roland Haggins, the Caribbean Community (CARICOM) director for the digital infrastructure development company Nuco Global Inc, pointed out that financial technology (Fintech) use was rapidly growing worldwide, and suggested that it could be “an additional sector to our economy, providing much-needed diversification”.
Pointing to links between Fintech systems and other sectors such as manufacturing, agriculture and small business, Haggins argued that the use of blockchain technology – which he described as “a secure version of the Internet in which value can be communicated” – would enhance the island’s overall level of economic activity.
In fact, Haggins said this was already evident in the millions of dollars being invested in the rapidly expanding Bitt and other blockchain firms with offices in Barbados and the rest of the region.
“To give some numbers, Bitt.com raised US$4 million in 2016 and a further US$3 million this year through foreign direct investment. Currently there are around 50 people at Bitt and they would likely expand to over 100 people within the next year.
“Barbados has its first blockchain protocol called the Aion platform [built by Nuco Global Inc],” Haggins noted, adding that the company had raised US$28 million last year, while Polymath – a security token company – raised another $60 million last year.
“So all in all, the blockchain companies in Barbados have raised well over US$100 million over the past year or so, and these businesses are worth hundreds of millions and will be employing hundreds of people by year end.
“In fact we would like to see all the major global tech companies have offices in Barbados employing Barbadians. We would like to see Barbadians with access to the latest technology advances that can improve our well-being, improve the ease of doing business and improve our Government systems. We have the potential to strengthen foreign reserves by attracting foreign investment as a stimulus,” he stressed.
The island’s foreign exchange reserves plunged to a low of 6.6 weeks of import cover, or just $410 million, at the end of December last year, with economists and other pundits forecasting that they could fall even further by the middle of this year, as the island continues to service its debts.
Haggins said in order for the economy to benefit from blockchain technology, greater emphasis would have to be placed on three key areas – an effective information communication technology infrastructure; a highly skilled work force and the right regulatory environment – all of which he said were already in place in Barbados.
“So now as a country we face the challenge of developing a regulatory environment and policy that will not stifle innovation but allow it to flourish,” he told the Barbados International Business Association’s Fintech seminar Barbados Blockchain Beach.
During the one-day event officials and policymakers explored a range of possibilities for blockchain technology use in Barbados, its advantages and best practices.
Minister of Industry, International Business, Commerce and Small Business Development Donville Inniss said he was pleased with the evolution of blockchain technology over the years, but added that he was eager to see Barbadians making greater use of the “phenomenal opportunities” and “allow us in this little island to be bold enough to develop solutions for global issues”.
For the past several years now, noted economist Jeremy Stephen has been a proponent of the use of digital currency as a mix in the Central Bank’s portfolio.
In a paper entitled ‘Should Cryptocurrencies Be included in the Portfolio of International Reserves Held by the Central Bank of Barbados?’, Stephen and fellow University of the West Indies lecturer and economist Dr Winston Moore had suggested several years ago that the Central Bank should include some form of digital currency in its reserve assets.
This, they argued, would help to safeguard the Barbados currency, which is pegged BD$2 to US$1, against speculative attacks.
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JSIF spearheads national risk information platform Sunday 15th April, 2018 – Jamaica Observer
The Jamaica Social Investment Fund (JSIF) is spearheading the development of a National Risk Information Platform (NRIP), which will allow all risk data to be located and updated in a centralised platform that is available to government agencies and the public.
Environment and Project Officer at JSIF, Stacey-Ann Preston, said that the NRIP will promote a culture of safety and risk reduction through the collection of targeted hazard and risk information, and will involve the assistance of several government ministries, departments and agencies.
“This platform will enhance the data-sharing capacities to facilitate integration of information. We know that people have data but we do not know what each person has and we do not want to re-invent the wheel and so…this platform will enable the sharing mechanism to facilitate planning and development,” she explained.
Preston informed that a series of workshops and information sessions are being conducted to facilitate dialogue and obtain feedback from major stakeholders on the development of the NRIP.
“The sessions held so far engaged the parties and sparked discussions on the proposed platform to determine the type of data to be collected, how relevant the data would be to them, how they will be able to use it to guide or influence risk reduction and emergency management,” the project officer informed.
This sub- project being executed by the JSIF involves direct partnership with the Office of Disaster Preparedness and Emergency Management (ODPEM), which will be responsible for monitoring and managing the data, while the National Spatial Data Management Division will be responsible for hosting the platform.
The National Environment & Planning Agency (NEPA) will also play a role in terms of providing solutions from the coastal and ecosystems-based assessments, which will be done on eight vulnerable areas.
These are Ocho Rios in St Ann; Black River, St Elizabeth; Savanna-la-Mar in Westmoreland; Portland Cottage, Clarendon; Morant Bay in St Thomas; Manchioneal, Portland; Port Maria, St Mary and Alligator Pond in Manchester.
Preston added that the development of the NRIP is one of various activities and initiatives being undertaken as part of the Disaster Vulnerability Reduction Project (DVRP).
The project, which is being implemented by the JSIF from 2016 to 2022, is funded by the Government of Jamaica through a loan agreement with the World Bank valued at US$30 million.
The various deliverables, the environment and project officer pointed out, are intended to reduce disaster and climate vulnerability by making infrastructure developments more resilient.
She added that the overall initiative will improve the capacity of government institutions to generate and use hazard and risk information to inform national planning and will also focus on increasing awareness about disaster-risk reduction, building resilience and emergency management.
“The DVRP is an example of collaboration and partnership across agencies and ministries, so it is critical that we mainstream across agencies the ability to use data to inform the development decisions that we make as a country,” Preston said.
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Stakeholders working to ready labour force for BPO demand Monday 16th April, 2018 – Jamaica Observer
ATTORNEY General Marlene Malahoo Forte says the Government is projecting 200,000 jobs in the business process outsourcing (BPO) sector over the next three years.
In delivering the keynote address at the opening of the inaugural two-day Outsource2Jamaica Symposium and Expo at the Montego Bay Convention Centre in Rose Hall on Thursday, Malahoo Forte, who is also the Member of Parliament for St James West Central, added that the Government is not only “all in at the highest level” but sees the sector as critical in every growth projection going forward.
She, however, noted that there is a concern that the labour force is not keeping pace with the number of skilled positions that are rapidly becoming available and that all hands will have to be on deck to ensure that “qualified workers are available” to seize the opportunities.
“The Business Process Industry Association of Jamaica (BPIAJ), which is responsible for hosting this symposium, has just recently signed a memorandum of understanding with the HEART Trust/NTA to provide training specifically for the industry,” Malahoo Forte noted.
“We also have a Housing, Opportunity, Production, and Employment (HOPE) programme that is working to ensure that young school leavers are ready for the thousands of jobs in this industry.”
She said that, in addition, JAMPRO has also entered the fray by engaging some of the local universities and key stakeholders so that graduates can be aware of the “higher-level jobs in the new areas”.
“So, in spite of the challenges in meeting the demands, work is being done to ensure that those challenges are overcome,” she stressed.
Prime Minister Andrew Holness last year officially launched the HOPE programme to provide educational and job opportunities for young people. The initiative targets individuals, aged 18 to 24, who are not employed or enrolled in a school or programme of training.
In the meantime, the attorney general added that “800,000 sq ft of space” was built out “or retrofitted” for the BPO over the last year, by both private and public sector operators.
“And there are several projects this year that will make additional space available. The Montego Bay BPO project has already been completed and is to be launched in the coming weeks. This one is near and dear to my heart because it falls in the constituency in which I am the Member of Parliament,” she said.
For her part, Dr Janet Dyer, managing director of the Heart Trust/NTA, said her organisation last year invested more than $108 million in the BPO sector, adding that “we are projecting to spend even more in this new fiscal year”.
“In 2017-2018, we enrolled over 18,000 persons in our BPO training programmes, and well, more than 11,000 persons have already attained their work-ready certification,” she noted.
“We plan to expand these numbers as the BPO market demands more trained graduates. We are currently retrofitting a building at the Vocational Training Development Institute at Gordon Town Road, (St Andrew), to house a BPO incubator at an estimated cost of $60 million,” Dyer said.
The Outsource2Jamaica Symposium and Expo was staged by BPIAJ and its members and partners, including JAMPRO. It ran from April 12-13 and was designed to provide a platform to raise the profile of Jamaica as a BPO destination.
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Jamaica close to signing air service agreement with Chile Sunday 15th April, 2018 – Jamaica Gleaner
Jamaica and the Republic of Chile are close to signing an air services agreement.
A release from the Office of the Prime Minister (OPM) last evening said Prime Minister Andrew Holness and President of the Republic of Chile Sebastian Pinera held bilateral talks yesterday in Lima Peru.
The release from the OPM said the leaders spoke of the need for ease of travel between the two countries and agreed to follow up on the discussions to ensure the agreement is formalised.
An air services agreement would also boost tourism between both countries.
The two leaders, who are attending the Summit of the Americas, also pledged to deepen cooperation in several key areas of mutual interest.
The leaders agreed to greater cooperation on investment and, in particular, enhancing the Memorandum of Understanding signed between Jamaica and Chile during an official visit by Holness in August 2017.
The prime minister and his Chilean counterpart also discussed exchanges in sports and culture.
With Jamaica expanding its cooperation with several Spanish speaking nations, Holness expressed particular interest in language training. In this regard both leaders pledged youth exchanges to build knowledge of each others country.
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Household debt on the rise - Personal loans climb to $308b Sunday 15th April, 2018 – Jamaica Gleaner
Jamaican households are increasingly living beyond their means as more than half of their disposable income goes towards paying back loans, a trend that concerns the financial stability committee enough for it to consider studying its drivers.
Household debt reached its highest level in a decade, with more than half of disposable income - that is, $54.20 of every $100 - going towards the servicing of personal loans, as at last September, according to the Fiscal Stability Report 2017 released by the central bank this month.
Last year, the ratio of real household debt to disposable income deteriorated at 54.2 per cent was trending well above the 10-year annual average of 42.9 per cent, said the report.
In the most recent breakdown of loans issued by commercial banks, personal loans are at the highest level they ever been, according to provisional data compiled by the bank of Jamaica (BOJ).
As of January 2018, the loan market in the commercial banking sector was valued at $616 billion, with personal loans accounting for $308 billion of the industry total. One of the drivers of the trend has been reported to be increasingly attractive auto loans that are now priced at single-digit rates.
A decade ago, the year-end ratio was 38 per cent, and the decade before that it was 19 per cent, according to central bank data.
The debt servicing burden of households has generally trended upward since 2011, the stability report itself noted.
It also noted that the stable macroeconomy as well as the Government of Jamaica's reduced need for debt - eliminating its crowding out effect - has created an opportunity for expansion of private sector credit. Within this context, the Financial System Stability Committee (FSSC), which is chaired by the governor of the central bank, says it intends to pay more attention to the potential risks associated with rising household and corporate debt.
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"Therefore, it is the committee's view that suitably anonymised granular loan level data is particularly important for Jamaica's macroprudential surveillance, and as such, the committee recommends the expansion of Bank of Jamaica's analysis based on its use," said the FSSC in a separate statement that followed publication of the stability report.
FSSC is a statutory committee which provides oversight of financial stability assessments prepared by BOJ staff. It has eight members, among them the BOJ governor as chair and other officers of the central bank - the financial secretary, executive director of the Financial Services Commission, and CEO of the Jamaica Deposit Insurance Corporation.
Two years ago, BOJ revised its definition of the debt serving ratio which changed the calculation of household debt as a share of disposable income. It resulted in a near 20-point reduction in the ratio.
Specifically, prior to the revision, the 2015 report indicated that household debt servicing worsened by three percentage points year on year to 69.5 per cent in 2015, which meant that roughly $7 of every $10 of household income went to paying down debt.
The growth in household debt rose alongside changes in the banking sector, but it was also occasioned by increased employment levels, the stability report noted. Last year, Jamaica's largest building society and a merchant bank converted to commercial banks, growing the sector to eight players.
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JMMB Securities arranges iPrint acquisition of outdoor sign company Sunday 15th April, 2018 – Jamaica Observer
Large print advertising firm, iPrint Digital has acquired billboard advertising agency National Outdoor Agency with the assistance of JMMB Securities as financial advisors to the deal.
According to Stephen Steele, chairman of iPrint Digital, this deal brings together the vibrancy and agility of the 12-year-old Jamaican-run and - owned iPrint Digital and the strength and experience of the 50-year-old industry leader, National Outdoor Agency.
“Together, the possibilities for the industry become endless, as it will not only be served by a dominant, dynamic industry leader, it will immediately experience the best outdoor billboard portfolio [and] upgraded with the best outdoor digital capabilities and an enhanced national network. The ultimate aim is to provide greater opportunities so the clients in turn can capture the attention of their customers throughout the island,” Steele explained.
The deal was officially completed at the iPrint Head Office on Westminster Road on Tuesday, where the company successfully finalised the acquisition of Fundamental LC, which owns 100 per cent of National Outdoor Advertising Limited, at an undisclosed price.
NOA believes this move is great for both companies. “With well over 800 advertising faces across the island, this provides the platform for growth in both physical and digital OOH. Two great companies have come together to bring more options and flexibility to meet the advertising and promotional needs of our clients, as we remain committed to providing the best quality and service they have become accustomed to. As we see it, this union is the perfect merger – where competencies of outdoor media, print and fabrication converge under one umbrella,” Karen James, CFO & general manager National Outdoor Advertising.
“The industry, the economy, and by extension the country move forward by entrepreneurs making bold moves, pushing the boundaries, doing great things while in the process deploying capital, creating jobs and stimulating aggregate demand. This is truly a case where the value of the new blockbuster entity far exceeds the summation of the individual parts,” Steele said.
According to grandviewresearch.com, the global digital signage market size was estimated at US$16,044.1 million in 2016 and is anticipated to reach US$ 31,714.1 million by 2025. This industry growth is accredited to the increasing demand for the digital promotion of products and services so as to attract the attention of the target audience in an effective manner.
Digital signage offers the necessary quality information to a large number of viewers by utilising huge display screens across a location with a concentrated target audience. With digitised display technology, information is provided in a digitised format that includes motion and pictures in order to attract customers with more impact, as compared to the traditional modes of reaching out to customers.
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