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Tourism Industry Continues to Record Unprecedented Growth Published: 11 September 2019

  • The tourism industry continues to record unprecedented growth, with a 9.1% increase in stopover arrivals for the first eight months of 2019.
  • Director of Tourism, Donovan White, points out that up to August 31, 2019, Jamaica recorded 1.8Mn in stopover arrivals, achieving a revenue inflow of US$2.39Bn, which is a 12.0% growth in earnings over the same period last year.
  • White was speaking at the 2019 Jamaica Product Exchange (JAPEX) Media Breakfast at the Half Moon Hotel, Rose Hall, Montego Bay, St. James, on Tuesday, September 10.
  • According to the Director, Jamaica is poised to generate approximately US$3.5Bn in tourism earnings from stopover arrivals for 2019, a 12.0% increase in revenue inflow over 2018.
  • He added that just under 2.7Mn stopover tourists are expected to visit the island by the end of 2019, an increase of 8.5%.

(Source: JIS)

Indies Pharma Increases Profit Published: 11 September 2019

  • Net profit at Indies Pharma increased 41.2% for the nine-month period ended July 31, 2019, moving from $80.11Mn (EPS: $0.06) to $113.09Mn (EPS: $0.09).
  • Revenues at the company increased by 28.2% (or $126.51Mn) and were the major contributor to the improved bottom line. In addition, Indies has decreased their liabilities and is now debt-free relative to the corresponding period of 2018 thereby resulting in a decline of 93.3% (or 3.92Mn) in finance costs. The company has also benefitted from exchange gains which increased by $932K.
  • The stock has risen 7.86% since the start of the calendar year and closed yesterday’s trading session at $3.43. The stock currently trades at a P/E of 28.58x which is above the Junior Market Distribution sector average of 25.01x.

(Source: Indies Pharma Financials)

Strong Consumption Will Underpin Jamaica's Steady Growth Published: 11 September 2019

  • Record-low unemployment, stable inflation, and credit expansion will drive economic activity in Jamaica over the coming quarters.
  • Fitch Solutions has forecasted real GDP growth of 2.1% y-o-y in 2019 and 1.8% in 2020.
  • Risks to the forecast are weighted to the downside given Jamaica’s dependence on the United States for remittances, tourism, and exports.

(Source: Fitch Solutions)

Latin America Currency Roundup: Increasingly Downbeat Outlook Across The Region Published: 11 September 2019

  • Fitch has become more downbeat on the near-term outlook for Latin America’s major currencies. Amid a deteriorating global economic outlook and US-China trade tensions, commodity prices have declined, causing most regional currencies to underperform expectations in recent months.
  • Moreover, downside risks to the forecasts are also rising given vulnerabilities in the external environment that would put selling pressure on risk assets.
  • Moreover, Fitch has become bullish on the US dollar, with the unit being supported by growing risk aversion in global markets, dovish central banks globally and technical dynamics. Idiosyncratic political factors also remain significant drivers of price movement in Argentina, Brazil, and Mexico, with risks largely slanted to the downside in these markets.

(Source: Fitch)

Govt faces multimillion claim from Chinese firm...but no liability if inducement was paid Published: 11 September 2019

  • The government of Trinidad and Tobago could be forced to make a termination payment of up to an estimated US$43Mn to the China Gezhouba Group International Engineering Co Ltd (CGGC) for the cancellation of its contract with the Housing Development Corporation (HDC), according to Express Business calculations based on local high-rise apartment construction costs and profit projections.
  • That is if an investigation of the award of the controversial contract determines that no bribes, inducement or commissions were paid by the Chinese contractor to any local official.

(Source: Trinidad Express)

Banks Brace Published: 11 September 2019

  • The European Central Bank looks set to announce a range of stimulus measures Thursday, with markets waiting anxiously for details of a plan that could include both lower interest rates and fresh bond purchases.
  • Unfortunately, the strategy of lowering borrowing costs for companies and households with increasingly negative interest rates is putting a serious dent in the banking industry’s profitability.
  • The ECB’s current deposit rate is minus 0.4%, and that has become a charge, according to Deutsche Bank, which tallies the cost at hundreds of millions of euros this year.

(Source: Bloomberg)

Trump Ups Pressure on Fed, Seeking Rates of Zero ‘Or Less Published: 11 September 2019

  • President Donald Trump urged the Federal Reserve to lower interest rates to a level typically reserved for recessions or periods of persistently weak growth, suggesting that such a setting could allow the government to refinance Treasury debt at a lower cost.
  • The Fed should “get our interest rates down to ZERO, or less,” Trump said in an early Wednesday tweet that went beyond his previous attacks and demand for a cut of one percentage point.
  • “We should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term.”
  • With Trump polling behind several Democratic candidates in his 2020 re-election campaign and Americans fearing a recession within the next year, the president is seeking to deflect blame for any economic ills.
  • He has repeatedly blamed the Fed and Chairman Jerome Powell, who goes by Jay, for raising interest rates too steeply in 2018 and constraining the economy as the president pursues a trade war with China.

(Source: Bloomberg)

Barbados IMF Plan on Track Published: 10 September 2019

  • Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program, says a team from the International Monetary Fund (IMF) at the conclusion of a four-day visit on September 5th.
  • The target for the Government’s primary surplus was met with a wide margin, with the Government running a primary surplus of 2.5% of (annual) of GDP in the first quarter of the financial year (FY) 2019/20. This bodes well for achieving the Government’s primary surplus target of 6.0% of GDP for FY2019/20. International reserves were also well over program targets at end of the review period.
  • Overall, good progress has been made in implementing the end of June and July 2019 structural benchmarks under the Extended Fund Facility Agreement (EFF).

(Source: NationNews)

Scrapping limits Published: 10 September 2019

  • China removed limits for overseas investment in the country’s stocks and bonds, the latest push by authorities to attract more foreign capital.
  • With almost two-thirds of the current $300 billion allowance on non-Chinese asset purchases untapped, the move may be more about signaling than meeting current demand.
  • Data released overnight showed the country’s economy remains under pressure, with factory deflation deepening while consumer prices quicken more than expected. In perhaps another sign of how the trade war is hurting China, a state-run paper took aim at Trump adviser Peter Navarro for his hawkish stance on the issue.

(Source: Bloomberg)

Now what? Published: 10 September 2019

  • After failing to get enough votes to call an election, but succeeding in getting Parliament closed until Oct. 14, British Prime Minister Boris Johnson promised to work to make a new deal with the European Union at the Oct. 17 summit in Brussels.
  • Despite all the shenanigans in Westminster, data this morning showed that the U.K. economy continues to motor on, with the jobless rate returning to 3.8% while basic pay rose 3.8% in the three months through July.

(Source: Bloomberg)