OUR UPCOMING WORKSHOPS!

WORKSHOP DATE COUNTRY

Credit Risk Analysis of Corporates & SMEs 27th & 28th February, 2018 Suriname

SME eSmart- Powering Your Potential Find out more today by calling: (868)-627-8879 ext. 228 or email: [email protected]

Latest Rating Actions by CariCRIS

▪ Government of Barbados rating downgraded to CariBBB- ▪ Saint Lucia Electricity Services Limited’s rating reaffirmed at CariBBB ▪ Endeavour Holdings Limited’s rating reaffirmed at CariA+ ▪ Gulf City Limited’s rating reaffirmed at CariA+ ▪ National Flour Mills Limited’s rating reaffirmed to CariA- ▪ Telecommunications Services of Trinidad and Tobago Limited’s rating reaffirmed to CariA ▪ Colonial Fire and General Insurance Company Limited’s initial rating assigned at CariA ▪ Home Mortgage Bank’s rating reaffirmed at CariA ▪ NCB Financial Group Limited’s initial corporate credit rating assigned at CariA ▪ National Commercial Bank Jamaica Limited’s rating upgraded to CariBBB+ ▪ NCB (Cayman) Limited’s initial corporate credit rating assigned at CariA ▪ The Government of the Commonwealth of Dominica placed on Rating Watch – Developing ▪ Dominica AID Bank’s rating downgraded by 1-notch and placed on Rating Watch – Negative

Please visit our website at www.caricris.com for the detailed Rationales on these and other ratings

Benefits of a CariCRIS Rating to a Credit Union: ▪ Demonstrate to members the institution’s financial strength and

soundness ▪ Demonstrate to members its investing capabilities

▪ Employ it as a marketing tool to attract new members

CariCRIS’ credit ratings and daily Newswire can also be found on the Bloomberg Professional Service.

REGIONAL

Trinidad and Tobago

GraceKennedy leads shares traded Overall Market activity resulted from trading in 15 securities of which five advanced, five declined and five traded firm.

Massy registers dip in first quarter profit Massy Holdings Ltd and its Subsidiaries is reporting an 8.1 per cent decrease in profit after tax for its first quarter ended December 31, 2017.

Another Republic Bank employee on fraud charges A second bank employee charged with defrauding her employer, Republic Bank Limited (RBL), of $.25 million will face a Port-of-Spain magistrate later today.

Barbados

Barbados ratifies WTO agreement on trade facilitation Barbados has ratified the World Trade Organization’s (WTO) on Trade Facilitation Agreement (TFA).

CDB tells Government to cap its wage bill With the Freundel Stuart administration currently under pressure from trade unions to grant a double-digit pay hike to public sector workers, one of the island’s key regional development partners is suggesting that Government acts otherwise.

Jamaica

Caricel sells LTE network to South African firm Jamaican LTE broadband network Caricel has announced the acquisition of its majority shares by a South African company, Involution Limited, under a sale agreement negotiated last October.

Jamaica Continued

Rewards programme to push Margaritaville sales Margaritaville (Turks) Limited (MTL) is one of only seven US dollar- denominated stocks on the Jamaica Stock Exchange (JSE), and investors appear to be holding on to the stock.

Wisynco reports $1.2b half-year profit despite weather effects In its first financial report as a listed company, Wisynco Group Limited reported half-year profit of $1.22 billion for the period ending December 2017, or 34 cents per share, after a period of restructuring in which the company hived off its non-core businesses as it prepared to go public.

FSC widens collateral pool for repos, breathes life into contracting trade The Financial Services Commission (FSC), in December, moved to widen the pool of allowable assets used as collateral for retail repos, a development that securities dealers say would be beneficial to companies seeking financing from the capital market.

Guyana

Completion of Exxon Shore-base on schedule First shipment of equipment for operation in 2020 here

The Bahamas

Chamber Urges 'Safeguards' For Gov'ts Tax-Free Zone Plan THE Chamber of Commerce's chief executive yesterday urged the Government to "put in safeguards" to prevent abuse of its promised Over- the-Hill 'tax free zones'.

Small Business Development Centre To Be Launched in The Bahamas The Cabinet of The Bahamas has approved the launch of a Small Business Development Centre later this year.

Dominica

Guadeloupe-based NGO raises funds for school repairs in Dominica The Guadeloupe-based NGO CORECA has raised over half a million dollars (€150,000) for the repair of schools in Dominica in the wake of Hurricane Maria.

Dominican Republic

Dominican Govt. issues US$1.82B bond The Dominican government issued US$1.0 billion of debt at 30 years and, for the first time, a bond in Dominican pesos for RD$40.0 billion (US$822.0 million), the Finance Ministry announced Thurs.

Grenada

Pure Grenada wins Expedia award Announced on Jan. 31, 2018 at the Caribbean Hotel & Tourism Association’s Travel Marketplace in Puerto Rico, Expedia named Pure Grenada, the Spice of the Caribbean, as the Caribbean Destination of the Year 2017.

St. Lucia

St Lucia Adopts Climate-Smart Cassava Cultivation The Food and Agricultural Organization (FAO) is spearheading a project which will not only increase the cultivation of cassava throughout the region but also encourages the production of cassava blended bread as a healthier alternative to the traditional white bread.

Other Regional

Bermuda records highest-ever number of visitors in 2017 2017 “brought the highest number of visitors to the island in recorded history,” the Bermuda Tourism Authority (BTA) said, adding that “the 692,947 total arrivals is the best statistical performance dating back to 1965.”

Bermuda-Based Business to Acquire Leading Italian Agriculture Insurance Specialty Company Bermuda-based specialty provider of property and casualty insurance and reinsurance, Sompo International, today announced that it has reached an agreement to purchase A&A srl, a leader in the Italian agriculture insurance market since 1996.

INTERNATIONAL

United States

Congress votes to end brief government shutdown The U.S. House of Representatives joined the Senate early on Friday morning in approving a bill to end an overnight federal shutdown, sparing Republicans further embarrassment and averting serious interruption of the government’s business.

Investors brace for more swings as U.S. inflation specter rises The inflation bogeyman has reared its ugly head and sent U.S. stock investors racing for the hills in recent days.

Wall Street on course for worst week in six years U.S. stock markets were set to open flat to lower on Friday, on course for their worst week in more than six years.

United Kingdom

Sterling rises further on BoE rate hike expectations Sterling climbed against the dollar and euro on Friday, extending the previous day’s gains, after the Bank of England said interest rates would probably need to rise sooner and by more than it had previously thought.

Europe

EU-Mercosur trade talks close with key gaps remaining Negotiators for the European Union and Latin American bloc Mercosur have concluded two weeks of talks in Brussels on a free trade deal with no clear breakthrough and no formal offers made.

European share declines limited after another Wall Street sell-off European shares posted limited losses on Friday morning after a fresh sell- off on Wall Street, which has now entered a correction with the benchmark S&P 500 and Dow industrials falling more than 10 percent from their Jan. 26 record highs.

China

China plans to launch crude oil futures on March 26: securities regulator China plans to launch its long-awaited crude oil futures contract on March 26, the country’s securities regulator said on Friday, a move that could potentially shake up pricing of the world’s largest commodity market.

Japan

Nikkei slides in broad global selloff; Nissan hit by lower profit Japan’s Nikkei share average tumbled on Friday after another torrid day for Wall Street, with oil-related stocks leading the broad declines as crude prices slumped.

Global

Savaged global stocks head for worst week since 2011 A 4 percent drop in Chinese shares dealt reeling world stock markets a fresh blow on Friday, as nerves about rising borrowing costs and soaring volatility put them on course for their worst week since the height of euro zone crisis.

Oil slides towards steep weekly loss as supply fears mount Oil prices fell for a sixth day on Friday, and were on track for their biggest weekly losses in 10 months, as record-high U.S. crude output added to concerns about a sharp rise in global supplies.

Completion of Exxon Shore-base on schedule Friday 9th February, 2018 – Guyana Chronicle

First shipment of equipment for operation in 2020 here

CONSTRUCTION of the ExxonMobil warehouse and onshore logistics base is expected to be completed before the scheduled time, said Chief Executive Officer (CEO) of TotalTec Oilfield Services, Lars Mangal after a tour of the facility on Thursday.

ExxonMobil – the company currently drilling for oil in Guyana along with joint venture partners HESS and CNOOC Nexen – had awarded the contract to Guyana Shore Base Inc. (GYSBI) which is a Guyanese joint venture made up of Muneshwers Ltd., Pacific Rim Constructors, TotalTec Oilfield Services and LED Offshore.

The area being developed by GYSBI is 28 acres, with a waterfront of 900ft by 1600ft. The company is aiming to build a wharf of 600ft.

“We are ahead of schedule, below budget and on track to exceed Exxon’s expectation and partners with Exxon,” said Mangal. He gave the completion date as March 2018.

General Manager of GYBSI, Glenn Lockwood, who was also a part of the tour, said the facility was constructed in “record time” and they are only finishing off a pipe wash and the 2000 square meters warehouse.

The infrastructure of the base also includes a large yard with pipe racks and staging places which they intend to use to put tubular (pipes) prior to sending them to the Floating Production, Storage and Offloading vessel (FPSO).

ExxonMobil had initially planned to use a shore base in Trinidad and Tobago before turning its full attention to Guyana. The base will service the needs of the FPSO which will be offshore Guyana producing oil. Fuel, water, cement, mud, and other materials will be available at the base.

Lockwood explained that the facility is practically operational already because the first shipment of equipment for operation in 2020 arrived Wednesday night. He said popular shipping company Inter Marine delivered developing casing and other tubular fittings on its ship the “Industry Aim” which is docked here.

The shipment is the first of many and according to the General Manager the next shipment is expected in Guyana by this weekend. “Right now we are getting ready to take the pipe off the ship, wash it so that it will be ready to go offshore,” said Lockwood, adding that they are off and running.

So far 60 persons, 94 per cent of whom are Guyanese, have been employed by GYSBI and when the facility is fully completed they expect to have a staff complement of close to 300 persons.

Minister of Natural Resources, Raphael Trotman said much more is in the pipeline for Guyanese and the shipment of equipment is a symbol of that.

“This is not a joke, not an illusion, it has started to happen… this is something to celebrate,” said the Minister, who further noted that persons need to be educated about the industry and the Government’s effort to get the first oil by 2020.

ExxonMobil and its joint venture partners HESS and CNOOC Nexen had discovered recoverable resources, including current proved reserves and additional resources, estimated to be 3.2 billion gross oil-equivalent barrels prior to the 2018 Ranger discovery. Production from Liza Phase 1 is expected to begin by 2020, less than five years after discovery.

<< Back to news headlines >>

Chamber Urges 'Safeguards' For Gov'ts Tax-Free Zone Plan Thursday 8th February, 2018 – Tribune 242

THE Chamber of Commerce's chief executive yesterday urged the Government to "put in safeguards" to prevent abuse of its promised Over- the-Hill 'tax free zones'.

Edison Sumner told Tribune Business that unless the necessary controls were implemented to monitor who was receiving tax concessions, the Minnis administration's long-touted plan could further fuel growth in an already-large "informal economy". The Government is promising real property tax and Business Licence exemptions, as well as the elimination of Customs duty on imported building materials and equipment, for so- called 'inner city' or Over-the-Hill areas it is still defining the boundaries for.

The revitalisation of these areas, and the reduction of poverty and unemployment, were a key election campaign pledge by the Minnis administration, but Mr Sumner yesterday urged it to guard against opening up opportunities for fraud, tax evasion and other financial abuses.

"We don't want to see this get to the stage where persons are taking advantage of this by going into these areas considered free zones to set up businesses, and do trade in goods and services, to evade taxes," he told Tribune Business.

"The Government has to be sure they're putting in place the very rigorous controls to ensure there are no abuses of the system. It's going to be important for us to understand that system, and once we understand how that's going to work and the engineering of it, we'll be able to provide some feedback to the Government."

Many observers have already questioned how the Government will be able to monitor its tax-free plan such that it ensures incentives and 'tax breaks' can only be accessed by businesses and residents within the zones.

The Customs duty and VAT exemptions, in particular, are seen as open to abuse, with persons potentially able to import materials and equipment at the concessionary rates via friends/family living within the zones even though they do not.

Businesses could employ the same tactics, even registering 'shell' companies in these areas solely to access the tax breaks, while concerns have already been expressed that the Government's initiative - though well-meaning - could end up pushing existing Over-the-Hill residents out by attracting wealthier people and companies from elsewhere eager to exploit the concessions.

Mr Sumner expressed concern that the 'tax free zones' could inadvertently fuel an expansion of the 'informal economy', representing businesses that do not pay due taxes and lack the necessary Business Licences and permits to operate.

"We're already having a significant challenge here with so many businesses operating in the informal sector of the economy," he told Tribune Business, "taking advantage of situations where the controls are not as tight as they should be.

"Many companies operate without the requisite licences and permits, and this becomes an affront to businesses operating legitimately in the formal sector. We don't want to create another type of competition where firms are competing against a competitor operating without any licences or oversight.

"That has created an uneven playing field. We want to make sure any company pays their fair share otherwise that will be creating inequity in the way business is done."

Mr Sumner said the Chamber was "anxious" to learn how the Government's 'tax free zone' plans for inner city revitalisation will work, and added: "We are all for developing business, all for ensuring businesses small, medium and large, who have struggled making their business work, and want to do all we can to ensure we support their business and concessions issued by the Government.

"But we also want to make sure everyone operating in the economy is doing so properly, and has access to the same resources to make their business work."

Meanwhile, Michael Maura, the Chamber of Commerce's chairman, said the private sector's concerns over the Government's plan to exempt from Value-Added Tax (VAT) so-called 'breadbasket' food items, utility and medical bills, and other essential goods remained unchanged from one year ago.

The issue came to the forefront again this week after the Prime Minister pledged to 'exempt' breadbasket foodstuffs from VAT in the upcoming 2018-2019 Budget year, and Mr Sumner again called for more details on how this will work.

"While this may be good for consumers, it requires an awful lot of work from businesses that operate in these areas and others to reverse engineer their systems where they are already filing and collecting VAT on the products they sell," Mr Sumner told Tribune Business.

"For us, it's going to be a matter of seeing how this plan is going to work. It's going to require reverse engineering for businesses on the products they sell. We went to great lengths and very intense discussions with the government of the time to narrow the number of exemptions being offered under the VAT regime. That was an onerous and extensive discussion.

"When removing VAT off these items, businesses have to reprice them on their shelves and systems. You have to separate what is VAT-able and what is not VAT-able. And when you file VAT returns that is going to become a very onerous exercise for many businesses."

The Minnis administration had also pledged before the May 2017 general election to remove VAT from education fees, water and light bills, medicine, healthcare and insurance. It is unclear whether it will also follow through in these areas, having argued that its plans were delayed by the worse-than-expected fiscal position it inherited.

The main arguments against the Government's plan are that introducing such 'exemptions' will undermine the concept of a low-rate, broad-based VAT, and potentially 'open the door' to further exemptions in the future - something that would create pressure for an increase in the present 7.5 per cent rate.

Increased exemptions also make VAT filings by businesses, and its administration by the Department of Inland Revenue, more complex and costly. And, for those retailers who sell 'breadbasket' items, the 'exemptions' will increase their costs and force them to increases prices on other items.

'Exempting' products from VAT means that, while end-consumers do not pay the 7.5 per cent levy on their purchases, businesses are unable to reclaim their input costs in proportion to the volume of 'exempt' goods they sell.

For example, if 60 per cent of a company's inventory was VAT-able, and 40 per cent 'exempt', that business would be unable to reclaim 40 per cent of the VAT paid on its 'input' costs - such as rent and utilities.

This, in turn, increases that business's operating costs, forcing it to increase prices to compensate. These price increases might encompass a broader base of goods, and greater rises, than if all goods had been VAT-able.

<< Back to news headlines >>

Dominican Govt. issues US$1.82B bond Friday 9th February, 2018 – Dominica Today

The Dominican government issued US$1.0 billion of debt at 30 years and, for the first time, a bond in Dominican pesos for RD$40.0 billion (US$822.0 million), the Finance Ministry announced Thurs.

“The Caribbean sovereign set final yields of 8.90% on a DOP40bn (US$817m) five-year tranche and 6.50% on a US$1bn 30-year,” Nasdaq reports quoting a Ministry source.

According to Finance, “the Dominican Republic made history in the global capital market by placing, for the first time in the New York market, a bond denominated in local currency for 5 years for RD$40.0 billion (US$822.0 million), and a bond in US$ at 30 years for US$1.0 billion at the lowest coupon rate issued by the country for this term.”

Nasdaq reports that expected ratings on the 144A/Reg S trade are Ba3/BB-/BB-. “Proceeds will be used for general purposes, including the partial financing of the 2018 budget.”

“Citigroup and JP Morgan are bookrunners, while Banreservas (State- owned bank, is co-manager.”

The issuance of the Dominican peso bond “is part of the strategy of the Dominican Government to continue reducing the exposure to foreign exchange variation and is the first made by a country in Latin America not classified as an investment grade.” The placement was made at an interest rate or coupon on the peso bond of 8.90%.

<< Back to news headlines >>

Small Business Development Centre To Be Launched in The Bahamas Thursday 8th February, 2018 – Caribbean 360

The Cabinet of The Bahamas has approved the launch of a Small Business Development Centre later this year.

Prime Minister Dr Hubert Minnis says the initiative, one of several to help stimulate business ownership and Bahamian enterprise, will be spearheaded by the Government, in conjunction with the University of The Bahamas and The Bahamas Chamber of Commerce and Employers’ Confederation with support from the Organization of American States (OAS).

“This Centre will provide a resource for all Bahamians to receive advisory and technical support when seeking to open a business or expand their operations,” he said.

“The Centre will steer entrepreneurs to available funding opportunities through government or private means. It will also assist business owners in navigating the regulatory and tax registration requirements for a new business.” The announcement came on the heels of the Prime Minister’s disclosure that his administration has committed to investing US$25 million over the next five years to help develop micro-small-medium-sized enterprises (MSMEs) in The Bahamas.

Funding for the project will amount to US$5 million per year for the next five years and will be funded through the sale of Government-owned shares in Aliv and the Bahamas Telecommunications Company (BTC).

Prime Minister said the “ambitious initiative” will help to stimulate the economy while boosting growth and employment and will also provide specific support for entrepreneurship and MSMEs development within marginalized groups, especially poorer communities and youth organizations. This will include organizations that participate in the Over- the-Hill Community Development Partnership Initiative.

The Prime Minister also announced that the Government of The Bahamas will, this year, waive the business licence fees for new businesses in order to encourage business development and small business enterprise. The Government will also waive business license fees for businesses with earnings of under US$100,000 “to help with economic relief for small businesses.”

The Government also proposes to establish an SME (small and medium- sized enterprises) Tax Help Desk to provide assistance to SMEs on tax matters including the preparation and filing of Value Added Tax (VAT) Returns and invoice formatting, etc.

<< Back to news headlines >>

St Lucia Adopts Climate-Smart Cassava Cultivation Thursday 8th February, 2018 – Caribbean 360

The Food and Agricultural Organization (FAO) is spearheading a project which will not only increase the cultivation of cassava throughout the region but also encourages the production of cassava blended bread as a healthier alternative to the traditional white bread.

Cassava is extensively cultivated as an annual crop in tropical and subtropical regions for its edible, starchy, tuberous root which is a major source of carbohydrates. And the Ministry of Health and Wellness in St Lucia has collaborated with the Ministry of Agriculture on a Roots and Tubers project funded by the Food and Agricultural Organization (FAO).

National Coordinator for the project, Marnus Cherry said among the benefits of this project is a projected increase in sweet cassava production island wide.

“It’s a crop that is drought resistant, so you can call it a climate smart crop and cassava has been one of the root crops most researched by researchers and other scientists. It also has a better finished product as compared to sweet potato and other root and tuber crops,” Cherry said.

Another component of the project is the value added aspect with the production of cassava mash which is used to make cassava blended bread. The bread is currently being produced by at least four bakeries on island.

Manager for Manees Bakery, Sylvia Cadasse said the only drawback is an increased cost in production due to the refrigeration of cassava mash.

“When FAO did an experiment in 2014 with us they brought cassava flour and they brought cassava mash. What we found was the end product with mash, as opposed to flour, gives a much better and softer product, much better than flour. However, mash may be more expensive because of the fact that you need freezing space,” she explained.

Cadasse said greater visibility and marketing of cassava blended bread is also required to increase the demand for the product: “First it has to be properly advertised, and it has to have the backing of the Ministry of Health and the Ministry of Agriculture in a bigger way that it is now.”

<< Back to news headlines >>

GraceKennedy leads shares traded Friday 9th February, 2018 – The Trinidad Guardian Newspaper

Overall Market activity resulted from trading in 15 securities of which five advanced, five declined and five traded firm.

Trading activity on the First Tier Market registered a volume of 768,647 shares crossing the floor of the Exchange valued at $4,938,388.21.

GraceKennedy Ltd was the volume leader with 311,789 shares changing hands for a value of $1,091,261.50, followed by NCB Financial Group Ltd with a volume of 238,662 shares being traded for $1,549,903.00.

National Flour Mills Ltd contributed 50,000 shares with a value of $97,000.00, while LJ Williams Ltd B added 50,000 shares valued at $38,336.62.

Trinidad and Tobago NGL Ltd registered the day’s largest gain, increasing $0.24 to end the day at $27.00. Conversely, Clico Investment Fund registered the day’s largest decline, falling $0.45 to close at $20.05.

Clico Investment Fund was the only active security on the Mutual Fund Market, posting a volume of 129,400 shares valued at $2,594,050.00. Clico Investment Fund declined by $0.45 to end at $20.05. Bourse

Brazil Latin Fund remained at $8.40.

Calypso Macro Index Fund remained at $21.40. Fortress Caribbean Property Fund Ltd SCC - Development Fund remained at $0.67. Fortress Caribbean Property Fund Ltd SCC - Value Fund remained at $1.70.

Praetorian Property Mutual Fund remained at $3.05.

The Second Tier Market did not witness any activity. Mora Ven Holdings Ltd remained at $14.49.

<< Back to news headlines >>

Massy registers dip in first quarter profit Friday 9th February, 2018 – The Trinidad Guardian Newspaper

Massy Holdings Ltd and its Subsidiaries is reporting an 8.1 per cent decrease in profit after tax for its first quarter ended December 31, 2017.

In its highlights to the unaudited Consolidated Financial statements, the company registered $149.9 million in after tax profit for the period as compared to $162.5 for the same period in 2016.

Third party revenue grew by 4.5 per cent, moving from $3.0 billion in the first quarter of 2016, to $3.2 billion in 2017.

Commenting on the increase in the Group's revenue Massy chairman Robert Bermudez said: "The majority of the Group's revenue increase is coming from Colombia at lower margins."

He added that "despite good progress at expense containment, lower revenue and gross margins from some of the traditionally more profitable subsidiaries in Trinidad resulted in lower gross profit contributions to the Group"

Addressing the issue of the shortage of US currency which continues to affect businesses in T&T Bermudez said that the group has "been able to pay its suppliers"

Bermudez also commented on the effect of its sale of Massy Communication and improvements in the energy sector on the company's performance.

"With the sale of Massy Communications and the turnaround of the energy services companies in T&T and Colombia, the group has significantly reduced its exposure to loss-making subsidiaries."

For the future, Bermudez said the group continues to explore a number of new growth initiatives in the Automotive industry in Colombia and Central America, as well as strategic opportunities in the integrated Retail sector in the region.

He added that Massy had embarked on a number of short, medium and long-term measures to improve its efficiency and competitiveness.

"In the short-term, cost reduction and cost containment initiatives have been implemented throughout the group. Medium-term initiatives focus on indirect and direct procurement initiatives."

"The first wave of savings initiatives from indirect procurement will commence in March 2018. The longer-term initiative for efficiency improvement involves a major shared services programme within the Massy Group. Consultants are being considered and a Request for Proposals to assist in the process is being developed." Bermudez said.

<< Back to news headlines >>

Another Republic Bank employee on fraud charges Friday 9th February, 2018 – The Trinidad Guardian Newspaper

A second bank employee charged with defrauding her employer, Republic Bank Limited (RBL), of $.25 million will face a Port-of-Spain magistrate later today.

The 37-year-old Diego Martin woman was yesterday charged on 19 counts larceny, six counts of forgery and six counts of uttering forged documents. She was employed at RBL’s Glencoe Branch.

Police investigations revealed during the period May 2011 and June 2017 the employee allegedly stole $253,500 from several account holders. A report was made by senior RBL officials to the Fraud Squad.

The investigation was led by Snr Supt Totaram Dookhie, who was assisted by Sgt David, Cpl Seemungal and WPCpl Nicole Antoine.

The bank employee was arrested yesterday at her home. Acting ASP Wayne Abbot laid the charges.

On Monday, RBL employee, Stephanie Elie, 22, of Hugh Payne Terrace, Arima, appeared before PoS Magistrate Kerri Honare-Narine accused of 14 fraud charges. Elie, who was last assigned to RBL’s branch at Valpark Shopping Plaza, in Valsayn, is accused of stealing $315,700 in a series of transactions between November last year and last month.

<< Back to news headlines >>

Pure Grenada wins Expedia award Thursday 8th February, 2018 – Caribbean Life News

Announced on Jan. 31, 2018 at the Caribbean Hotel & Tourism Association’s Travel Marketplace in Puerto Rico, Expedia named Pure Grenada, the Spice of the Caribbean, as the Caribbean Destination of the Year 2017.

The coveted prize was presented to members of the Grenada Tourism Authority (GTA) at a press luncheon held at the Puerto Rico Convention Centre during the two-day industry event. Those in attendance to accept the award were; Patricia Maher, CEO of the GTA; Francine Stewart, marketing manager, GTA; Christine Noel, director of sales US market, GTA and delegates representing the destination’s various hotel and tourism products.

“On behalf of destination Pure Grenada, Carriacou and Petite Martinique, it is an honour and privilege to be presented with such a prestigious award from our industry partner, Expedia,” said Patricia Maher, CEO of the GTA. “This represents the hard work and dedication put in by the entire team at the GTA and our international offices as well as the continued drive and collaborative efforts from all our on-island partners, whose combined tireless efforts continue to attract visitors to our shores. We are looking forward to another year as a partner of Expedia with the many benefits it provides.”

The annual awards recognize original and ground-breaking partner campaigns that demonstrate exemplary innovation, creativity and success in digital travel marketing and advertising. Grenada’s 2017 campaigns exemplify innovative and collaborative ways to engage travel audiences and drive impactful results. Expedia Inc works with 85 properties in Grenada and Carriacou.

2017 proved to be fruitful for Pure Grenada as it experienced an overall increase of more than 8.14 percent in stayover arrivals. This, coupled with the island’s many tourism developments and hotel renovations, allowed the destination to flourish and stand out amongst the rest. The destination expects a strong upcoming year with additional developments, vigorous marketing efforts and increased airlift to match demand.

<< Back to news headlines >>

Guadeloupe-based NGO raises funds for school repairs in Dominica Thursday 8th February, 2018 – Dominica News Online

The Guadeloupe-based NGO CORECA has raised over half a million dollars (€150,000) for the repair of schools in Dominica in the wake of Hurricane Maria.

Soon after the hurricane, the group under the leadership of its President, Julien Merion, sprang into action in order to assist the stricken island.

On the recommendation of the Ministry of Education, the funds will go towards the repair of the Clifton and Morne Jaune primary schools.

Representative of CORECA, Ezrah Winston said the group had originally planned to raise funds to repair one school.

“We never thought we could raise €150,000 but after we got the €150,000 we went back to the minister (of education) and we said OK we want to do two schools, recommend another school and so he recommended the Morne Jaune Primary School,” he stated.

He said an agreement has already been signed for a contractor from Portsmouth to work on the projects.

“He is going to do both schools at once because we told him we want to speed up the process so that the kids can be back in proper schools …” he stated.

Winston also said CORECA sent over 500 tons of supplies to Dominica after the hurricane.

CORECA is a contact and research association made up mainly of graduates from the University of the French Antilles.

<< Back to news headlines >>

Caricel sells LTE network to South African firm Friday 9th February, 2018 – Jamaica Observer

JAMAICAN LTE broadband network Caricel has announced the acquisition of its majority shares by a South African company, Involution Limited, under a sale agreement negotiated last October.

In a statement on the sale, director and Chief Executive Officer (CEO) Lowell Lawrence said that Caricel has chosen Involution Limited “because it is a progressive and innovative investor who would be able to provide the best Internet experience at reasonable prices.

“We expect this to create a positive impact on our economy, in that it will allow entrepreneurs, students and families to grow their businesses and improve their quality of life. Caricel has always sought to provide quality service, with the added confidence that we understand the needs of our customers and we are willing to invest in meeting those needs,” Lawrence said.

Lawrence also assured Caricel customers that its doors will remain open to serve them, and that his company is confident that the imminent changes will work to the greater advantage of the customers.

Involution was founded in 2017 by South African tech entrepreneurs Brandon Leigh, Conrad Leigh, Phumlani Moholi, and Gustav Schoeman, who also operate Rain, a new LTE only operator in South Africa, with an ever-expanding network of sites and customers.

Involution's parent company, InstituteX, was founded in 2010, with a view to “disrupt the mobile industry”.

Involution was founded as a subsidiary of InstituteX in 2017 to allow for the pursuit of international opportunities such as the acquisition of Caricel, with the intention that it will acquire and grow the building blocks to build new generation, data-focused, mobile network operators.

Caricel pledged in February, 2017, to continue offering services, despite an on-going legal battle in the Jamaican courts over its spectrum licence.

Caricel, part of Symbiote Investments Limited, had applied for an injunction to block the Government from revoking its spectrum licence in January, 2017. The Supreme Court ruled against Symbiote, refusing the operator's application for an injunction and allowing the Government to carry out investigations into its services.

The court ruling meant Caricel faces losing the licence it was granted in May 2016 that allowed it to deploy 4G services across the Caribbean island. Caricel had invested around $50 million on deployment up to that time, with a further $50 million earmarked for expansion over the next three years.

Caricel told the Jamaica Observer then that the company would, however, continue to offer LTE services, despite the court's decision.

Caricel says it has continued to offer top of the line LTE service to its customers, since.

<< Back to news headlines >>

Rewards programme to push Margaritaville sales Friday 9th February, 2018 – Jamaica Observer

Margaritaville (Turks) Limited (MTL) is one of only seven US dollar- denominated stocks on the Jamaica Stock Exchange (JSE), and investors appear to be holding on to the stock.

While there are 67.5 million units available to trade, year to date the highest volume of trades was 8,034 shares. That has resulted in the share price remaining steady at $0.22.

That said, there are sellers who have indicated that they would sell the stock at US$0.30. And so the bid/ask spread of US$0.22 and US$0.30 means that until the buyers and sellers come to a meeting of the minds, the stock's trading volumes will remain low.

However, progress waits for no one, and the directors of MTL have announced a new initiative to boost sales volumes at the tourist destination.

In an effort to drive local business and build passionate fans for the brand, Margaritaville Caribbean Group has launched the Margaritaville Rewards Programme, which is exclusively available to residents of Jamaica.

Under this programme, local patrons can enjoy daytime benefits between 10am and 10pm every day of the week, with discounts up to 30 per cent on select food and beverages. This includes discounts on menu favourites including appetisers, sandwich and burger selections, and local menu items like escoveitched fish, jerk pork, curry chicken, and conch.

Patrons are able to take advantage of these offers at Margaritaville Montego Bay, Negril and Ocho Rios.

Additionally, members can use their rewards card to receive discounts ranging from 30 per cent to 60 per cent off a variety of beverages during club nights.

“The support we have received from our local community over the years has helped to elevate Margaritaville to where we are today, and we are positive that our local customers will enjoy these fantastic rewards,” says Michael Patrick, marketing project manager at MCG. “We are very excited to share this opportunity with our friends, family and peers.”

Currently the market capitalisation of MTL is US$14.85 million.

<< Back to news headlines >>

Wisynco reports $1.2b half-year profit despite weather effects Friday 9th February, 2018 – The Gleaner

In its first financial report as a listed company, Wisynco Group Limited reported half-year profit of $1.22 billion for the period ending December 2017, or 34 cents per share, after a period of restructuring in which the company hived off its non-core businesses as it prepared to go public.

Chairman William Mahfood says the company performed ahead of last year in the second quarter despite adverse weather conditions. Profit for the quarter amounted to $578 million, up 23 per cent from $470 million in the 2016 period. Earnings per share rose from 13 cents to 16 cents.

"We're very pleased with the performance for the quarter. Indeed, we were ahead of last year by a good margin, but the reality is that the rains we had for that quarter impacted our customers' business significantly," he said, in reference to the damper on sales by the rainy weather.

Sales at the manufacturing and distribution company topped $12.2 billion at half-year, split at just over $6 billion in each quarter. Revenue rose by $1.67 billion in the six-month period or nearly 16 per cent year-on-year.

NON-CORE BUSINESS TRANSFER

Wisynco Group listed on the Jamaica Stock Exchange at the end of December following a $6-billion initial public offering of its shares. Two months before that, the company got approval for a new scheme of arrangement from the tax authorities under which it transferred three non- core operations to its ultimate parent.

Those transfers, valued at around $1 billion net, according to the company's second-quarter disclosures this week, included Wisynco Foods Limited, under which the company operated its restaurant businesses; Seville Development Limited, through which it holds undeveloped lands; and Fusion Limited, which is the face of the juice distribution partnership with Trade Winds Limited.

They now fall under Wisynco Group (Caribbean) Limited, which itself owns 77 per cent of Wisynco Group Limited.

Mahfood says the disclosure of the restructuring upheld a commitment to give clear information to the market.

"This was in keeping with our undertaking in our prospectus prior to listing ... the note would reflect in the results so that you're comparing apples with apples that is to say, you are comparing the financial results of the group post-restructuring in the second year," the chairman said.

Profit from discontinued operations, as a result of the restructuring, amounted to $8.2 million in the second quarter and $41 million over six months.

Mahfood said the company, which is still spending on recovery and restitution from the May 2016 fire, says those expenses should be behind it by the end of its financial year in June 2018, and that the focus now is on cost containment.

"We do have some areas of cost control that we have to focus on as we try to settle down once more in the new facility. That will certainly occupy our attention for the rest of the year," he said.

The construction of cold-storage facilities, announced last year as part of the overall recovery programme, has also been delayed due to the rains over the summer and into fall.

That project, which is part of a $2-billion expenditure programme, is ongoing. Mahfood said the lack of a centralised cold storage is a logistical challenge and cost issue for Wisynco, as the operations for chilled products are currently spread across three different locations.

Wisynco expects to finalise the project during its fourth quarter.

Currently, the value of the company's fixed assets has grown to $5 billion, up from $3.7 billion the previous year amid the recovery. Wisynco reported total assets of $13.4 billion at December, of which $3.3 billion is held in cash and short-term deposits.

Wisynco, which listed on the market at $7.87, is now trading at $10.51 per share, valuing the company at $39.4 billion.

<< Back to news headlines >>

FSC widens collateral pool for repos, breathes life into contracting trade Friday 9th February, 2018 – The Gleaner

The Financial Services Commission (FSC), in December, moved to widen the pool of allowable assets used as collateral for retail repos, a development that securities dealers say would be beneficial to companies seeking financing from the capital market.

The pool now includes corporate bonds issued by an investment-grade company.

Retail repos were once the bread-and-butter market for dealers, and popular among investors, including persons with small holdings. However, the FSC, citing a mismatch of assets, in which securities dealers were using long-term holdings to back short-term risk, began encouraging dealers to shift to fee-based products more than three years ago.

Investors choosing to remain in repos were asked to sign a new type of retail master repurchase agreement with their brokers.

With the policy shift, the market has seen gradual compression, with value of retail repo contracts compressing over time from a high of around $400 billion to $195.4 billion at December 2017.

"The changes are aimed at refining some inconsistencies in the pool of the allowable assets that were defined during the retail repo transition in 2015," the FSC told the Financial Gleaner.

"It is expected that the quality of the asset pool - as it relates to credit risks - would be improved, to the benefit of retail repo investors," the regulator said.

Still, Steven Gooden, president of the Jamaica Securities Dealers Association (JSDA), says one of the positive outcomes could be better rates on repo products.

JMMB Group, which is one of the largest holders of repo liabilities, added that the FSC decision could lead to more attractive funding levels for issuers of securities.

But asked whether it would lead to an increase in its own repo book, JMMB was non-committal, saying only that it will continue to guide retail clients using a "holistic portfolio approach". Last September, JMMB Group reported nearly $174 billion of repo liabilities, up $20 billion in the course of one year.

In a document outlining the forms of collateral which were now permitted, the FSC said that subsequent to the 2015 transition, the JSDA highlighted some inconsistencies in the pool of allowable assets published in the Securities Industry Advisory for the New Retail Repurchase Agreement Regulatory and Operational Framework.

"After several discussions, the FSC recognised that the inconsistencies have resulted in the exclusion of securities that are of a similar or higher quality than the ones currently defined in the pool, as well as some of the securities that are currently allowed in the pool are not clearly defined in the 2015 advisory," the regulator said.

Examples of the inconsistencies were the exclusion of corporate bonds issued by a company with an investment-grade rating, but the inclusion of corporate bonds issued by a non-investment-grade company that is guaranteed by a parent company with an investment grade.

Additionally, the pool excluded locally issued corporate bonds secured by cash, but included corporate bonds secured by less liquid assets, such as real estate with a first-mortgage lien.

The pool of assets were adjusted on January 2, with the issue of a new advisory establishing that the revised pool of allowable securities that can be used as underlying assets for retail repo transactions will include dematerialised and immobilised securities as specified by the FSC. They cover Government of Jamaica (GOJ) and other sovereign bonds, Bank of Jamaica securities, and foreign currency-denominated corporate and sovereign bonds.

Gooden told the Financial Gleaner that he does not expect the changes to lead to an expansion in repo books, but anticipates better diversification of assets for dealers.

"The new forms of collateral allow for securities dealers to provide a wider variety of credit exposures to client via the retail repo. This will translate to improved risk diversification for both dealer and client as well as the potential for better rates on the product," he said.

Gooden noted that 2017 was a record year for the capital markets with $105 billion worth of private placements subscribed by institutions and clients of high net worth, under the FSC's exempt distribution regime.

Easier access to funding

With the collateral changes, the JSDA president said companies would also be able to access funding more easily.

Gooden initially spoke of the widening collateral pool at the JSE Capital Markets Conference last month.

"The change, though it may appear simple, will significantly impact the market, making capacity of securities dealers. The expansion allows for a larger group of corporates to better access debt capital through dealer intermediation with the use of repo funding," the JSDA president said at the time.

"Additionally, securities issued by companies and agencies of the GOJ are now included. This will create greater appetite and better terms for funding GOJ-led infrastructure projects, as well as allow for the GOJ to improve its debt ratios through the removal of explicit guarantees, as dealers are now better able to execute their market-making mandate with these securities ...," he told the conference.

<< Back to news headlines >>

Barbados ratifies WTO agreement on trade facilitation Thursday 8th February, 2018 – Barbados Nation News

Barbados has ratified the World Trade Organization’s (WTO) on Trade Facilitation Agreement (TFA).

The instrument of ratification was formally handed over by Ambassador to the United Nations and Other International Organisations, Bentley Gibbs, to Secretary General of the WTO, Robert Azevedo, in Geneva, Switzerland, recently.

The Trade Facilitation Agreement is the first major agreement concluded by all members of the WTO since the establishment of that body in 1995. It contains provisions to expedite the movement, release and clearance of goods at the border. The provisions of the TFA aim to improve transparency in transactions and reduce the scope for corruption.

The TFA is unique because it provides special and differential treatment for developing countries. It allows for greater country ownership, giving countries the ability to determine the pace of implementation of the provisions of the Agreement.

It also increases Barbados’ possibility to participate in global value chains and provides for technical assistance and capacity building in order to effectively implement the Agreement.

As a signatory to the Agreement, Barbados is now in a position to engage donors and other members that have pledged to provide assistance under the Agreement.

This ratification is another step in the development of a national Trade Facilitation Roadmap to identify priority reform measures to be mapped to donor interest areas.

Additionally, implementation of the TFA will enable Barbados to remedy existing barriers to trade and investment facilitation and redound to the benefit of the local business community.

The full implementation of the TFA is estimated to reduce global trade costs. Furthermore, the TFA is forecast to add up to 2.7 per cent a year to world export growth and more than 0.5 per cent a year to world GDP growth by 2030.

<< Back to news headlines >>

CDB tells Government to cap its wage bill Thursday 8th February, 2018 – Barbados Today

With the Freundel Stuart administration currently under pressure from trade unions to grant a double-digit pay hike to public sector workers, one of the island’s key regional development partners is suggesting that Government acts otherwise.

In fact, if the Stuart administration heeds the advice of the Caribbean Development Bank (CDB) it could be a while before any significant wage increases are granted.

Speaking to Barbados TODAY on the sidelines of Wednesday’s regional press conference at the Bank’s headquarters here, Director of Economics Justin Ram strongly urged Government to consider putting a cap on its wage bill relative to its gross domestic product (GDP), while pointing to the urgent need for the country to reverse its high debt-to-GDP ratio and to reduce its massive transfers and subsidies bill.

The economist explained that by capping the wage bill at a certain percentage of GDP, public sector workers would be afforded an increase once the economy grows.

However, he said the catch was that state departments and agencies would have to be reformed and public sector workers would have to become more productive in order to help drive that growth, which he said should be led primarily by the private sector.

“As it relates to wages, we have been advocating for most of our borrowing member countries to have fiscal rules, and one of those fiscal rules says that perhaps wages of central government should be no more than a certain percentage of GDP,” Ram told Barbados TODAY.

Using Grenada as an example, he said public sector wages were capped at about nine per cent of GDP, while suggesting that Barbados should consider putting a similar cap in place.

“We think that nine per cent level is quite good. Here is where the crux of the matter is, We say to workers in the public sector, ‘if you want to have an increase in your wages that should be matched by an increase in productivity’. So public sector workers have to have an interest in ensuring that the economy grows as well, because once the economy grows and if you have that cap on wages, let’s say nine per cent of GDP, then you could imagine your wages will rise if the overall pie is increasing.

“So when unions ask for increases in salaries you should ensure that those increases are also matched by improvements in productivity as well,” he stressed.

The National Union of Public Workers has been pressuring Government for a 23 per cent wage hike for its members, while its sister union, the Barbados Workers’ Union, has been demanding a 15 per cent pay rise.

However, Ram cautioned against a double-digit increase at this time, pointing out that Government was still saddled with a high debt despite a slight improvement last year.

Just last week, the Central Bank reported that gross Government debt dropped slightly to 145.9 per cent of GDP between April to December last year, from 147.5 per cent of GDP the previous year.

“Why did we have those improvements? Primarily because the Government did not spend enough on capital expenditure and we are seeing that with respect to infrastructure,” Ram said.

“What has to happen is that the Government needs to put in place a plan to coherently deal with bringing the debt to GDP ratio down to a sustainable level within a certain period of time,” he added.

The CDB economist said it was about time Government reforms state enterprises in an effort to reduce transfers and subsidies, which he said was “just too high in Barbados”.

While there was a marginal decrease in the wages and salaries bill for the April to December period last year, there was a $49.9 million increase in transfers and subsidies, which reached $803.4 million at the end of December.

“It means that state-owned enterprises need to be reformed. So the Government needs to look at that in its entirety and decide which state- owned enterprises are providing useful benefits to society and which of those state own enterprises may not be providing such a useful benefit, and then Government can decide if it wants to improve productivity or perhaps use a type of public private partnership to improve productivity of those state-owned enterprises thereby reducing the transfers on Government expenditure,” Ram recommended.

<< Back to news headlines >>

Bermuda records highest-ever number of visitors in 2017 Thursday 8th February, 2018 – Caribbean News Now

2017 “brought the highest number of visitors to the island in recorded history,” the Bermuda Tourism Authority (BTA) said, adding that “the 692,947 total arrivals is the best statistical performance dating back to 1965.”

Previously, 2007 was the industry’s high mark; additionally, year-end hotel occupancy passed the 60 percent mark for the first time since 2007.

“Bermuda’s tourism industry achieved its most impressive performance in a decade last year with the number of leisure air visitors and the money they spend on-island surging to double-digit percentage growth,” the BTA said.

All key performance indicators for the tourism industry finished higher in 2017 when compared to the previous year:

• Air leisure spending up 22.5% • Cruise spending up 7.6% • Leisure air arrivals up 11% • Hotel occupancy up 9.2%

“Beginning in 2014 the Bermuda Tourism Authority began a multiyear strategy to restore the island’s tourism industry to prominence. Last year was a major stride forward on that journey,” said BTA chief executive Kevin Dallas.

Further driving optimism is the number of visitors under 45 years old, which continues to power the Bermuda tourism industry comeback. About 83% of the growth in leisure air arrivals in 2017 is from visitors younger than 45. It’s an audience that also had spending power in 2017. The total estimated amount directly injected into the island’s economy by visitors in 2017 is $431 million, which represents a sizeable 20% increase over the previous year.

Bermuda’s tourism industry has been resurging since 2015, particularly over the past two years where the island has enjoyed eight consecutive quarters of leisure air arrival growth and increased leisure visitor spending. In 2017, the 35th America’s Cup played a critical role in driving demand and higher visitor spending, not only in May and June but throughout much of the year.

Vacation Rental Market Performance

“The number of visitors who chose vacation rentals when they traveled to Bermuda surged 133 percent in 2017 versus 2016, according to Airbnb data shared with the Bermuda Tourism Authority. Meantime year-end hotel occupancy passed the 60 percent mark for the first time since 2007.

Shawn Sullivan of Airbnb said: “Bermuda represents an incredibly important and growing market for Airbnb. Through our partnership agreement with Bermuda’s government and tourism authority we have significantly grown our supply and increased the number of visitors for Bermudian homeowners. In 2018 we plan to further develop our partnership in Bermuda and engage the community with more home sharing educational seminars across the island.

“With all vacation rentals factored into the equation, ten percent of total visitors chose vacation rentals last year.”

Hotel Market Performance

Simultaneously, the hotel sector island-wide experienced a strong growth year with occupancy climbing 9 percent to 63 percent for the year. While the Bermuda hotel sector as a whole requires further growth to reach sustainable profitability levels, the performance in 2017 was the best in a decade.

On the revenue side, performance was even more impressive for local hotels with revenue per available room going up 19.5 percent and the average daily rate moving 9 percent higher. The 35th America’s Cup in 2017 played a critical role in driving demand and higher visitor spending for the hotel sector, not only in May and June but throughout much of the year.

Meantime, a sizable increase in hotel inventory is in the pipeline for the first time in a generation. By New Year’s Day 2018, Azura, Caroline Bay and the St George’s Resort all had shovels in the ground, and in some cases, structures taking shape. When work is completed Bermuda will have 240 additional hotel rooms to join up with a growing vacation rental inventory which surged 96 percent in 2017, among Airbnb listings.

<< Back to news headlines >>

Bermuda-Based Business to Acquire Leading Italian Agriculture Insurance Specialty Company Thursday 8th February, 2018 – Caribbean 360

Bermuda-based specialty provider of property and casualty insurance and reinsurance, Sompo International, today announced that it has reached an agreement to purchase A&A srl, a leader in the Italian agriculture insurance market since 1996.

The transaction is expected to close by March 2018 pending regulatory approvals.

Sompo said in a statement that the A&A acquisition aligns with its recently announced new initiative, AgriSompo, a global platform to deliver innovative and coordinated agricultural risk management solutions tailored to local market needs.

“A&A will complement AgriSompo’s objective of building integrated global capabilities in the crop insurance business, both by leveraging Sompo’s extensive agriculture insurance expertise and acquiring specialty companies in key markets,” it added.

Sompo International plans to maintain A&A’s current staff, structure and management team, including Giovanni Giudici as Chairman and Guido Passarini as Chief Administrative Officer. Once the transaction is complete, John Charman, Sompo International CEO and Chairman; Kristopher Lynn and Avery Cook, Senior Vice Presidents of Agriculture Reinsurance; and Patrizio Cassinis, Senior Vice President and Senior Underwriter Reinsurance, will join A&A’s Board of Directors.

Charman said A&A is “an attractive addition to our AgriSompo platform, given the A&A team’s deep technical expertise and knowledge of agriculture insurance, and their significant market share built on long-term distribution relationships throughout Italy”.

“The acquisition of A&A will greatly accelerate Sompo International’s presence in the Italian crop insurance market and provide us with unique opportunities to introduce new products and technologies in the Italian agri-business market,” he added.

Giudici added that through Sompo International’s extensive agriculture insurance capabilities and financial investment in new technologies, A&A will be able to provide enhanced risk solutions to the Italian agriculture community.

Sompo International’s Tokyo-based parent company Sompo Holdings Inc. completed its purchase of Bermuda-based Endurance Specialty Holdings Ltd., for US$6.3 billion in March last year. Endurance was integrated into Sompo Holdings through the creation of Sompo International.

<< Back to news headlines >>

Savaged global stocks head for worst week since 2011 Friday 9th February, 2018 – Reuters

A 4 percent drop in Chinese shares dealt reeling world stock markets a fresh blow on Friday, as nerves about rising borrowing costs and soaring volatility put them on course for their worst week since the height of euro zone crisis.

European bourses saw relatively minor early losses but China’s overnight plunge had gouged at confidence again after the second 1,000 point loss of the week for the U.S. Dow Jones Industrial had sent it into official correction territory.

Capital flow figures also showed a record $30 billion had already been yanked out of stocks during the rout, though even after that, Bank of America’s closely followed “Bull & Bear” indicator was still flashing red and warning investors to sell.

“After the moves earlier this week market investor sentiment is fragile and because of this we aren’t expecting the markets to immediately start moving higher once again,” said J.P. Morgan Asset Management Global Market Strategist Kerry Craig.

“But given that U.S. markets are now in correction territory - with a 10 percent drop since the market peak in January - it’s likely that the most severe gyrations will hopefully have passed,” he added as U.S. futures turned higher.

There was limited reaction as the U.S. government staggered into another shutdown after lawmakers failed to meet a funding deal deadline, but it did play into many of the overarching market concerns that have taken hold this month.

The yield on benchmark 10-year U.S. Treasuries, which tends to be the driver of global borrowing costs, was hovering at 2.86 percent just short of both Thursday peak and Monday’s four-year high of 2.885 percent.

Europe’s mainstay - German Bunds - were barely budging too at 0.70 percent, as their recent rise in yields left them flirting with another weekly rise, which would mark their longest run of weekly gains in 16 years.

Higher yields are seen hurting equities as they increase loan costs for companies and ultimately consumers. They also present an alternative to investors who may reallocate some funds to bonds from equities.

CAUTION, FRAGILE CHINA

On top of pressure from the drop in global shares, Chinese equities had also been hurt by traders closing positions ahead of the Lunar New Year holidays which begin next week.

The Shanghai Composite Index had tumbled as much as 6.0 percent to its lowest since May 2017, and the blue chip CSI300 index dived as 6.1 percent.

Both indexes had pruned the losses to just over 4 percent by the time they closed, but it was still their largest single-day losses since February 2016.

Frank Benzimra, head of Asia equity strategy at Societe Generale in Hong Kong, said he now was neutral on China equities due to two concerns: valuations on China-consumer related industries and execution risks on deleveraging, especially financial deleveraging.

Japan’s Nikkei had also shed 2.3 percent, en route to a weekly loss of 8.1 percent - its biggest since February 2016 too.

For MSCI’s broadest index of world shares, the 47-country ACWI the slump was 6.2 percent, which as long as it is still more than 6.1 percent when U.S. markets close later will be the biggest loss since September 2011.

At that point markets where being slammed by worries about Greek debt default and a collapse of the euro zone. The Federal Reserve was also starting one of its mass bond buying programs.

“The correction phase in equities could last through February and possibly into March,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

In currencies, the dollar edged up 0.2 percent to 108.985 yen, after slipping 0.5 percent overnight. For the week, it was on track to lose 1.5 percent against its Japanese peer amid risk aversion in broader markets.

The Swiss franc dipped 0.2 percent to 0.9383 franc per dollar after advancing about 0.7 percent the previous day, while the euro was on course for its worst week against the dollar since October as it nudged up to $1.2271.

Oil was still slippy with U.S. crude futures down 1.1 percent at $60.53 per barrel after hitting a seven-week trough of $60.27 on Thursday. Brent crude fell for a sixth straight day too to 0.7 percent to $64.37 per barrel.

As well as the all the global market uncertainty, there are signs supplies could be going up again after Iran announced plans to increase production and data showed U.S. crude output hitting record highs.

Metals took another mauling too. Bellwether industrial metal copper < CMCU3> was on course for its worst week of the year so far having dropped back below the $7,000 a tonne mark that had become something of a support crutch.

<< Back to news headlines >>

Congress votes to end brief government shutdown Friday 9th February, 2018 – Reuters

The U.S. House of Representatives joined the Senate early on Friday morning in approving a bill to end an overnight federal shutdown, sparing Republicans further embarrassment and averting serious interruption of the government’s business.

The stopgap funding and budget measure, approved by a 240-186 House vote, will go next to President Donald Trump. The White House said in a statement that he will sign it into law, which would extend government funding through March 23.

The shutdown, which started at midnight, was the second this year under the Republican-controlled Congress and Trump, who played little role in attempts by party leaders earlier this week to head it off and end months of fiscal squabbling.

A carefully crafted, bipartisan stopgap funding and budget package was introduced with confidence earlier this week by Senate leaders, who predicted swift passage before the expiration at midnight on Thursday of current funding authority.

But in an unexpected turn of events, the deadline was missed because Kentucky Republican Senator Rand Paul, objecting to deficit spending in the bill, engaged in a nine-hour, on-again, off-again protest and floor speech that leaders could not stop.

Paul’s dissent dragged the Senate proceedings into the wee hours past the deadline, underscoring the persistent inability of Congress and Trump to deal efficiently with Washington’s most basic fiscal obligation of keeping the government open.

“Republican majorities in the House and Senate have turned the (budget) process into an embarrassing spectacle, running from one crisis directly into the next,” said Democratic Representative Nita Lowey prior to the House vote.

‘LOOT THE TREASURY’

After an all-night session of debating and voting, the bill ending the shutdown finally won House passage only after Democrats provided enough votes to offset the opposition of 67 Republicans, a remarkable rebellion in the party’s ranks.

While Paul’s performance in the Senate strained the patience of his colleagues, he focused on the same concern that caused so many House Republicans to oppose the bill - deficit spending.

The budget bill raises military and domestic spending by almost $300 billion over the next two years. With no offsets in the form of other spending cuts or new tax revenues, that additional spending will be financed by borrowed money.

That part of the overall package was a bipartisan attempt by Senate leaders to end for many months, at least beyond November’s midterm congressional elections, the fiscal policy quarrels that increasingly consume Congress.

But the deficit spending in the bill will add more red ink to Washington’s balance sheet and further underscore a shift in Republican thinking that Paul was trying to draw attention to.

Once known as the party of fiscal conservatism, the Republicans and Trump are quickly expanding the nation’s budget deficit and its $20 trillion national debt.

Their sweeping tax overhaul bill approved in December will add an estimated $1.5 trillion to the debt over 10 years, an accumulation of past years of annual budget deficits.

The $300 billion in spending included in the bill just approved will ensure the annual budget deficit will exceed $1 trillion in 2019, said the Committee for a Responsible Federal Budget, a private fiscal policy watchdog group in Washington.

“I ran for office because I was very critical of President Obama’s trillion- dollar deficits,” Paul told fellow senators.

“Now we have Republicans hand in hand with Democrats offering us trillion-dollar deficits. I can’t ... in good faith, just look the other way because my party is now complicit in the deficits. Really who is to blame? Both parties,” he said.

Paul voted for the deficit-financed tax bill in December.

South Dakota Republican Representative Kristi Noem told Reuters she voted against the bill because it increases non-defense spending and raises the federal debt ceiling.

“To increase domestic spending and raise the debt ceiling was coupling two very bad policy decisions and with no reforms tied to it. It was very disappointing,” she said.

MARKETS UNEASY

The 5-1/2-hour shutdown in Washington came at a sensitive time for financial markets. Stocks plunged on Thursday in New York on heavy volume, throwing off course a nearly nine-year bull run. The S&P 500 slumped 3.8 percent.

Markets barely flinched at the last shutdown in January, but that was before a dizzying selloff that started on Jan. 30 amid concerns about inflation and higher interest rates.

Uneasiness in the markets could be partially eased by the bill’s extension of the federal debt ceiling to March 2019, preventing further near-term confrontations over that issue.

On another front, House Democratic leader Nancy Pelosi and others in her party had opposed the bill because Republican House leaders would not guarantee her a debate later on steps to protect about 700,000 “Dreamer” immigrants from deportation.

These young people were brought illegally to the country as children years ago, mostly from Mexico. Trump said in September he would end by March 5 former Democratic President Barack Obama’s Deferred Action for Childhood Arrivals (DACA) program that protects the Dreamers from deportation.

Trump urged Congress to act before then. Senate Republicans have pledged to hold a separate immigration debate this month.

<< Back to news headlines >>

EU-Mercosur trade talks close with key gaps remaining Friday 9th February, 2018 – Reuters

Negotiators for the European Union and Latin American bloc Mercosur have concluded two weeks of talks in Brussels on a free trade deal with no clear breakthrough and no formal offers made.

The two sides’ negotiating teams have agreed to continue discussions in Asuncion, Paraguay, in the week beginning Feb. 19, a Commission spokesman said on Friday.

“There is still some work to be done,” he told a Commission news conference.

The EU signaled last week that it could open up its market to more beef from Mercosur countries Argentina, Brazil, Paraguay and Uruguay, raising its potential offer for beef access to 99,000 tonnes per year from a previous 70,000 tonnes, people close to the talks said.

The people said it was not clear how the tonnage would be split, such as between more expensive chilled and cheaper frozen meat, and whether tariffs would still apply.

Beef has been a key demand for the Mercosur countries, but a concern for EU farming nations such as Ireland and France.

“We are very watchful,” French Agriculture Minister Stephane Travert told French lawmakers on Jan. 31, saying the amount of beef offered should be kept to a minimum.

A European Commission source said there was still some ground to cover.

For the EU, key issues are market opening for cars and car parts and dairy products, access for European companies to public tenders and maritime services, as well as protection of food and drink names, such as champagne or Parma ham, which the EU says can only be used for products made in particular areas.

In terms of tariff reduction, it could be the EU’s most lucrative trade deal to date, with the savings potentially three times greater than for deals with Canada and Japan combined.

A Mercosur source said Latin American negotiators had also signaled some willingness to move towards meeting EU demands, without making formal offers.

“Both sides have a clearer idea of how much they can get in this deal,” the source said. “There is some expectation that we can nail this, but it depends on the political decision-makers.”

<< Back to news headlines >>

Investors brace for more swings as U.S. inflation specter rises Friday 9th February, 2018 – Reuters

The inflation bogeyman has reared its ugly head and sent U.S. stock investors racing for the hills in recent days.

Next week, coming off one of the most volatile stretches in years, two important readings on U.S. inflation could help determine whether the stock market begins to settle or if another bout of volatility is in store.

If the January’s U.S. consumer price index due next Wednesday from the U.S. Labor Department, and the producer price index the next day, come in higher than the market anticipates, brace for more selling and gyrations for stocks.

U.S. consumer prices rose 2.1 percent year-on-year in December and is forecast to stay around that pace this month.

“If we get a hot CPI print it will insert additional uncertainty, but if we get a quiet, below-consensus print, you may see yields down and equities rally,” said Jason Ware, Chief Investment Officer & Chief Economist at Albion Financial Group in Salt Lake City, Utah.

The equity market has become highly sensitive to inflation this month. A selloff in U.S. stocks earlier this week was in large part sparked by the Feb. 2 monthly U.S. employment report which showed the largest year-on-year increase in average hourly earnings since June 2009.

Recent U.S. tax cuts that may spur economic growth, the prospect of more government borrowing to fund a widening fiscal deficit, and rising wages, have all pushed up benchmark U.S. Treasury yields to near four year highs.

“This is how we started, go back to Friday and this is exactly where we were,” said Art Hogan, chief market strategist at B. Riley FBR in New York. “The conversation about equity risk premium, interest rates and inflation, we are coming full circle.”

The jump in wage inflation pushed yields on the benchmark 10-year U.S. Treasury note US10YT=RR closer to the 3.0 percent mark last seen four years ago, denting the attractiveness of equities, and unnerving investors fearful inflation will force the U.S. Federal Reserve to raises short term interest rates at a faster pace than is currently priced into the market.

The current earnings yield for the S&P 500 index companies stands at 5.4 percent, below the 6.4 percent average of the past 20 years. As bond yields rise the spread between the two narrows, prompting asset allocation changes between equities and fixed income.

Investor concerns over inflation was reflected in Lipper funds data on Thursday, which showed U.S.-based inflation-protected bond funds attracted $859 million over the weekly period, the largest inflows since November 2016. On Thursday, New York Federal Reserve President William Dudley said the central bank’s forecast of three rate hikes still seemed a “very reasonable projection” but added there was a potential for more, should the economy look stronger.

Traders are currently putting the chances of a 25 basis point hike by the Fed at its March meeting at 84.5 percent, according to Thomson Reuters data.

Benchmark 10-year notes US10YT=RR last {US10YT=RR;NETCHNG_1*32:0;[F1>0] rose F1 [F1<0] fell -F1}/32 in price to yield {US10YT=RR;RT_YIELD_1} percent, from {US10YT=RR;HST_CLSYLD} percent late on Wednesday.

While many analysts were predicting bond yields to rise this year as global economies improve, the suddenness of the move was a large factor in the recent stock market selloff.

The 10-day correlation between the S&P 500 index and yields on the 10- year note stands at a negative 0.79.

Both the Dow Jones Industrial Average and S&P 500 index were on track on Thursday for their biggest two-week percentage declines since August 2011.

“The pace really does matter,” said Ron Temple, Head of US Equities and Co-Head of Multi Asset Investing at Lazard Asset Management in New York.

“If we see 3.0 percent next week that is going to spook people more - the equity market psyche is fragile at this point.”

The fragile investor psyche is likely to lead to continued volatility coming off a week that saw the Dow suffer its largest intraday index point decline in history on Monday, nearly 1,600 points. The Dow currently has an average intraday swing over the past 50 days of 265.76 points, the highest since March 2016.

While volatility has subsided a little from the heights touched earlier this week, it is far from an all clear, Nigol Koulajian, chief executive of Quest Partners, a New York-based systematic commodity trading advisor with $1.4 billion in assets under management, said.

Koulajian pointed to the fixed income market as the main catalyst right now for near-term moves in the stock market.

“Investors need to keep a very, very close eye on fixed income,” he said. “The catalyst needn’t be big. When the market is this levered, even tiny events can trigger a big avalanche.”

But analysts also caution yields are not at levels that should be alarming to investors, and in fact are at levels that signal a healthier global economy, and the performance of some stocks this week points to a belief the consumer is also getting healthier.

The average yield on the 10-year Treasury note over the past 30 years is 4.834 percent, still well above current levels.

“Fundamentals are still positive, there is strong economic growth and strong earnings growth - those will help stocks move higher over time,” said Kate Warne, investment strategist at Edward Jones in St. Louis.

“But it doesn’t do much for predicting short-term moves.”

<< Back to news headlines >>

Wall Street on course for worst week in six years Friday 9th February, 2018 – Reuters

U.S. stock markets were set to open flat to lower on Friday, on course for their worst week in more than six years.

Stocks plunged another 4 percent on Thursday, overturning gains a day earlier and adding to the sense that a broader correction is firmly underway for Wall Street after nine years of almost uninterrupted gains.

Both the Dow Jones Industrial Average .DJI and the benchmark S&P 500 index .SPX are down more than 10 percent since hitting record highs on Jan. 26, and Thursday was the second time this week that the Dow fell more than 1,000 points.

By 6:40 a.m. EDT Dow e-minis 1YMc1 were down 32 points, or 0.13 percent, S&P 500 e-minis ESc1 were up 3 points, or 0.12 percent, and Nasdaq 100 e- minis NQc1 were up just 9.5 points, or 0.15 percent.

At the heart of the pullback is a rise in U.S. bond yields due to growing expectations that a robustly performing economy will lead to higher inflation and a steady rise in official interest rates over this year.

The danger for stock market investors is that means the Federal Reserve - and other major central banks - reining in the vast supplies of cheap funds they have pumped into the global economy since the 2008-09 financial crisis.

The yield on benchmark 10-year U.S. Treasuries US10YT=RR, which tends to be the driver of global borrowing costs, was hovering at 2.846 percent just short of a four-year high of 2.885 percent hit during Monday’s selloff.

Stocks plunged another 4 percent on Thursday, overturning gains a day earlier and adding to the sense that a broader correction is firmly underway for Wall Street after nine years of almost uninterrupted gains.

Both the Dow Jones Industrial Average .DJI and the benchmark S&P 500 index .SPX are down more than 10 percent since hitting record highs on Jan. 26, and Thursday was the second time this week that the Dow fell more than 1,000 points.

By 6:40 a.m. EDT Dow e-minis 1YMc1 were down 32 points, or 0.13 percent, S&P 500 e-minis ESc1 were up 3 points, or 0.12 percent, and Nasdaq 100 e- minis NQc1 were up just 9.5 points, or 0.15 percent.

At the heart of the pullback is a rise in U.S. bond yields due to growing expectations that a robustly performing economy will lead to higher inflation and a steady rise in official interest rates over this year.

The danger for stock market investors is that means the Federal Reserve - and other major central banks - reining in the vast supplies of cheap funds they have pumped into the global economy since the 2008-09 financial crisis.

The yield on benchmark 10-year U.S. Treasuries US10YT=RR, which tends to be the driver of global borrowing costs, was hovering at 2.846 percent just short of a four-year high of 2.885 percent hit during Monday’s selloff.

World stocks were also on track for their worst week since 2011, knocked by a 4 percent decline in Chinese stocks.

The U.S. House of Representatives early on Friday approved a bill to fund the federal government through March 23 and to increase overall spending limits over two years, sending the legislation to President Donald Trump.

With Wall Street’s quarterly results season more than half-way through, 78.3 percent of the S&P 500 companies have topped profit expectations, above the 72 percent beat rate in the past four quarters.

Chipmaker Nvidia (NVDA.O) was up about 11 percent in premarket trading after its upbeat results and forecast.

Expedia (EXPE.O) shares sank 19 percent after the online travel services company missed analysts’ quarterly profit estimate due to higher marketing expenses.

<< Back to news headlines >>

European share declines limited after another Wall Street sell-off Friday 9th February, 2018 – Reuters

European shares posted limited losses on Friday morning after a fresh sell- off on Wall Street, which has now entered a correction with the benchmark S&P 500 and Dow industrials falling more than 10 percent from their Jan. 26 record highs.

Europe’s STOXX 600 share index fell 0.2 percent by 0900 GMT with most European bourses trading flat or in negative territory. The index had already fallen 1.6 percent on Thursday, with declines accelerating towards the end of the trading day.

So far this year the pan-European benchmark is down over 4 percent.

“It would appear that the brief respite for stocks seen in the middle of the week turned out to be the eye of the storm as once again rising bond yields prompted a further bout of selling across the board, not only in the U.S. last night but in Asia again this morning”, said Michael Hewson, chief market analyst at CMC Markets.

Utilities stocks, which are expected to suffer as interest rates rise, were the worst performers and the sector’s index fell 0.9 percent.

Energy shares were also in negative territory as oil prices fell for a sixth day after Iran announced plans to boost production and U.S. crude output hit record highs.

The oil and gas index lost 0.5 percent with Royal Dutch Shell and BP down both 1.1 percent.

French asset manager Amundi posted the worst performance of the STOXX 600, losing 4.7 percent after publishing its annual results and new financial targets.

A.P. Moller-Maersk missed fourth-quarter profit expectations and fell 4.3 percent.

Belgium’s Umicore was the top-gainer after raising 892 million euros in equity for new investments in rechargeable battery materials at a discount of only 2.7 percent to Thursday’s closing price.

The technological sector was up 0.3 percent with Infineon rising 2.5 percent and Siltronic adding 2.3 percent.

Shares in French cosmetics group L‘Oreal rose 1.8 percent after its fourth- quarter sales beat expectations and comments by its CEO regarding its intentions on Nestle’s stake further buoyed the stock.

In the banking sector, Italian investment bank Mediobanca rose 1.9 percent after it raised its dividend guidance after second-quarter profit beat forecasts on higher net interest income and fees.

Still in Italy, UBI Banca added 0.9 percent as it planned to sell a “substantial package” of bad loans over the next three years in an acceleration of efforts to clean up its balance sheet.

The Italian bourse was one of the only in Europe to be trading in positive territory with a 0.3 percent rise.

<< Back to news headlines >>

Nikkei slides in broad global selloff; Nissan hit by lower profit Friday 9th February, 2018 – Reuters

Japan’s Nikkei share average tumbled on Friday after another torrid day for Wall Street, with oil-related stocks leading the broad declines as crude prices slumped.

The Nikkei finished down 2.3 percent at 21,382.62 bringing its weekly loss to 8.1 percent.

The broader Topix was 1.9 percent lower at 1,731.97, down 7.1 percent for the week.

On Tuesday, Japanese stocks suffered their biggest point drop since June 2016, with the Nikkei shedding 4.7 percent.

Decliners outnumbered advancers 524 to 117 on Friday, with 33 unchanged. All sectors were in the red.

The oil and coal sector was down 4.9 percent, while the mining sector shed 5.4 percent.

Oil prices fell for a sixth day on Friday after Iran announced plans to boost production and U.S. crude output hit record highs, adding to concerns about a sharp rise in global supplies.

Nissan Motor Co shares slid 3.1 percent after the automaker said on Thursday that its third-quarter operating profit halved, weighed by costs stemming from improper final inspection procedures at home, and higher discounts in the United States

Shares of Nikon Corp provided a rare bright spot, up 3 percent a day after the company posted upbeat earnings and forecasts.

Shares of Softbank Group Corp, Aeon Co Ltd and Yahoo Japan Corp all initially slipped in line with the broader market selloff, but pared losses after national broadcaster NHK reported that the three companies will launch an online retail business.

Softbank ended with a 0.4 percent gain and Aeon ended down 0.1 percent.

<< Back to news headlines >>

Oil slides towards steep weekly loss as supply fears mount Friday 9th February, 2018 – Reuters

Oil prices fell for a sixth day on Friday, and were on track for their biggest weekly losses in 10 months, as record-high U.S. crude output added to concerns about a sharp rise in global supplies.

The drop came amid a rout in global equity markets sparked by inflation fears.[MKTS/GLOB]

Brent futures LCOc1 were down 30 cents at $64.51 a barrel by 0925 GMT. On Thursday, Brent fell 1.1 percent to its lowest close since Dec. 20.

U.S. West Texas Intermediate (WTI) crude CLc1 was down 42 cents at $60.73 a barrel, having settled down 1 percent in the previous session, its lowest close since Jan. 2.

Both contracts have fallen more than 9 percent from this year’s high point in late January. Brent was heading for a weekly loss of nearly 6 percent, its biggest since April, while WTI’s weekly decline of more than 7 percent is the steepest since March.

“It has now become painfully clear for beleaguered oil bulls that the early-year rally was not justified,” PVM Oil Associates’ Stephen Brennock said in a note. “In its place is a deepening price rout that has quashed any lingering pockets of optimism.”

U.S. domestic crude production hit a record of 10.25 million barrels per day (bpd) for the most recent week, according to the U.S. Energy Information Administration (EIA), while an outage on a key oil pipeline in the North Sea proved short-lived.

OPEC member Iran also announced plans on Thursday to increase production within the next four years by at least 700,000 barrels a day, which Brennock said marked “a hat-trick of heartaches” for oil bulls.

“This will be a tall order as the spectre of fresh U.S. sanctions looms but nevertheless exacerbated the sell-off,” Brennock said.

Both contracts have fallen more than 9 percent from this year’s high point in late January. Brent was heading for a weekly loss of nearly 6 percent, its biggest since April, while WTI’s weekly decline of more than 7 percent is the steepest since March.

“It has now become painfully clear for beleaguered oil bulls that the early-year rally was not justified,” PVM Oil Associates’ Stephen Brennock said in a note. “In its place is a deepening price rout that has quashed any lingering pockets of optimism.”

U.S. domestic crude production hit a record of 10.25 million barrels per day (bpd) for the most recent week, according to the U.S. Energy Information Administration (EIA), while an outage on a key oil pipeline in the North Sea proved short-lived.

OPEC member Iran also announced plans on Thursday to increase production within the next four years by at least 700,000 barrels a day, which Brennock said marked “a hat-trick of heartaches” for oil bulls.

“This will be a tall order as the spectre of fresh U.S. sanctions looms but nevertheless exacerbated the sell-off,” Brennock said.

<< Back to news headlines >>

China plans to launch crude oil futures on March 26: securities regulator Friday 9th February, 2018 – Reuters

China plans to launch its long-awaited crude oil futures contract on March 26, the country’s securities regulator said on Friday, a move that could potentially shake up pricing of the world’s largest commodity market.

Chang Depeng, a spokesman for the China Securities Regulatory Commission (CSRC), gave the launch date at a regular briefing in Beijing, confirming what two sources familiar with the situation told Reuters earlier on Friday.

The launch will mark the culmination of a years-long push by China to create Asia’s first oil futures benchmark, and is aimed at giving the world’s biggest oil importer more clout in pricing crude sold to Asia.

It will potentially give the Shanghai International Energy Exchange (INE), which will operate the new contract, a share of the trillions of dollars each year in oil futures trading.

The Shanghai Futures Exchange (ShFE) and INE, which is part of the ShFE, declined to comment.

Asia has become the world’s biggest oil consuming region, and China hopes its own derivative crude contract will better reflect market conditions in the region.

The two most active oil futures contracts in the world are the West Texas Intermediate (WTI) CLc1 contract offered by the New York Mercantile Exchange (NYMEX), owned by CME Group (CME.O), and the Brent LCOc1 contract offered by the Intercontinental Exchange (ICE.N) from London.

WTI futures are an important component of physical oil prices in the Americas, while Brent plays a vital role for prices for Middle Eastern, European and Asian crude.

Most physical oil trades globally are hedged using those two crude derivatives.

The creation of the yuan-denominated contract, which will be open to Chinese and overseas investors, was originally expected about six years ago, but has run into delays as turmoil in China’s stock markets and other commodity futures raised concerns about its capacity to handle financial turbulence.

The proposal was put on the backburner early last year. Potential international participants worried they would not be able to freely exchange the yuan because of a Chinese clampdown on capital outflows, and were concerned at Beijing’s heavy handed intervention in its commodity markets.

John Browning, chief operating officer of Hong Kong-based futures broker Bands Financial Ltd, which has been approved by the CSRC as an overseas intermediary for the INE, said international participation in the contract was crucial to ensure INE pricing truly reflects global trade flows.

“The principal driver for the choice of this contract is to enable China to develop its own benchmark for oil pricing while increasing the trade of renminbi-denominated oil,” Browning said in a statement, using another name for the Chinese currency.

But while the contract will be quoted in yuan, “the exchange will accept USD as collateral for initial margin,” opening the way for participation by non-Chinese companies, he added.

<< Back to news headlines >>

Sterling rises further on BoE rate hike expectations Friday 9th February, 2018 – Reuters

Sterling climbed against the dollar and euro on Friday, extending the previous day’s gains, after the Bank of England said interest rates would probably need to rise sooner and by more than it had previously thought.

BoE Deputy Governor Ben Broadbent said on Friday he did not think a couple of interest rate hikes in the space of a year should come as a great shock, though he also added that the central bank had not fixed any path for tightening policy.

That came a day after the central bank said it was likely to tighten policy sooner and by more than policymakers had reckoned only three months ago, because Britain’s slow-moving economy was getting a boost from the global recovery.

Although the pound jumped on the BoE’s more hawkish tone, the currency’s gains were muted, with the main focus of markets a sharp stock market selloff that has driven demand for the dollar.

Since Monday, sterling was still down more than 1 percent against the dollar, leaving it on track for its worst weekly performance in four months.

“Arguably, the pound could have strengthened even further (on the BoE) if it were not for less favourable external conditions,” said MUFG currency strategist Lee Hardman.

“The correction lower in global equities appears to be encouraging some de-risking and lightening of positions in the foreign exchange market, which is acting as a temporary dampener on the pound in the near term.”

Data released on Friday showing British industrial output sank by more than expected in December had little impact on the pound.

It traded up 0.3 percent on the day at $1.3953. Against the euro sterling was up 0.1 percent at 87.94 pence.

After Thursday’s policy meeting, financial markets now price in a nearly 70 percent chance of a BoE rate hike in May.

But the BoE’s rate-setters on Thursday gave themselves time to assess how Britain is coping with the approach of its exit from the European Union.

“The Bank of England’s Brexit-contingent hawkish signal today means meaningful sterling upside may be slightly tempered in the near-term,” wrote ING currency strategist Viraj Patel in a note to clients.

“We expect full upside potential to be unleashed once we get greater clarity on a Brexit transition deal.”

Not all market players agree, however. A Reuters poll of strategists found on Thursday that this year’s sterling surge is over, and concerns over Brexit will start weighing the currency down again.

<< Back to news headlines >>