• Barita Investments Limited (Barita) reported a net profit of $1.18Bn for the six-month period ending March 2025, marking a 38.1% decline compared to the same period last year. This drop in profitability was largely driven by a weaker net operating income.
• Impacted by a 51.4% ($1.32Bn) reduction in gains from investment activities, mainly due to the underperformance of its real estate exposures, which were adversely affected by the depreciation of the Jamaican dollar, net operating income (NOI) fell 27.7%. The falloff in NOI occurred despite a 33.4% increase in Net Interest Income.
• Gains from its private equity holdings partially offset the underperformance of its real estate portfolio.  However, Fees and Commissions Income declined by 9.0%, primarily reflecting lower asset management fee income.
• Non-interest expenses for the six-month period ending March 31, 2025, declined by 15.5% to $1.97Bn aided by reductions in both administration expenses and staff costs. Administration expenses fell by 18.4% to $1.31Bn, driven by the reclassification of costs related to the core system replacement project to intangible assets. This adjustment stemmed from significant changes in the project’s implementation approach, which influenced the appropriate accounting treatment. Additionally, the 14.0% reduction in staff costs was largely the result of a restructuring exercise undertaken in the prior year.
• Notwithstanding the underperformance of its real estate exposures, and the expectation that the performance of its broader alternative investment (AI) portfolio to taper, management still expects to continue earning from its AI portfolio. Notably, Barita recently disclosed plans to develop a warehouse and mixed-use complex over the next 18 to 24 months via its wholly owned subsidiary, MJR Real Estate Holdings. This initiative aligns with the company’s strategic focus on broadening its portfolio, aimed at enhancing long-term returns and portfolio diversification.
• Barita’s stock price has declined by 3.3% year-to-date, closing at $71.10 as of Monday. At this price, the stock is trading at a price-to-book (P/B) ratio of 2.4x, which is notably higher than the Main Market Financial Sector’s average of 1.2x.

(Source: JSE & NCBCM Research)

• The Ministry of Agriculture, Fisheries and Mining, through its Veterinary Services Division (VSD), has taken an exclusionary approach to safeguard the poultry sector against the threat of Avian Influenza, commonly known as ‘Bird Flu’.
• According to Portfolio Minister, Hon. Floyd Green, the highly contagious virus is often transmitted by migratory birds and can be introduced to poultry farms through contaminated feed, equipment, clothing, or improperly declared imports. He added that the virus has a high mortality rate and can cause economic devastation to farmers and, ultimately, could lead to trade restrictions.
• This could prove devastating to Jamaica, where poultry is the largest source of animal protein and supports the livelihood of thousands of people, with backyard farmers accounting for 40% of the country’s total production. Consequently, the Ministry has taken measures to ensure that not a single case of Bird Flu enters Jamaica.
• The measures being undertaken include enhancing border protection, encompassing strengthened veterinary surveillance at ports of entry and increased screening of high-risk imports such as poultry products, live birds and feed materials; ongoing surveillance of wild bird populations by the VSD in collaboration with international partners; and implementation of robust biosecurity measures on small and large poultry farms.
• Other measures include public education and awareness, targeting farmers, backyard growers, vendors, and pet bird owners; and implementing emergency preparedness and response measures in the unlikely event that Bird Flu is detected in the country. He emphasised that partnership is essential for the success of various initiatives against Bird Flu, asserting that all stakeholders – both locally and regionally – must report suspicious illnesses, adhere to biosecurity guidelines, and remain vigilant and proactive.

(Source: JIS)

• Chile's gross domestic product grew 0.7% in the first quarter of 2025 relative to the previous three-month period, central bank data showed on Monday, May 19, 2025. The result came in slightly above the 0.5% expansion expected by economists in a Reuters poll.
• The Andean nation's economy was up 2.3% in the first quarter from a year earlier, the central bank added, also above the 2.0% forecast in the Reuters poll.
• Trade, manufacturing, personal services, and agricultural activity were the main contributors to GDP growth, while mining, financial services and construction registered declines.
• "Looking ahead, we expect growth to slow gradually over the coming quarters as the impact of temporary drivers fades and external conditions become less favourable," Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, said in a note to clients. The slowdown should not be a major worry, as leading indicators suggest that activity in Chile will remain relatively strong, Abadia added.
• The central bank also released on Monday a poll of analysts showing that they expect interest rates to be held at 5% at the bank's next monetary policy meeting in June.

(Source: Reuters)

• The Guyanese economy is projected to experience robust growth, with estimates indicating an increase of 11.7% for the period of 2025-2026. This marks a notable decline from the staggering 43.6% growth estimate for 2024, attributed mainly to less favourable base effects.
• In a noteworthy development, new tariffs imposed by the United States are not expected to significantly impact Guyana's growth trajectory as most of the country's exports to the U.S., primarily oil and gold, are exempt from these tariffs. The continued expansion of oil production is set to ensure that net exports remain a vital driver of economic growth in the years to come.
• The surge in oil revenues is also anticipated to provide the government with substantial fiscal flexibility, allowing for sustained stimulation of consumption and investment in the non-oil sector. However, lower global oil prices pose a moderate challenge to this outlook.
• As a result of these dynamics, Guyana's fiscal deficit is projected to shrink from an estimated 7.4% of GDP in 2024 to 6.9% in 2025. This narrowing of the deficit is less than previously forecasted, due in part to a weaker outlook for oil revenues amid declining global prices. The government's commitment to increased spending is likely to bolster support for President Irfaan Ali and his People's Progressive Party/Civic (PPP/C), positioning them favorably ahead of the general election slated for November 2025.
• Meanwhile, ongoing tensions with Venezuela over the contested Essequibo region continue to represent a potential external security risk. However, experts suggest that the likelihood of military action remains low in the short term, given the severe repercussions this would likely entail for Venezuela.

(Source: Fitch Connect)

• On Friday, Moody’s ratings agency lowered the U.S. government’s credit rating one notch amid mounting concerns over deficits and interest costs that remain at an unsustainable pace. It was the last of the major ratings agencies to cut the U.S. sovereign rating from the highest level.
• U.S. Federal Reserve officials speaking on Monday took on cautiously the ramifications of the latest downgrade of the U.S. government’s credit rating and unsettled market conditions as they continued to navigate a very uncertain economic environment.
• "We will put that downgrade in the same perspective that we do with all incoming information: What are the implications of this in terms of us achieving our mandated goals without commenting on what that downgrade might mean in sort of a political economy context," Fed Vice Chair Philip Jefferson said at a conference held by the Federal Reserve Bank of Atlanta.
• While not an imminent issue for the Fed, over time, higher market borrowing costs tied to a deteriorating U.S. financial position make credit generally more expensive and create restraint on economic activity. In turn, that becomes a consideration for how the Fed sets monetary policy and its expectations for the longer-run path of economic activity.
• The downgrade "will have implications for the cost of capital and a bunch of other things, and so it could have a ripple through the economy," said Atlanta Fed President Raphael Bostic, speaking in a CNBC interview on Monday. With the economy in flux, "I think we'll have to wait three to six months to start to see where this settles out, and I think that'll be an important determinant about people's willingness and appetite for investing in the U.S."
• While concerns about the government’s financial position have existed for years, and Fed officials have regularly warned that long-run borrowing trends have been on an unsustainable path, ongoing huge levels of spending, joined with a Republican budget plan now under consideration that’s likely to add even more debt, are raising fears of a nearing crisis.
• At the same time, the aggressive and erratic trade policy agenda of the Trump administration, which targets most of the world’s nations with high tariffs in a bid to bring more factory work back to the U.S., is shaking confidence in the U.S. as a reliable place to invest.

(Source: Reuters)

• The Bank of Japan will continue to raise interest rates if the economy rebounds from an expected hit from higher U.S. tariffs, the central bank's deputy governor Shinichi Uchida said, while warning of a highly uncertain outlook.
• Japan's underlying inflation will stay around the BOJ's 2.0% target if there is an economic rebound, Uchida told parliament. He noted that recent gains in domestic prices were largely due to higher import costs and increasing food costs, such as for rice.
• "We are mindful that such price rises are having a negative impact on people's livelihood and consumption," he said. "If our forecast materialises, we will continue to raise our policy rate," Uchida said. "But there is extremely high uncertainty over the outlook for each country's trade policy and its fallout. As such, we will determine without pre-conception whether the economy and prices move in line with our forecast," he added.
• Japan's economy shrank for the first time in a year and at a faster pace than expected, data for the March quarter showed on Friday, underscoring the fragile nature of its recovery now under threat from U.S. President Donald Trump's trade policies.

(Source: Reuters)

• Point-to-point (P2P) inflation inched up to 5.3% in April, up 30 basis points from 5.0% in March. This marks the second consecutive P2P increase following February’s 4.4%.
• The average price paid for goods and services by Jamaican consumers fell in April as seen by a 0.4% decline in the All-Jamaica Consumer Price Index (CPI). The largest contributor to the downward movement was a 1.4% decline in the index of the ‘Housing, Water, Electricity, Gas and Other Fuels’ division, influenced mainly by a 4.0% reduction in the index of the group ‘Electricity, Gas and Other Fuels’ as electricity rates fell.
• A marginal reduction (-0.5%) in the heavily weighted index for the division ‘Food and Non-Alcoholic Beverages also contributed to the downward movement in April 2025. The slight falloff in the index was due to a 2.8% decline in prices for some agricultural produce as production continues to improve post-Beryl.
• However, April’s outturn was tempered by a 0.4% increase in the index of the ‘Health’ division, primarily due to higher costs for prescription medication.
• While it is higher than the 5.0% between March 2024 and March 2025, April’s monthly CPI reading continues to support the Bank of Jamaica’s (BOJ’s) expectations that inflation will remain anchored within its target range of 4%-6% over the next two years. Still, uncertainties surrounding the changing trade policies of our main trading partner could result in a less favourable outcome. These policies could result in higher inflation in the U.S. and higher imported inflation in the domestic market. However, the policies remain fluid, and the final level of tariffs is still unknown as negotiations continue between the U.S. and its trade partners.
• At its last monetary policy meeting in March, the BOJ kept its policy rate at 6.00% as it continues to monitor the effects of U.S. trade policies on the local economy. The next policy decision will be on the 20th of May, when it is expected that BOJ will maintain its policy rate at 6.00%.

(Sources: STATIN and NCBCM Research)

• Caribbean Producers Jamaica (CPJ) reported strong earnings for its first quarter ended March 31, 2025 (Q1 2025), with net profit increasing by 28.5% year-over-year, driven by higher sales volumes and expanded product offerings.
• Revenues rose to $45.97Mn, marking a substantial 21.5% (or $8.14Mn) increase, compared to $37.83Mn in Q1 2024. This growth was fueled by increased sales to large resorts and the successful introduction of new products, notably the Stry8 Vybz rum, developed in partnership with Angostura Limited of Trinidad and Tobago.
• The company also improved its protein supply through increased manufacturing capacity and expanded its entire spirits portfolio. These efforts, along with an expanded distribution footprint and intensified marketing strategies, contributed to positive top-line performance.
• However, top-line growth was met by a 26.9% rise in direct costs totalling $33.30Mn. Consequently, gross margin declined to 27.6% of revenues, down from 30.6% in Q1 2024. 
• Operating expenses also rose by 5.7%, reflecting higher selling and administrative costs from increased headcount as the company prepared for upcoming business opportunities by employing additional staff. Other expenses related to manufacturing upgrades also contributed to the higher operating costs. Financing costs also increased (+15.3%).
• Despite the increase in direct and indirect costs, CPJ’s bottom line growth was robust, supported by an improvement in revenue and operating profit (+20.22%). Consequently, there was an accompanying improvement in its net profit margin to 3.9% from 3.7% in the prior corresponding period.
• Looking ahead, the company is poised for several operational improvements throughout 2025. These include its manufacturing plant upgrade, slated for completion in June 2025; the implementation of warehouse storage and distribution in Kingston in June 2025; and ERP implementation, which should enhance efficiency and overall productivity by July 2025.
• At market close on Thursday, CPJ’s price was J$8.03, down 3.40% since the start of the year. At its current price, the company trades at a P/E of 8.8x, which is below the Main Market Distribution and Manufacturing Sector average of 15.97x.

(Sources: CPJ Financial Release & NCBCM Research)

• Fitch forecasts that Costa Rica’s current account deficit will remain stable, edging up slightly from 1.4% of GDP in 2024 to 1.5% in 2025, before reaching 1.6% in 2026. This reflects a modest deterioration in the goods trade deficit, which is expected to widen from 2.6% of GDP to 3.8%.
• Agricultural exports underperformed in Q1 2025, reinforcing the view that pineapples, bananas, and coffee—highly reliant on the US market—remain among the most exposed to trade disruptions and falling global food prices. Therefore, a slowdown in the US will likely deepen this contraction in H2 2025 and 2026. 
• However, medical devices, which account for just under half (43%) of total goods exports, are expected to remain insulated. These high-value products are deeply integrated into US supply chains, and many multinational manufacturers operate locally to take advantage of lower labour costs. As a result, Fitch is not overly concerned about broader export disruption.
• Meanwhile, imports are expected to slow as a share of GDP, from 25.5% in 2024 to 24.3%, owing to the negative terms of trade effects from lower oil prices, Costa Rica’s main import. In contrast, input purchases and consumer goods imports are expected to remain strong, as household consumption remains a key driver of growth in 2025. Overall, the goods trade balance posted a deficit of 1.0% of GDP in Q1, slightly narrower than the 1.2% recorded in the same period last year.
• That said, both the service trade surplus and primary income deficit are set to improve in 2025, with the former rising from 9.3% of GDP to 10% and the latter narrowing from 8.6% to 8.2%. Service exports will remain strong, supported by Costa Rica’s role in global value chains for business services, IT, and other high-value sectors.
• On the primary income side, lower interest payments due to fiscal consolidation will help reduce net income outflows. Although rising FDI inflows could limit further improvement by increasing profit repatriation, this should be partially offset by a continued trend toward reinvestment, particularly in free trade zones.

(Source: Fitch Solutions – BMI)

• The Bank of Mexico lowered its benchmark interest rate by 50 basis points for the third consecutive meeting on Thursday, as inflation remains within the bank's target range, but uncertainty persists around trade tensions and a weak economy.
• The unanimous decision by the bank's governing board, which was expected by analysts polled by Reuters, brings Mexico's benchmark rate to 8.50%, its lowest level since August 2022.
• In a statement announcing the decision, the Mexican monetary authority said it could consider cutting the rate by a similar magnitude at future meetings. The decision comes days after official data showed headline inflation in Latin America's no. 2 economy hit 3.93% on an annual basis in April, accelerating from the previous month but still within the central bank's target range. Banxico, as Mexico's central bank is known, targets inflation at 3%, plus or minus a percentage point.
• The bank said its board considered Mexico's weak economic activity, "as well as the possible changes in trade policies worldwide." Banxico upheld its expectation that inflation will converge to its 3% target in the third quarter of 2026, but flagged risks from trade tensions with the United States, its top trading partner.

(Source: Reuters)