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Latest Rating Actions by CariCRIS

▪ Massy Holdings Limited rating reaffirmed at CariAA+ ▪ The Government of the British Virgin Islands rating reaffirmed at CariAA- ▪ Venture Credit Union Co-operative Society Limited rating reaffirmed at CariBBB- ▪ Sagicor Group Jamaica Limited’ rating reaffirmed at CariA ▪ Sagicor Life Jamaica Limited’ rating reaffirmed at jmAAA ▪ Transjamaican Highway Limited’s rating assigned at CariA- ▪ HMB’s collateralised mortgage obligation’s (CMO 2020-01) rating assigned at ttAA- (SO) ▪ Island Car Rentals Limited’s J $2.2 billion debt issue rating reaffirmed at jmBBB+ ▪ HMB’s collateralised mortgage obligation’s (CMO 2019-01) rating reaffirmed at CariAA- (SO) ▪ Government of Barbados’ rating reaffirmed at CariBB- ▪ NCB Capital Markets (Barbados) Limited’s rating reaffirmed at CariBBB- ▪ PanJam Investment Limited’s rating upgraded to CariA- ▪ The Pegasus Hotels of Guyana Limited’s rating reaffirmed at CariBBB- ▪ National Flour Mills Limited’s rating reaffirmed at CariA- Please visit our website at www.caricris.com for the detailed Rationale s on these and other ratings

Benefits of a CariCRIS Rating to an SME:

• Access a loan or line of credit from a financial institution • Access credit from international suppliers • Improve your business operations for greater efficiency and

profitability

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

REGIONAL

Trinidad and Tobago

S&P downgrades Republic, FCB Following its downgrade of T& T's sovereign credit rating last week Thursday, S& P Global Ratings on Wednesday lowered its long-term issuer credit ratings on Republic Bank and First Citizens from 'BBB' to 'BBB-'.

NGC, TGU's ratings lowered as well on the Economy S&P Global Ratings downgraded two state-owned companies, National Gas Company and electricity generator, Trinidad Generation Unlimited on March 27, the day after it lowered T& T's sovereign credit rating.

Index Fund jumps $1.88 Overall market activity resulted from trading in 11 securities of which four advanced, six declined and one traded firm.

CAL to waive fees for ticket changes up to August 30 Caribbean Airlines will waive cancellation and rebooking fees for tickets booked for travel from July 1 up to August 30 as these plans may upended by the covid19 pandemic.

Barbados

Barbados going under 24-hour curfew A 24-hour curfew will come into effect for Barbados tomorrow as Government continues to fight against the spread of the coronavirus (COVID-19).

Jamaica

79 stocks traded The Jamaica Stock Exchange (JSE) Combined Index advanced on Thursday with an advance/decline ratio of 49/18.

Jamaica Continued

GHL acquires Fidelity insurance brokerage GUARDIAN HOLDINGS Limited, GHL, and one of its associates have taken over a Cayman-registered insurance broker in a deal struck back in October but which was just disclosed in the regional insurance conglomerate’s audited financial results published last week.

PanJam profit tops $8b PANJAM INVESTMENT Limited made a profit of more than $8 billion last year, a new record for the conglomerate whose diversified holdings include real estate, insurance, hospitality and other assets.

Digicel negotiating new debt plan with creditors, delays interest payments TELECOMMUNICATIONS COMPANY Digicel Group announced a halt to interest payments to bondholders for 30 days, which led the rating agency Fitch to downgrade its bonds to ‘C’.

JMMB extends financial lifeline to its retail clients, SMEs WITH THOUSANDS set to experience the personal impact of a major economic fallout, due to the circumstances surrounding the coronavirus (COVID-19) crisis in Jamaica, The JMMB Group has responded by easing some of the weight of this financial burden on its most vulnerable clients.

Jamaica's financial system remains sound and stable – FSSC But COVID-19 impacts looms Having reviewed the Bank of Jamaica (BOJ) 2019 Financial Stability Report, the Financial System Stability Committee (FSSC) has indicated that the data and analysis presented showed that Jamaica's financial system remains sound and stable.

Growth was flat for the fourth quarter — STATIN Total value added for the Jamaican economy was $197,013 million for the fourth quarter of 2019. This remained relatively unchanged when compared to $197,086 million for the similar quarter of 2018. The services industries grew by 1.2 per cent, while the goods producing industries declined by 3.7 per cent.

Golden Grove farmers, cane cutters to get payouts Friday Some 205 cane farmers in St Thomas are set to receive the long-awaited cash payments as a part of the government’s pledge of $200 million to assist those displaced by the closure of the Golden Grove Sugar Factory.

Guyana

GECOM to decide on way forward today WILL the Guyana Elections Commission (GECOM) order a National Recount? That decision would be determined today, when the Commission, chaired by Justice (Ret’d) Claudette Singh, meets to chart the way forward with the anticipation of bringing an end to the electoral process, which has been protracted for more than a month.

Stabroek Block produces 1.7M barrels of oil in January; Exxon collects over 1M for cost recovery According to the latest Report on Petroleum Production and Revenues (RPPR), the Liza Phase One Project on the Stabroek Block produced 1,745,930 barrels of oil for January 2020, or 56,320 barrels of oil per day.

Govt. to collect US$1.3M royalty for first quarter by month end For January, Guyana has earned US$1,268,706 in royalty from the Stabroek Block, but this would not be received until April month end, according to a Ministry of Finance Report on Petroleum Production and Reserves.

The Bahamas

BPL’S Revenue In 32.5% March Fall Bahamas Power & Light’s (BPL) March revenues have slumped by almost one-third year-over-year, a Cabinet minister revealed yesterday, as it halted disconnections for the lockdown’s duration.

Online Delivery Firm In 60% Demand Rise A Bahamian online delivery service yesterday said it has seen a 60 percent increase in demand following the COVID-19 country-wide lockdown and closure of many businesses.

Other Regional

Republic gives US$2m for COVID-19 fight Republic Financial Holdings Ltd is contributing the equivalent of US$2 million ($13.4 million), across all of the territories in which it operates, namely, Trinidad and Tobago, Grenada, Guyana, Barbados, Ghana, Suriname, Cayman Islands, St Lucia, St Vincent & the Grenadines, St Kitts & Nevis, St Maarten, Anguilla and Dominica.

INTERNATIONAL

United States

Futures dip ahead of payrolls, business activity data U.S. stock index futures retreated on Friday, with investors awaiting data on business activity and non-farm payrolls to get a clearer picture of the economic hit from the novel coronavirus.

U.S. economy to shrink at fastest rate since 1946, unemployment to top 15% The United States economy will shrink 5.5% in 2020, the steepest drop since 1946, with a huge 38% contraction predicted for the second quarter, Morgan Stanley said on Friday in a new batch of forecasts on the economic damage from the coronavirus outbreak.

Coronavirus likely ended record U.S. job growth in March The U.S. economy likely shed jobs in March, abruptly ending a historic 113 straight months of employment growth as stringent measures to control the coronavirus pandemic shuttered businesses and factories, confirming a recession is underway.

JPMorgan reaches agreement to increase stake in China mutual fund venture to 100% JPMorgan has reached agreement with its Chinese partner to increase its stake in its Chinese mutual fund venture to 100%, joining BlackRock and Neuberger Berman to grow its presence in the world’s second biggest economy.

United Kingdom

UK facing Depression-style hit as firms slump in March Britain’s economy looks set for a slump that in the short term could be deeper than during the depression of the 1930s, as a survey showed the coronavirus crisis caused a record downturn among services and manufacturing firms in March.

UK Export Finance expands exporter protection against non-payment Britain is expanding the scope of its export insurance policy to cover exporters against the risk of non-payment if customers become insolvent, joining other European countries that have provided insurance support for their supply chains.

Europe

Nestle confirms 2019 dividend proposal Nestle on Friday confirmed its 2019 dividend proposal of 2.70 Swiss francs per share even as the pandemic caused by the new coronavirus upends planned shareholder payouts.

European insurer shares fall as battle over dividends erupts Shares in Europe’s insurers fell sharply on Friday after the EU regulator said they should temporarily halt payouts to shareholders during the coronavirus epidemic, although Germany backed Allianz’s decision to go ahead with a dividend.

European shares dip on more corporate pain from coronavirus European stock markets headed lower on Friday, erasing meagre gains for the week, as more companies flagged a hit to business from the coronavirus pandemic, foreshadowing a deeper earnings recession ahead of the reporting season.

European insurer shares fall as row over dividends breaks out Shares in Europe’s insurers fell sharply on Friday after the industry’s EU regulator said they should temporarily halt dividends and share buybacks in response to the coronavirus epidemic.

China

China frees up $56 billion for virus-hit economy by slashing small banks' reserve requirements China’s central bank said on Friday it was cutting the amount of cash that small banks must hold as reserves, releasing around 400 billion yuan ($56.38 billion) in liquidity to shore up the economy, which has been badly jolted by the coronavirus crisis.

Japan

Japan to roll out huge stimulus package next week as pandemic pain deepens Japanese Prime Minister Shinzo Abe said on Friday a stimulus package to combat the coronavirus pandemic will be rolled out next week, and target small firms and households hardest hit by social distancing policies that are affecting consumption.

Global

Brent oil rises above $32 on hopes of output deal Benchmark Brent crude oil futures rose as high as $33.05 a barrel on Friday on rising hopes of a new global deal to cut global crude supply.

Stocks fall as business signals hit from pandemic, oil grinds higher Global stock markets sank on Friday, as more companies flagged a hit to business from the coronavirus pandemic while oil prices extended their previous day’s gains on hopes of a cut to global supply.

OPEC+ debates biggest ever cut as virus destroys oil demand OPEC and allies are working on a deal for an unprecedented production cut equivalent to around 10% of global supply, an OPEC source said after U.S. President Donald Trump called on oil nations to stop the oil rout caused by the coronavirus pandemic.

Dollar resumes climb as investors bid for safety The dollar resumed its climb against major currencies on Friday as investors took refuge in safety bids amid worsening economic fallout from the coronavirus pandemic.

79 stocks traded Thursday 2nd April, 2020 – Jamaica Gleaner

The Jamaica Stock Exchange (JSE) Combined Index advanced on Thursday with an advance/decline ratio of 49/18.

The index moved by 3,429.40 points or 0.92 per cent to close at 376,623.05.

The JSE Main Market Index advanced by 2,911.92 points or 0.77 per cent to close at 380,510.48 while the Junior Market Index advanced by 69.27 points or 2.89 per cent to close at 2,463.20.

The JSE USD Equities Index advanced by 6.44 points or 3.18 per cent to close at 208.70.

Overall market activity 79 stocks traded 49 advanced 18 declined 12 traded firm

Winners

Efresh up 29.23 per cent to close at $0.84 Sygnus Credit ($US) up 28.29 per cent to close at $0.16 Sterling Investment ($US) up 25 per cent to close at $0.03 Eppley up 24.48 per cent to close at $15 Berger up 21.21 per cent to close at $14.06

Losers

SSL Ventures down 18.27 per cent to close at $0.85 Jamaica Producers down 15.65 per cent to close at $18.81 Barita down 6.84 per cent to close at $52.30 Pulse down 5.20 per cent to close at $3.10 Jetcon down 4.76 per cent to close at $1.00

Market volume

32.342 million units valued at over $105.619 million.

Volume leaders were Transjamaican Highway Limited followed by MailPac Group and Wigton Windfarm.

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GHL acquires Fidelity insurance brokerage Friday 3rd April, 2020 – Jamaica Gleaner

GUARDIAN HOLDINGS Limited, GHL, and one of its associates have taken over a Cayman-registered insurance broker in a deal struck back in October but which was just disclosed in the regional insurance conglomerate’s audited financial results published last week.

Guardian acquired 67.74 per cent of the issued shares of Fidelity Insurance Cayman Limited for cash of TT$70.89 million (US$10.5 million), while Royal Star Holdings Limited, acquired the other 32.26 per cent. Royal Star – which operates as a property and casualty insurer and is registered in The Bahamas – is itself an associate company of GHL, which holds a 26 per cent stake in it.

The identity of the seller of the brokerage wasn’t immediately clear.

Fidelity’s net asset value, or book value, was stated as TT$3.13 million.

In accounting for the transaction, Guardian, which is majority owned by Jamaica’s top ranking conglomerate NCB Financial Group, booked TT$68.48 million (US$10.13 million) in goodwill, which is the difference between the purchase price and the net tangible assets.

“The nature of the brokerage business is that their core asset is a block of customers with which they have deep client relationships. Hence, there is always substantial amount of goodwill generated in purchasing a broker. The key is to retain and grow this customer base,” said NCB Financial, whose President & CEO Patrick Hylton is chairman of Guardian Holdings.

“A few years ago, we took the strategic decision to enter into the brokerage arena and develop fee/commission income as an additional income stream. In other words, we moved vertically down our value chain,” the bank said.

GHL, a regional insurance conglomerate, projects a 10 per cent growth rate for Fidelity, whose largest tangible assets are its loans of US$161,000 and cash of US$922,000.

“None of the loans and receivables has been impaired, and it is expected that the full contractual amounts can be collected,” said Guardian.

Other acquisitions by Guardian last year included the portfolios of two insurance brokerages in the Netherlands through its subsidiary Thoma Exploitatie BV, a deal worth TT$11.89 million (US$1.76 million).

At year ending December 2019, Guardian reported TT$30 billion (US$4.4 billion) in total assets for the group, with equity of TT$3.96 billion (US$590 million). The company made a profit of TT$692 million last year, up from TT$534 million.

The insurance conglomerate, which is based in Trinidad & Tobago, operates in 22 markets, including Barbados, Jamaica, Curaçao, Aruba, St Maarten, Bonaire, and now the Cayman Islands. Additionally, the group’s products and services are marketed in the Eastern Caribbean, Bahamas, Belize and the US Virgin Islands, according to the company’s investors section on its website. GHL is owned 62 per cent by NCB Financial Group.

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PanJam profit tops $8b Friday 3rd April, 2020 – Jamaica Gleaner

PANJAM INVESTMENT Limited made a profit of more than $8 billion last year, a new record for the conglomerate whose diversified holdings include real estate, insurance, hospitality and other assets.

“Last year, we had a happy confluence of events in that Sagicor performed well, so too did property. The local stock market was booming and we managed to contain our expenses; so we were firing on all cylinders,” said PanJam Chief Operating Officer Paul Hanworth.

The conglomerate owns more than 30 per cent of Sagicor Group Jamaica, the top insurance company, which itself produced record profit of $15.65 billion in 2019.

Riding high on Sagicor’s performance and the boom in the stock market, PanJam’s bottom line swelled 55 per cent, from $5.38 billion, or $5.09 per share, to $8.35 billion, or $7.97 per share.

Referring to the gains on equities: “Although they were unrealised, they’re recognised in the P&L. We, therefore, had more money invested and great returns,” Hanworth said.

The stock market has since taken a downturn, which has been exacerbated by the coronavirus crisis.

“Obviously, we’re not allowed to give forward-looking statements, but certainly, unless things turn around dramatically in a week, which I don’t see happening, we’re not going to be able to replicate that investment return in the first quarter,” Hanworth said.

“We are long-term investors, so to a great extent quarterly results are somewhat meaningless. Our longer-term horizon guides us to invest in companies that are solid, well managed, and have good prospects,” he said.

Jamaican stocks are in bear market territory, and are currently down 26 per cent from their January 2 peak. The JSE Combined Index has regained some ground in the past week, closing at 373,193 points as of Wednesday, but is still well off the 508,130 points recorded at the start of the calendar year.

As to PanJam’s ongoing hotel projects, the conglomerate is working towards a year-end opening of the ROK Hotel on the Kingston waterfront, mindful that the measures to address the coronavirus could derail the timetable. PanJam is transforming the 12-storey Oceana Hotel into a mix of 168 hotel rooms and 42 apartment suites at a cost, says Hanworth, of just under US$40 million, or J$5.4 billion at the present rate of exchange.

“We have a franchise agreement signed with Hilton; we also have a management agreement signed with a third-party manager. We’ve cleared all the approvals with the Kingston project, so we are moving ahead as we had planned and we hope we can open by the end of the year,” said the PanJam executive.

“Whether this current COVID-19 slowdown continues, we’ll have to keep that in mind and possibly adjust, but we’re pressing ahead,” he said.

The hotel under consideration for Montego Bay is still in the conceptual phase, so while it’s early days for that project, the concepts under review indicate it “will be one exciting project,” Hanworth said.

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Digicel negotiating new debt plan with creditors, delays interest payments Friday 3rd April, 2020 – Jamaica Gleaner

TELECOMMUNICATIONS COMPANY Digicel Group announced a halt to interest payments to bondholders for 30 days, which led the rating agency Fitch to downgrade its bonds to ‘C’.

Digicel defended its move as an allowed measure, saying the delay comes within the context of ongoing negotiations with certain bondholders.

The interest payments that were due on March 30 affected the 2022 bond, which pays annual interest of 8.250 per cent for Digicel Group One Limited and Digicel Group Two Limited. Another interest payment that was set for April 1 for notes due in 2024 at 9.125 per cent for Digicel Group Two Limited was also delayed.

Digicel Group, a company founded by Irish billionaire and investor Denis O’Brien, operates telecoms and entertainment services in 30 markets in the Caribbean, Central America and Asia Pacific. After 18 years of operation, its total investment to date stands at over US$6 billion worldwide, according to the company.

Digicel launched its operations in Jamaica, then later spread to other parts of the Caribbean and, eventually, beyond the region. Its build-out across the 30 markets have been financed by debt.

“Digicel has publicly announced over recent days that arising from ongoing constructive and consensual discussions with some of its largest debtholders, certain Digicel subsidiaries are electing to take advantage of the 30-day grace period permitted under the relevant indentures,” said Digicel Group’s head of public relations, Antonia Graham, in a general response to specific Financial Gleaner queries on the delayed interest payments.

She added that Digicel continues to engage in “constructive discussions” with certain debtholders regarding potential transactions involving an exchanges of existing debt, all aimed at reducing Digicel’s leverage, extending its debt maturities, and continuing the monetisation of its network.

Fitch did not label the missed payments as a default on the debt, saying instead that its ‘C’ rating indicates a default-like process in which the issuer, Digicel, has entered into a grace or cure period following non- payment of a material financial obligation.

Digicel’s ratings are generally negatively affected by its operating environment in the Caribbean and South Pacific, Fitch Ratings said, but noted that its latest decision did not factor a country ceiling. It downgraded the issuer default ratings for Digicel Group Limited (DGL3), Digicel Group Two Limited (DGL2) and Digicel Group One (DGL1) Limited to ‘C’ from ‘CC’, ‘CC’, and ‘CCC’, respectively, in the wake of the suspended debt payments.

Last November, the rating agency had said it expected Digicel to require refinancing in order to sustain its debt payments over time. Added to that, US$1.3 billion of those notes are due to mature in April 2021.

Part of the concern about Digicel’s ability to meet its debt obligations relates to the telecoms’ earnings from operations, or EBITDA. Digicel has been pursuing strategies to reduce its debt ratios, by at least a percentage point to 6.6 per cent of EBITDA, in the short term. Fitch, however, indicates that the ratio moved in the opposite direction, increasing to 7.5 times EBITDA at June 2019.

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JMMB extends financial lifeline to its retail clients, SMEs Friday 3rd April, 2020 – Jamaica Gleaner

WITH THOUSANDS set to experience the personal impact of a major economic fallout, due to the circumstances surrounding the coronavirus (COVID-19) crisis in Jamaica, The JMMB Group has responded by easing some of the weight of this financial burden on its most vulnerable clients.

In response to this crisis, and as part of The JMMB Group’s commitment to see about its clients’ interest, the entity will provide a financial lifeline in the form of moratoriums, extended credit facilities, and the maintenance of its pre-existing ‘no late payments policy’ on loans to those who, it believes, are among its most vulnerable clients. As such, entrepreneurs; individuals working in the tourism and transportation sectors; and small and medium-sized enterprises (SMEs); and corporate entities that operate in tourism-related areas; entertainment; communications and storage; transportation; distribution; manufacturing and construction will all benefit from this special financial lifeline.

Keisha Forbes Ellis, chief executive officer (CEO), JMMB Investments, shares, “The JMMB Group remains committed to partnering with our clients to ensure that we support their sustainability throughout this period, as they remain major contributors to our economy.” Adding, “As such, both JMMB Bank and JMMB Investments will offer our clients a moratorium on their principal and interest payments, or principal payments of their loans, for three and six months, respectively. Thereafter, we will examine our clients’ circumstances, with a view to assisting them with a financial solution that is in their best interest. These offerings will allow those clients the necessary financial space to retool and regroup from any falloff in revenue, which has resulted from the scaling down of operations and, in most instances, shuttering of their businesses temporarily.” In so doing, the company is also seeking to help these individual and business clients to preserve their financial reputation, creditworthiness, and manage their liquidity and cash flow.

PAYMENT HOLIDAYS

According to JMMB, individuals who are employed in the tourism and transportation sectors, and who have been impacted by a job loss, temporary lay-off, or a reduction of income; as well as self-employed persons who have been affected by loss of income, due to the closure of their business, as a result of the COVID-19 crisis, are eligible for ‘payment holidays’ – which will see these clients being able to defer the payment of interest and principal on their loans, for up to three months, initially.

In touting the value of partnership to overcome the challenges of the COVID-19 crisis, the CEO notes that the JMMB team has already begun reaching out to a number of clients to discuss their unique circumstances in a bid to strategize and craft a plan with those clients.“ Forbes Ellis adds, “We recognise that these are challenging times and so, in addition to helping our clients to have a plan in place to ease the impending financial burden, we want to extend hope and reassure them that we are committed to overcoming this challenge together as a nation.”

Jerome Smalling, CEO of JMMB Bank, also outlined that JMMB’s business clients (SMEs and large corporate entities) in these vulnerable sectors, who have been affected by the COVID-19 crisis, can also benefit from other credit facilities offered by the bank, including pre-approved, non- revolving lines of credit and pre-approved term loans.

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Jamaica's financial system remains sound and stable – FSSC But COVID-19 impacts looms Friday 3rd April, 2020 – Jamaica Observer

Having reviewed the Bank of Jamaica (BOJ) 2019 Financial Stability Report, the Financial System Stability Committee (FSSC) has indicated that the data and analysis presented showed that Jamaica's financial system remains sound and stable.

The report assessed developments in the financial system and the associated systemic risks since the September 2018 quarter.

According to the committee, both deposit-taking institutions and non- deposit taking financial institutions were well capitalised and profitable and the extent of maturity mismatch of financial entities' balance sheets and their ability to meet significant demand for liquidity showed no significant change in the review period.

Notably, the financial system remains highly interconnected and concentrated, as the report identified a significant degree of counterparty funding between related entities operating in different financial sectors. As a result of the extent of related party funding, a shock to a single entity could be amplified through its financial group, causing further spillover to the wider financial system.

The report also concluded that the movement in stock and real estate prices during the assessment period largely reflected a reversion to levels observed prior to the 2007/2008 global financial crisis, due to Jamaica's fiscal consolidation and accommodative monetary policy.

“The fiscal consolidation and accommodative monetary policy have also facilitated strong growth in private sector credit. The report, however, states that the lag in the real growth of disposable personal income and GDP represents a potential build-up of vulnerabilities in the financial system,” the committee stated.

“The ability of BOJ to assess systemic risk exposures due to financial conglomerates, and separately, systemic risks due to household and corporate debt, is therefore imperative. The FSSC recognises the bank's effort to better understand the operations of Jamaica's largest financial groups and the initiatives being taken to improve group-wide supervision.”

THREAT OF COVID-19

It is important to note that the FSSC pointed out that the COVID-19 pandemic may create new challenges for managing financial system stability as global economic activity is projected to slow or even decline due to the virus.

According to the committee, BOJ's scenario analyses show potentially significant adverse impact on Jamaica's gross domestic product (GDP) growth arising from the global spillover, while significant uncertainties still exist as the extent and length of the pandemic is still unknown.

“Due to the macro-financial linkages which exist within the Jamaican economy, there is the potential for the weakening of financial institutions' balance sheet and profitability. A significant fall-off in economic activity could result in the reduced demand for credit, higher nonperforming loans and the withdrawal of bank deposits. Further, non-deposit- taking financial institutions may experience challenges associated with a sell-off in financial markets, material declines in asset prices, and subsequent market illiquidity,” the committee stated.

It added that it therefore endorses the initiatives being undertaken by BOJ to ensure adequate foreign currency and Jamaican dollar liquidity and is of the view that these initiatives will support the normal functioning of the financial system, including the payment system, during this challenging period.

The Financial System Stability Committee is a statutory committee established under section 34H of the Bank of Jamaica Act. Its functions include reviewing developments in the financial system and the economic environment, advising on macro prudential policy, and mitigating the emergence of systematic risks.

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Growth was flat for the fourth quarter — STATIN Friday 3rd April, 2020 – Jamaica Observer

Total value added for the Jamaican economy was $197,013 million for the fourth quarter of 2019. This remained relatively unchanged when compared to $197,086 million for the similar quarter of 2018. The services industries grew by 1.2 per cent, while the goods producing industries declined by 3.7 per cent.

All industries within the services industries grew: electricity & water supply (2.8 per cent), wholesale & retail trade; repairs; installation of machinery & equipment (0.7 per cent), hotels & restaurants (3.7 per cent), transport, storage & communication (0.5 per cent), finance & insurance services (3.3 per cent), real estate, renting & business activities (0.7 per cent), producers of government services (0.2 per cent) and other services (1.4 per cent).

Within the goods producing industries, the mining & quarrying and construction industries declined by 40.4 per cent and 1.9 per cent, respectively. Higher levels of output were however achieved in agriculture, forestry & fishing (3.9 per cent) and manufacturing (0.4 per cent).

The decline in the mining & quarrying industry was due to lower production of alumina and bauxite resulting from the closure of the Jiquan Iron and Steel Company Limited (JISCO)/Alpart refinery.

The decrease in output for the construction industry was mainly due to a reduction in the civil engineering subgroup.

The performance of the agriculture, forestry & fishing industry was impacted by favourable weather conditions. The growth in manufacturing was due to an increase in the food, beverages & tobacco sub-industry of 1.8 per cent, largely due to increased production of grain mill products, dairy products, bakery products, sugar & molasses, and beverages.

However, the other manufacturing sub-industry declined by 1.2 per cent influenced mainly by lower production levels of petroleum products and non-metallic minerals.

Preliminary estimates for the calendar year 2019 showed a 0.9 per cent growth in the Jamaican economy. This was due to a 1.4 per cent growth in the services industries. The goods producing industries declined by 0.6 per cent.

The GDP Fourth Quarter 2019 provides additional information and is available on the Statistical Institute of Jamaica's website: www.statinja.gov.jm or at the institute's library: 7 Cecelio Avenue, Kingston. Visit the institute's Facebook page at Facebook.com/STATINJA for the forth quarter 2019 GDP infographic.

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Golden Grove farmers, cane cutters to get payouts Friday Thursday 2nd April, 2020 – Jamaica Gleaner

Some 205 cane farmers in St Thomas are set to receive the long-awaited cash payments as a part of the government’s pledge of $200 million to assist those displaced by the closure of the Golden Grove Sugar Factory.

Cane cutters and ex-factory workers are also to receive compensation.

The sums are to be paid on Friday) at the old factory.

It was previously announced that the payments would have been made in February.

Speaking with The Gleaner, former chairman of the All-Island Cane Farmers Association Allan Rickards explained that only cane farmers listed as registered will qualified for payments.

“Registered cane farmers are those who deliver cane to a factory without breaking the sequence for two crops, therefore, any farmer who supplied cane to the factory over the last two crops will be entitled to a cash payment as a part of the assistance package announced by the minister,” he said, noting that this will be followed by other aspects of the package which includes providing fertilisers, seeds and land.

Rickards said the payment exercise will observe social distancing guidelines as set by the government in light of the global COVID-19 pandemic.

“Arrangements have been made with the police to ensure that the facilities are set up in a manner that will not offend regulations of more than 10 people be gathered at any particular location,” he said.

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Barbados going under 24-hour curfew Thursday 2nd April, 2020 – Nation News

A 24-hour curfew will come into effect for Barbados tomorrow as Government continues to fight against the spread of the coronavirus (COVID-19).

The decision to increase restrictions on Barbadians less than 24 hours after Government had imposed new hours of business and restricted movement was delivered moments ago by acting Prime Minister, Santia Bradshaw.

All restaurants will be closed until midnight April 14, but bakeries and bread depots will remain open.

Bradshaw also revealed that another case of COVID-19 had been recorded, after 33 more tests were conducted overnight. Barbados’ count now stands at 46 positive infections.

The fact that Barbadians continued to exhibit panic-buying appeared to have forced the administration’s hand. Bradshaw told the media Cabinet’s sub-committee that deals with COVID-19 had been forced to meet with supermarket and gas station owners, as businesses were struggling to keep things under control.

From 5 p.m. tomorrow, persons will now only be allowed on the street for legitimate business, inclusive of the purchase of food from village shops, or medication from pharmacies, Bradshaw confirmed.

“A number of our essential service providers will need access to these facilities, as well as persons who will want to legitimately visit pharmacies and other exempt services. I want to remind the village shop owners that during this period no more than three people are allowed to congregate, and I ask they simply dispatch goods to customers and allow persons to return to their homes,” Bradshaw advised.

In a press conference from Government Headquarters at Bay Street, St Michael, Attorney General Dale Marshall also made it clear that police would be taking a no-nonsense approach to keeping law and order and would be rounding up any persons found on the street without a legitimate reason to be outside, or who break the curfew.

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Brent oil rises above $32 on hopes of output deal Friday 3rd April, 2020 – Reuters

Benchmark Brent crude oil futures rose as high as $33.05 a barrel on Friday on rising hopes of a new global deal to cut global crude supply.

Brent crude LCOc1 futures were up 9.3%, or $2.79, at $32.73 a barrel by 1014 GMT. Brent soared as much as 47% on Thursday for its highest intraday percentage gain on record. It closed 21% up, still about half the $66 at which it was trading at the end of 2019.

U.S. West Texas Intermediate (WTI) crude CLc1 also moved back into positive territory, rising 4.8%, or $1.22, to $26.54 a barrel after advancing by 24.7% on Thursday.

U.S. President Donald Trump on Thursday said that he had brokered a deal that could result in Russia and Saudi Arabia cutting output by 10 million to 15 million barrels per day (bpd), representing 10-15% of global supply. Trump said he had not offered to cut U.S. output.

The OPEC+ oil exporter group is debating cutting global supply by 10 million bpd, an OPEC source said on Friday, adding that any further cuts must include producers from outside the alliance.

Russia and Saudi Arabia both belong to the grouping of members of the Organization of the Petroleum Exporting Countries and its allies, but the United States does not.

Oil prices slumped 65% in the first quarter on a demand slump caused by the global coronavirus outbreak and moves by Russia and Saudi Arabia to flood the market after the failure last month to extend a previous supply pact.

The energy ministry of non-OPEC producer Azerbaijan, meanwhile, said an OPEC+ meeting is planned for April 6 and will be held as a video conference, Russia’s RIA news agency reported.

“There does appear to finally be collective acceptance that the market is in such an extraordinary state of oversupply that coordinated action is needed,” said Callum Macpherson, Investec’s head of commodities.

“For now, the possibility of ‘something’ happening could make short sellers more wary and help to limit downward pressure on oil prices, but there may need to be more tangible signs of progress fairly soon if a retest of recent lows is to be avoided.”

Saudi could drop production down to about 8.5 million bpd but is likely to be reluctant to go below that because of the desire to maintain associated gas production. Russia, meanwhile, is likely to look for some measure of sanctions relief from Washington, said Helima Croft, global head of commodity strategy at RBC Capital Markets.

The Canadian province of Alberta, home to the world’s third-largest oil reserves, is open to joining any potential global pact to reduce a glut of crude, Premier Jason Kenney said.

Citi analysts forecast a decline in global oil demand of 18-20 million bpd in the second quarter, which could result in the collapse of 2 million bpd of refinery runs, triggering unprecedented 1 billion barrel growth in inventories over two months.

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Stocks fall as business signals hit from pandemic, oil grinds higher Friday 3rd April, 2020 – Reuters

Global stock markets sank on Friday, as more companies flagged a hit to business from the coronavirus pandemic while oil prices extended their previous day’s gains on hopes of a cut to global supply.

With virus-fighting lockdowns raising the risk of a prolonged global downturn, investors continued to seek the safety of the U.S. dollar and government bonds, pushing U.S. Treasury yields near their lowest in three weeks.

With over a million people infected worldwide, there were more signs the pandemic would take a massive toll on economic growth. Morgan Stanley said the U.S. economy will shrink 5.5% in 2020, the steepest drop since 1946, with a huge 38% contraction predicted for the second quarter.

The pan-European STOXX 600 index was down 0.7% by midday in London, taking MSCI’s All Country World Index down 0.4%.

A number of firms flagged a hit to business from the pandemic, foreshadowing a deeper earnings recession ahead of the reporting season.

MSCI’s Asia-Pacific index outside Japan dipped 0.6% while Japan’s Nikkei erased earlier gains to end flat.

U.S. stock futures sank nearly 1 percent.

“Global recession fears are now being confirmed by the incoming economic prints,” said Han Tan, market analyst at FXTM.

“Until the virus case count peaks and the business earnings outlook improves, risk sentiment may only experience fleeting bouts of positivity.”

Brent crude futures gained 8.95% to $32.62, extending Thursday’s record 24.7% surge , while U.S. West Texas Intermediate (WTI) crude rose 4.66% to $26.42.

U.S. President Donald Trump on Thursday said that he had brokered a deal that could result in Russia and Saudi Arabia cutting output by 10 million to 15 million barrels per day (bpd), representing 10-15% of global supply. Trump said he had not offered to cut U.S. output.

Saudi Arabia said it would call an emergency meeting of the Organization of the Petroleum Exporting Countries, state media reported.

The amount cited by Trump would represent an unprecedented cut equal to 10% to 15% of global supply, in output per day terms, a common unit of measurement.

However, Trump provided few details, an omission some analysts said was likely intentional, and which they said explained a pullback in prices in the Asian session.

In early March, talks over production cuts between the two countries collapsed, leading them to start a price war that pushed oil prices to the lowest levels in nearly two decades.

SAFE ASSETS IN DEMAND Investors sought the safety of government bonds. Benchmark U.S. 10-year notes last yielded 0.597%, near a three-week low of 0.563% touched on Thursday.

More evidence of the damage from widespread stay-at-home orders to contain the spread of coronavirus emerged in the United States, with an unprecedented number of workers - 6.6 million - filing jobless claims.

Projections released by the U.S. Congressional Budget Office showed gross domestic product would decline by more than 7% in the second quarter as the health crisis takes hold.

The pandemic has claimed more than 52,000 deaths as it further exploded in the United States and the death toll climbed in Spain and Italy, according to a Reuters tally.

Highly rated U.S. corporate bond issuers raised a record $110.502 billion this week, according to Refinitiv IFR data, as firms borrowed cash in fear the coronavirus crisis may soon limit their access to capital markets.

In the currency market, the dollar maintained its firmness against a basket of currencies as investors and companies continued to hoard the world’s most liquid currency.

The dollar index has risen 2.47% so far this week, even as extreme tightness for greenback since last month eased.

The euro dipped 0.6% to $1.0792 set for five straight days of losses, and at its lowest level since March 25. The yen also stepped back to 108.53 per dollar from Wednesday’s two-week high of 106.925.

Gold prices were subdued. Spot gold fell 0.1% to $1,611.17 per ounce after a 1.28% rise on Thursday.

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OPEC+ debates biggest ever cut as virus destroys oil demand Friday 3rd April, 2020 – Reuters

OPEC and allies are working on a deal for an unprecedented production cut equivalent to around 10% of global supply, an OPEC source said after U.S. President Donald Trump called on oil nations to stop the oil rout caused by the coronavirus pandemic.

The meeting of OPEC and allies such as Russia has been scheduled for Monday, April 6, Azeri’s energy ministry said, but details were still thin on the exact distribution of production cuts.

Oil prices have fallen to around $20 per barrel from $65 at the start of the year as more than 3 billion people went into a lockdown because of the virus, reducing global oil demand by as much as a third or 30 million barrels per day.

Trump said on Thursday he had spoken with both Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman and they agreed to reduce supplies by 10-15 million bpd out of total global supply of around 100 million bpd.

Trump said he did not make any concessions to Saudi Arabia and Russia, such as agreeing to a U.S. domestic production cut - a move forbidden by U.S. antitrust legislation.

Some U.S. officials have suggested U.S. production was set for a steep decline anyway because of low prices.

“The U.S. needs to contribute from shale oil,” an OPEC source said. Russia has long expressed frustration that its joint cuts with OPEC were only lending support to higher-cost U.S. shale producers.

A second OPEC source said any cut in excess of 10 million bpd must include producers from outside OPEC+, an alliance which includes OPEC members, Russia and other producers, but excludes oil nations such as the United States, Canada, Norway and Brazil.

The second source added that OPEC+ was watching the outcome of a meeting between Trump and oil firms later on Friday and that a final figure on cuts depends on participation by all oil producers.

Jason Kenney, the premier of Alberta, Canada’s primary oil-producing province, said on Thursday that Alberta was open to joining a production- cut deal.

Oil prices recovered from the lows of $20 per barrel this week with Brent trading near $33 per barrel on Friday, still less than half its $66 closing level at the end of 2019.

CUTS OUT OF NECESSITY

Oil production cuts are poised to happen with or without OPEC and its allies as global oil strorage levels are close to being full, meaning many producers would soon have no choice but to start shutting oil wells.

Some 3 billion people around the world have been put on lockdown to slow the spread of the coronavirus, which has sickened 1 million people worldwide and killed nearly 50,000.

The immense decline in demand sent oil prices to their lowest levels since 2002, hitting budgets of oil-producing nations and dealing a huge blow to the U.S. shale oil industry, which cannot compete at low prices.

The downward pressure has been exacerbated by the battle for market share between Russia and Saudi Arabia.

Major global producers have already scaled back production as fuel demand has dropped precipitously and storage is rapidly filling.

Brazilian state-run oil producer Petrobras has already cut output by 200,000 barrels per day, about 6 percent of its output, in response to what its chief executive called the “worse oil industry crisis in 100 years.”

U.S.-based Chevron Corp (CVX.N) and BP Plc (BP.L) recently said they would pump less oil from shale than previously targeted.

The freefall in prices has spurred regulators in the U.S. state of Texas, the heart of the country’s oil production, to consider regulating output for the first time in nearly 50 years, while producers in neighboring Oklahoma asked state regulators also to consider cuts.

Ryan Sitton, one of three elected oil-and-gas regulators in Texas, spoke with Russia’s Novak about a cut of 10 million bpd in global supply.

“This isn’t good for anybody,” Sitton told Reuters. “We’re talking about a destabilization of the global energy market.”

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Dollar resumes climb as investors bid for safety Friday 3rd April, 2020 – Reuters

The dollar resumed its climb against major currencies on Friday as investors took refuge in safety bids amid worsening economic fallout from the coronavirus pandemic.

The greenback index is on course for a near 2.5% gain over the week, having whipsawed last month from highs on a scramble for cash before slumping as the U.S. Federal Reserve flooded the market with liquidity.

Indecision among euro zone governments about a rescue package for the region’s hobbled economies has weakened the euro in recent days, helping the dollar to its best day in two weeks against the single currency on Thursday.

Analysts said the euro may also be faltering due to rebalancing by forex reserve managers stocking up on dollars.

The dollar was up 0.5% against the euro on Friday at $1.8060, putting it on course for a 3% gain over the week. EUR=EBS. It was also up 0.5% against a basket of currencies =USD.

As lockdowns continue, the economic impact of the epidemic is becoming more marked, with purchasing managers’ indexes across the euro zone and Britain on Friday showing a slump in business activity.

The coronavirus is worsening in the United States where weekly jobless claims doubled to 6.6 million last week. U.S. payroll figures are due on Friday, although the cut-off period for the survey is March 12 so it will not reflect the impact of COVID-19.

“These global recession fears are terrifying the markets - presumably without much differentiation between the countries. Which is why the dollar is standing up rather well and might be able to appreciate a little bit more,” said analysts at Commerzbank in a note.

Brief gains on Thursday in oil-exposed currencies such as the Norwegian crown NOK= and Canadian dollar CAD=D3 on the back of a rallying oil price mostly evaporated with some retracement of oil's gains amid doubts around supply cuts. [O/R]

The Japanese yen, Swiss franc, sterling and the Australian and New Zealand dollars all also lost ground as the dollar strengthened across the board.

“Rising jobless numbers suggest that productive capacity is being eroded,” said Seema Shah, chief strategist at Principal Global Investors in London.

“So when self-isolation measures are eventually lifted, economic activity will take that much longer to get back on its feet. The chances of a V- shaped economic recovery are fading.”

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Futures dip ahead of payrolls, business activity data Friday 3rd April, 2020 – Reuters

U.S. stock index futures retreated on Friday, with investors awaiting data on business activity and non-farm payrolls to get a clearer picture of the economic hit from the novel coronavirus.

Wall Street gained about 2% on Thursday as oil soared on hints of a Saudi- Russia deal, but doubts returned on whether the rebound would last as the health crisis crushes demand, sparking fears of corporate defaults and mass layoffs.

Walt Disney Co (DIS.N) said on Thursday it would furlough some U.S. employees this month, while sources said luxury retailer Neiman Marcus was stepping up preparations to seek bankruptcy protection.

“We view the consolidation today as a combination of some jitters ahead of the weekend, concerns about the extent of the global demand shock and questions regarding the quality of the health response in the United States,” said Sebastien Galy, macro strategist at Nordea Asset Management in Luxembourg.

With global infections topping 1 million and more U.S. states implementing stay-at-home orders, economists have slashed their forecasts for U.S. real GDP. Morgan Stanley now expects U.S. real GDP to plunge 38% in the second quarter.

The S&P 500 .SPX has lost about a quarter of its value from an all-time high despite a brief lift provided by trillions of dollars in fiscal and monetary stimulus, and analysts foresee further declines heading into the quarterly earnings season.

At 07:04 a.m. EDT, Dow e-minis 1YMcv1 were down 203 points, or 0.95%, S&P 500 e-minis EScv1 were down 21.25 points, or 0.84% and Nasdaq 100 e-minis NQcv1 were down 64.25 points, or 0.84%.

Data at 10 a.m. ET is expected to show a reading of ISM’s services activity index dropping to 44.0 in March from 57.3 in February. A reading below 50 would indicate contraction in the sector, which accounts for more than two-thirds of U.S. economic activity.

All eyes will also be on the Labor Department’s employment report that is expected to show the U.S. economy shed jobs in March, but it will likely not reflect the full extent of the layoffs as it covers data until March 12.

U.S. jobless claims blew past a record 6 million last week, doubling from 3 million in the previous week.

3M Co (MMM.N) fell 3.6% premarket, leading losses among Dow components .DJI, after U.S. President Donald Trump invoked the Defense Production Act to get the company to produce face masks and said it "will have a big price to pay".

Oil stocks looked set to extend gains from the previous session, with Chevron (CVX.N), Exxon Mobil (XOM.N), Diamondback Energy (FANG.O), Apache (APA.N) and Occidental (OXY.N) rising between 1% and 12% on hopes of a huge global supply cut. [O/R]

Tesla Inc (TSLA.O) jumped 13% after the electric-car maker said production and deliveries of its Model Y sport utility vehicle were ahead of schedule, as it delivered the highest number of vehicles in any first quarter to date.

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U.S. economy to shrink at fastest rate since 1946, unemployment to top 15% Friday 3rd April, 2020 – Reuters

The United States economy will shrink 5.5% in 2020, the steepest drop since 1946, with a huge 38% contraction predicted for the second quarter, Morgan Stanley said on Friday in a new batch of forecasts on the economic damage from the coronavirus outbreak.

The U.S. bank said it had cut its first-quarter forecast to an annualised 3.4% contraction from a previous 2.4%, while in the second quarter the economy is predicted to shrink 38%, up from an earlier forecast of a 30% contraction.

U.S. unemployment will also peak at a record 15.7% in the second quarter - that is up from a previous 12.8% forecast by the bank’s economists - with cumulative job losses of 21 million in the second quarter, Morgan Stanley said.

Projections released by the U.S. Congressional Budget Office showed U.S. gross domestic product will decline by more than 7% in the second quarter as the health crisis intensifies.

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Coronavirus likely ended record U.S. job growth in March Friday 3rd April, 2020 – Reuters

The U.S. economy likely shed jobs in March, abruptly ending a historic 113 straight months of employment growth as stringent measures to control the coronavirus pandemic shuttered businesses and factories, confirming a recession is underway.

The Labor Department’s closely watched employment report on Friday will not fully reflect the economic carnage being inflected by the contagious coronavirus. The government surveyed businesses and households for the report in mid-March, before a large section of the population was under some form of a lockdown, throwing millions out of work.

Friday’s report could sharpen criticism of the Trump administration’s handling of the public health crisis, with President Donald Trump himself facing criticism for playing down the threat of the pandemic in its initial phases. Already, data has shown a record 10 million Americans filed claims for unemployment benefits in the last two weeks of March.

The United States has the highest number of confirmed cases of COVID- 19, the respiratory illness caused by the virus, with more than 214,000 people infected. Nearly 5,000 people in the country have died from the illness, according to a Reuters tally.

“The economy has fallen into the abyss,” said Chris Rupkey, chief economist at MUFG in New York. “Everywhere you look Washington and state governments were not prepared for the rapid spread of the virus and the devastating damage that would be done to the economy if businesses were shut down and workers sent home.”

According to a Reuters survey of economists, nonfarm payrolls probably decreased by 100,000 jobs last month, snapping a record streak of employment gains dating to October 2010. Payrolls increased by 273,000 jobs in February.

With jobless claims, the most timely indicator of labor market health, breaking records over the last couple of weeks and a majority of Americans now under “stay-at-home” or “shelter-in-place” orders, Oxford Economics is predicting payrolls could plunge by at least 20 million jobs in April, which would blow away the record 800,000 tumble in March 2009.

Economists also worry the rapid closure of businesses could make it difficult for the Labor Department to accurately capture the magnitude of layoffs. There are also perceptions that a $2.3 trillion fiscal package signed by President Donald Trump last week, which makes generous provisions for the unemployed, and the federal government’s easing of requirements for workers to seek benefits could also be driving the jobless claims numbers higher.

“The April report should better reflect the severity of the recession, though the exact numbers are hard to pin down,” said Michelle Meyer, a U.S. economist at Bank of America Securities in New York. “Businesses that have closed won’t be responding to the survey.”

ADDITIONAL STIMULUS NEEDED

The unemployment rate is forecast to have increased three-tenths of a percentage point to 3.8% in March. With the ranks of the unemployed ballooning, economists say the jobless rate could top 10% in April. Mounting job losses spell disaster for gross domestic product, and economists say the government and the Federal Reserve will need to provide additional stimulus.

Some also argued a portion of cash payments to American families was likely to be saved, not spent, pointing to similar patterns in the early 2000s.

Economists believe GDP contracted sharply in the first quarter and that the economy slipped into recession in March.

The National Bureau of Economic Research, the private research institute regarded as the arbiter of U.S. recessions, does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries. Instead, it looks for a drop in activity, spread across the economy and lasting more than a few months.

“It is premature to predict a V-shaped economic recovery based on the massive stimulus program,” said Sung Won Sohn, a business economic professor at Loyola Marymount University in Los Angeles. “To put the economy back on its feet we need a bigger plan which will include infrastructure. We have a lot more pain ahead of us.”

Wage growth is expected to have remained steady in March, but that is all in the rear view mirror. Average hourly earnings are forecast rising 0.2% in March after increasing 0.3% in February. That probably kept the annual increase in wages at 3.0%. The average workweek likely fell to 34.1 hours last month from 34.4 hours in February.

The anticipated job losses in March were probably spread across all industries, with deep cuts in the leisure and hospitality sector, which has seen restaurants and bars, movie theaters and other social gathering venues closed.

Transportation and warehousing payrolls likely declined further after shedding 4,000 jobs in February as shipping volumes at ports have plummeted. But hiring for the 2020 Census likely boosted government employment in March.

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JPMorgan reaches agreement to increase stake in China mutual fund venture to 100% Friday 3rd April, 2020 – Reuters

JPMorgan (JPM.N) has reached agreement with its Chinese partner to increase its stake in its Chinese mutual fund venture to 100%, joining BlackRock and Neuberger Berman to grow its presence in the world’s second biggest economy.

The U.S. firm’s asset management arm expects to proceed with the required processes to complete the transaction to take full ownership of China International Fund Management Co. (CIFM), including seeking approval from the China Securities Regulatory Commission (CSRC)， according to an emailed statement from JPMorgan Asset Management on Friday.

It did not provide financial details of the deal.

The moves comes as China is pushing ahead with opening up of its financial sector after the coronavirus pandemic. CSRC said on Wednesday that it has accepted applications from BlackRock (BLK.N) and Neuberger Berman to set up fully owned mutual fund units in China as the country scraps foreign ownership caps in the sector on April 1 as planned.

“We are pleased to have reached this important milestone,” said Dan Watkins, J.P. Morgan Asset Management Asia Pacific’s Chief Executive Officer, in the statement.

Established in 2004, Shanghai-based CIFM managed more than 150 billion yuan ($21 billion) in assets as of the end of 2019, according to the statement.

JPMorgan said last August that it had won an auction to increase its stake in CIFM to 51% from 49%.

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China frees up $56 billion for virus-hit economy by slashing small banks' reserve requirements Friday 3rd April, 2020 – Reuters

China’s central bank said on Friday it was cutting the amount of cash that small banks must hold as reserves, releasing around 400 billion yuan ($56.38 billion) in liquidity to shore up the economy, which has been badly jolted by the coronavirus crisis.

The latest stimulus move comes as the world’s second-largest economy looks likely to shrink for the first time in at least 30 years. Hopes for a quick recovery are being soured by the rapid spread of the disease worldwide, crushing global demand.

“The deterioration of the global economy is bound to have a great impact on China’s economy, which requires that China’s policy should be further loosened and be more flexible,” said Yan Se, chief economist at Founder Securities.

The People’s Bank of China said on its website it will cut the reserve requirement ratio (RRR) for those banks by 100 basis points (bps) in two equal steps, the first effective as of April 15 and the second as of May 15.

China has about 4,000 small and mid-sized banks. The latest cuts would lower their RRR to 6%.

In addition, the interest rate on financial institutions’ excess reserves with the central bank would be reduced to 0.35% from 0.72%, effective April 7, the PBOC said.

The RRR cut was flagged by the cabinet on Tuesday along with other support measures as Beijing tries to cushion the economic blow from the pandemic, which is fanning worries about heavy job losses.

While most of the country’s factories are believed to be up and running again, though not at normal levels, a private survey earlier on Friday suggested services companies are still struggling to get back on their feet and cut jobs in March at the fastest pace since at least 2005.

Many are small, privately owned firms with less cash to see them through a prolonged downturn than large, state-owned enterprises.

The export sector is also facing a fresh shock, as the swift spread of the virus around the world prompts many countries to impose draconian containment measures similar to those used in China. Nomura estimates China could lose 18 million export-related jobs in the next one to two quarters as shipments contract 30%.

The latest RRR cut would be the third so far this year and the 10th since early 2018, when the economy was starting to slow under the weight of intensifying U.S.-China trade frictions.

The central bank has been stepping up its policy easing since early February, cutting the benchmark lending rate and telling banks to offer cheap loans and payment relief to firms that have been hardest hit by the outbreak and anti-virus measures.

Chinese banks issued new loans totalling nearly 7 trillion yuan ($989 billion) in the first quarter, said Zhou Liang, vice head of the China Banking and Insurance Regulatory Commission (CBIRC) earlier in the day.

The move to slash the interest rates on excess reserves for banks is aimed at boosting the efficiency for banks to use the funds and better serving small and micro-firms, said the PBOC.

The rate cut on excess reserves indicates that the PBOC is very keen to lower credit costs for companies, said Commerzbank economist Hao Zhou. PBOC last reduced the rates to 0.72% from 0.99% during the global financial crisis in 2008.

“The rates for excess reserves are also seen as the floor of the ‘rates corridor’ in China. In this sense, today’s cut has opened a big door for further cut to MLF, which is the ceiling of the corridor.”

MORE STIMULUS STEPS IN PIPELINE

The central bank is expected to take further steps, including more cuts in RRR, lending rates, and the benchmark deposit rate.

China has ample policy tools to support growth, but it will tread warily in cutting the benchmark deposit rate due to elevated inflation and the potential impact on ordinary savers, Liu Guoqiang, a vice central bank governor, said earlier on Friday.

After widespread factory closures and travel restrictions imposed by Beijing to contain the spread of the coronavirus that has killed more than 3,300 in the country, businesses in the country have reopened and life for millions of people has started to slowly return to normal.

But economists are forecasting a steep contraction in China’s first quarter gross domestic product. Some expect a year-year slump of 9% or more, the first such contraction in at least three decades.

Policy sources told Reuters that the Chinese government could expand the 2020 budget deficit to a record high and was considering lowering its economic growth target for 2020 given the prolonged impact of the pandemic. But one central bank adviser has suggested that a growth target not even be set this year due to all the uncertainty.

Last week, the ruling Communist Party’s Politburo called for expanding the budget deficit, issuing more local government special bonds and issuing special treasury bonds, which would be the first such move since 2007.

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UK facing Depression-style hit as firms slump in March Friday 3rd April, 2020 – Reuters

Britain’s economy looks set for a slump that in the short term could be deeper than during the depression of the 1930s, as a survey showed the coronavirus crisis caused a record downturn among services and manufacturing firms in March.

The composite Purchasing Managers’ Index covering the two sectors fell to 36.0 from 53.0 in February and was weaker than a preliminary ‘flash’ reading of 37.1, data firm IHS Markit and the Chartered Institute of Procurement and Supply said.

The survey data were collected between March 12 and March 27, covering the period after Prime Minister Boris Johnson ordered the closure of bars, restaurants, gyms and other services businesses to slow the coronavirus outbreak on March 20.

Britain’s dominant services industry suffered its sharpest fall by far since the survey began in 1996. Its index sank to 34.5 from February’s 53.2, and was also weaker than the March flash reading of 35.7.

Sterling weakened almost half a cent against the dollar to its lowest since March 31 after the news, which was only a bit less bleak than the equivalent euro zone survey.

Andrew Wishart, an economist at Capital Economics, said the PMIs were probably underestimating the hit.

“We are forecasting a 15% fall in GDP in Q2, a larger fall in output than in the financial crisis or the Great Depression,” he said.

“Our base case is that the recession won’t be as protracted as either of those episodes. But evidence that unemployment is shooting up despite the government response raises the risk that the recovery takes longer than we expect.”

Tim Moore, economics director at IHS Markit, said job losses had been mitigated by firms’ use of a government scheme to temporarily put staff on leave, rather than fire them.

Britain’s government has said it will pay 80% of the wages of workers who are furloughed by companies.

“However, employment levels across the service sector still dropped at the fastest pace for more than a decade, reflecting some forced redundancies and the non-replacement of departing staff amid widespread hiring freezes,” Moore said.

British Airways (ICAG.L) said on Thursday it had struck a deal with its unions to suspend more than 30,000 cabin crew and ground staff. Data on Wednesday showed around 950,000 people in the United Kingdom have applied for welfare benefits in the two weeks since Johnson shut down swathes of the economy.

The PMI survey showed the biggest drop in new work among services firms and the bleakest business expectations in more than 20 years of data collection.

Technology services were the only area to signal a rise in business activity - possibly reflecting the stay-at-home order for many people - but new workloads for tech firms dropped more quickly than at any time since 2011.

A final PMI for Britain’s manufacturing sector, published on Wednesday, showed factory output shrank at the fastest pace since the euro zone debt crisis in March.

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UK Export Finance expands exporter protection against non-payment Friday 3rd April, 2020 – Reuters

Britain is expanding the scope of its export insurance policy to cover exporters against the risk of non-payment if customers become insolvent, joining other European countries that have provided insurance support for their supply chains.

UK Export Finance, a government department, on Friday said it has expanded the policy to cover transactions with the European Union, Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland and the United States.

The scheme is designed to help companies concerned about the impact of the coronavirus to export with confidence, offering insurance that can cover up to 95% of the value of an export contract.

Government export credit insurance schemes typically provide cover for countries where commercial trade credit insurance is less readily available.

European Union states are giving guarantees to credit insurers in an effort to keep coronavirus-hit companies afloat, as some cut cover for trade involving bloc members such as Italy and Spain, sources say.

In France, the finance ministry said credit insurers had vowed not to cut or curtail cover in return for a reinsurance backstop worth up to 10 billion euros ($10.8 billion), to be set up by the end of the week.

It also announced 2 billion euros in short-term aid as part of a package to help French exporters with credit insurance.

In Germany, Reuters reported this week that the government and the country’s credit insurance industry have agreed to help to maintain insurance cover for trade, with the government guaranteeing up to 30 billion euros for the commercial credit insurance industry.

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Nestle confirms 2019 dividend proposal Friday 3rd April, 2020 – Reuters

Nestle on Friday confirmed its 2019 dividend proposal of 2.70 Swiss francs per share even as the pandemic caused by the new coronavirus upends planned shareholder payouts.

“We confirm our dividend proposal to the coming annual general meeting. We believe strongly in being dependable, especially in this period of uncertainty,” a spokesman for the world’s biggest food group said. “Nestle has always maintained a strong balance sheet and we are not facing any liquidity issue.”

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European insurer shares fall as battle over dividends erupts Friday 3rd April, 2020 – Reuters

Shares in Europe’s insurers fell sharply on Friday after the EU regulator said they should temporarily halt payouts to shareholders during the coronavirus epidemic, although Germany backed Allianz’s decision to go ahead with a dividend.

Shares of Dutch insurers NN Group (NN.AS) and Aegon (AEGN.AS) slumped around 10% while France’s CNP Assurances fell 7% and AXA (AXAF.PA) was down 4%. British insurers - which still need to follow EU insurance regulation during the Brexit transition period - also fell with Aviva (AV.L) and Prudential (PRU.L) down 4%.

The European Insurance and Occupational Pensions Authority (EIOPA) said late on Thursday that it was essential to ensure insurers and reinsurers hold a “robust level” of reserves to protect policyholders and absorb potential losses.

The move followed the European Central Bank telling banks last week to halt shareholder payouts.

But while most major banks in the euro zone have heeded calls to suspend their dividends, insurers may put up more of a battle.

Germany’s financial regulator BaFin said on Friday that a general payout ban for insurers and pension funds is currently not necessary after the EU’s insurance regulator said dividends and share buybacks should be suspended during the coronavirus pandemic.

“BaFin does not see a blanket distribution ban for insurers and pension funds as necessary,” the German watchog said.

Analysts at JPMorgan Cazenove said halting dividends would remove one of the sector’s main attractions.

IN GOOD SHAPE

Italian financial group Unipol Gruppo (UNPI.MI) said on Thursday it was suspending its dividend payment in line with requests from national regulators, while its insurance unit UnipoSAI (US.MI) would pay one despite Italy’s insurance watchdog IVASS calling on companies to be prudent.

Allianz, the region’s biggest insurer, told Reuters it wanted to maintain both its dividend for 2019 and a share buyback worth 1.5 billion euros ($1.6 billion).

“Allianz is in good shape,” its spokesman Holger Klotz said.

German reinsurer Munich Re (MUVGn.DE), which declined to comment on the EIOPA statement, announced on Tuesday it was scrapping a share buyback but keeping a 9.8 euros per share dividend, despite a profit warning.

Although BaFin is the direct regulator for German insurers, it is also a member of EIOPA, which groups national insurance regulators from the 27-member bloc.

The Dutch central bank said late on Thursday that it supported EIOPA’s call “to the utmost”.

In response to EIOPA’s guidance, the Bank of England said on Friday that it, like the EU watchdog, expects insurers to pay close attention to the need to protect policyholders when making any decisions on the distribution of profits.

“We therefore expect firms to be prudent in deciding on dividend payments or variable remuneration in view of the elevated levels of uncertainty presented by coronavirus and its impact on the global economy,” the BoE said.

Britain no longer has a seat at EIOPA but it is still required to follow EU rules until the end of December under the transition deal that followed Britain’s exit from the European Union in January.

Although Switzerland is not an EU member, its regulator FINMA has urged financial institutions to carefully consider dividends. Reinsurer Swiss Re (SRENH.S) and Swiss Life (SLHN.S), however, are both sticking to their dividend proposals.

EIOPA said the suspensions should be reviewed as the financial and economic impact of the COVID-19 epidemic starts to become clearer.

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European shares dip on more corporate pain from coronavirus Friday 3rd April, 2020 – Reuters

European stock markets headed lower on Friday, erasing meagre gains for the week, as more companies flagged a hit to business from the coronavirus pandemic, foreshadowing a deeper earnings recession ahead of the reporting season.

The pan-European STOXX 600 index fell 0.5%, with insurers .SXIP tumbling 3% after a European Union regulator asked them to suspend dividends and share buybacks to shore up liquidity, as a halt in business activity crushes consumer demand and sparks mass layoffs.

“We are entering a climate with lower or no dividends, fewer financial options, but most importantly, fewer jobs and lower output,” said Stephen Innes, a strategist at AxiCorp.

“Many small- and large-sized businesses will not survive this storm.”

H&M (HMb.ST), the world’s second-biggest clothing retailer, reported a 46% plunge in March sales and said it expected a loss in its fiscal second quarter.

However, the company’s shares, which have lost 40% of their value since end January, jumped 7% as it said was taking steps to strengthen its liquidity buffer and cut operating expenses.

With more than 1 million people now infected around the world and countries extending national lockdowns, economists expect euro area real GDP to shrink as much as 43% in the second quarter.

Macroeconomic figures are starting to reflect the extent of the economic damage from the health crisis, with U.S. jobless claims blowing past a record 6 million last week. In Spain, about 900,000 workers have lost their jobs since mid March.

“Global recession fears are now being confirmed by the incoming economic prints,” said Han Tan, market analyst at FXTM.

“Until the virus case count peaks and the business earnings outlook improves, risk sentiment may only experience fleeting bouts of positivity.”

The STOXX 600 index is still down about 28% — or $3.5 trillion in market value — from its mid-February record highs despite a rebound last week that was powered by aggressive monetary and fiscal stimulus from around the world.

Travel & leisure stocks .SXTP lost about 0.1%, as the industry braced for a long road to recovery with fresh data showing international seat capacity dropping by almost 80% from a year ago and half the world’s airplanes in storage.

Energy stocks tracked a slide in oil prices as investors grew doubtful about a Saudi-Russia deal that U.S. President Donald Trump said he had brokered. [O/R]

Britain’s BAE Systems (BAES.L) fell 2% after saying it would defer a decision on whether to pay its dividend and launching cost control measures following significant disruption from the virus outbreak.

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European insurer shares fall as row over dividends breaks out Friday 3rd April, 2020 – Reuters

Shares in Europe’s insurers fell sharply on Friday after the industry’s EU regulator said they should temporarily halt dividends and share buybacks in response to the coronavirus epidemic.

Some firms said they would resist such a move and Germany indicated its opposition.

Dutch insurers NN Group (NN.AS) and Aegon (AEGN.AS) slumped around 10% while France’s CNP Assurances fell 7% and AXA (AXAF.PA) was down 4%. British insurers - which still need to follow EU insurance regulation during the Brexit transition period - also fell, with Aviva (AV.L) and Prudential (PRU.L) down 4%.

The European Insurance and Occupational Pensions Authority (EIOPA) said late on Thursday the temporary suspensions were essential to ensure insurers and reinsurers held a “robust” level of reserves to protect policyholders and absorb potential losses.

Last week, the European Central Bank told lenders to halt shareholder payouts. But while most major banks in the euro zone have heeded calls to suspend their dividends, insurers may put up more of a battle.

Germany’s financial regulator BaFin said on Friday that a general payout ban for insurers and pension funds was currently not necessary.

Germany-based Allianz, the region’s biggest insurer, told Reuters it was in “good shape” and wanted to maintain both its dividend for 2019 and a share buyback worth 1.5 billion euros.

German reinsurer Munich Re MUVGn.DE, which declined to comment on the EIOPA statement, said on Tuesday it was scrapping a share buyback but keeping a 9.8 euros per share dividend, despite a profit warning.

The suspensions should be reviewed as the financial and economic impact of COVID-19 starts to become clearer, the watchdog added.

Its statement was similar to a letter from Bank of England Deputy Governor Sam Woods on Tuesday to insurer CEOs in Britain, asking them to pay close attention to the need to protect policyholders and remain sound before taking decisions on dividends or bonuses.

Global coronavirus cases surpassed 1 million on Thursday with more than 52,000 deaths, according to a Reuters tally of official data.

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Japan to roll out huge stimulus package next week as pandemic pain deepens Friday 3rd April, 2020 – Reuters

Japanese Prime Minister Shinzo Abe said on Friday a stimulus package to combat the coronavirus pandemic will be rolled out next week, and target small firms and households hardest hit by social distancing policies that are affecting consumption.

The package will include spending on medical supplies, as well as cash payouts to small firms and households facing sharp falls in income, Abe said.

The government will also urge private financial institutions to join government-affiliated lenders in offering zero-interest rate loans to cash- strapped small and midsized firms, he said.

“We’ll compile the package next week,” Abe told parliament.

“We’ll deliver in a short period of time a targeted, bold package” that will help the economy achieve a V-shaped recovery, he said.

A senior ruling party official told reporters on Friday he has agreed with Abe to offer 300,000 yen ($2,800) in cash payments per household that suffers a certain degree of income falls from the pandemic.

The government is set to approve a supplementary budget on Tuesday to fund the package.

BOOST TO GROWTH LIMITED

Supply chain disruptions, travel bans and social distancing policies triggered by the pandemic have hit Japan’s economy, which was already on the brink of recession.

Economy Minister Yasutoshi Nishimura said the government’s stimulus measures will be delivered in two stages.

The first package will focus on immediate steps to ease corporate funding strains and protect jobs. The second batch will focus on boosting demand, particularly for industries currently hit by social distancing policies such as tourism and event organisers, he told a news conference.

Abe has pledged to lay out a huge stimulus plan to combat the virus that will exceed the 57-trillion-yen ($525 billion) package compiled after the collapse of Lehman Brothers in 2008.

Sources have said Japan will fund the package by boosting government bond issuance by $149 billion, adding to what is already the industrial world’s heaviest debt burden at more than twice the size of Japan’s $5 trillion economy.

Rating agency S&P affirmed Japan’s sovereign debt credit rating and kept the outlook positive on Friday, despite the government’s plan to boost spending to battle the economic fallout from the coronavirus outbreak.

Analysts expect Japan’s economy, which shrank in the final quarter of last year, to suffer two more quarters of contraction as the pain from the pandemic deepens.

Hiroshi Ugai, chief economist at JPMorgan Securities Japan, expects the world’s third-largest economy to contract 3.1% this year, with any rebound later in the year to be modest.

“The government’s planned economic stimulus package would help address immediate problems that could lead to declines in household and corporate income,” he said. “But it would not be enough to change the big picture for Japan’s economy.”

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GECOM to decide on way forward today Friday 3rd April, 2020 – Guyana Chronicle

WILL the Guyana Elections Commission (GECOM) order a National Recount? That decision would be determined today, when the Commission, chaired by Justice (Ret’d) Claudette Singh, meets to chart the way forward with the anticipation of bringing an end to the electoral process, which has been protracted for more than a month.

When the Commission met on Thursday at its High and Cowan Streets Office, the Chair iterated her commitment made to the High Court to have a National Recount facilitated but this was met with recommendations, from the Government nominated-Commissioners, that legal guidance be sought ahead of any decision. Commissioner Charles Corbin is expected to submit a report on legal guidance received on the topic of a national recount at this stage of the elections.

Thursday’s meeting was the first since the Full Court ruled on March 31 that a Judicial Review of the decisions of the Elections Commission is not possible at this stage of the electoral process, and any challenge must be brought by way of an Elections Petition following the declaration of the results. A private citizen, Ulita Moore, had filed legal proceedings to block GECOM’s decision to facilitate a national recount, on the grounds that the Chief Elections Officer, Keith Lowenfield has already compiled his report, and a President of Guyana should be declared.

During the meeting, Justice (Ret’d) Singh reminded the Commissioners of the legal ramifications that currently face the Commission. “…Chairperson of the Guyana Elections Commission, Justice Claudette Singh provided a brief background on the Court proceedings and explained that the contempt matter brought against her has not concluded but has been shelved due to her giving an undertaking to conduct a full national recount of all votes cast in the March 2, 2020 General and Regional Elections at the level of the Commission,” GECOM’s Public Relations Officer, Yolanda Ward explained in a statement.

Against that background, the Chair asked the Commission to discuss the possibility of the recount but within the framework of the Constitution and the Electoral Laws of the country. In the early stages of the meeting, Opposition nominated-Commissioner Robeson Benn moved a motion calling for a recount but subsequently withdrew it based on the contention that GECOM had already taken a decision to so do.

“[The] Opposition nominated Commissioners expressed the view that the Commission did approve to have a recount supervised by CARICOM and that there is nothing that precludes the Commission from moving ahead in this regard now that the Court has paved the way for GECOM to finalize its deliberation to operationalise the recount,” Ward explained.

While President David Granger and the Leader of the Opposition Bharrat Jagdeo have signed an Aide Memoire for a high-level Caribbean Community (CARICOM) team to supervise a recount of ballots in the 10 Electoral Districts, the country’s Chief Parliamentary Counsel, Charles Fung-a-Fatt, had advised the such an arrangement would be in contravention of the Constitution of Guyana and the Representation of the People Act. The Full Court, however, in dismissing the case brought by Moore, said there are provisions within the Constitution and Sections 22 of the Elections Law (Amendment) Act of 2000 for the Elections Commission to one, facilitate credible elections and two, address any difficult that may arise. Several difficulties have arisen since the March 2 Elections resulting in a significant delay in the delivery of the results.

“It is within this context, one would expect GECOM to step in and take charge of the situation. Article 162 (1) (b)…gives wide powers to GECOM to ensure an impartial and fair elections process. Section 22 of Act No. 15 of 2000 merely supplements or provides one of many mechanisms for ensuring that there is compliance with Article 162 in this regard,” Justice Roxane George-Wiltshire reasoned as she handed down the ruling in the Full Court.

Section 22 states: “If any difficulty arises in connection with the application of this Act, the Representation of the People Act or the National Registration Act or any relevant subsidiary legislation, the Commission shall, by order, make any provision, including the amendment of the said legislation, that appears to the Commission to be necessary or expedient for removing the difficulty; and any such order may modify any of the said legislation in respect of any particular matter or occasion so far as may appear to the Commission to be necessary or expedient for removing the difficulty.”

The decision of the Full Court is now being challenged at the Court of Appeal.

In addition to recommending that the Elections Commission seek legal guidance as it decides on its next step, Government nominated Commissioner Vincent Alexander tabled a motion for the Commission to await the completion of the legal proceedings and consider the report of the Chief Elections Officer on the results of the Elections. But the Chair of GECOM again reminded the Commissioners of the legal challenges filed against the Commission.

“Justice Singh explained that she would be unable to allow the CEO to present his report at this point in time since a contempt motion brought by the People’s Progressive Party restrains her from so doing. In relation to this matter, she had given an undertaking to the Court to facilitate a recount at the level of the Commission,” Ward reported.

But while Ward reported that the motion was not allowed, Commissioners Sase Gunraj and Vincent Alexander told reporters, upon the conclusion of the meeting, that the motion was put to a vote, and it was voted down – 4-3.

“The question of whether we should not wait on the present legal proceedings before we proceed was brought by way of motion, and that motion was disposed of negatively by a 4-3 vote,” Commissioner Alexander told reporters outside of GECOM’s office, moments after the meeting concluded.

Asked what the reason behind the motion was, Alexander, in response, said “if one looks at the procedural elements of the things, there really is no impediment to that report being table.” Further to that, he referenced to commitment by the Chair of GECOM to await the completion of the legal proceedings before taking any action. Nonetheless, Alexander said he would vote in favour of a national recount in accordance with the CARICOM initiative.

Commissioner Gunraj also expressed support for a national recount. “As we speak, I believe that everyone recognizes that a recount has to or ought to be conducted. There is discussion about the legality or whether we can do that. It is my position is that we can,” he told reporters outside of GECOM’s head office.

The meeting of the Commission will reconvene today at 10:00hrs and a decision on the way forward is expected.

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Stabroek Block produces 1.7M barrels of oil in January; Exxon collects over 1M for cost recovery Friday 3rd April, 2020 – Kaieteur News

According to the latest Report on Petroleum Production and Revenues (RPPR), the Liza Phase One Project on the Stabroek Block produced 1,745,930 barrels of oil for January 2020, or 56,320 barrels of oil per day.

Of the 1,745,930 barrels produced, the Ministry of Finance which prepared the report said that a total of 1,020 barrels was used for facility fill.

The Ministry said as a result of the first lift of crude oil in January 2020 by ExxonMobil, this volume of crude will remain in the hose and piping between cargo tanks and the crude offloading hose point that connects to the offloading vessel.

With respect to the actual lift by ExxonMobil, the Ministry said that this amounted to 1,046,897 barrels. This lift included the 21,592 barrels of Marine Gas Oil and Intermediate Fuel Oil that was loaded onto the Liza Destiny in Singapore for commissioning activities. The Ministry was keen to note however that the lift by ExxonMobil was completely allocated to cost recovery while noting that the American oil company is still owed a few more barrels to cover the allotted sum that was supposed to be recovered for that time.

Expounding further, the report specifically noted that Article 11.2 of the Petroleum Agreement for the Stabroek Block, states that in any month during which crude is produced and sold, a maximum of 75 percent of crude produced after losses and operations (PALO), can be allocated to permissible recoverable costs incurred by the Contractor.

Taking this into account, it was stated that cost recovery based on the 75 percent ceiling amounted to 1,308,682 barrels, hence all 1,025,305 barrels produced and sold from the Liza field by ExxonMobil was allocated to cost oil.

Since it did not recover the full costs, the Ministry noted that Exxon under lifted 409,251 barrels at the end of January 2020.

Furthermore, the 719,605 barrels of PALO remaining after the allocation to cost oil, i.e. 1,744,910 – 1,025,305, is referred to as profit oil, of which the government is entitled to 50 percent, or 359,802 barrels.

It was further noted that there was no change in the volume of crude used as ballast in the cargo tanks. Additionally, there were no operational losses reported for this period and no crude was used for fuel or transportation in petroleum operations.

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Govt. to collect US$1.3M royalty for first quarter by month end Friday 3rd April, 2020 – Kaieteur News

For January, Guyana has earned US$1,268,706 in royalty from the Stabroek Block, but this would not be received until April month end, according to a Ministry of Finance Report on Petroleum Production and Reserves.

The document notes that ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) lifted crude for that month which amounted to 20,506 barrels.

Government reminded on this note that it is entitled to a royalty of two percent of all crude produced and sold. It further stated that the cash- based value of the royalty will be determined using the average fair market price of a barrel of crude for January 2020, calculated in accordance with Article 13 of the Petroleum Agreement for the Stabroek Block.

Up to the time it published the report yesterday, the Ministry noted that the Government and the Contractor were still finalising the procedures to give effect to Article 13 of the Agreement.

However, based on the current draft of the procedure, the average fair market price of crude for January 2020 would be US$61.87 per barrel. Using this price, the value of the royalty for January 2020 would be US$1,268,706, the Ministry said.

The Ministry said that while royalties are estimated on a monthly basis, Article 15.6 of the Petroleum Agreement stipulates that the monies will be transferred to the Government quarterly, thirty (30) days after the end of each calendar quarter. As such, the royalty payments for January, February and March 2020 will be transferred to the Natural Resource Fund (NRF) by April 30, 2020.

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BPL’S Revenue In 32.5% March Fall Thursday 2nd April, 2020 – Tribune 242

Bahamas Power & Light’s (BPL) March revenues have slumped by almost one-third year-over-year, a Cabinet minister revealed yesterday, as it halted disconnections for the lockdown’s duration.

Desmond Bannister, pictured, minister of works, told Tribune Business that the state-owned energy monopoly had suffered a $13m shortfall in customer payments last month compared to March 2019 as the business closures and job losses associated with the COVID-19 pandemic started to bite.

Addressing yesterday’s confusion surrounding whether BPL would continue its suspension disconnection beyond March 31, Mr Bannister said the utility needed to both make it easier for consumers to pay bills and improve its communications strategy.

BPL’s Blue Hill Road headquarters was yesterday besieged by customers seeking to become current with their accounts, with the lines made longer by COVID-19-related social distancing. Mr Bannister suggested that it was also an indication that some who could meet their obligations had taken advantage of the previous week-long suspension to avoid doing so.

Calling on all households and businesses to “be responsible” with their monthly electricity bill, especially those who can still afford to pay, the minister added that the government planned to deploy several “strategies” through the Department of Social Services to help persons who have lost their jobs and incomes meet their obligations.

“Last year this time, BPL would have collected a little over $40m for March,” Mr Bannister told Tribune Business. “This year, they’ve collected $27m. The significance of that is that the government is going to have to find a way to make up some of the shortfall at BPL.

“When you look at the social responsibility we have as a government, we cannot continue to let these challenges go on from month-to-month. We all have to play our part in being responsible. Everyone who can pay should ensure they pay. That’s critical, and BPL should make it easier for them to pay.”

The figures unveiled by Mr Bannister show BPL’s year-over-year revenue collections are down 32.5 percent for March, which is hardly surprising given the COVID-19 pandemic’s economic fall-out. His reference to making it “easier to pay” refers to the complaints from numerous customers that upgrades to the utility’s website left them unable to log-in and pay their bills online.

Confirming that BPL has now suspended disconnections until the COVID- 19 emergency is over, which will be April 8 at the earliest, Mr Bannister acknowledged: “There are some challenges we have to deal with, and we have to deal with them head on; fairly and squarely.

“BPL has to improve their online portal so people can pay efficiently. They have to improve that, and they have to improve their communications strategy. It’s important we make it easier for people to pay their bills. These are critical duties we have to perform.”

Mr Bannister said he had also informed BPL that it needed to align its billing cycle with customer pay-days, which typically fall at the end of most months. And he suggested that the long customer lines at BPL’s head office yesterday indicated that the now-suspended disconnection restart had motivated some who exploited this waiver - and have the ability to pay - to race to become current.

“We see evidence of that,” he added. “We saw anecdotal evidence of that this morning in the sense there were very long lines at BPL. Some people clearly have the money to pay. Others may have had the money to pay, but they may have had challenges going online or not be a person who uses the Internet.

“We have to make it easier for people to pay, and take away a lot of the stress they are feeling nowadays. It’s very interesting. Sebas [Bastian, the Island Luck owner], sent me information today that his system permits people to pay their utility bills. We need to continue to improve, and BPL has to continue to improve, and when we run into challenges like this they’re going to improve from it and learn from it.”

Still, Mr Bannister reiterated that electricity bills cannot be wished away. “They accumulate, and I think it’s important for all of us to appreciate they’re not going to go away,” he told Tribune Business. “There’s no magic in getting bills to go away. They have to be paid at some stage.

“The Bahamian consumer cannot be responsible for paying Desmond Bannister’s bills or any other consumer’s bills. It cannot be through the Government taking on responsibility on a long-term basis for consumer bills and not expecting them to be paid. That’s the taxpayer’s money, your money. All of us have to be responsible.”

The minister added that the Government had instructed BPL to be lenient with consumers who had genuinely fallen on “hard times” as a result of the COVID-19 pandemic and were unable to pay their light bill.

“It’s important for them to communicate with BPL,” he said of those persons. “There are some social services strategies that the Government is seeking to unveil, and the Department of Social Services will inform the public about that and provide assistance in certain circumstances.”

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Online Delivery Firm In 60% Demand Rise Thursday 2nd April, 2020 – Tribune 242

A Bahamian online delivery service yesterday said it has seen a 60 percent increase in demand following the COVID-19 country-wide lockdown and closure of many businesses.

Jamial Rolle, chief executive of Runnah's, told Tribune Business: "We have definitely seen a stark increase in business interest from both businesses and customers using the app. Especially with the COVID-19 and people being not able to gather in groups because of safety reasons, businesses are looking for safety options.

"We have seen roughly about a 60 percent increase from sign-ups, business interest and customer use. Our most popular feature is custom pick-up that allows for pick-ups for businesses that are not on the app.

"Our custom pick-up works like this. Let's say, for example, if you have a package at the Mall at Marathon, we can deliver that package to you where you are without the recipient being on the app. We are being flexible for everyone, but want people to sign up to the app to make it easier for everyone in the process."

Mr Rolle added: "The Runnah's app is more like a marketplace. We created the app like a marketplace, and it is a hybrid of Amazon, Uber Eats and Postmates. We don't just deliver food. We deliver everything. Anyone who has something to sell can use our app. It is a full functional marketplace that delivers, plus we allow for marketing for business.

"We try to keep costs down, and that is why most of our advertising is done by social media and through word of mouth, because we want to keep it favourable to everybody's pocket right now."

Mr Rolle said Runnah's is offering a no-fee sign up for businesses, and its purpose for creating the app was to establish an "economic ecosystem that is fair for everyone, the business, the customer and the driver".

He added: "We have about 55 drivers on staff, and we had an additional 30 drivers sign up since the COVID-19 lock down. People are not working right now, so this is important for them to have something to do.

"Drivers receive the majority of the money; they receive 70 percent of the delivery fee. The fee varies based on distance, and they also get tips. Delivery starts at $4.99. We have had drivers do up to 15 runs a day."

Mr Rolle, who is stuck in Atlanta due to the worldwide COVID-19 shutdown, praised the Bahamian government for allowing delivery service applications such as Runnah's to operate. "I see this working in Atlanta, and businesses are still making money and thriving. Some are making more money," he added.

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S&P downgrades Republic, FCB Friday 3rd April, 2020 – Caribbean News Now

FOLLOWING its downgrade of T& T's sovereign credit rating last week Thursday, S& P Global Ratings on Wednesday lowered its long-term issuer credit ratings on Republic Bank and First Citizens from 'BBB' to 'BBB-'.

The credit rating agency, at the same time, lowered its short-term ratings on both local commercial banks entities from 'A-2' to 'A3' and reduced its outlook on the two banks to negative.

S& P also revised downwards on T& T's Banking Industry Country Risk Assessment (BICRA) economic risk from stable to negative, because it expects 'pressure on banks' asset quality to surge and business growth to slow as the coronavirus outbreak hits trade and lower oil prices contribute to a deeper economic contraction and increasing unemployment'. The trend on industry risk remains stable.

S& P said the downgrade of Republic Bank and First Citizens mirrors the action on the sovereign ratings and it noted that although T& T's banks are not heavily exposed to oil companies, the domestic economy is heavily dependent on the energy sector.

The credit rating agency pointed out that the energy sector has historically contributed over a third to the Government's revenue and the country's real GDP, and over 80 per cent of its exports.

'As a result, we expect lower hydrocarbon prices will cause T& T's economy to shrink 2.7 per cent for 2020, continuing the contraction in the country's real GDP per capita over the past several years. We forecast that real GDP per capita will fall to about US$16,600 in 2020, down more than 19 per cent compared with the 2014 level.'

S& P said that it sees local banks facing increasing challenges as a result of the downturn caused by declining energy prices and the coronavirus outbreak. It said there is uncertainty over when the spread of COVID-19 will cease and how deep the economic strain it will cause, because there are no empirical rules to estimate how social distancing could affect key economic variables.

S& P said: 'We expect pressure on banks' asset quality to surge and business growth to slow as the coronavirus outbreak hits trade and lower oil prices contribute to a deeper economic contraction.

'As public health crisis disrupts production and the plunge in consumption interrupts the payment chain, some companies and individual borrowers will have difficulty with debt repayment.

'Therefore, we expect T& T's banking system to shift from a slight expansionary phase into the one of correction, but with a limited impact up to this point because we expect credit losses to remain manageable.'

The credit rating agency noted that local banks were able to contain the damage to asset quality in the past years of recession amid weak energy prices but relatively low unemployment and inflation rates.

'Nevertheless, we believe that a consecutive contraction of economy since 2015 could impair companies' finances, while the rising unemployment could hinder the individual borrowers' ability to service their loans.'

It said, on the other hand, that it expects regulatory and governmental measures to mitigate this risk to some extent, noting that the banks are renegotiating existing loans to customers, whose finances have been crimped by the pandemic, waiving fees for some products and reducing interest rates on credit cards.

'We believe the full impact on asset quality will take time to materialize, given the regulatory and banks' measures to lessen the strain,' S& P said.

Responding to questions from the Express on the downgrade, Republic Bank Ltd's chief executive, Nigel Baptiste, said the bank expected to be downgraded once T& T's sovereign debt was lowered.

But he said he does not expect the ratings action to have an impact on the bank's future fund-raising efforts.

He also said none of the T& T bank's existing bonds have covenants that are triggered by downgrades, while disclosing that Republic Bank Ltd has issued US$225 million in bonds/fund raising.

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NGC, TGU's ratings lowered as well on the Economy Friday 3rd April, 2020 – Trinidad Express Newspaper

S& P GLOBAL RATINGS downgraded two state-owned companies, National Gas Company and electricity generator, Trinidad Generation Unlimited on March 27, the day after it lowered T& T's sovereign credit rating.

S& P lowered its rating on Government-owned NGC from BBB to BBB- and TGU from BBB- to BB+.

'The ratings on both companies continue to reflect our opinion that there's a very high likelihood that T& T would provide timely and sufficient extraordinary support in the event of financial distress, given the very important role that they play in the country's energy matrix.

'In addition, ratings on NGC and TGU incorporate their stand-alone credit profiles (SACPs) of 'bbb-' and 'bb-', respectively,' S& P said.

Both companies maintain a stable outlook.

The stable outlook on NGC and TGU mirrors that on the sovereign and our expectations that the very high likelihood of extraordinary support from the Government would remain unchanged in the next 12-24 months.

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Index Fund jumps $1.88 Friday 3rd April, 2020 – Trinidad Express Newspaper

OVERALL market activity resulted from trading in 11 securities of which four advanced, six declined and one traded firm.

Trading activity on the first tier market registered a volume of 237,695 shares crossing the floor of the Exchange valued at $6,112,246.21.

The Composite Index declined by 2.29 points (0.18 per cent) to close at 1,271.15.

The All T& T Index advanced by 0.57 points (0.03 per cent) to close at 1,708.47.

The Cross Listed Index declined by 0.71 points (0.63 per cent) to close at 112.73.

The SME Index remained at 67.69. Massy Holdings was the volume leader with 87,890 shares changing hands for a value of $3,970,878.90, followed by NCB Financial Group with a volume of 68,446 shares being traded for $496,458.02. TTNGL contributed27,043 shares with a value of $511,566.48, while JMMB Group Ltd added 25,000 shares valued at $50,000.

Calypso Macro Index Fund registered the day's largest gain, increasing $1.88 to end the day at $15.88. Conversely, First Citizens Bank registered the day's largest decline, falling $0.28 to close at $38.04.

On the mutual fund market 21,639 shares changed hands for a value of $448,184. CLICO Investment Fund was the most active security, with a volume of 18,609 shares valued at $400,053.50. CLICO Investment Fund declined by $0.17 to end at $21.50. Calypso Macro Index Fund advanced by $1.88 to end at $15.88.

The second tier market did not witness any activity. The SME market did not witness any activity.

CinemaOne remained at $5.97. Endeavour Holdings Ltd remained at $12.60. The USD equity market did not witness any activity. MPC Caribbean Clean Energy remained at $1.08.

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Republic gives US$2m for COVID-19 fight Friday 3rd April, 2020 – Trinidad Express Newspaper

Republic Financial Holdings Ltd is contributing the equivalent of US$2 million ($13.4 million), across all of the territories in which it operates, namely, Trinidad and Tobago, Grenada, Guyana, Barbados, Ghana, Suriname, Cayman Islands, St Lucia, St Vincent & the Grenadines, St Kitts & Nevis, St Maarten, Anguilla and Dominica.

The pledge of the equivalent of US$2 million across all its territories, falls under the Bank's Power to Make a Difference programme, and is being specifically targeted to address some of the key immediate requirements in the fight against COVID-19.

The funding is targeted to assist with the purchase and provision of critical needs such as ventilators, PPE equipment, testing kits, food and supplies for the health care workers as well as supporting the all-important social distancing messages.

Members of the Republic Group have already taken numerous steps to safeguard the wellbeing of their clients and staff, while ensuring the provision of essential banking services. And the group has also reached out to its clients to provide cash flow relief to those affected by the disruption brought about by the COVID-19 pandemic.

TT$5 million has been earmarked for Trinidad and Tobago. Nigel Baptiste, managing director of Republic Bank Ltd and CEO of Republic Financial Holdings Ltd remarked: 'While there is no good time for a crisis such as this, it comes at a particularly bad time for the Trinidad and Tobago economy and for the public purse.

'There is much that needs to be done and the Government can realistically only afford to finance a fraction of what is needed. We are hopeful that our contribution will not only assist in reducing the number of cases (critical or otherwise) in Trinidad and Tobago but also inspire generous contributions by others in the corporate community.'

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CAL to waive fees for ticket changes up to August 30 Friday 3rd April, 2020 – Trinidad and Tobago Newsday

Caribbean Airlines will waive cancellation and rebooking fees for tickets booked for travel from July 1 up to August 30 as these plans may upended by the covid19 pandemic.

In a release Thursday, the national airline, which has been effectively grounded since TT’s borders were closed to all international travel last month, said it will allow people the opportunity to rebook tickets without feed so long as they meet certain criteria:

• Ticket numbers must start with 106

• Tickets must be issued on or before July 15 for travel from July 1 to August 30, 2020

• New travel must be completed within one year of the original ticket.

The offer does not apply to same day travel.

Passengers may also place tickets on hold for future use and the change fee will be waived although differences in fare price may be applicable at time of re-booking.

CAL had previously announced waivers on tickets with travel dates up to June 30. This remains in place, the airline said, and refunds will be processed “in accordance with the applicable fare rules of customers’ tickets.”

Customers may make changes via the airline’s website, www.caribbean- airlines.com or contact the reservations call centre for re-bookings, however, those who used a travel agent or partner must call that agent directly.

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