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Trinidad & Tobago ‘Lacklustre' Response On Oil Spill Drawing International Attention Published: 22 February 2024

  • Mayaro MP and Opposition spokesperson on trade and industry Rushton Paray says international media outlets have been monitoring the country's response to the Tobago oil spill. In a statement, Paray said the "lacklustre response" has drawn international attention.
  • “The recent oil spill disaster in Tobago has drawn widespread attention from international media outlets, shedding light on the Rowley administration's mishandling of the crisis and subsequent lacklustre response”, said Paray.
  • He asserted that international media identified the issue as a catastrophe days before Prime Minister Dr Keith Rowley visited the island on February 11 - the incident had first been reported to the Tobago Emergency Management Agency (TEMA) on February 7.
  • Furthermore, he noted that Dr Rowley lacked concrete answers to pertinent inquiries or a clear timeline for the cleanup efforts even upon visiting the incident. He went on to say, "Numerous foreign news agencies have criticised the government's slow and inadequate reaction to the emergency, highlighting its failure to swiftly contain the spill and hold those responsible to account.”
  • Since the disaster volunteers have come forward to assist with clean-up operations following reports of the spill - the vessel, now identified as the Gulfstream, was reportedly being tugged to Guyana when it overturned. 

(Sources: Trinidad and Tobago Loop News)

 

‘Investors Need Not Worry; Guyana’s Borders Are Clearly Defined’ Published: 22 February 2024

  • Maintaining that all developments are being done within Guyana’s territory, President Dr Irfaan Ali has reassured investors that they need not worry because it is clear where Guyana’s borders are.
  • During an interview with Bloomberg on Tuesday, February 20, the President again rejected the Bolivarian Republic of Venezuela’s spurious claim over Guyana’s territory.
  • According to Dr Ali “The greatest assurance that we can offer is that Guyana is sure of its territorial integrity, we are sure of our borders and in 1899, our borders were settled. Venezuela participated in the settlement of those borders. So, there is absolutely no doubt as to where our borders are.”
  • Dr Ali further noted that the matter is currently before the International Court of Justice (ICJ) and that Guyana has fully submitted itself to international law. “We are a country that respects the rule of law. We are a country that abides by international law, and that is why we respectfully ask Venezuela to participate and be a responsible member of the international community and to respect the outcome of the ICJ.”, Ali said.
  • Dr Ali stated that the nation is partnering with many countries both regionally and internationally. He made note of CARICOM’s support for its territorial integrity along with support from Brazil, France, Canada, the UK, and most of the international community.
  • Finally, he stated that Guyana is working with Venezuela now and through CARICOM to ensure that the situation does not escalate, given that Guyana’s primary focus is to ensure that the region remains stable and peaceful. This is also reinforced by the Argyle Declaration agreed upon by Venezuela and Guyana, following a meeting between both nations’ Presidents brokered by CARICOM, CELAC, and Brazil.

(Source: Guyana Chronicle)

Fed Worried About Cutting Rates Too Soon Published: 22 February 2024

  • Policymakers at the Federal Reserve are cautious about the risks of cutting interest rates too soon, emphasizing uncertainty about the appropriate duration of current borrowing costs.
  • Participants highlight uncertainty about maintaining a restrictive monetary policy to reach the Fed's 2% inflation target. While most warn against quick easing, some note risks of an overly restrictive stance.
  • The minutes seemed to reinforce the recent message of Fed policymakers that they would be in no hurry to deliver on rate cuts, stressing the need for greater confidence in falling inflation before rate cuts can commence. Still, investors anticipate rate cuts in June.
  • The rapid easing in financial conditions during the fourth quarter, after the Fed began signaling that its rate hikes were likely over, had largely run its course by the time officials gathered at the end of January. Since then, the picture has been mixed: Treasury yields have increased by more than a quarter of a percentage point, bringing an end for the time being to a decline in consumer and corporate borrowing costs, but stocks have continued to march to record highs.
  • Given what seemed to be falling inflation on the horizon, Ryan Sweet, chief U.S. economist at Oxford Economics, said the concern of Fed policymakers about cutting rates too soon "seems odd," and suggested that risks may be tilting towards overly tight policy beginning to weigh on the economy.
  • "If the central bank waits for clear signs that the labour market, or the broader economy, is deteriorating, they will be behind the curve," Sweet wrote. "This could turn a 'soft landing' into a bumpier one."

 (Source: Reuters)

 

Japan Downgrades View Of Economy On Sluggish Consumer Spending Published: 22 February 2024

  • Japan's government downgraded its view on the economy in February, the first downgrade since November 2023. The downgrade is attributed to sluggish consumer spending, slow wage recovery, and lackluster industrial output.
  • The government also slashed its assessment of consumer spending for the first time in two years, stating that the pickup seems to be "stalling." Japan's economy unexpectedly slipped into recession in the fourth quarter of 2023, losing its position as the world's third-largest economy to Germany.
  • The nation's real wages fell for 21 straight months in December, impacting household spending due to inflation outpacing wage recovery. The government cut its view on industrial output for the first time since March 2023, citing a production stoppage at Toyota Motor's small-car unit Daihatsu over safety issues.
  • Recovery in capital spending is also "stalling" due to firms' solid capital spending plans not being realized, partly because of a labour shortage.
  • The government highlighted the need to pay "full attention" to the impact of an earthquake in Japan's Noto peninsula on New Year's Day, which killed about 240 people. Analysts believe the earthquake will have only a small short-term impact on the economy.

(Source: Reuters)

Barita Reports Decline in Q1 2023-24 Earnings Published: 21 February 2024

  • A 45.4% (or $1.09Bn) deterioration in net operating revenue saw Barita Investments Ltd. (BIL) reporting net profit of $479.32Mn (EPS: $0.40) for its first quarter of the FY 2023-24 financial year, a 55.2% contraction relative to prior year.
  • Reductions in net interest income (-33.4% or $73.6Mn), gain on investment activities (-78.0% or $1.15Bn), and foreign exchange trading losses (-$7.43Mn), all outweighed the +22.9% growth in fees and commission income resulting in the falloff in operating revenue.
  • Amidst the background of the falloff in revenues, operating expenses were well contained, falling by 35.8% (or $387.06Mn), reflecting a reduction in administration costs (39.5%) and reversals of expected credit loss (ECL) charges. However, the results were moderated by a +22.8% increase in staff costs primarily due to one-off separation expenses related to restructuring.
  • Despite the improvement in indirect costs during the period, the operating expenses margin rose by 7.86 percentage points to 52.6%, as the contraction in operating revenues (-45.4%) outpaced the improvement in operating expenses (-35.8%).
  • Barita attributed the decline in earnings to the ongoing impact of higher central bank interest rates, which led to tight money market liquidity and increased market volatility. The company anticipates that a turnaround in the monetary policy environment beginning in 2024 into 2025 will result in more positive tailwinds for its performance over the next couple of quarters.
  • BIL’s stock price fell by 24.2% in 2023 and has declined a further 3.6% since the start of the year, closing Tuesday’s trading session at $71.40. At this price, the stock currently trades at a P/E of 30.25x earnings, which is above the Main Market Financial Sector Average of 12.03x.

 (Sources: Company Financials and NCBCM Research)

 

Gov’t to Invite Bids for Another 168 Megawatts of Renewable Energy Published: 21 February 2024

  • Another request for a proposal for a further 168 megawatts of renewable energy will be launched in the new fiscal year, which begins on April 1. This is in addition to the supply of up to 100 megawatts of electricity generation, for which the Generation Procurement Entity invited tenders last September.
  • The disclosure was made by Governor-General, His Excellency the Most Hon. Sir Patrick Allen, as he delivered the Throne Speech to open the 2024/25 Parliamentary Year in Gordon House on Thursday (February 15).
  • The Governor-General said the Government continues to develop policies that will contribute to reducing Jamaica’s energy intensity and carbon footprint while advancing the adoption of new technologies.
  • The policy and guidelines for energy efficiency and conservation in public facilities, particularly for schools and hospitals, and the electric vehicle policy were tabled in Parliament in June 2023.
  • Efforts to diversify energy sources for public passenger vehicles for the Jamaica Urban Transit Company (JUTC) received a major boost with the acquisition of five battery electric buses, as well as 20 compressed natural gas (CNG)-fueled buses.
  • Jamaica’s target for the share of renewable energy in the total grid-connected capacity mix is 50% by 2030.  The current installed capacity reaches 1,041MW, of which 83% is thermal, primarily natural gas, and the remainder is renewables (wind, hydro, and solar).

(Source: JIS)

St. Kitts and Nevis Tourism Is On Its Way to Pre-COVID Numbers Published: 21 February 2024

  • Under the leadership of the Honourable Dr. Terrance Drew-led administration, St. Kitts and Nevis has made significant advancements in the tourism sector during the 2023-2024 season.
  • Permanent Secretary in the Ministry of Tourism, Tivanna Wharton said that substantial progress has been achieved, with notable developments and initiatives implemented to bolster the tourism industry of the nation.
  • During the radio and television show ‘InFocus’ on February 14, 2024, Ms. Wharton stated that last year, the stayover visitors were approximately 133,000, noting that “this again suggests that we are well on the way to pre-COVID numbers, which is our benchmark at this time.” She continued that this success is a reflection of the work that is being done under the current administration.
  • Further, Senior Minister and Minister of Economic Development and Investment, the Right Honourable Dr Denzil Douglas, during the Prime Minister's Press Conference at the NEMA Conference Room on February 13, announced the expansion of the nation’s tourism and hospitality sector through a major investment by Troy Property Investment Limited.
  • Highlighting the government’s ongoing efforts to attract new investments and expand the economy, the minister underscored the recent groundbreaking for the newest addition to the country’s hospitality sector, Hotel Indigo. This development, Dr Douglas said, is set to take a step further with Troy Property Investment Limited’s plans to enhance the hotel’s offerings.
  • The government of St. Kitts and Nevis remains dedicated to fostering a conducive environment for investment and development, ensuring that the twin-island nation continues to thrive as a premier destination in the Caribbean for both tourists and investors alike.

(Source: SKN Vibes)

Mexican Headline Inflation Seen Slowing in Early February Published: 21 February 2024

  • Mexico's headline inflation rate likely eased in the first half of February, a Reuters poll showed on Monday, reinforcing bets that the country's central bank could soon lower its key benchmark interest rate for the first time since 2021.
  • A median forecast of 13 analysts predicted that the annual headline inflation rate would settle at 4.70% for the first 15 days of the month, which would mark the continuation of a downward trend that was briefly interrupted at the end of last year.
  • The expected rate of rising consumer prices; however, still hovers above the central bank's target of 3%, plus or minus 1 percentage point. The closely watched core inflation index, which strips out volatile energy and food prices, is seen falling to 4.67% in early February, its lowest level since July 2021.
  • The Bank of Mexico's five-member board held the benchmark interest rate at 11.25% for a seventh straight time in the last meeting, while hinting a rate cut could be considered during upcoming meetings.
  • The central bank, known as Banxico, began a rate hiking cycle in June 2021, but it has held the key borrowing rate at its current record-high level since last March.

(Source: Reuters)

Canada's Inflation Rate Slows, Bolstering Bets On Early Rate Cut Published: 21 February 2024

  • Canada's annual inflation rate slowed significantly more than expected to 2.9% in January, and core price measures also eased, data showed on Tuesday, bringing forward bets for an early interest rate cut. Analysts polled by Reuters had forecast inflation to tick down to 3.3% from 3.4% in December.
  • It was the first time in seven months that headline inflation has dipped below 3%. This prompted money markets to hike bets for a rate cut in April to as much as a 58% chance from a 33% chance before the figures were published. The Bank of Canada's next policy announcement is March 6, and expectations are that rates will stay on hold at a 22-year high of 5%.
  • Month-over-month, the consumer price index was unchanged, compared with a forecast of a 0.4% rise, Statistics Canada said. The Bank of Canada targets inflation at 2%. Two of its three core measures of underlying inflation also edged down. CPI-median slowed to 3.3%, the lowest since November 2021, while CPI-trim decreased to 3.4%, the lowest since August 2021.
  • The three-month annualized rate of the combined figures decelerated to 3.2% in January from 3.6% in the prior month. The BoC said last month its thinking had shifted to how long rates must stay at the current level. At the same time, it did not completely rule out another rate hike, citing persistence in underlying inflation.
  • "The key takeaway here is that Bank of Canada can seriously consider cutting rates," Doug Porter, chief economist at BMO Capital Markets, said. The BoC projects headline inflation will remain around 3% in the first half of 2024, before cooling down to 2.5% by end-year.
  • The central bank said last month that while interest rates had helped to bring down overall inflation, which touched a peak of 8.1% in June 2022, similar to the U.S., categories like shelter costs have fed underlying pressures. Shelter price inflation accelerated to 6.2% in January from 6% in December. Rental inflation continued to show upward momentum and accelerated to 7.9% in January from 7.7% in December.
  • "The Bank of Canada will likely remain cautious in the face of still-strong wage gains, firm services prices, and the reality that core inflation is still holding above 3%," said Porter from BMO.

(Source: Reuters)

Barclays Maps Uncertain Route to A Simpler, Stronger Future Published: 21 February 2024

  • Barclays, unveiling its biggest revamp since 2016, sought to appease investors seeking a clearer route to less volatile returns. However, investors said the British lender's plan to dedicate fewer financial resources to its investment bank is at odds with ambitions to expand in some of the unit's higher-risk businesses.
  • Barclays has historically devoted much of its capital to investment banking, roiling more conservative shareholders who say other businesses posting more reliable profits have been under-invested as a result.
  • The bank will continue to allocate the lion's share of its firepower to investment banking, and while a bigger push into domestic lending is broadly welcomed, some analysts and investors are unconvinced the bank can grow market share enough to meet its lofty revenue goals, against strong competition and a skittish UK economy.
  • Barclays' long-awaited strategic update presented on Tuesday will have the bank return at least 10Bn pounds ($12.66Bn) to investors and reorganize into five units from the current three business lines, a move it said would create a simpler and better-balanced bank. This so-called "re-segmentation" aims to give investors greater transparency of performance in each division, unlike the previous structure, which reported corporate lending and investment banking revenues together, the bank said.
  • In a key part of the overhaul, Barclays will reduce the share of risk-weighted assets (RWA) devoted to its investment bank to around 50% by 2026 from about 63%. In turn, the bank plans to deploy around 30Bn pounds more to its UK consumer, corporate lending, and private banking arms that generate higher returns.
  • By reallocating its capital, Barclays says revenue will grow to around 30Bn pounds by 2026 from 25.4Bn pounds in 2023.
  • The average returns on tangible equity (RoTE) in the businesses the bank has pledged to invest in ranged from 18% to 31% in the two years to end-2023, compared with a more modest 10% at the investment bank, company figures show.

(Source: Reuters)