• International Monetary Fund officials on Thursday warned that risks of a sovereign debt crisis sparked by the coronavirus pandemic will rise without changes to the international debt architecture, including more transparency for government borrowing.
• In a blog post and speech, IMF officials called for the G20 debt service suspension initiative to be extended for another 12 months until the end of 2021, and a common restructuring approach across all official bilateral creditors, including China. A new IMF research paper also laid out options for improving debt transparency and restructuring.
• “A pandemic-induced systemic debt crisis cannot be ruled out,” IMF First Deputy Managing Director Geoffrey Okamoto said in remarks prepared for delivery to a Peterson Institute for International Economics online event. “The longer the problem is postponed, the worse it will become.”

(Source: Reuters)

• Large outflows from emerging market investments towards the end of September point to a big “risk-off” shift brewing, Institute of International Finance (IIF) economists say.
• Emerging markets sucked in $2.1Bn in portfolio flows in a month marked by fresh market turmoil, uncertainty arising from the U.S. election, a rejuvenated dollar, and uncertainty about the recovery from the coronavirus.
• But it said high-frequency outflows from emerging markets towards the end of the month were almost as big as in the 2013 “taper tantrum” or during 2015 when the Chinese yuan was devalued.
• IIF said it saw growing differentiation inflows to emerging markets, with some markets seeing outflows that continue to build, and increasing divergence between debt and equity flows.
• After a huge exodus from the asset class at the height of market turmoil caused by the pandemic in March, flows to emerging markets had been recovering somewhat as investor confidence in developing countries’ handling of the crisis improved.

(Source: Reuters)

• Barita Investments Limited advised that, following the closing of its Additional Public Offer, First Citizens Investments Services Limited (“FCIS"), a fully owned subsidiary of First Citizens Bank Limited (FCB), now owns 5% of the shareholding of the Company.
• FCIS is a registered securities broker-dealer in the countries in which it operates, namely, Trinidad & Tobago, St. Lucia, Barbados, and St. Vincent and Grenadines. FCIS, with total assets under management of approximately US$3.2Bn, which includes both proprietary and client assets, offers investment management products and services to its customers.
• FCB is a publicly-traded company on the Trinidad and Tobago Stock Exchange with just over US$6Bn in assets and equity of over US$1Bn. FCB has an Investment Grade credit rating of BBB- by Standard & Poor.

(Source: JSE)

• NCB Capital Markets Limited (NCBCM) has advised of the Basis of Allocation of Tropical Battery Company Limited’s combined Offer for Sale and Initial Public Offer (IPO), as follows:
• Applicants in all reserved share pool will be allocated 100% of the shares for which they applied.
• Subscribers to the General Public Pool will receive up to the first 50,000 units (Base Allotment) plus a pro-rata allocation of approximately 30.6499% of the excess shares for which they applied above the Base Allotment.
• Refunds for Applicants who did not receive full allotment will commence on September 30, 2020.

(Source: JSE)

• COVID-19 continues to spread virtually unchecked throughout Nicaragua, posing downside risks to its real GDP growth forecasts for 2020 and 2021.
• While Fitch Solutions maintains its 2020 and 2021 real GDP growth forecasts at -6.3% y-o-y and 1.0%, the absence of public health lockdowns or major fiscal support suggests that the economic recovery will be slow in the coming years.
• In addition, fading external attention to Nicaragua suggests that President Daniel Ortega’s government will not offer electoral concessions ahead of the November 2021 general election, increasing the risk of economically disruptive social unrest.

(Source: Fitch Solutions)

• Fitch Solutions expects the Central Bank of Trinidad & Tobago (CBTT) will reduce its benchmark interest rate 50 basis points (bps) to 3.00% by end-2020, and hold the rate at 3.00% through 2021 to support economic activity in the wake of the COVID-19 pandemic.
• Low inflation and international conditions, including the expectation for an extended period of low rates in the US, will support continued loose monetary policy.
• However, we believe the CBTT is nearing the bottom of its current easing cycle, as COVID-19 economic restrictions limit the transmission of lower interest rates into the real economy.

(Source: Fitch Solutions)

• The United States’ trade deficit in goods widened in August, with imports rising as businesses rebuild inventories that were depleted when the COVID-19 pandemic upended the flow of goods.
• The Commerce Department said on Tuesday the goods trade gap increased by 3.5% to $82.9Bn last month. Imports of goods rose 3.1% to $201.3Bn, eclipsing a 2.8% increase in goods exports to $118.3Bn.

(Source: Reuters)

• The dollar index slipped from the recent two-month highs on Tuesday, as markets wait for the first debate between the U.S. presidential candidates, signs of progress in U.S. fiscal stimulus talks, and economic data including German inflation.
• After racking up its biggest weekly gains since early April last week as markets turned cautious and sought safer assets, the dollar gave up some gains on Monday and edged down further on Tuesday, ahead of the debate between President Donald Trump and Democratic challenger Joe Biden.
• ING strategists told clients in a note that a rise in Trump’s perceived chances was likely to boost the dollar, “although the non-negligible risk of a contested outcome (along with the ultra-dovish Fed) may keep the dollar’s upside somewhat capped in the run-in to the vote”.

(Source: Reuters)

• The Producer Price Index for the Mining and Quarrying industry increased by 6.0% in August 2020. This upward movement was mainly due to a 6.2% and 1.4% rise in the index for the major groups ‘Bauxite Mining & Alumina Processing’ and ‘Other Mining & Quarrying’, respectively.
• Similarly, a 6.5%, 0.5%, and 0.8% hike in the index for the major groups, ‘Refined Petroleum Products’ and ‘Food, Beverages & Tobacco’ and ‘Chemicals and Chemical Products’ contributed to a 1.5% increase in the index for the Manufacturing industry.
• Year-to-date, both indices declined, but for the period August 2019 - August 2020, the point-to-point index for the Mining & Quarrying industry decreased by 1.6%, while the point-to-point index for the Manufacturing industry declined by 2.3%.

(Source: STATIN)

• The Jamaica Deposit Insurance Corporation (JDIC) has embarked on a media campaign to heighten public awareness about the increased coverage limit for accounts held at deposit-taking institutions (DTIs).
• Effective August 31, 2020, the coverage limit has been adjusted from $600,000 to $1.2Mn for holders of individual, joint, business, and trust accounts at commercial and merchant banks and building societies.
• Jamaica Bankers Association (JBA) President, Jerome Smalling, said the adjustment in the deposit insurance limit is “timely”, noting that doubling the coverage “is truly impressive and should be commended”.
• Smalling said that consequent on the increased deposit insurance coverage limit, “the JDIC has taken an important step to bolster the confidence of the depositing public, as well as protect against unregulated entities that enter the deposit-taking space from time to time.

(Source: JIS)