• Concern about inflation deepened at the Federal Reserve's (Fed’s) meeting last month, with "several" policymakers ready to raise interest rates and "many" saying a hike in borrowing costs would be ‌needed if inflation does not decline to the U.S. central bank's 2% target, the minutes of the session showed on Wednesday.
• The policymakers who favoured a rate increase at the meeting "remarked that price pressures appeared broad-based and judged that the (policy-setting) Committee should adopt a more restrictive policy stance to meet its commitment to achieving its price stability and maximum employment goals on a sustained basis." Failure to do so, they argued, would risk a steeper and potentially more costly sequence of tightening moves at a later stage.
• The Fed voted at that meeting to hold its benchmark interest rate ⁠in the current 3.50%-3.75% range, but with three policymakers dissenting in favour of a quarter-percentage point hike. A larger group of "many" participants "assessed that policy tightening would likely be necessary if inflation did not decline," the minutes said. The minutes, covering Fed Chairman Kevin Warsh's second meeting as head of the central bank, showed central bankers already delving into some of the broader issues he wants to pursue as part of a possible overhaul of how the Fed operates.
• Warsh also asked for input from the Committee on whether it would be better for the Fed to hold only six meetings a year rather than the current eight, allowing for two full months of data ⁠to accumulate each time. No decisions were made regarding this issue, and the 2026 schedule of meetings would not be altered.
• The minutes drew little reaction in financial markets. An announcement earlier on Wednesday that the Treasury would double its buyback of longer-term U.S. government debt had eased upward pressure on yields, and there was no mention of support for a rate cut. This represents how the Fed's policy debate has shifted over the course of a year that began with an expectation that the central bank would be able to lower borrowing costs this year as inflation slowed.
• Price pressures, ⁠however, have continued to build, particularly after the Trump administration joined Israel in a war with Iran. Shipments of oil and gas through the strategic Strait of Hormuz continue to be constrained almost six months after the start of the conflict.
• The Fed is expected to hold its policy rate steady again at its September 15-16 ⁠meeting after recent data showed inflation easing slightly and firms unexpectedly shedding jobs in July. The data has left officials still divided over whether rate hikes will be needed to slow inflation further, but also more cautious about the strength of the labour market and the risks to their goal of maintaining full employment.

(Source: Reuters)

• A jump in household energy bills pushed British inflation ​to a four-month high in July, matching forecasts, and it looks set to rise further as the war in Iran grinds ‌on with no end in sight. Annual consumer price inflation rose to 2.9% in July from a 15-month low of 2.6% in June, the Office for National Statistics said on Wednesday, reflecting a 13% rise last month in the maximum tariff British regulators allow energy firms to charge households.
• Inflation likely ​rose to 2.9% in July from 2.6% in June, further above the Bank of England’s (BoE's) 2% ⁠target, according to a separate Reuters poll ahead of official data due on Wednesday. But in its latest set ​of quarterly forecasts, the BoE expects inflation to rise above 3% later this year. Still, nearly 90% (56 of 64) of economists polled ​by Reuters expect the Monetary Policy Committee to leave rates unchanged at 3.75% this year, up from 83% last month. Six expected a hike by then, and another two forecast a cut. The poll was conducted August 13-18.
• The BoE is likely to be reassured by the absence of nasty surprises in Wednesday's data, and ​figures a day earlier showed a slightly cooler labour market, which may limit the lasting impact of inflation caused by the Iran war. The central bank was burned by the scale of price rises in 2022 after Russia's full-scale invasion of Ukraine, which, combined with a tight post-COVID job market, drove British inflation above 11%. U.S. President Donald Trump ​said on Tuesday that no talks were taking place with Iran and insisted the Strait of Hormuz was open, contradicting Iran's assertion that the critical ​waterway remained shut to shipping. Sterling and British government bond futures showed little immediate reaction to the inflation figures.
• Core ​inflation, which excludes the impact ⁠of energy and food prices, came in a little higher than expected at 2.6%, unchanged from June, rather than the 2.5% median Reuters poll prediction. Services inflation, closely watched by the BoE as a gauge of domestically generated price pressures, ​eased as the central bank and economists had expected, to 3.4% in July from 3.6%. Food and non-alcoholic drink ​price inflation, which economists ⁠had expected to surge after the start of the Iran war, cooled to 1.3%, an almost two-year low, adding to signs that fierce supermarket competition has helped to absorb the shock.

(Source: Reuters)

• Seprod Limited (Seprod) and its subsidiaries, A.S. Bryden & Sons Holdings Limited (ASBH) and Caribbean Producers (Jamaica) Limited (CPJ), faced similar headwinds in Q2 2026, but differences in diversification and tourism exposure produced sharply contrasting results. Seprod proved the most resilient, growing net profit 16.3% despite a 2.6% revenue decline. ASBH remained profitable, but earnings plunged 92.3%. However, CPJ swung to a loss as depressed hotel and restaurant volumes continued to weigh on its hospitality-heavy business.

Seprod’s Diversification Cushions Weak Demand

• Seprod’s diversified operations and cost discipline provided the strongest buffer against weaker demand in its subsidiaries. Revenue declined 2.6% YoY to J$36.51Bn, primarily reflecting weaker demand from Jamaica’s tourism sector, while gross profit fell 3.8% to J$9.75Bn as elevated energy and raw material costs added further pressure. Consequently, gross profit margin edged down to 26.7% from 27.0%. However, tighter cost management more than offset this decline, with other operating expenses declining 5.9%.
• The improvement below the gross-profit line allowed Seprod to convert weaker sales into stronger earnings, with Q2 net profit rising 16.3% to J$687.64Mn and net margin improving to 1.9% from 1.6%. The first-half performance was even stronger, as net profit increased 62.4% to J$2.34Bn despite a 3.0% reduction in revenue to J$72.93Bn. However, the H1 result benefited from the gain associated with the disposal of International Biscuits Limited.

Higher Costs Deepen ASBH’s Earnings Pressure

• ASBH faced broad weakness across its regional operations, resulting in significantly greater earnings pressure. Q2 revenue declined 6.8% to US$139.80Mn amid softer demand for premium beverages likely due to the Special Consumption Tax (SCT) levied on sugary and alcoholic beverages in May 2026 in Jamaica and industrial equipment in Trinidad & Tobago and the slowdown in Jamaica’s tourism sector. Operating profit fell 30.7% to US$5.91Mn, while higher finance costs contributed to earnings plunging 92.3% to US$0.21Mn. Finance costs increased 16.4% YoY to US$4.12Mn. The weakness extended through H1, with net profit for the period falling 95.4% to US$0.28Mn as revenue declined 6.5%.

CPJ Bears the Brunt of Tourism Disruption

• CPJ remained the most exposed to the lingering effects of Hurricane Melissa, demonstrating the downside of its greater concentration in Jamaica’s tourism and hospitality sector. Topline plunged 26.1% YoY to US$31.33Mn as major hotel and restaurant customers remained closed, partially reopened or operated below normal occupancy levels. Jamaica sales were down approximately 34%, while the St. Lucia business proved comparatively resilient. The volume decline also reduced CPJ’s ability to absorb fixed manufacturing and logistics costs, pushing gross profit down 30.4% to US$8.00Mn and compressing gross profit margin by 158bps to 25.5%.
• Unlike Seprod and ASBH, CPJ was unable to offset its weaker topline through cost containment, resulting in a return to losses. Administration and other operating expenses increased 6.1% to US$9.30Mn amid elevated repair, utility and restructuring costs, which contributed to the company recording a net loss of US$0.47Mn compared with net profit of US$1.49Mn in Q2 2025. The H1 picture was similarly weak, with revenue declining 27.0% to US$64.47Mn and the Group recording a US$1.64Mn net loss versus a US$3.29Mn profit in the prior-year period.

Tourism Recovery Offers Upside, but Valuations Diverge

• Looking ahead, Jamaica’s tourism recovery should provide a common tailwind, but the pace and magnitude of the earnings rebound is likely to remain uneven. CPJ expects operating conditions to strengthen during H2, particularly in Q4 as hotel occupancy normalises, while its continued integration into the wider Seprod and Brydens platform should create opportunities for distribution synergies, improved procurement and greater operating efficiency. ASBH is similarly pursuing regional integration, centralised warehousing, brand expansion and cost rationalisation, with its improving cash generation and lower borrowings providing additional support. Seprod enters this recovery phase from the strongest position of the three, supported by greater diversification, improved liquidity and ongoing debt reduction. However, elevated input and energy costs, macroeconomic uncertainty and the pace of Jamaica’s tourism recovery remain key downside risks to the broader group’s H2 performance.
• Despite the longer-term benefits expected from integration, investors appear to be more focused on the near-term challenges and have remained cautious on all three stocks. As at August 18, 2026, Seprod, ASBH and CPJ closed at J$75.01, J$5.15 and J$24.98, respectively, representing YTD declines of 10.6%, 32.1% and 17.7%. At these prices, Seprod and ASBH trade at P/E multiples of 10.15x and 6.28x, respectively, below the Main Market Distribution & Manufacturing average of 14.01x, while CPJ trades at a substantially higher 31.81x. The valuation gap is particularly notable given CPJ’s current earnings weakness, suggesting that its premium multiple embeds greater expectations for an earnings recovery as Jamaica’s tourism sector normalises.

(Sources: JSE & NCBCM Research)

• Honey Bun (1982) Limited (HONBUN) and Consolidated Bakeries (Jamaica) Limited (PURITY) delivered sharply contrasting performances in their most recent financial quarters. HONBUN rose to the occasion, with earnings climbing 62.5% on stronger demand and increased production capacity, while PURITY felt the heat, swinging to a J$11.10Mn net loss as rising operating and financing costs weighed on profitability.
• Honey Bun’s expansion appears to be adding the right ingredients for growth, with the completion of its Angels manufacturing expansion helping to drive a robust third quarter ended June 30, 2026 (Q3 2025/26). Gross operating revenue increased 22.5% YoY to J$1.26Bn, supported by sustained demand, product innovation, increased production capacity and continued market penetration. Gross profit rose 19.1% to J$558.78Mn; however, higher raw material costs took a small bite out of margins, with gross margin easing to 44.5% from 45.8%.
• Despite higher expenses, HONBUN still had enough dough to deliver stronger operating profitability. Operating expenses increased during the quarter as the company strengthened its distribution, commercial and organisational capabilities, while depreciation rose following the commissioning of the expanded Angels production facility. Nevertheless, operating profit before finance costs and taxation more than doubled to J$89.73Mn. Furthermore, profit before tax increased by 71.4%, while operating margin rose to 5.1% from 3.7%.
• PURITY, by contrast, struggled to turn its revenue into bread and butter, as higher operating costs eroded profitability for its second quarter ended June 30, 2026 (Q2 2026). Revenue crumbled 2.7% to J$402.81Mn, while gross profit declined 5.3% to J$166.22Mn, resulting in gross margin narrowing 110bps to 41.3%. Total operating expenses rose 6.1% to J$173.80Mn, driven by higher depreciation from recent capital investments, increased distribution costs and continued investment in operational capabilities. As a result, PURITY moved from a J$11.70Mn operating profit in Q2 2025 to a J$7.58Mn operating loss in Q2 2026, while the bottom line went from baked to burnt, moving from J$5.53Mn profit to a J$11.10Mn loss.
• Despite a solid Q2 for HONBUN, the full-year performance for both companies was weak as they remain in the middle or near the end of significant investment programmes aimed at strengthening their manufacturing platforms. HONBUN’s nine-month revenue rose 13.5% although net profit declined 58.2% to J$62.9Mn as finance costs and depreciation increased sharply following the Angels expansion. PURITY’s H1 revenue increased 7.5%, but net profit fell 26.3% to J$18.85Mn as higher operating, depreciation and financing costs, affected by its capacity and process-improvement programme, absorbed the benefits of revenue growth. Going forward, investors will be looking to see whether both companies can translate their expanded capacity into sufficient volume growth to spread these costs and bake stronger margins into future earnings.
• Since the start of the year, HONBUN and PURITY have seen 12.6% and 28.3% share price declines to close the market at J$6.20 and J$1.32, respectively, on August 18, 2026. At their current market prices, HONBUN and PURITY trade at P/B multiples of 1.86x and 0.18x, compared with the Junior Market Manufacturing sector average of 1.28x.

(Sources: JSE & NCBCM Research)

• Trinidad and Tobago's (T%T’s) economy contracted by 0.5% year over year (YoY) in 2025, underpinned by a weak Q4, marking the first full-year economic contraction since 2021. Several key sectors contributed to 2025's weak performance, with notable contractions in domestic trade (-4.0% y-o-y), construction (-3.2%) and public administration (-2.7%).
• Despite this weakness, BMI expects the economy to return to growth in the near term, expanding by 0.8% in 2026 and by 2.6% in 2027. This will be driven by a rebound in the energy sector as new gas projects come online. BP's Cypre field, which came online in April 2025 and completed drilling in December, will continue to boost overall production in 2026.
• Overall, LNG output has returned to year-over-year growth since December 2025, most recently expanding by 23.3% YoY in April 2026. Shell's Manatee field and BP's Ginger field, expected in 2027, will lift production further. Access to reliable sources for natural gas imports, potentially including the all-important Dragon gas field, would further support a rebound in the energy sector in 2026 and 2027. Favourable energy prices should support inbound investment too, despite external uncertainty.
• However, economic conditions in the non-energy sector were softening earlier this year. Trinidad and Tobago's economic activity index shows continued weakness to start 2026, with a pronounced pullback in the non-energy sector (-2.9% YoY) that was larger than the drop in the energy sector (-0.5% YoY). This leading indicator, which tracks quarterly GDP, suggests another contraction to start 2026, a view supported by more granular domestic economic indicators. Credit growth continued to slow in 2026 through April (4.0% YoY, down from 9.1% a year prior) on weak business-sector borrowing, local sales of concrete fell (13.6% YoY) for a fifth consecutive quarter in Q1 2026, and the cashless payments index showed continued weakness to start 2026, slowing to just 3.4% YoY from 8.5% a year prior.
• Risks to the near- and medium-term outlooks are tilted slightly to the downside. Global economic uncertainty will likely weigh on inbound investment, alongside business-environment headwinds from stubborn violent crime and ongoing states of emergency. Furthermore, potential delays to energy projects coming online is a downside risk to the 2026 and 2027 forecasts. On the upside, the successful development of the long-awaited Dragon gas project is an upside risk to growth in the near and medium terms, both through increased investment flows and growth in natural-gas-dependent sectors as availability constraints fade.

(Source: BMI)

• Ocean carriers are raising surcharges as the Panama Canal continues to take precautionary measures in case of a drought.
• The Panama Canal has been implementing water-saving measures to prepare for potential weather impacts from the looming El Niño climate pattern expected in the second half of 2026. A drought hit the canal in 2023 and 2024, leading to longer transit times and higher transit fees.
• In its latest draft adjustment, the major waterway announced that the maximum authorized draft for vessels transiting the Neopanamax locks will be 48 feet, effective Aug. 26. The next draft is set at 47.5 feet, effective Sept. 3.
• The Panama Canal had already implemented two separate draft measures earlier this summer. These reductions represent the fourth and fifth draft adjustments announced by the Panama Canal Authority.
• The measures are the result of operational planning informed by lessons learned during the 2023–2024 period, as well as hydrological analyses and historical data that support the canal’s operational decision-making process,” according to a press releasefrom the Panama Canal.
• Due to the ongoing draft restriction, ocean carriers have recently updated their previous Panama Canal surcharges. 

(Source: SupplyChainDive)

• Long-term borrowing costs from the U.S. to Germany and Japan hit their highest in decades on Tuesday due to ballooning government debt and geopolitics, raising borrowing costs for companies and households and complicating policy. Bond markets ‌are entering an era where the inflation and interest rate outlook is more uncertain, and the upside risks are greater, as U.S. President Donald Trump’s policies, from tariffs to war, upend the global order.
• Debt levels in developed countries are reaching thresholds that look increasingly unsustainable, with the U.S. debt pile nearing $40 trillion. The Iran war is dragging on, pushing up oil prices and inflation and hitting global growth. In addition, massive borrowing by technology companies to fund a buildout of AI infrastructure is ​competing with demand for government bonds.
• In addition, massive borrowing by technology companies to fund a buildout of AI infrastructure is ​competing with demand for government bonds. Bond yields' recent surge "suggests investors are losing patience with fiscal profligacy," said Jonas Goltermann, chief markets economist at Capital Economics.
• Thirty-year bond yields in the United States, the ⁠world's deepest and most systemically crucial government bond market, hit their highest since 2007earlier on Tuesday as oil prices rose back above $90, fanning inflation worries as US.-Iran peace hopes faded. In Japan, inflation angst and expectations that the central bank could hike interest rates as early as Septemberpushed 10-year borrowing costs to a three-decade high.
• In Europe, Germany's 10-year Bund yield touched its highest since 2011, French yields were at their highest since 2008, and Britain's 30-year borrowing costs neared peaks hit in May that marked the ​highest levels since 1998. When a bond's yield rises, its price falls.
• The selloff ​in government bond markets matters because the repercussions ripple through economies. Sovereign debt sets the benchmark for borrowing costs for companies and other loans, including household mortgages

(Source: Reuters)

• The Bank of England (BOE) will leave interest rates unchanged at 3.75% for the rest of the year, according to a strong majority of economists polled by Reuters, ​clinging to a view they've held since the U.S.-Israeli war on Iran began in late February.
• The UK ‌economy has remained mostly resilient since then, with little evidence of any spillover from higher energy prices into the broader economy. That has given the central bank room to stay on the sidelines. But three of the nine Monetary Policy Committee members voted for an ​immediate rate rise to 4.0% at the July meeting, up from two in the previous meeting.
• Inflation likely ​rose to 2.9% in July from 2.6% in June, further above the BOE's 2% ⁠target, according to a separate Reuters poll ahead of official data due on Wednesday. But in its latest set ​of quarterly forecasts, the BOE expects inflation to rise above 3% later this year. Still, nearly 90% of economists polled ​by Reuters, 56 of 64, expect the Monetary Policy Committee to leave rates unchanged at 3.75% this year, up from 83% last month. Six expected a hike by then, and another two forecast a cut. The poll was conducted August 13-18.
• No economists forecast a rate ​change at the next MPC meeting in September. Financial markets are still pricing in one quarter-point rate rise ​by year-end. Elizabeth Martins, UK economist at HSBC, said "a big rebound in energy prices would certainly change things. But the real game changer ‌for ⁠the MPC, I think, is around second-round effects."
• Crude oil prices, trading at about $91 a barrel, are still about 25% above pre-war levels as the Strait of Hormuz, a key shipping route for Middle Eastern oil, is still closed. The most recent set of labour market data showed weak hiring and pay growth within the MPC's tolerance range, which economists ​said is likely to keep ​policymakers on the sidelines ⁠for now.

(Source: Reuters)

• Local inflation accelerated in July, with the latest data from the Statistical Institute of Jamaica (STATIN) showing consumer prices rose 1.2%, following a 0.8% increase in June. The stronger monthly outturn pushed 12-month point-to-point (P2P) inflation to 7.5%, further above the Bank of Jamaica's (BOJ’s) 4.0%-6.0% target range and reinforcing the central bank's warning that inflation would temporarily breach its ceiling amid higher transportation, food and utility costs.
• July's increase was driven primarily by a 6.3% rise in the 'Transport' division, reflecting the implementation of the second phase of increases in route taxi and hackney carriage fares effective July 1, 2026. The fare adjustment, which was identified by the BOJ as a key upside risk to inflation, contributed to an 8.7% increase in the index of the ‘Passenger transport by road’ and a 13.6% P2P increase in Transport.
• Food prices also continued to trend upward, with the 'Food and Non-Alcoholic Beverages' division rising 0.6%. Higher prices for agricultural produce resulted in a 2.3% increase in the index for 'Vegetables, tubers, plantains, cooking bananas and pulses'. Food and Non-Alcoholic Beverages recorded a 9.4% P2P increase, making it one of the main contributors to the annual rise in consumer prices.
• Additional upward pressure came from the 'Housing, Water, Electricity, Gas and Other Fuels' division, which increased 0.9%, driven mainly by higher electricity, water and sewage rates. On a 12-month basis, the division recorded 5.2% inflation, highlighting the broader pass-through of higher utility and fuel-related costs into domestic prices.
• Looking ahead, weather-related risks will be an important consideration for food prices, particularly if El Niño conditions continue to intensify and affect domestic agricultural production or reduce the supply of key crops locally. At the same time, uncertainty surrounding global energy prices due to the prolonged Middle East conflict presents another source of upside risk, given the potential pass-through to transportation, electricity and other domestic fuel and fertiliser costs. The extent to which these pressures persist or become embedded in inflation expectations will be important in determining the trajectory of headline inflation.
• Against this backdrop, attention turns to the BOJ's August 19 monetary policy decision, which will mark the final MPC decision under Governor Richard Byles, whose term ends on August 18. While the recent breach of the target range is consistent with the MPC's expectation that inflation would temporarily exceed its ceiling, the combination of weather-related food risks and uncertainty around energy prices could keep inflation elevated for longer than previously anticipated. The BOJ could therefore maintain the policy rate at 5.50% while monitoring whether these upside risks begin to translate into more persistent domestic inflationary pressures.

(Sources: STATIN, BOJ, & NCBCM Research)

• Carreras Limited (CAR) kept the fire burning in Q2 2026 despite the higher Special Consumption Tax (SCT), with net profit increasing 15.3% year-over-year (YoY) to J$1.94Bn for the three months ended June 30, 2026 (Q2 2026). The quarter provided the first indication of CAR's performance under the higher SCT, which took effect on May 1, 2026, increasing the tax on cigarettes from J$17.00 to J$20.00 per stick.
• Revenues rose 4.6% YoY to J$5.76Bn, supported by a portfolio-wide price increase implemented during the quarter, which helped offset the expected decline in cigarette volumes following the SCT increase. The company also reported an improvement in direct cost, which was down 3.4%. Reflecting improved pricing, favourable mix and continued cost discipline, gross profit rose 10.8% to J$3.43Bn, with gross margin expanding by 340 basis points to 59.6% from 56.2%.
• The stronger gross margin flowed through to the bottom line, underpinned by disciplined expense management. Administrative, distribution and marketing expenses were broadly flat at J$860.24Mn, while lease interest expense declined 20.5% to J$17.65Mn. Consequently, profit before tax advanced 15.7% to J$2.59Bn. Although income tax expense increased 17.0% to J$652.54Mn, earnings growth remained robust, with net profit margin widening to 33.7% from 30.6%. The earnings performance highlights the Company's ability to protect profitability despite the near-term volume pressure associated with the higher cigarette tax.
• The Q2 performance added to Q1 combined to create a particularly strong first half, with H1 2026 revenue rising 28.0% YoY to J$12.69Bn and net profit increasing 43.9% to J$4.45Bn. Topline benefited from higher year-to-date volumes as well as the Q2 price increase, while gross profit advanced 30.6% to J$7.45Bn, lifting  gross margin by 120bps to 58.7%. Meanwhile, administrative, distribution and marketing expenses declined 2.7% to J$1.59Bn, underscoring continued cost discipline.
• The combination of robust earnings, strong operating cash flow and a relatively healthy liquidity position reinforce CAR's capacity to maintain attractive shareholder returns while preserving financial flexibility. Cash generation remained a key strength, with operating cash flow increasing 18.3% to J$5.45Bn in H1 2026, while cash and cash equivalents rose 45.7% to J$3.29Bn. Strong liquidity supported continued shareholder distributions, with dividends paid increasing 7.5% YoY to J$4.17Bn.
• Looking ahead, the higher SCT is likely to remain a key factor influencing CAR's performance during the remainder of 2026, with the Company expected to balance further pricing actions against consumer affordability, cigarette volumes and the risk of increased illicit trade. While the initial Q2 results suggest that pricing has successfully cushioned the impact of the tax increase on revenue and margins, sustained volume pressure could become more pronounced in subsequent quarters. Nevertheless, the continued expansion of CAR's Vuse (e-cigarette) and reduced-risk product portfolio, alongside disciplined cost management and efforts to mitigate illicit trade, should provide some offset while supporting the preservation of profitability and market share.
• CAR’s stock has increased 87.7% year-to-date, closing at $33.99 on Monday, August 17, 2026. At its current price, CAR trades at a price-to-earnings (P/E) ratio of 20.7x, representing a sizeable premium to the Main Market Distribution & Manufacturing average of 14.85x. The premium suggests that much of CAR's strong earnings momentum is already reflected in the share price.

(Sources: JSE & NCBCM Research)