• The ​Bank of Canada (BoC) on left its key interest rate unchanged as expected and said it was ‌seeing limited evidence that higher energy prices were fueling broad-based inflation. But Governor Tiff Macklem reiterated that the bank would not hesitate to raise rates if need be to keep inflation in check.
• This decision marks the fifth consecutive meeting at which the BoC has left its key policy rate at the 2.25% ​level, as an array of factors have complicated the economic outlook. The Iran war, which has sent gasoline prices soaring, ​is squeezing household budgets, though Canada, as a net exporter of crude oil, is taking in more ⁠
• Data last month showed Canada's economy posted a surprise contraction in the first quarter versus the year before, making it two straight quarters of annualised decline, which some economists call a technical recession. Macklem, though, said that the economy had basically been flat over the ​last year.
• Canada's overall inflation rate in April ​rose to 2.8%, and Macklem said ​the bank expected it ⁠to hover around 3% before gradually easing toward the 2% target.
• Macklem noted that the Middle East war posed a dilemma for monetary policy makers. Raising rates to dampen inflation could further slow the economy, while ​easing rates to support growth increases the risk of persistently higher inflation.
• Economists see the upcoming review of the North American free trade deal - the ⁠United States-Mexico-Canada ​Agreement - as the biggest uncertainty hanging over the economy. Macklem reiterated that if the U.S. ​imposed significant new trade restrictions, the bank might have to cut rates. If, on the other hand, higher energy prices started leading to generalised inflation, "there may ​be a need for consecutive rises in the policy rate."

(Source: Reuters)

• Shareholder returns remained in focus this week, with dividend declarations, ongoing share buybacks, and corporate governance developments dominating releases among select JSE listed companies.
• Leading the corporate actions were dividend announcements from Kingston Wharves Limited (KW) and Eppley Limited (EPLY). On June 2, 2026, KW’s Board approved a dividend of J$0.26 per ordinary share, payable on August 14, 2026, to shareholders on record as of Thursday, July 16, 2026, which is also the ex-dividend date. Eppley’s followed with the declaration of an interim dividend of J$0.102 per share payable on June 26, 2026, to shareholders on record as of June 12, 2026, which is also the ex-dividend date. Eppley’s dividend announcement came against the backdrop of a strong first quarter, with earnings up 20.7% to J$298.4Mn, driven by broad-based growth across its real estate, asset management, leasing, and investment businesses and lower financing costs.
• Meanwhile, Scotia Group Jamaica (SGJ) signaled the potential for additional shareholder distributions advising that a dividend payment will be considered at its upcoming Board meeting on June 11, 2026.
• Beyond dividends, JMMB Group Limited (JMMBGL) continued returning capital to shareholders through its ongoing share repurchase programme. The company announced that on June 1, 2026, it purchased 60,901 ordinary shares on the open market at an average price of J$15.99, representing a significant discount to its book value per share of J$29.58 for a total of J$974,044.04. The shares were acquired through its broker, JMMB Securities Limited. The buyback forms part of a broader J$300.0 million programme funded from internal cash resources and aimed at enhancing long-term shareholder value.
• On the governance front, Medical Disposables & Supplies Limited (MDS) and Productive Business Solutions Limited (PBS) announced board changes. MDS reported the resignation of Independent Director Mrs. Sheree Martin, effective May 6, 2026. The Company indicated that the departure reflects the increased demands of a senior leadership role she recently assumed and noted that the Board will consider appropriate steps to fill the vacancy in due course. PBS also reported that Director Blondell Walker has resigned effective June 5, 2026, and subsequently appointed Eduardo Rodriguez, Group Chief Financial Officer, as an additional Director effective June 8, 2026. This appointment strengthens the Board's financial and executive leadership representation.
• Against this backdrop, investor sentiment toward these companies has remained mixed. Year to date, KW’s (+8.6%) and SGJ’s (+0.1%) share prices increased, while Eppley (2.1%), MDS (13.9%), and JMMBGL (20.8%) have declined. In terms of valuation metrics, JMMBGL (0.51x) and SGJ (0.98x) continue to trade below the Main Market Financial Sector average price-to-book (P/B) ratio of 1.09x. In contrast, EPPLEY overshot the sector’s average with a P/B of 2.44x.
• Meanwhile, MDS remains deeply discounted, trading at just 0.32x book value compared to the Junior Market Health Sector average of 1.23x, as ongoing losses continue to weigh on investor sentiment

(Sources: JSE & NCBCM Research)

• The Senate, on June 5, approved the National Housing Trust (Amendment) (Special Provisions) Act, 2026, authorising an annual J$11.4Bn withdrawal from the NHT to provide budgetary support to the Government's budget from fiscal year 2026/27 through 2030/31. The measure was passed without amendment and includes a sunset provision^[1] at the end of the period.
• The Government indicated that the continuation of the transfers reflects the increased fiscal demands arising from Hurricane Melissa, which have placed additional pressure on public finances and reconstruction spending requirements. The measure had previously been signaled as part of the Government's revised revenue framework announced in February.
• In discussing the NHT's capacity to support the transfers, the Government noted that housing supply challenges extend beyond financing and include factors such as the availability of serviced land, infrastructure constraints, construction costs, labour shortages, and planning and approval processes.
• From a fiscal perspective, the measure secures a recurring J$11.4Bn annual non-tax revenue source over the medium term. This helps to support budgeted expenditures amid elevated reconstruction and recovery costs. The transfers should provide additional fiscal flexibility while supporting Jamaica's broader fiscal consolidation and debt reduction objectives.
• The arrangement also underscores the Government's continued reliance on NHT resources as a source of budgetary support until the measure expires in fiscal year 2030/31. This diverts funding away from the agency’s mandate to augment and improve the overall supply of affordable housing across the country.

(Sources: JIS & NCBCM Research)

^[1] A sunset provision (or sunset clause) is a specific measure in a law, contract, or regulation that dictates an automatic expiration date for the agreement. Once that date is reached, the law or clause becomes void unless lawmakers or involved parties actively vote or agree to renew it.

• S&P affirmed Bank of N.T. Butterfield's (BNTB) BBB+ and the A-2 short-term issuer credit ratings and simultaneously revised the outlook to Negative from Stable following the bank's planned acquisition of CIBC Caribbean 91.7% interest in CIBC Caribbean Bank Ltd. for $1.794Bn.
• The acquisition will be financed by about $1.1Bn of cash and $703Mn in Butterfield shares, in a deal that's expected to close in the first half of 2027. BNTB will look to acquire the remaining 8.3% stake from minority shareholders. The acquisition is projected to nearly double BNTB's asset base, expand its geographic footprint across the Caribbean, diversify revenue streams, and strengthen its deposit franchise.
• Despite the strategic benefits, the transaction is expected to significantly weaken capital levels. BNTB's Common Equity Tier 1 (CET1) ratio is projected to decline to around 12% from 27.6% at year-end 2025. The CET1 ratio is a key metric used by regulators and investors to measure a bank's financial strength and its ability to withstand economic downturns.
• Meanwhile, its risk-adjusted capital (RAC) ratio will fall significantly at the transaction's closing. The bank's RAC ratio was 13.6% at the end of 2025, and it is anticipated to drop to the 7%-10% range which is considered adequate, from the current 10%-15% range that was considered strong.
• The Negative Outlook also reflects integration and execution risks, as BNTB will need to successfully merge a substantially larger operation while rebuilding capital and achieving expected cost synergies.
• Offsetting these concerns are BNTB's strong profitability, proven ability to generate capital internally, and the enhanced scale and diversification that the acquisition is expected to deliver over the longer term.
• The outlook could return to Stable if the bank successfully integrates CIBC Caribbean and demonstrates meaningful capital rebuilding following the transaction's completion.

(Source: S&P Global Ratings)

• Guyana’s oil production has climbed from a standing start in December 2019 to over 900,000 barrels per day (bpd) in just over six years, marking one of the fastest offshore production ramp-ups in history. With additional Stabroek Block projects still to come, output capacity is expected to rise to approximately 1.3Mn bpd by the end of 2027.
• The analysis of daily reported production data from the Ministry of Natural Resources shows output rising in large, project-led steps rather than gradually, moving from startup volumes in 2020 to roughly 100,000 bpd by 2021, then toward the 400,000 bpd range in 2022, and now to just over 900,000 bpd.
• The Stabroek Block, operated by ExxonMobil Guyana with partners Hess and China National Offshore Oil Corporation (CNOOC), has been the engine of the ramp-up, with each new Floating Production, Storage and Offloading vessel (FPSO) adding another large block of capacity. Whiptail is expected to add about 250,000 bpd by the end of 2027 and bring Guyana’s total production capacity to about 1.3 Mn bpd.
• The pace is globally significant, as Guyana has gone from no commercial oil production to output levels comparable with, or higher than, several long-established producing countries, making it one of the key non-Organisation of the Petroleum Exporting Countries (OPEC) growth stories alongside the United States, Canada, and Brazil.
• The rapid ramp-up is strengthening export earnings, government revenue, and Guyana’s strategic importance in global energy supply, but it also increases pressure on public institutions, infrastructure, local content capacity, environmental oversight, and long-term fiscal management.
• Guyana’s rapid production growth is part of a wider shift in global crude flows toward South America, which has posted the largest year-to-date increase in oil exports of any producing region in 2026. While Brazil remains the region’s largest exporter, Guyana has been the fastest-growing contributor, with January–May export loadings increasing from around 17 Mn barrels in 2021 to around 137 Mn barrels in 2026, reinforcing its rising importance as a non-Middle East source of global oil supply.

(Source: OilNOW)

• LATAM Airlines CEO Roberto Alvo warned that the airline industry may need to cut capacity further if elevated fuel prices persist into 2027, noting that capacity adjustments may be the only way to “balance the equation” in the industry.
• According to Alvo, airlines with strong balance sheets and more premium travellers are better placed to absorb the fuel shock, while carriers with weaker finances or greater exposure to price-sensitive customers, such as ultra-low-cost carriers, would face more challenges.
• The pressure is already visible in airline financing conditions, as higher fuel bills are making borrowing costlier and affecting publicly traded bond prices. Notably, LATAM’s fuel hedges are not fully protecting the airline because current prices are above the range covered by those contracts. More broadly, airline hedging strategies have fallen short as jet fuel prices surged, meaning hedging can smooth margins but cannot fully shield carriers from sudden fuel-price spikes.
• Further, aircraft and engine supply-chain problems are expected to remain a challenge for another two or three years, forcing airlines to keep older planes in service for longer and adding further pressure to operating costs.
• According to the International Air Transport Association (IATA), Middle East disruptions and elevated fuel prices have halved the airline industry’s 2026 profitability outlook, as higher fuel costs and regional disruption weigh on demand, operating costs and flight activity. Global airline profits are now expected to fall to US$23Bn in 2026, down from US$45Bn in 2025, while industry margins are projected to narrow from 4.2% to 2.0%.

(Sources: Reuters & the International Air Transport Association)

• U.S. small-business sentiment fell in May, and the share of owners planning to raise prices over the ‌next three months increased to the highest level in nearly four years, suggesting inflation could remain elevated for a while.
• According to the National Federation of Independent Business (NFIB), its Small Business Optimism Index slipped 0.6 to 95.3 last month, falling further below its 52-year average of 98.0. The ​survey's uncertainty index rose three points to 91. It is running well above its historical average of 68.
• The U.S.-Israeli war with Iran, now in its fourth month, has driven up prices of energy and ​other products that are shipped through the Strait of Hormuz, stoking inflation. The government is expected to report on Wednesday that the Consumer Price Index surged 4.2% on a year-over-year basis in May, a Reuters survey of economists predicted, which would be the largest gain since April 2023. The CPI ​rose 3.8% in April.
• The NFIB survey showed the share of small businesses planning to increase prices over the next three ​months jumped seven points to 34%, the highest reading since July 2022. About 36% of owners reported raising prices, the highest since March 2023, ‌and ⁠up six points from April. The actual price increases were "well above the historical average of net 13%," the NFIB said. Inflation ranked as the second most important problem facing small businesses after taxes.
• Though the Labour Department's closely watched employment report last Friday showed the economy posting three straight months of strong job growth and the unemployment rate holding at 4.3% for the ​third consecutive month in May, ​small business owners were less ⁠enthusiastic about the labour market. The survey's employment index eased to 100.3 last month from 100.4 in April, declining for the third month in a row. The share of owners planning to create new jobs in the next three months dropped four points to 9%, the lowest level since May ⁠ The NFIB noted that "plans to hire are now below the historical average of a net 11%."
• While the share of owners reporting job openings they could not fill declined five points to 29%, the lowest level since May 2020, worker shortages remained an issue ⁠in some industries, including wholesale trade and agriculture.

(Source: Reuters)

• Bank of England (BoE) policymaker Alan Taylor said interest ​rates at their current level ‌were restrictive for the economy and he did not see the ​need for an increase ​to tackle inflationary pressures that ⁠have grown as a result ​of the Iran war.
• As he defined it, "restrictive" in central bank terminology means that borrowing costs are sufficiently high to moderate economic activity and dampen demand. The implication: rates don’t need to go higher to fight inflation, even though UK CPI is running at 2.8%, well above the BoE’s 2% target.
• Taylor was one of the strongest ​advocates on ​the ⁠BoE's Monetary Policy Committee (MPC) for rate cuts before ​the U.S. and Israeli ​war ⁠with Iran began. He and a majority of MPC members ⁠have ​voted since then ​to keep borrowing costs on hold.

(Source: Reuters)

• Eppley Limited saw a 20.7% increase in earnings to J$298.4Mn for the three months ended March 31, 2026 (Q1 2026). The improved performance was underpinned by growth across the Company's key business segments.
• Revenue growth remained broad-based during the quarter. Gross investment income rose 16.0% to J$464.56Mn, supported by higher contributions from real estate, asset management, leasing and associate investments. With the continued expansion of Eppley's real estate portfolio net rental income rose 19.0%, while higher management and performance fees generated by the Caribbean Mezzanine Fund II (CMF II) buoyed asset management income, which expanded by 15.6% to J$155.16Mn. Operating lease income nearly doubled to J$44.5Mn, and profit contributions from associates and joint ventures increased 10.1%, further bolstering gross investment income.
• Improved funding efficiency and disciplined balance sheet management also enhanced profitability. Interest expense declined 6.6% to J$156.38Mn, despite the Company's continued growth initiatives, resulting in a 32.2% increase in net investment income to J$308.18Mn.
• Administrative expenses rose 32.3% to J$145.7Mn, reflecting inflationary pressures and costs associated with the Company's new corporate offices. Nevertheless, a J$2.90Mn net impairment gain on financial assets helped offset part of the increase. Consequently, profit before taxation grew 14.2% to J$300.19Mn.
• The combination of expanding revenues, lower financing costs, and a favourable tax outturn demonstrates Eppley's ability to translate topline growth into stronger shareholder earnings. Looking ahead, Eppley appears well positioned to sustain earnings momentum. The Company continues to benefit from multiple growth engines across private credit, real estate, leasing, and asset management, while its expanding third-party assets under management should support a more recurring fee-based earnings stream. Continued capital deployment opportunities and growth within its investment portfolio are expected to remain key drivers of performance over the medium term.
• Year-to-date EPPLEY's stock price has appreciated by 2.9% to closed at J$34.90 on June 8, 2026. At this price, the stock trades at a P/E ratio of 8.6x, below the Main Market Real Estate sector average of 15.5x. This valuation discount may suggest that the market has yet to fully reflect the Company's earnings growth potential and diversified business model, although investors may continue to assign a discount given the relatively illiquid nature of the stock.

(Sources: Eppley Limited 2026 First Quarter Report & NCBCM Research)

• Jamaica's Net International Reserves (NIR) rose marginally US$6.48Bn at the end of May 2026, reflecting a 0.5% month over month increase compared to April 2026. The improvement was driven primarily by a 0.5% rise in foreign assets (US$32.09Mn) alongside a marginal 0.2% decline in foreign liabilities (US$0.02Mn).
• The increase in foreign assets was largely driven by a 1.0% growth in Currency & Deposits (US$32.32Mn) and a 0.5% rise in Securities (US$15.12Mn), which were partly offset by a 7.9% decline in Special Drawing Rights (SDRs) equivalent to US$15.27Mn.
• Jamaica’s reserve position remains robust, equating to 26.6 weeks of goods & services imports down from 30.3 weeks at the end of May 2025. At this level, the NIR is more than 2.2 times the international benchmark of 12 weeks of imports, underscoring the country's strong capacity to absorb external shocks. This strong reserve position also remains a key credit strength underpinning Jamaica's BB Sovereign Credit Rating profile.
• Looking ahead, reserve levels are expected to remain supportive of macroeconomic stability despite external risks such as elevated energy prices and global market volatility. The continued accumulation of reserves reinforces Jamaica's external resilience, helping to cushion the economy against foreign exchange pressures, given weaker tourism and mining inflows. It supports the country's ability to meet external obligations, maintain confidence in the Jamaican dollar and mitigate additional inflation pressures form currency depreciation.

(Sources: Bank of Jamaica and NCBCM Research)