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Barbados IMF Plan on Track Published: 10 September 2019

  • Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program, says a team from the International Monetary Fund (IMF) at the conclusion of a four-day visit on September 5th.
  • The target for the Government’s primary surplus was met with a wide margin, with the Government running a primary surplus of 2.5% of (annual) of GDP in the first quarter of the financial year (FY) 2019/20. This bodes well for achieving the Government’s primary surplus target of 6.0% of GDP for FY2019/20. International reserves were also well over program targets at end of the review period.
  • Overall, good progress has been made in implementing the end of June and July 2019 structural benchmarks under the Extended Fund Facility Agreement (EFF).

(Source: NationNews)

Scrapping limits Published: 10 September 2019

  • China removed limits for overseas investment in the country’s stocks and bonds, the latest push by authorities to attract more foreign capital.
  • With almost two-thirds of the current $300 billion allowance on non-Chinese asset purchases untapped, the move may be more about signaling than meeting current demand.
  • Data released overnight showed the country’s economy remains under pressure, with factory deflation deepening while consumer prices quicken more than expected. In perhaps another sign of how the trade war is hurting China, a state-run paper took aim at Trump adviser Peter Navarro for his hawkish stance on the issue.

(Source: Bloomberg)

Now what? Published: 10 September 2019

  • After failing to get enough votes to call an election, but succeeding in getting Parliament closed until Oct. 14, British Prime Minister Boris Johnson promised to work to make a new deal with the European Union at the Oct. 17 summit in Brussels.
  • Despite all the shenanigans in Westminster, data this morning showed that the U.K. economy continues to motor on, with the jobless rate returning to 3.8% while basic pay rose 3.8% in the three months through July.

(Source: Bloomberg)

Jamaica Broilers Group Profit Dips Published: 06 September 2019

  • For the three-month period ended July 2019, Jamaica Broilers Group reported a 12.7% fall-off in net profit. Net profit ended the quarter at $361.01Mn (EPS: 35.81¢) down from $413.38Mn (EPS: 38.58¢) reported for the corresponding period in the prior year.
  • The contributing factors to the decline in profit were a decline of $263.60Mn (or 87.8%) in finance income; a 60.3% (or $116.18Mn) decline in other income; and a 2.1% (or $9.20Mn) increase in distribution costs.
  • The stock has risen 14.7% since the start of the calendar year, closing yesterday’s trading session at $33.39. The stock currently trades at a P/E of 14.69x which is below the Main Market Distribution & Manufacturing average of 20.12x.

(Source: JBG Financials)

Consumption Drives Accelerating Growth In Guatemala Published: 06 September 2019

  • It is expected that the Guatemalan economy will increasingly be driven by its consumer-oriented service sectors, as growth slows in primary sectors.
  • The forecast is that growth will accelerate to 3.3% in 2019 and 3.5% in 2020, supported by consumption and expansionary fiscal policy.
  • Risks are skewed to the downside, given the growing risks of a global recession and a fractious political environment.

(Source: Fitch)

Dominican Republic Will See Lower Interest Rates With Below-Target Inflation Published: 06 September 2019

  • The Banco Central de la República Dominicana (BCRD) will continue its rate-cutting cycle through end-2019 given below-target inflation in the Dominican Republic and increasing headwinds to global growth.
  • A more accommodative monetary policy stance by the US Federal Reserve and low global energy prices will allow the BCRD to keep rates low in the coming quarters.
  • Fitch revised its end-2019 and end-2020 interest rate forecasts to 4.25% and 4.50%, from 5.00% and 5.25% previously, to incorporate the expectation that the BCRD will look to support economic activity amid slowing global growth.

(Source: Fitch)

Powell Published: 06 September 2019

  • With less than two weeks to go to another hotly anticipated Federal Reserve meeting, today’s speech by Chairman Jerome Powell at 12:30 p.m. will be monitored closely by investors looking for any update on his thinking for the next policy move.
  • While an interest rate cut is expected at the Sept. 17-18 gathering, policymakers remain split on the need for how much, if any, easing is needed.
  • Powell’s speech will be the last scheduled public comments by an FOMC member ahead of that decision.

(Source: Bloomberg)

China Ratchets Up Stimulus, Cutting Reserve Ratio to Lowest Level Since 2007 Published: 06 September 2019

  • One central bank that’s not waiting around to ease policy is the People’s Bank of China, which this morning cut its reserve ratio by 0.5%.
  • The move had been flagged earlier this week when the government called for “timely” use of tools including broad and targeted reserve-ratio cuts to support the economy.
  • With some banks getting an extra 1% reduction, the decision will release 900 billion yuan ($126 billion) in liquidity, according to the monetary authority. 

(Source: Bloomberg)

Tourism Minister Announces New Flights from South America and Russia Published: 05 September 2019

  • Tourism Minister, Hon. Edmund Bartlett has announced new flights out of South America and Russia to Jamaica.
  • Speaking at a press conference to provide updates on industry developments, at the Ministry’s New Kingston offices on Tuesday, Mr. Bartlett said those and further expansion in the island’s hotel room stock by more than 1,000 over the next three months, are projected to result in an average 8% - 9% growth in stopover visitor arrivals.
  • He added that this should also result in a 10.2% growth in overall revenue generated by tourism for the 2019 calendar year.
  • Meanwhile, Mr. Bartlett said rooms being brought back on stream include 790 at Riu Ocho Rios, which reopens this month, while among the new inventory are 500 by the H10 Hotel Group, which will commence operations in November.
  • Regarding the airlift arrangements, Mr. Bartlett said come December 2, LATAM Airlines will commence service between Lima, Peru and Montego Bay, with three flights per week.

(Source: JIS)

NRG Energy Inc. Outlook Revised to Positive On Accelerated Debt Pay-downs and Strong Retail Performance; Ratings Affirmed Published: 05 September 2019

  • NRG Energy Inc.'s business transformation plan has resulted in the sale of several assets that, while reducing scale, have contributed to significantly better financial metrics as debt retirement has been accelerated.
  • S&P is revising the outlook on NRG Energy to positive from stable, as well as is affirming their 'BB' issue rating on the company and all issue-level ratings on its debt.
  • The positive outlook reflects S&P’s expectation that the company's integrated wholesale and retail power strategy, cost-cutting initiatives, and optimization of assets will drop adjusted debt to EBITDA below 3.0x by year-end 2019 (S&P’s ratios are weaker than the company's calculations due to imputed debt adjustments, as well assumptions of lower power prices).
  • The rating is expected to rise by a notch over the next one to two quarters on continued execution of the company's transformation plan and if it meets S&P’s expectation of summer 2019 performance.

 (Source: S&P Global)