• The March quarter earnings season is still underway, and today the spotlight is on real estate stocks, which have produced mixed earnings thus far.
• Relative to the March 2025 quarter, 138 Student Living (138SL) achieved a 56.8% surge in quarterly earnings to $120.74Mn, owing to higher revenues and lower expenses. Buoyed by improved rental rates and maintenance of a 98% average student occupancy rate, total revenues increased by 6.8% to $410.01Mn. Administrative expenses also decreased by 1.6% to $218.18Mn amid enhanced operational discipline, effective cost management, and general efficiency measures across its student housing properties. Consequently, its operating margins improved from 42.2% to 46.8%. A 9.5% decline in finance costs to $67.26Mn and a 64.8% decline in taxation to $3.83Mn also contributed to the stronger profits. Notwithstanding strong earnings, a bulk of current assets is still tied up in a growing $711.80Mn receivables balance, as it remains in talks with The University of the West Indies to resolve its variation claim¹. Talks are at an advanced stage, according to management. 138SL closed at $3.08 on May 20^th, down 2.61% YTD and trades at a P/E of 5.13x below the Main Market Real Estate Average of 6.5x.
• Meanwhile, Sagicor Real Estate X Fund (XFUND) Limited recorded a 2.7% decline in earnings to $391.47Mn, reflecting lower revenues of $2.37Bn (-3.0%), despite notable growth within the group's core hospitality segments. Segment revenues from direct hotel and commercial operations improved by 2.3% to reach $2.30Bn. However, this was countered by a $28.98Mn capital loss, which is a $96.74Mn reversal from March 2025. Total operating expenses were tightly controlled during the quarter (down 4.9% to $1.80Bn), demonstrating improved cost efficiency across the board. This enhanced cost management, alongside resilient core performance, allowed the group to mitigate the falloff in its earnings under challenging operating conditions, including high interest rates, depressed asset valuations and Hurricane Melissa’s fallout. XFUND closed trading at $9.90 yesterday and is up 23.8% YTD and trades at a P/E of 22.5x, far exceeding the Main Market Real Estate Average.
• Lastly, as we’ve previously reported on May 15^th, Kingston Properties Limited (KPREIT) reported a decline 34.2% in earnings to US$658,957, largely due to the absence of fair value and property disposal gains. This was despite rental income rose 31.7% to US$1.82Mn, driven by portfolio expansion, particularly in the UK (+165%), and stable contributions from Jamaica and the Cayman Islands. Management fees also increased by 26.7%. KPREIT closed at $10.62, is up 13.0% YTD and trades at a P/E of 15.45x.
• Stanley Motta (SML) and Eppley CPFV have yet to release their March Earnings.

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¹According to the company website, the claim refers to compensation demand by 138SL against the campus administration arising from differences in the original 2015 accommodation concession agreement between the parties and the final, “as-built” configuration of Irvine Hall, which changed from intended double rooms to largely single rooms. The claim, which was initiated around 2019-2020, has been subject to long-term negotiations between the two parties.

(Sources: Company Filings via JSE & NCBCM Research)

• Following its meetings on 19 and 20 May 2026, the Bank of Jamaica's (BOJ's) Monetary Policy Committee (MPC) unanimously decided to maintain the policy rate at 5.50%. The decision was framed against a backdrop of heightened global uncertainty stemming from the deepening conflict in the Middle East, which has driven further increases in key international commodity prices, particularly crude oil.
• The MPC assessed that maintaining the current stance remains appropriate to limit second-round price increases resulting from higher international commodity prices. Annual headline inflation stood at 4.3% at April 2026, in line with March 2026 but above the Bank's projection, while core inflation rose to 4.1% (Mar-26: 4.0%). Prospectively, headline inflation is forecast to trend upward over the June 2026 and September 2026 quarters and breach the 4.0%–6.0% target range, with the extent of the breach contingent on the severity and duration of the conflict.
• Since the Bank's March 2026 assessment, the Middle East conflict has deepened, with more extensive damage to critical oil infrastructure and supply chain disruptions, leaving international fuel prices projected to remain elevated. This is expected to place upward pressure on electricity costs in Jamaica, while domestic gas prices have already risen and may accelerate further, feeding into transport-related inflation and broader second-round price increases across goods and services.
• Nonetheless, headline inflation is forecast to gradually return to the Bank's target range as global oil supplies return to normal levels. However, this is expected to be partly offset by domestic demand pressures, stemming primarily from fiscal spending to support post-Hurricane Melissa rebuilding efforts.
• Even so, inflation risks are skewed to the upside, driven by the potential for a broader Middle East conflict, El Niño-related pressure on agricultural prices, and stronger-than-anticipated post-hurricane recovery spending. Inflation expectations have already begun shifting, with the April 2026 business survey showing 12-month-ahead expectations rising to 7.1% from 6.5%. Weaker consumer purchasing power provides a partial offset on the downside.
• The BOJ also continues to monitor key indicators and stability metrics. Private sector credit growth moderated to 6.5% in the March 2026 quarter (Dec-25: 7.8%), reflecting a slowdown in lending to both businesses (+5.1% vs. +7.5%) and individuals (+7.5% vs. +8.3%). The domestic banking system remains sound with adequate capital and liquidity.
• Real GDP growth for FY2026/27 is projected between 1.0%–3.0%, with risks skewed to the downside reflecting the potential adverse effects of the Middle East conflict on services industries, alongside the drag from higher imported input costs. The negative impact of the conflict on the external accounts is also expected to be significant, though the Bank's strong foreign reserves continue to provide an important buffer, supporting the orderly functioning of the FX market and helping to contain imported inflation.
• Overall, the MPC signalled a cautious but vigilant approach, emphasising its readiness to adjust the monetary policy stance if the Middle East conflict is protracted and results in sustained price increases. The next policy decision announcement is scheduled for 29 June 2026.

(Sources: Bank of Jamaica & NCBCM Research)

• The probability of a super El Niño event in 2026-2027 is rising, with mounting implications for Latin America and the Caribbean. The National Oceanic and Atmospheric Administration’s (NOAA’s) Climate Prediction Centre issued an El Niño Watch in April, placing a 61% probability on emergence in the May-July window. Furthermore, models are increasingly pointing toward peak sea surface temperature anomalies that would push the event into ‘super’ territory, a threshold passed only five times since 1950.
• El Niño and La Niña are the warm and cool phases of a natural climate pattern across the Tropical Pacific known as El Niño-Southern Oscillation (ENSO). The two different phases represent variations in ocean surface temperatures in the central and eastern tropical Pacific Ocean, affecting wind and rainfall patterns.
• For Latin America, El Niño does not affect the region uniformly. The dominant pattern causes droughts across Central America, the northern Andes, the Brazilian Amazon and the Pantanal, while pushing excess rainfall into the southern cone – southern Brazil, Uruguay, Paraguay and north-eastern Argentina.
• For the Caribbean¹, El Niño’s effects are usually secondary compared with LATAM, but they are still significant. The phenomenon often brings hotter temperatures and below-average rainfall, increasing the risk of drought, water shortages and bushfires. Countries, like Jamaica, that depend heavily on rain-fed agriculture can face reduced crop yields and stress on livestock, while low reservoir levels can affect water supply. At the same time, warmer and drier conditions can damage coral reefs through coral bleaching, affecting fisheries and tourism.
• The overarching result is a phenomenon that simultaneously tightens agricultural output, strains hydropower capacity and elevates inflationary pressures. One of the primary transmission channels is through external accounts, given the continued importance of agriculture for exports across much of the region despite modest diversification. This comes at a point when external balances for some countries across the region are already weakening into 2026, leaving less room to absorb a weather-driven export shock.
• A second transmission channel runs through energy, particularly in those countries (e.g. Costa Rica, Colombia) whose electricity generation comes from hydropower. While recent rainfall has supported reservoir levels, these gains could reverse if El Niño emerges, raising energy costs and external pressures.
• Finally, food supply disruptions have an outsized impact on inflation due to the large weight of food in CPI baskets. The 2015–2016 Super El Niño episode is an example of this dynamic, with food inflation outpacing headline rates across the LATAM region. In this cycle, the US–Iran conflict has already raised fuel and fertiliser costs, introducing an initial supply shock that has yet to fully pass through. An El Niño-driven shock in 2026 would compound this dynamic while posing risks of rising food production costs and reduced supply, which has increased the upside risks to inflation and could create more hawkish interest rate trajectories.

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¹Higher vertical wind shear in the Atlantic typically inhibits the development of hurricanes. However, recent trends show that record-warm Atlantic sea surface temperatures can sometimes counteract this effect, leading to a "tug-of-war" where intense storms can still form despite El Niño.

(Sources: BMI, A Fitch Solutions Company and NCBCM Research)

• The Executive Board of the International Monetary Fund (IMF) recently (May 4, 2026) concluded the Article IV consultation with Antigua and Barbuda (A&B). The authorities warned that A&B must tackle arrears despite falling debt.
• Antigua and Barbuda’s economic expansion continues. Real GDP grew by an estimated 3% in 2025, supported by a pick-up in construction despite slowing tourism activity. Employment has gradually recovered to pre-pandemic levels, and inflation moderated from over 6% (year-average) in 2024 to 1.4% in 2025.
• Additionally, public debt as a share of Gross Domestic Product (GDP) declined from 101% of GDP in 2020 to an estimated 68% in 2025, aided by an improved fiscal position. However, arrears to the Paris Club¹ creditors and domestic suppliers are significant, and gross financing needs are elevated. The IMF noted that persistent arrears and elevated gross financing needs are constraining access to longer‑term financing and undermining debt sustainability. A&B is therefore being urged to develop and implement a credible and comprehensive strategy for addressing all arrears, broadening financing options, and making space for resilience-building investments. The IMF also noted the need to continue strengthening cash and debt management to prevent future arrears.
• That said, the fiscal position strengthened in 2024–25, reflecting both improved tax collection and one-off factors. The 2025 primary balance is estimated at nearly 5% of GDP, underpinned by higher tax revenues, stronger inflows under the Citizenship-by-Investment Program (CIP), restraint in current spending, and a modest increase in capital spending. However, the CIP has recently come under increased international scrutiny, particularly from the United States (U.S), over concerns about vetting standards and the granting of citizenship without long-term residency requirements. THE IMF noted that continued efforts to strengthen this framework remain important.
• Looking ahead, steady economic expansion is projected to continue, but risks are tilted to the downside amid heightened global uncertainty. Downside risks stem externally from commodity price volatility and a slowdown in major trading partners and, domestically, from capacity constraints weighing on growth. Upside potential could materialise from stronger tourism demand, improved connectivity, and productivity-enhancing reforms.

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¹The Paris Club is an informal group of major creditor nations, including countries such as France, the United States, the United Kingdom, and Japan, that work together to help countries manage and restructure sovereign debt.

(Sources: IMF & NCBCM Research)

• BMI analysts forecast real GDP growth to average 1.7% per year over 2026-2035 for the Bahamas, slightly slower than 2.1% over the previous 10 years. Bahamas’ performance is anticipated to be constrained by structural capacity limits in tourism, slow labour force growth and incomplete public sector reform.
• For 2026, growth is forecasted to come in at 1.9%, a downward revision from the previous 2.2% forecast. The negative impact of the Iran conflict on oil import costs and household purchasing power has driven this. However, the impact will be partially offset by the government's fuel hedges.
• The Bahamas’ fuel hedge is a financial risk-management strategy introduced in partnership with the Inter-American Development Bank in 2020 and later expanded in December 2025 through Bahamas Power and Light (BPL). The hedge locks in fuel prices for part of the country’s oil imports, covering about 2.5 million barrels for 365 days at $70 per barrel, helping shield households, businesses, and public finances from sudden spikes in global oil prices driven by external shocks such as the U.S.-Iran conflict.
• Furthermore, BMI noted that political stability will remain a tailwind for the economy, with centre-left Prime Minister Phillip 'Brave' Davis and his Progressive Liberal Party having comfortably won re-election on May 12^th by securing 33 of 41 seats up for grabs.
• This was the first time in over 30 years that an incumbent had won re-election in The Bahamas, a development that will help to sustain the steady progress that has been made toward returning the public finances to a sounder footing since the pandemic.

(Sources: BMI, A Fitch Solutions Company, Fitch Ratings, & NCBCM Research)

• Fed officials are looking at holding rates longer than thought, while also considering rate hikes if inflation remains sticky, according to minutes from the central bank’s April policy meeting released on Wednesday, May 20, 2026.
• The minutes shed light on the Fed's most recent meeting, in which the committee voted to hold rates steady. One official dissented from that decision, favouring a rate cut, while three others said the FOMC should have removed language from its post-meeting statement suggesting the central bank's next move would likely be a rate cut.
• Participants generally judged that continued elevated inflation readings, together with uncertainty related to the duration and economic implications of the Middle East conflict, could necessitate maintaining the current policy stance for longer than previously anticipated.
• At the same time, a majority highlighted that “some policy firming” – Fed speak for rate hikes — would likely become appropriate if inflation were to continue to run persistently above the Fed’s 2% goal. According to the minutes, inflation is emerging as the top concern, since recent reports on the job market have shown the unemployment rate falling despite low job creation, suggesting the job market has stabilised.
• Further, concerns remain about a scenario where sustained elevated energy prices combined with tariffs could lead to broader inflation, potentially increasing inflation expectations and creating a tougher trade-off between the Fed’s goals of maintaining maximum employment and stable prices.
• The growing appetite for rate hikes could put the central bank at odds with President Donald Trump, who has demanded rate cuts to boost the economy and lower the interest the U.S. government pays on the national debt.

(Sources: Yahoo Finance & Investopedia)

• British inflation cooled by more than expected in April, but the slowdown did little to mask a tough outlook for households, with global costs from the Iran war set to hit them harder later this year.
• Consumer prices rose by an annual 2.8%, down from March’s annual inflation rate of 3.3%, helped by smaller increases in household energy and other regulated utility bills than in April 2025, and by measures to lower energy bills introduced by Finance Minister Rachel Reeves. It marked the lowest reading since March 2025.
• Sterling dipped briefly against the dollar and the euro after the Office for National Statistics published its data before largely recovering. Investors reduced their bets on the Bank of England (BoE) raising interest rates in the coming months.
• However, this improvement is set to be short-lived as the impact from the Middle East conflict continues to build, with motor fuel prices rising at the fastest pace since the Ukraine war. Motor fuel prices for consumers surged in April, up 23% on the year, the biggest rise since September 2022.
• The expected rise in inflation to around 4% later this year adds to the pressure on Prime Minister Keir Starmer, who is facing challenges to his leadership from within his Labour Party. Most major forecasters, including the International Monetary Fund (IMF), still expect Britain to end 2026 with the fastest inflation in the G7.
• Meanwhile, the BoE’s key question is whether the expected rise in headline inflation creates longer-term price pressures in the economy. Several policymakers have said the weak jobs market could make it harder for workers to demand higher pay and for businesses to pass on higher costs, although business surveys show cost pressures and selling price hikes are spreading rapidly across companies.

(Source: Reuters)

• March earnings are down for logistics stocks Kingston Wharves Limited (KW) and Cargo Handlers Limited (CHL).
• For the quarter ended March 2026, KW reported a 22.3% decline in net profit to $590.85Mn as core revenue growth was undermined by an 80.3% slip in other operating revenue. Driven by a 12.0% increase from its terminal segment and a 35.0% surge in Logistics, which benefited from higher container volumes partially linked to post-Hurricane Melissa activity, core revenues grew by 18.0% to $3.33Bn. However, $84.66Mn in exchange losses, which is a reversal from the $117.45Mn gains for March 2025, weighed heavily on the bottom line, leading to the 22.0% decline in earnings. Management noted that the FX losses were due to the appreciation of the Jamaican dollar relative to the US Dollar, and that, excluding the FX volatility, net earnings would have grown by 5.0%.
• Notwithstanding the decline, management maintains a positive outlook as it seeks to leverage its strategic infrastructure and strong liquidity to navigate heightened global uncertainties, such as Middle East tensions and fuel price volatility. To capitalise on shifting regional trade routes and growing logistics demand, KW plans to collaborate with the government to acquire and develop near-port lands for expanded yard space. Prior capital investments in berth capacity and yard modernisation are also expected to continue bolstering operational efficiency and support faster vessel handling across its diversified cargo base.
• CHL also reported softer earnings, which declined by 39.1% to $39.69Mn, owing to lower core operating revenues and the share of profit of associates.
• Reflecting reduced warehousing capacity and smaller cement shipments at the Port of Montego Bay following Hurricane Melissa, revenues dipped by 18.9% to $105.17Mn. Management noted that the reduction in cement shipments is expected to be short-term and that restoration of warehousing facilities at the port continues post-Melissa. Revenue streams were further suppressed by an 8% drop in cruise revenue, although container handling numbers normalised and showed a marginal year-over-year improvement.
• The company experienced a minor relief as operating and administrative expenses decreased by 3% to $85.38Mn. However, with the faster pace of decline in revenues relative to expenses, operating profit ultimately collapsed by 54.6% to $17.8M. The bottom line was also weighed down by the company's share of profit from associates, which shrank 43% to $19.49M for the quarter.
• As at the close of trading on May 18, 2026, KWL shares traded at $36.99, meaning it is up 7.41% YTD and trades at a P/E of 15.73x. Meanwhile, CHL traded at $16.73, is down 16.7% and trades at a P/E of 18.73x. The peer median for Energy Material and Infrastructure (EMI) stocks was 17.28x.

(Sources: Kingston Wharves Ltd., Cargo Handlers Ltd. & NCBCM Research)

• March 2026 quarter releases for JSE-listed stocks show that the majority of Investment Firms reported higher earnings. The most frequent earnings driver was gains on investment activities.
• For the March 2026 Quarter, Barita Investments Limited (BIL) delivered net profits of $1.17Bn, up 86.5% on the March 2025 quarter. The growth reflected higher operating revenue, which exceeded the dollar value growth in operating expenses (OPEX). Revenues rose by $1.55Bn (+71.9%) to $3.72Bn, driven primarily by a 154% increase in gains on investment activities, amid fair value appreciation in its equity portfolio (324.8% YoY) and the Real Estate Fund. Net interest income also improved, owing to a materially higher contribution from interest-earning assets and a more favourable rate backdrop relative to the prior-year comparative period. Conversely, OPEX surged by 84.8% to $1.02Bn, driven primarily by higher administrative and accounting costs. This expense spike was heavily influenced by an $883Mn non-recurring, accounting-related charge taken to transition from an old core technology system to a more scalable target infrastructure. As of March 19^th, BIL’s stock traded at $69.56, is down 3.4% YTD and had a P/B of 2.33x.
• Meanwhile, Sygnus Credit Investments (SCI), earnings are up 19.7% to US$2.20Mn, marking its best March quarter since its inception. This was supported by an 80.0% drop in provisions for potentially bad loans as the workout of previously stressed borrowers neared completion. Mark-to-market gain in fair-value investments of US$123.5K versus a US$514.4K loss for March 2025, also aided earnings growth. However, the company absorbed a one-off US$1.24Mn downward correction to interest income, a catch-up adjustment reversing interest recognised across earlier periods and the carryover impact of an unusually large US$19.51Mn early loan repayment in H1. It created a “temporary cash drag", earning while it was undeployed, even as SCI continued to pay interest on its own borrowings. SCI traded at $10.13 and is down 14.5% YTD (P/B of 0.28x).
• Supported by a 16.8% increase in operating revenues, VM Investments Limited (VMIL) reversed its fortunes, with $70.14Mn profits, relative to a $32.53Mn loss for March 2025. Revenue expansion was driven by higher gains from investment activities, which grew by 68.6% and offset a decline in net interest income. Total operating expenses decreased by 9.0% year-over-year, bolstering profitability. This reduction was driven by a 23.3% drop in other operating costs from ongoing cost-saving initiatives, which successfully countered a 9.5% increase in staff costs arising from inflationary wage adjustments. The company traded at $1.57 as it declined by 26.5% YTD and has a P/B of 0.90x.
• In contrast, Sterling Investments Limited (SIL) reported net profits of $34.3Mn (-65.7%). This falloff was due to lower revenues overwhelming cost savings. Revenues slipped by 66.3% to $23.19Mn due to a reversal of 22.69Mn in FX gains to a $13.29Mn FX loss amid the appreciation in the Jamaican dollar. Lower gains on the sale of investments, which resulted in a 70.1% decline in realised gains on debt securities sales, added to the drag on earnings. However, total operating expenses declined by $14.74Mn (-67.4%) to $7.12Mn. This was due to a $14.52Mn swing from fair value losses of $4.48Mn in Q1 2025 to $10.07Mn for Q1 2026. Accordingly, operating profits declined by 65.7% to $16.07Mn. SIL’s stock is up 2.43% YTD with a price of $3.17 and a P/B of 0.86x.

(Sources: Company Filings via the JSE & NCBCM Research)

• The International Monetary Fund (IMF) and the government of Barbados have reached a staff-level agreement on a 36-month precautionary Stand-By Arrangement (SBA) valued at Special Drawing Rights¹ (SDR) 189Mn, or approximately US$260Mn. The agreement remains subject to approval by the IMF Executive Board in June.
• The new SBA will provide Barbados with insurance in a shock-prone external environment, while helping preserve macroeconomic stability and supporting reforms under the homegrown Barbados Economic Recovery and Transformation Plan 2026 (BERT 2026). BERT 2026 marks the next phase of Barbados’ reform journey, moving from stabilisation and growth toward long-term transformation into a high-performing, inclusive, and climate-resilient economy.
• The SBA will support efforts to enhance public financial management, including the fiscal framework, management of public-private partnerships and State-Owned Enterprise (SOE) oversight; revenue policy and administration; productivity and competitiveness; climate resilience; financial supervision; and the Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) framework. The structural reform agenda will be supported by technical assistance from the Fund and other partners.
• According to the IMF, Barbados enters the proposed arrangement from a position of strengthened macroeconomic credibility. Guided by sound macroeconomic policies, economic activity remained robust in 2025, with growth estimated at 2.7%, driven by tourism, construction, and business services. Additionally, gross international reserves remained at about US$1.5Bn at end-2025, equivalent to around 6 months of imports, and remain ample to support the exchange rate peg.
• Fiscal performance continued to be strong, with the fiscal primary surplus reaching 4.2% of GDP in FY2025/26, and high corporate income tax revenues enabling an expansion of public investment in infrastructure and resilience. Furthermore, fiscal policy will continue to balance debt sustainability with development needs. This will require sustaining strong primary fiscal balances to keep public debt on track to reach the 60% of GDP target by FY2035/36, while maintaining fiscal space for critical investment, resilience, and social spending as noted by the IMF.
• However, the outlook remains subject to downside risks, including heightened global policy uncertainty, commodity price pressures, and Barbados’ vulnerability to natural disasters. Higher commodity prices are expected to place upward pressure on inflation and the current account deficit, although international reserves are projected to remain ample. External conditions are expected to normalise thereafter, but the outlook remains subject to unusually high uncertainty, with risks tilted to the downside.

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¹Special drawing rights are supplementary foreign exchange reserve assets defined and maintained by the IMF. SDRs are units of account for the IMF, and not a currency per se. SDRs represent a claim to currency held by IMF member countries for which they may be exchanged.

(Source: IMF)