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IMF Credits ERP’s Success to Strong Stakeholder Ownership Published: 13 November 2019


  • Former International Monetary Fund (IMF) Mission Chief for Jamaica, Dr. Uma Ramakrishnan, has credited the success of the Economic Reform Programme (ERP) to the broad-based stakeholder ownership of the reforms and a commitment to “seeing things turn around”.
  • “The ownership that we have seen across political administrations, where things went smoothly and where there was the commitment to retaining the policy discipline, especially on the fiscal side, was something for everyone to take note of and take on board as a lesson,” she said.
  • Dr. Ramakrishnan was addressing journalists during a teleconference at the IMF’s local office at the Bank of Jamaica (BOJ) building in downtown Kingston on Monday, November 11.
  • The ERP is the Government of Jamaica’s strategic plan of action to generate sustained economic growth and long-term development of Jamaica. It targets public debt reduction, macroeconomic stability, and higher levels of job creation and improved labor force productivity as key outcomes.

(Source: JIS)

SOS Reports Strong Growth In Profit Published: 13 November 2019


  • SOS grew profits 24.5% for the nine-month period ended September 2019. Net profit for the period was $114.00Mn (EPS: $0.46) up from $91.58Mn (EPS: $0.37).
  • Favorable movement in revenues which increased by $131.77Mn (or 16.4%) was the main driver behind the improved performance.
  • The stock has increased by 49.7% YTD and closed yesterday’s trading session at $12.50 per share. At this price, the stock trades at a P/E of 27.17x which is above the Junior Market Distribution Sector average of 24.90x. 


(Source: SOS Financials)

Tariff Threat Published: 13 November 2019


  • In true game-theory style, President Donald Trump said the U.S. will increase tariffs on China if the first step of a broader agreement isn’t reached.
  • “If we don’t make a deal, we’re going to substantially raise those tariffs,” he said Tuesday in a speech to the Economic Club of New York. “And that’s going to be true for other countries that mistreat us too.” 
  • Nevertheless, he noted that the world’s two largest economies were “close” on phase one deal. 
  • Trump and Chinese President Xi Jinping had planned to sign “phase one” of the deal this month in Chile, but the official ratification hit a roadblock when the event was canceled due to social unrest in Santiago.
  • A new site for the signing hasn’t yet been announced. Still, U.S. stocks have rallied to records in recent days partly on optimism that tensions are cooling. 

(Source: Bloomberg)

Pulse Investments Off to Strong Start Published: 08 November 2019


  • Net profit more than doubled (104.9% or $124.27Mn) at Pulse investments for the first three months of the 2019 financial year. Net profit was $242.71Mn (EPS: $0.15) up from $118.44Mn (EPS: $0.07) one year prior.
  • The company benefitted significantly from a fair value appreciation on investment property of $101.43Mn (or 230.6%).  In addition, the performance benefitted from a 15.7% (or $20.21Mn) increase in revenues.
  • The stock has risen 50.2% YTD and closed yesterday’s trading session at $4.49 per share. At this price, the stock currently trades at a P/E of 9.34x which is below the Main Market sector average of 24.95x.

(Source: Pulse Investments Financials)

Weak Aluminium Market to Widen Jamaican Current Account Deficit Published: 08 November 2019


  • Jamaica’s current account deficit will widen over the coming quarters as goods exports earnings weaken due to falling aluminum prices.
  • Fitch Solutions has revised the 2019 current account deficit forecast from 2.8% of GDP to 3.0% and its 2020 forecast from 2.7% to 3.0%.
  • Solid direct investment inflows and Jamaica’s sizeable international reserves will bolster its external account stability.


(Source: Fitch)

Panama Fiscal Rule Change Signals Weak Fiscal Credibility Published: 08 November 2019


  • Panama's legislative approval for wider fiscal deficits will lead to a further weakening of public debt dynamics, says Fitch Ratings.
  • Modifying the fiscal rule's deficit ceiling also follows a decade-long pattern of postponement of fiscal consolidation goals that has weighed on policy credibility, a key constraint for the sovereign rating since its upgrade to 'BBB' in 2011.
  • The government has modified its fiscal responsibility law (LRSF) to widen its fiscal deficit targets because of declining revenues (despite positive, albeit slower growth) and a need to settle accumulated arrears. General government debt in 2019 is expected to be in line with the 'BBB' median of 38% of GDP.

(Source: Fitch)

Amazon Fire Fallout Highlights Brazil Protein ESG, Export Risk Published: 08 November 2019


  • The significant increase in Amazon rainforest wildfires in 2019 and international backlash highlights potential trade risk caused by environmental, social and governance (ESG) factors for the Brazilian protein sector, says Fitch Ratings.
  • Credit implications are manageable but quantifying the effect of Amazon deforestation and the effectiveness of sector sustainability and traceability efforts in minimizing financial ramifications remains a challenge.
  • Brazil is the world's second-largest producer of beef (the U.S. is largest), exporting about 20% of production in 2018, per the US Department of Agriculture's Foreign Agricultural Service. Livestock farming is a driver of deforestation in the Amazon region with roughly one-third of Brazil's cattle pasture land in the rainforest.
  • JBS, Marfrig, and Minerva have mechanisms to only procure beef produced on land that can be legally used for cattle production. However, deforestation, given the release of carbon dioxide when trees burn, is garnering greater attention due to climate change, resulting in increased scrutiny of industry practices.

(Source: Fitch)

Tariff Rollback?- A sign of progress of the trade front Published: 08 November 2019


  • The U.S. and China both said that a phase-one agreement would feature pledges to roll back tariffs on each other’s goods in stages.
  • Such a move would pave the way for a de-escalation in the trade war that’s hung over the world economy.
  • Still, nothing’s certain, including where to sign any deal, with Iowa and Alaska having been ruled out.
  • Separately, a “fully informed” European Commission President Jean-Claude Juncker said European Union carmakers can breathe a sigh of relief, pledging the U.S. won’t impose tariffs on the region’s cars next week as threatened.

 (Source: Bloomberg)

EU Cuts Growth Forecasts for the Euro Zone on Global Trade Tensions Published: 08 November 2019


  • The EU slashed its growth forecasts for the eurozone Thursday, saying global trade tensions are set to weigh on the region and limit economic expansion.
  • The warning from the EU’s executive arm comes at a time when the ECB has started a new round of stimulus to prop up fragile growth.
  • The 19-member region is now set to grow at a pace of 1.1% this year and 1.2% in 2020. In its previous forecasts, out in May, the European Commission had estimated a 1.2% growth rate for the euro zone in 2019 and 1.5% for 2020.

 (Source: CNBC)

UK Election Campaign Starts Published: 31 October 2019

  • The U.K. election campaign starter gun has unquestionably been fired and the first significant speech from Labour Party leader Jeremy Corbyn will arrive on Thursday.
  • He’ll reiterate many of the pledges already made by his party, including re-nationalizing swathes of British industry, and will attack a “corrupt system” filled with “tax dodgers” and “bad bosses.”
  • Traders, however, are more worried about the threat posed by Brexit champion Nigel Farage than by the socialist agenda of Corbyn while companies face a difficult choice too.
  • Consumer confidence, by the way, has hit a six-year low with Britons fretting about their finances.

(Source: Bloomberg)