• Following Israel’s massive strikes on Iran’s nuclear facilities and top commanders and nuclear scientists in the early hours of June 13, 2025, Fitch Solutions believes that the conflict could escalate in the near term. Israel is likely to conduct further strikes over the coming days, and Iran will seek to respond forcefully.
• Notably, Tehran’s (Tehra - Capital of Iran) retaliation is expected to be more forceful than what was previously witnessed in the tit-for-tat strikes with Israel on two occasions in 2024, but the full extent of the response will depend on the regime’s appetite to escalate as well as its ability to do so.
• The deaths of the armed forces chief of staff and commander of the Islamic Revolutionary Guard Corps could complicate Iran’s response. As such, Fitch sees the middle scenario in the infographic as the most likely scenario.
• Iran will also need to decide whether to strike at United States (U.S.) interests, most notably bases, in the Middle East. Although the U.S. is not directly involved in Israel’s attacks, Tehran could still hold Washington responsible. That said, Iran is expected to refrain from attacking U.S. military assets in the region because the Trump administration would likely respond very aggressively, focusing on strategic military and nuclear targets in Iran, working alongside Israel. This could lead to a full-scale war that could weaken the regime.
• If the conflict escalates significantly, Iran could also attempt to close the Strait of Hormuz, through which about 20-30% of all oil and LNG exports pass. However, the U.S. would step up its intervention against Iran, despite Trump’s aversion to becoming dragged into another protracted conflict in the Middle East.

(Source: Fitch Connect)

• Seprod Ltd. (Seprod) announced that its takeover bid for AS Bryden & Sons Holdings (ASBH) Ltd was oversubscribed, as shareholders tendered approximately 465.48Mn shares, surpassing the 447.49Mn the company initially sought to acquire.
• The ordinary shares of ASBH that have been tendered are subject to verification by Republic Wealth Management Limited (RWML)
• Given the oversubscription, Seprod will accept the shares on a pro-rata basis of approximately 96.1%. Seprod currently owns 50.1% of ASBH and will own 80.0% of ASBH’s outstanding shares following the acceptance.
• The stock prices of Seprod and ASBH have declined by 12.2% and 13.4% since the start of the year, respectively, closing at $76.56 and $26.00 on June 12, 2025. Both stocks currently trade above the Main Market Distribution & Manufacturing sector average P/E of 15.5x, with P/E ratios of 25.4x and 28.5x, respectively.

(Sources: Seprod & NCBCM Research)

• Jamaica and Barbados are no longer considered high-risk jurisdictions for money laundering and terrorist financing by the European Union, following a significant update to the EU’s official list of countries requiring enhanced financial scrutiny.
• The European Commission confirmed that both Caribbean nations, along with Gibraltar, Panama, the Philippines, Senegal, Uganda, and the United Arab Emirates, have been delisted after demonstrating substantial progress in strengthening their anti-money laundering and counter-terrorism financing (AML/CFT) frameworks. The Commission concludes that these countries have addressed the strategic deficiencies identified in their AML/CFT regimes. Therefore, the Commission deemed it appropriate to remove the listed countries.
• The list is part of the EU’s broader effort to safeguard its financial system. Under the EU Anti-Money Laundering Directive, entities operating within the bloc are required to exercise increased vigilance when dealing with countries on the high-risk list. The removal of Jamaica and Barbados is expected to reduce friction in financial transactions between these countries and EU-based institutions.
• The Commission’s decision follows a “thorough technical assessment” that considered criteria set by the Financial Action Task Force (FATF), the global watchdog on money laundering. The review included bilateral discussions, on-site visits, and analysis of reforms implemented by the delisted countries.
• According to the Commission, both Jamaica and Barbados met the requirements laid out in action plans previously agreed upon with the FATF. No other Caribbean nation was delisted.

(Source: Caribbean National Weekly)

• After a series of shocks over the past five years, the global economy seemed to have stabilised, at steady but underwhelming rates, as compared with recent experience, according to the International Monetary Fund (IMF). However, the landscape has now changed, with major policy shifts signalling a reset of the global macroeconomic environment.
• In early April, the U.S. effective tariff rate jumped to levels not seen in a century. However, while trade talks continue and there’s been a scaling back of some tariffs, trade policy uncertainty remains off the charts.
• In the IMF’s latest World Economic Outlook, the agency projected tepid growth in the Caribbean region overall, even before accounting for the U.S. trade policy announcements. Stronger performance in some countries, such as Jamaica and Trinidad and Tobago, was offset by slower growth in others. Furthermore, in several countries, crime continues to weigh on growth prospects. Particularly in Haiti, where the security situation hampers efforts to sustain economic activity, implement reforms, and attract aid and foreign direct investment.
• On top of that, the IMF now estimates that the April tariff announcement and its global spillovers would lower Caribbean regional growth by at least 0.2 percentage points on average. But the impact varies across countries.
• In tourism-dependent economies, where growth is closely tied to U.S. economic activity, the impact will mainly depend on the size of the U.S. tourist base. While in oil-exporting countries, lower commodity prices and higher volatility are the main channels of transmission. Lower global growth means lower demand for these commodities, which adversely impacts the economies of commodity-exporting countries.
• Slower growth, while a relatively recent phenomenon from a global perspective, is, unfortunately, not new to the Caribbean. Declining growth trends in the Caribbean region have loomed over the longer horizon, according to the IMF. This presents the Caribbean with an aggravated challenge, to reverse the trend of slower growth at a time when global growth is also declining. Notwithstanding, there are exceptions to the regional trend. In particular, Guyana’s economy has grown rapidly over the past two decades, progressing from low-middle-income to high-income status. Growth accelerated to over 45% on average in the past three years, making Guyana the fastest-growing economy in the world.
• Addressing the Caribbean growth challenge requires systematic and comprehensive policies to strategically improve the factors that contribute to growth potential. The Caribbean’s productivity growth has declined to almost zero and is seen as the root of the Caribbean’s growth challenge. In addition to productivity growth, physical and human capital development need to be accelerated, which, according to the IMF, will require as much effort as the effort put into the macro stability reforms successfully undertaken in Jamaica, Barbados and Suriname.

(Source: IMF)

• The Caribbean Development Bank (CDB), on June 10, 2025, signed a memorandum of understanding (MoU) with the Development Bank of Latin America and the Caribbean (CAF) aimed at boosting cooperation in key sectors that are essential to accelerating sustainable development for the Caribbean region.
• The MoU underscores the two institutions' shared commitment to sustainable growth, resilience, and inclusive development across Caribbean Community (CARICOM) countries. The agreement sets the stage for deeper collaboration in areas critical to Caribbean well-being, including food, water and energy security, resilient infrastructure, climate action, private sector development, and digitalisation. It also enables the banks to explore joint operations, parallel and co-financing, technical assistance, and knowledge sharing.
• With this agreement, both institutions can leverage their comparative strengths to respond more quickly and flexibly to regional development needs. This partnership will directly support national and regional priorities, as well as the United Nations Sustainable Development Goals (SDGs).
• The joint agenda also includes mechanisms for institutional strengthening, staff exchanges, post-disaster recovery support, and customised financing instruments for micro, small, and medium enterprises.

(Source: Trinidad Express Newspaper)

• The number of Americans filing new applications for unemployment benefits held at an eight-month high last week, consistent with easing labour market conditions, while slowing domestic demand helped to restrain producer prices in May.
• In the absence of economic uncertainty caused by President Donald Trump's aggressive tariffs on imported goods, the softening labour market conditions and benign producer inflation reported by the Labour Department on Thursday would support a move by the Federal Reserve to resume its interest rate cuts soon. The data was released a day after the Labour Department reported a moderate rise in consumer prices in May.
• A report from the Labour Department's Bureau of Labour Statistics showed the producer price index for final demand rose 0.1% in May after a revised 0.2% decline in April. Economists had forecast the PPI would rise 0.2% after a previously reported 0.5% drop in April. In the 12 months through May, the PPI advanced 2.6% after rising 2.5% in April.
• "There are some disinflationary forces, including a softening labor market," said Ryan Sweet, chief U.S. economist at Oxford Economics. "But the Fed needs to carefully monitor whether businesses opt to lay off workers to cut costs because they're eating more of the tariffs than anticipated.
• That said, despite the tamer inflation readings, economists expected inflation pressures to start building up from June through the second half of the year as businesses pass on import duties to consumers. Surveys, including from the U.S. central bank, have suggested higher prices are coming.
• The Fed is expected to leave its benchmark overnight interest rate in the 4.25%-4.50% range at the end of its two-day policy meeting next Wednesday. "But it won't be the tariffs in place now that prevent the Fed from cutting rates next week," said Chris Low, chief economist at FHN Financial. "It is the chance trade talks might collapse and tariffs might jump in coming months, causing a supply shock that has the Fed sidelined.

(Source: Reuters)

• Britain's economy slowed sharply in April, reflecting shockwaves from U.S. President Donald Trump's announcement of wide-ranging tariffs and a one-off hit from the end of a tax break on property sales, official data showed on Thursday.
• Gross domestic output shrank by a larger-than-expected 0.3% in April from March - the biggest monthly drop since October 2023 and more than the 0.1% fall forecast in a Reuters poll, following 0.2% growth in March.
• Finance minister Rachel Reeves said the GDP numbers were "clearly disappointing". Britain's economy has grown slowly since the COVID-19 pandemic, and the fall in monthly GDP was led by a 0.4% contraction in output from the dominant services sector.
• A big factor in this was a slump in real estate and legal activity in April after the end of a temporary tax break on house purchases, which contributed 0.2 percentage points of the overall 0.3 percentage point fall in output in April. Car makers also reported lower output and exports to both the United States and the European Union.
• Britain's economy had expanded by 0.7% in the first quarter of 2025, outstripping growth in other countries in the Group of Seven advanced economies and prompting the Bank of England to revise up its full-year growth forecast to 1% last month. However, the BoE revised down its growth forecast for 2026 to 1.25% and said it expected the tariffs to knock 0.3% off British output in three years' time.
• BoE policymakers are expected to keep interest rates unchanged next week as they are faced with competing forces of stubborn inflation and a relatively sluggish economy, but most economists polled by Reuters expect two more rate cuts this year.

(Source: Reuters)

• Amid heightened costs combined with subdued topline growth, Fosrich Limited (Fosrich) recorded a net loss of $68.60Mn for its first quarter ended March 31, 2025n (Q1 2025), representing a reversal from the 32.99Mn profits in Q1 2024.
• Q1 2025 revenues declined by of 0.8% to $852.91Mn, compared to $859.83Mn in Q1 2024. Despite higher sales volumes, revenue was pressured by a sharp decline in global prices for PVC and solar panels; cost reductions that the company strategically passed on to customers to maintain competitiveness. However, the company could experience a turnaround, as management noted that it has not yet begun to benefit from the recent interest rate reductions. These reductions could potentially boost demand for Fosrich’s products, driven by increased construction activity.
• Cost of sales increased by 16.7%, primarily attributable to ongoing disruptions in the shipping industry, particularly those linked to operational challenges at the Panama Canal. These issues led to substantial delays in the transportation of both finished goods and raw materials, leading to higher logistical and operational costs. In light of higher direct costs and lower revenues, gross margins fell to 35.8%, down from 45.3% in Q1 2024.
• In terms of operating costs, administrative expenses for the quarter amounted to $337.37Mn, reflecting an 11.8% year-on-year (y-o-y) increase. The increase was primarily driven by higher staff-related expenses resulting from expanded staffing levels, increased travel and vehicle costs, elevated insurance premiums due to higher renewal rates and increased risk exposure, higher security expenses stemming from additional locations, and increased depreciation charges associated with new fixed assets. Consequently, the company recorded an operating loss of $24.37Mn, down from an operating profit of $93.19Mn in Q1 2024.
• Due to prevailing uncertainties surrounding the macroeconomic outlook, namely, increased tariffs, stricter immigration rules, and reduced government aid, FosRich has announced a temporary pause on its plans to expand into the United States (U.S.) market. The company is expected to monitor the global climate and resume its U.S. expansion efforts when conditions become more favourable.
• Despite this setback, FosRich remains committed to pursuing growth opportunities within its existing markets. The FosRich Superstore and Corporate Offices are on track for completion in Q3 2025. This development is expected to enhance the company's operational capacity and generate additional revenue through lease income. Furthermore, any potential reductions in interest rates could positively influence FosRich by stimulating housing starts, which may, in turn, increase demand for its products and services.
• Notwithstanding its earnings performance, Fosrich’s stock price has increased by 10.7% year-to-date, closing at $2.59 on June 11, 2025. At this price, the stock trades at a price-to-book (P/B) ratio of 6.8x, which is higher than the Junior Market Distribution Sector’s average of 3.8x.

(Sources: FosRich Financial & NCBCM Research)

• Kingston Wharves Limited (KW) has made the first payment on its planned multi-level car park, pushing ahead with infrastructure upgrades as vehicle transshipment volumes continue to climb.
• The new facility, which has been in the works for some time, comes on the back of record volumes in the company’s automotive segment, with more than 170,000 vehicles handled last year, a figure that’s expected to grow as Kingston Wharves opens new lanes, including incoming shipments from India.
• The three-storey car park, which will come in at a price tag of US$15Mn, is just one piece of a broader investment programme now reshaping Kingston Wharves’ operations. The company recently wrapped up a US$30Mn redevelopment of Berth 7, which expanded the port’s capacity by 25% to handle one million TEUs^[1] in container operations and brought a new warehouse online near the Tinson Pen corridor, an area now being eyed by the government for future logistics development.
• At the same time, Kingston Wharves is preparing for what it calls its “next phase,” which includes acquiring businesses across the Caribbean and Central America to grow its logistics footprint and diversify revenue beyond shipping.
• While Kingston remains at its core, the company is exploring additional warehousing options along the north coast and is continuing to roll out new digital tools to improve tracking, automation, and customer experience.
• KWL’s stock price has decreased by 21.0% year-to-date, closing at $26.00 on June 11, 2025. At this price, the stock trades at a price-to-book (P/E) ratio of 13.8x, which is below the Main Market Energy, Industrials and Materials Sector’s average of 18.3x.

(Sources: Loop News and NCBCM Research)

^[1] In shipping, a TEU (Twenty-foot Equivalent Unit) measures container capacity. By increasing TEU capacity, a company like Kingston Wharves can handle more cargo, attract more shipping lines, and boost trade activity through expanded terminal and logistics infrastructure.

• Trade and economic development ministers from the 15-member Caribbean Community (Caricom) began a two-day meeting in Trinidad and Tobago against the background of many trade-related challenges facing the region, and in a geopolitical environment which is changing rapidly.
• Caricom Secretary General Dr Carla Barnett, addressing the 60th meeting of the Council of Trade and Economic Development (COTED), said the recent tariff shocks are a stark reminder of the need to diversify the region's trade and economic relations.
• 'We must redouble our efforts to deepen existing and explore new markets and develop new partnerships, if the region is to advance its goals of economic growth and sustainable development,' she said.
• U.S. President Donald Trump has implemented a series of trade tariffs on countries worldwide, including the Caribbean, in a move economists and other traders say is designed to dismantle much of the architecture of the global economy and trigger broader trade wars. In the case of the Caribbean, Trump announced a 10% tariff on most regional countries, while in the case of Guyana, the tariff is as high as 38%.
• Barnett told the conference that, as such, focused attention must be placed on work to address the way forward in trade relations with the United States, the bilateral negotiations with Colombia, and the outstanding Certification of the Belize-El Salvador Partial Scope Agreement. 'Equally, we need to promote regional production and expand intraregional trade by updating policies and practices to support entrepreneurship and make trade and business development easier. We also have an imperative to address the impediments to trade and remove long-standing issues of 'non-compliance' from the agenda.'

(Source: Trinidad Express Newspaper)