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Wisynco Group Limited (WISYNCO) Responds to the Government of Jamaica Announced Bans Published: 21 September 2018

Wisynco Group Limited (WISYNCO) has advised that it has taken note of the Government of Jamaica’s recently announced ban on plastic bags, plastic straws and Styrofoam, pending final legislative provisions.

The areas of impact for WISYNCO include plastic straws and Styrofoam, which the Company manufactures.

Regarding plastic straws, it is proposed that this can take effect on January 1, 2019. Plastic straws represent less than 1/10th of 1% of the Company’s revenue and the ban will therefore have no impact.

Regarding the ban on Styrofoam for local manufacturers, though there is still some uncertainty, it is currently proposed that this ban take effect on January 1, 2020. Styrofoam represents 4% of the company’s revenue and approximately 3% of the company’s net income.

 

Source: JSE

 

 

Jamaica's point-to-point Inflation as at August 2018 is 3.9% Published: 20 September 2018

The All Jamaica Consumer Price Index (CPI) for August 2018 recorded an inflation rate of 0.9 per cent. This was outlined in the Consumer Price Index Bulletin – August 2018 released today by the Statistical Institute of Jamaica (STATIN). The upward movement in August 2018 CPI was influenced by a 1.6 per cent increase, in the index for the ‘Food and Non-Alcoholic Beverages’ division. This was primarily due to higher prices for agricultural produce resulting in an increase of 0.6 per cent in the class ‘Vegetables and Starchy Foods’. Another influence on the upward movement was the ‘Furnishing, Household Equipment and Routine Household maintenance’ division as a result of the increase in the Minimum Wage of approximately 13.0 per cent. These increases were mitigated by a fall of 0.1 per cent in the index for the division ‘Housing, Water, Electricity, Gas and Other Fuels’, due to lower electricity rates. The calendar year-to-date inflation was 1.6 per cent while the movement in the index for the fiscal year-to-date was 1.9 per cent and the point-to-point movement was 3.9 per cent. A breakdown of the three regions for the month showed that all three regions recorded increases in their index: Greater Kingston Metropolitan Area (KMA) (1.2 per cent), Other Urban areas (OUC) (1.0 per cent), and Rural Areas (0.7 per cent).

 

Source: STATIN

Trump Presses OPEC To Reduce Prices Published: 20 September 2018

(Bloomberg) U.S. President Donald Trump resumed his criticism of OPEC, saying on Twitter that the cartel “must get prices down now!”. Trump’s fresh intervention in the oil market comes before a meeting of ministers from the Organization of Petroleum Exporting Countries and its allies in Algeria on Sunday. His complaint follows signals from Saudi Arabia that it was content to see prices climb above $80. That’s been a red line for the White House in the past, provoking the president to direct his first social-media barb against the cartel since July 4. According to commodity analyst Giovanni Staunovo, Trump’s tweet makes sense “with oil prices close to the highs of the year,” Considering the upcoming OPEC meeting in Algiers, he wants to keep the pressure on the group ahead of the mid-term elections.”

Refinancing US$850Mn International Bond Critical Issue in Petrotrin Restructuring Published: 19 September 2018

Plans are in earnest to refinance Petrotrin’s US$850Mn bond which fall due 2019, with a request for proposals (RFP) expected as soon as next month according to the company’s chairman Wilfred Espinet. 

In an effort to curb losses emanating from the company’s operations, Petrotrin in a statement released on August 28, 2018 announced that it will be closing its Pointe-a-Pierre oil re­fin­ing op­er­a­tions while completely re­designing its Ex­plo­ration and Pro­duc­tion divisions.  Refinancing the 2019 in­ter­na­tion­al bond, held widely by for­eign in­vestors, is seen as one of the key is­sues fac­ing the com­pa­ny whose re­fin­ery operations are scheduled to be closed in two weeks. Estimates are that approximately 3500 permanent workers and another 1200 non-permanent workers will be affected by the closure which is expected to cost the state-owned Oil Company upwards of $1Bn.  However, concerns abound that the costs associated with the closure may come out well above the $1Bn estimate due staff related costs such as pension benefits as well as unpaid supplier costs.   

With respect to the refinancing plans, Es­pinet indicated that the company is currently weighing its options, stating further, “we'll is­sue a re­quest for pro­pos­als for re­fi­nanc­ing by Oc­to­ber. It will take a lit­tle time but we an­tic­i­pate that with­in the next two months we should have an idea of where we are on the sit­u­a­tion.”

 

Source: Trinidad & Tobago Guardian

 

Digicel Bondholders Are Said to Hire Moelis to Improve Debt Deal Published: 18 September 2018

(Bloomberg)  A group of Digicel Group Ltd. bondholders hired financial adviser Moelis to negotiate better terms for a proposed debt exchange, according to people familiar with the matter.

The group includes Ashmore Group Ltd. and holders of a majority of the targeted bonds, said the people, who asked not to be identified because the discussions are private The same creditors hired law firm Akin Gump Strauss Hauer & Feld, people familiar with the matter said this month. The advisers are seeking to coordinate with a separate group of creditors represented by law firm Milbank, Tweed, Hadley & McCloy, the people said.

“Digicel remains in ongoing and constructive discussions with an ad hoc group of noteholders regarding the exchange offers and consent solicitations,” a representative for the company said in an emailed statement, without elaborating Representatives for Moelis, Ashmore and Milbank declined to comment on the talks. An Akin Gump official didn’t return calls and emails seeking comment.

Bondholders have balked at elements of a plan outlined by Irish billionaire Denis O’Brien’s phone carrier on Aug. 31 and quickly organized to push for better terms. Digicel asked them to exchange $2 billion of bonds due in 2020 and $1 billion of notes due in 2022 for new securities maturing two years later.

Under the plan, the latter notes would be structurally subordinated to the rest of the capital structure and could be repaid with more debt. Digicel is also seeking to remove many key covenants in the existing bonds.

An early tender deadline was extended to Sept. 28 from Sept. 14.

 

China Hits Back Published: 18 September 2018

(CNBC) China said it will institute new tariffs on U.S. goods worth $60 billion on Sept. 24, according to a Reuters report. The media outlet said the Asian country's tariff rate on a list of 5,207 U.S. products will range between 5 percent and 10 percent. This is in retaliation to Trump's announcement on Monday, that his administration will impose 10 percent tariffs on about $200 billion of imports from China effective Sept. 24. Trump, in a statement, said that the tariffs would rise to 25 percent on Jan. 1, 2019. Earlier on Monday, White House economic advisor Larry Kudlow said Trump has not been satisfied with trade talks. The world two largest economies have already applied tariffs to $50 billion of each other's goods. 

GraceKennedy Limited (GK) – Signia Financial Group Inc Acquires Globe Finance Inc Published: 14 September 2018

(JSE) GraceKennedy Limited (GK)  has announced that one of its associated companies in Barbados, Signia Financial Group Inc., has acquired Globe Finance Inc.

The acquisition will result in the formation of the amalgamated company, which will be known as SigniaGlobe Financial Group Inc.

GK currently holds a 40% shareholding in Signia and will hold the same 40% stake in the new entity, SigniaGlobe Financial Group Inc.

The transaction is estimated to cost a total of BBD11.8 million. GK Capital Management Limited, the investment and advisory arm of GK, advised Signia in the transaction.

Brexit warning Published: 14 September 2018

Bank of England Governor Mark Carney joined a meeting of U.K. government ministers yesterday to share worst-case economic scenarios used by the central bank as part of its Brexit planning. He warned of a 35 percent collapse in house prices and surging inflation that could lead to rate hikes. On the negotiation front, things seem to have slowed to a crawl. Today’s scheduled meeting between Brexit Secretary Dominic Raab and his EU counterpart Michel Barnier will now just be a phone call, as both sides gear up for an informal EU summit next Thursday. 

Muddying waters- No promise of a quick resolution in US China Trade Talks Published: 14 September 2018

(Bloomberg) President Donald Trump damped hopes of a successful and timely outcome from proposed trade talks between the U.S. and China. In a tweet yesterday, he said that his officials “are under no pressure to make a deal,” a move seen as undercutting Treasury Secretary Steven Mnuchin who issued the invitation to Beijing. Chinese state media warned the nation shouldn’t expect a quick resolution as Trump has not changed his thinking. 

Oil rise Published: 12 September 2018

A barrel of West Texas Intermediate for October delivery was trading at $69.70 by 5:45 a.m. as crude held onto yesterday’s gains following yesterday’s U.S. inventory data that increased fears of a supply crunch. Russian Energy Minister Alexander Novak told reporters that the country could add as much as 300,000 barrels per day to production within a year, if needed, as output concerns increase ahead of U.S. sanctions on Iran kicking in on Nov. 4.