• BMI analysts forecast real GDP growth to average 1.7% per year over 2026-2035 for the Bahamas, slightly slower than 2.1% over the previous 10 years. Bahamas’ performance is anticipated to be constrained by structural capacity limits in tourism, slow labour force growth and incomplete public sector reform.
• For 2026, growth is forecasted to come in at 1.9%, a downward revision from the previous 2.2% forecast. The negative impact of the Iran conflict on oil import costs and household purchasing power has driven this. However, the impact will be partially offset by the government's fuel hedges.
• The Bahamas’ fuel hedge is a financial risk-management strategy introduced in partnership with the Inter-American Development Bank in 2020 and later expanded in December 2025 through Bahamas Power and Light (BPL). The hedge locks in fuel prices for part of the country’s oil imports, covering about 2.5 million barrels for 365 days at $70 per barrel, helping shield households, businesses, and public finances from sudden spikes in global oil prices driven by external shocks such as the U.S.-Iran conflict.
• Furthermore, BMI noted that political stability will remain a tailwind for the economy, with centre-left Prime Minister Phillip 'Brave' Davis and his Progressive Liberal Party having comfortably won re-election on May 12^th by securing 33 of 41 seats up for grabs.
• This was the first time in over 30 years that an incumbent had won re-election in The Bahamas, a development that will help to sustain the steady progress that has been made toward returning the public finances to a sounder footing since the pandemic.

(Sources: BMI, A Fitch Solutions Company, Fitch Ratings, & NCBCM Research)

• Fed officials are looking at holding rates longer than thought, while also considering rate hikes if inflation remains sticky, according to minutes from the central bank’s April policy meeting released on Wednesday, May 20, 2026.
• The minutes shed light on the Fed's most recent meeting, in which the committee voted to hold rates steady. One official dissented from that decision, favouring a rate cut, while three others said the FOMC should have removed language from its post-meeting statement suggesting the central bank's next move would likely be a rate cut.
• Participants generally judged that continued elevated inflation readings, together with uncertainty related to the duration and economic implications of the Middle East conflict, could necessitate maintaining the current policy stance for longer than previously anticipated.
• At the same time, a majority highlighted that “some policy firming” – Fed speak for rate hikes — would likely become appropriate if inflation were to continue to run persistently above the Fed’s 2% goal. According to the minutes, inflation is emerging as the top concern, since recent reports on the job market have shown the unemployment rate falling despite low job creation, suggesting the job market has stabilised.
• Further, concerns remain about a scenario where sustained elevated energy prices combined with tariffs could lead to broader inflation, potentially increasing inflation expectations and creating a tougher trade-off between the Fed’s goals of maintaining maximum employment and stable prices.
• The growing appetite for rate hikes could put the central bank at odds with President Donald Trump, who has demanded rate cuts to boost the economy and lower the interest the U.S. government pays on the national debt.

(Sources: Yahoo Finance & Investopedia)

• British inflation cooled by more than expected in April, but the slowdown did little to mask a tough outlook for households, with global costs from the Iran war set to hit them harder later this year.
• Consumer prices rose by an annual 2.8%, down from March’s annual inflation rate of 3.3%, helped by smaller increases in household energy and other regulated utility bills than in April 2025, and by measures to lower energy bills introduced by Finance Minister Rachel Reeves. It marked the lowest reading since March 2025.
• Sterling dipped briefly against the dollar and the euro after the Office for National Statistics published its data before largely recovering. Investors reduced their bets on the Bank of England (BoE) raising interest rates in the coming months.
• However, this improvement is set to be short-lived as the impact from the Middle East conflict continues to build, with motor fuel prices rising at the fastest pace since the Ukraine war. Motor fuel prices for consumers surged in April, up 23% on the year, the biggest rise since September 2022.
• The expected rise in inflation to around 4% later this year adds to the pressure on Prime Minister Keir Starmer, who is facing challenges to his leadership from within his Labour Party. Most major forecasters, including the International Monetary Fund (IMF), still expect Britain to end 2026 with the fastest inflation in the G7.
• Meanwhile, the BoE’s key question is whether the expected rise in headline inflation creates longer-term price pressures in the economy. Several policymakers have said the weak jobs market could make it harder for workers to demand higher pay and for businesses to pass on higher costs, although business surveys show cost pressures and selling price hikes are spreading rapidly across companies.

(Source: Reuters)

• March earnings are down for logistics stocks Kingston Wharves Limited (KW) and Cargo Handlers Limited (CHL).
• For the quarter ended March 2026, KW reported a 22.3% decline in net profit to $590.85Mn as core revenue growth was undermined by an 80.3% slip in other operating revenue. Driven by a 12.0% increase from its terminal segment and a 35.0% surge in Logistics, which benefited from higher container volumes partially linked to post-Hurricane Melissa activity, core revenues grew by 18.0% to $3.33Bn. However, $84.66Mn in exchange losses, which is a reversal from the $117.45Mn gains for March 2025, weighed heavily on the bottom line, leading to the 22.0% decline in earnings. Management noted that the FX losses were due to the appreciation of the Jamaican dollar relative to the US Dollar, and that, excluding the FX volatility, net earnings would have grown by 5.0%.
• Notwithstanding the decline, management maintains a positive outlook as it seeks to leverage its strategic infrastructure and strong liquidity to navigate heightened global uncertainties, such as Middle East tensions and fuel price volatility. To capitalise on shifting regional trade routes and growing logistics demand, KW plans to collaborate with the government to acquire and develop near-port lands for expanded yard space. Prior capital investments in berth capacity and yard modernisation are also expected to continue bolstering operational efficiency and support faster vessel handling across its diversified cargo base.
• CHL also reported softer earnings, which declined by 39.1% to $39.69Mn, owing to lower core operating revenues and the share of profit of associates.
• Reflecting reduced warehousing capacity and smaller cement shipments at the Port of Montego Bay following Hurricane Melissa, revenues dipped by 18.9% to $105.17Mn. Management noted that the reduction in cement shipments is expected to be short-term and that restoration of warehousing facilities at the port continues post-Melissa. Revenue streams were further suppressed by an 8% drop in cruise revenue, although container handling numbers normalised and showed a marginal year-over-year improvement.
• The company experienced a minor relief as operating and administrative expenses decreased by 3% to $85.38Mn. However, with the faster pace of decline in revenues relative to expenses, operating profit ultimately collapsed by 54.6% to $17.8M. The bottom line was also weighed down by the company's share of profit from associates, which shrank 43% to $19.49M for the quarter.
• As at the close of trading on May 18, 2026, KWL shares traded at $36.99, meaning it is up 7.41% YTD and trades at a P/E of 15.73x. Meanwhile, CHL traded at $16.73, is down 16.7% and trades at a P/E of 18.73x. The peer median for Energy Material and Infrastructure (EMI) stocks was 17.28x.

(Sources: Kingston Wharves Ltd., Cargo Handlers Ltd. & NCBCM Research)

• March 2026 quarter releases for JSE-listed stocks show that the majority of Investment Firms reported higher earnings. The most frequent earnings driver was gains on investment activities.
• For the March 2026 Quarter, Barita Investments Limited (BIL) delivered net profits of $1.17Bn, up 86.5% on the March 2025 quarter. The growth reflected higher operating revenue, which exceeded the dollar value growth in operating expenses (OPEX). Revenues rose by $1.55Bn (+71.9%) to $3.72Bn, driven primarily by a 154% increase in gains on investment activities, amid fair value appreciation in its equity portfolio (324.8% YoY) and the Real Estate Fund. Net interest income also improved, owing to a materially higher contribution from interest-earning assets and a more favourable rate backdrop relative to the prior-year comparative period. Conversely, OPEX surged by 84.8% to $1.02Bn, driven primarily by higher administrative and accounting costs. This expense spike was heavily influenced by an $883Mn non-recurring, accounting-related charge taken to transition from an old core technology system to a more scalable target infrastructure. As of March 19^th, BIL’s stock traded at $69.56, is down 3.4% YTD and had a P/B of 2.33x.
• Meanwhile, Sygnus Credit Investments (SCI), earnings are up 19.7% to US$2.20Mn, marking its best March quarter since its inception. This was supported by an 80.0% drop in provisions for potentially bad loans as the workout of previously stressed borrowers neared completion. Mark-to-market gain in fair-value investments of US$123.5K versus a US$514.4K loss for March 2025, also aided earnings growth. However, the company absorbed a one-off US$1.24Mn downward correction to interest income, a catch-up adjustment reversing interest recognised across earlier periods and the carryover impact of an unusually large US$19.51Mn early loan repayment in H1. It created a “temporary cash drag", earning while it was undeployed, even as SCI continued to pay interest on its own borrowings. SCI traded at $10.13 and is down 14.5% YTD (P/B of 0.28x).
• Supported by a 16.8% increase in operating revenues, VM Investments Limited (VMIL) reversed its fortunes, with $70.14Mn profits, relative to a $32.53Mn loss for March 2025. Revenue expansion was driven by higher gains from investment activities, which grew by 68.6% and offset a decline in net interest income. Total operating expenses decreased by 9.0% year-over-year, bolstering profitability. This reduction was driven by a 23.3% drop in other operating costs from ongoing cost-saving initiatives, which successfully countered a 9.5% increase in staff costs arising from inflationary wage adjustments. The company traded at $1.57 as it declined by 26.5% YTD and has a P/B of 0.90x.
• In contrast, Sterling Investments Limited (SIL) reported net profits of $34.3Mn (-65.7%). This falloff was due to lower revenues overwhelming cost savings. Revenues slipped by 66.3% to $23.19Mn due to a reversal of 22.69Mn in FX gains to a $13.29Mn FX loss amid the appreciation in the Jamaican dollar. Lower gains on the sale of investments, which resulted in a 70.1% decline in realised gains on debt securities sales, added to the drag on earnings. However, total operating expenses declined by $14.74Mn (-67.4%) to $7.12Mn. This was due to a $14.52Mn swing from fair value losses of $4.48Mn in Q1 2025 to $10.07Mn for Q1 2026. Accordingly, operating profits declined by 65.7% to $16.07Mn. SIL’s stock is up 2.43% YTD with a price of $3.17 and a P/B of 0.86x.

(Sources: Company Filings via the JSE & NCBCM Research)

• The International Monetary Fund (IMF) and the government of Barbados have reached a staff-level agreement on a 36-month precautionary Stand-By Arrangement (SBA) valued at Special Drawing Rights¹ (SDR) 189Mn, or approximately US$260Mn. The agreement remains subject to approval by the IMF Executive Board in June.
• The new SBA will provide Barbados with insurance in a shock-prone external environment, while helping preserve macroeconomic stability and supporting reforms under the homegrown Barbados Economic Recovery and Transformation Plan 2026 (BERT 2026). BERT 2026 marks the next phase of Barbados’ reform journey, moving from stabilisation and growth toward long-term transformation into a high-performing, inclusive, and climate-resilient economy.
• The SBA will support efforts to enhance public financial management, including the fiscal framework, management of public-private partnerships and State-Owned Enterprise (SOE) oversight; revenue policy and administration; productivity and competitiveness; climate resilience; financial supervision; and the Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) framework. The structural reform agenda will be supported by technical assistance from the Fund and other partners.
• According to the IMF, Barbados enters the proposed arrangement from a position of strengthened macroeconomic credibility. Guided by sound macroeconomic policies, economic activity remained robust in 2025, with growth estimated at 2.7%, driven by tourism, construction, and business services. Additionally, gross international reserves remained at about US$1.5Bn at end-2025, equivalent to around 6 months of imports, and remain ample to support the exchange rate peg.
• Fiscal performance continued to be strong, with the fiscal primary surplus reaching 4.2% of GDP in FY2025/26, and high corporate income tax revenues enabling an expansion of public investment in infrastructure and resilience. Furthermore, fiscal policy will continue to balance debt sustainability with development needs. This will require sustaining strong primary fiscal balances to keep public debt on track to reach the 60% of GDP target by FY2035/36, while maintaining fiscal space for critical investment, resilience, and social spending as noted by the IMF.
• However, the outlook remains subject to downside risks, including heightened global policy uncertainty, commodity price pressures, and Barbados’ vulnerability to natural disasters. Higher commodity prices are expected to place upward pressure on inflation and the current account deficit, although international reserves are projected to remain ample. External conditions are expected to normalise thereafter, but the outlook remains subject to unusually high uncertainty, with risks tilted to the downside.

_______________________

¹Special drawing rights are supplementary foreign exchange reserve assets defined and maintained by the IMF. SDRs are units of account for the IMF, and not a currency per se. SDRs represent a claim to currency held by IMF member countries for which they may be exchanged.

(Source: IMF)

• The International Monetary Fund (IMF) has recently expressed that Trinidad and Tobago (T&T) will record modest economic growth in 2026, supported by new energy projects and continued expansion in the non-energy sector. The projection came following the IMF Executive Board’s completion of its latest Article IV consultation with the twin-island republic.
• Economic activity continued its gradual recovery in 2025, with real GDP growth moderating to 0.8% and inflation returning to low, pre-pandemic levels. However, persistent fiscal deficits led to an increase in public debt. The current account balance remained in surplus, and while international reserves are trending downwards, they are supplemented by substantial (25% of GDP) liquid assets in the Heritage and Stabilisation Fund (HSF).
• Looking ahead, growth is projected to remain at around 0.8% in 2026 according to the IMF, and to strengthen over the medium term, supported by new energy projects and continued momentum in the non-energy sector. Additionally, inflation is expected to rise temporarily to around 3.1% in 2026, reflecting global commodity price developments, before stabilising around 2% over the medium term.
• The overall fiscal deficit is expected to decline to 4.6% of GDP in 2026, down from 5.5% in 2025, and international reserves are expected to remain adequate at about 5.5 months of imports. That said, higher energy prices are expected to support fiscal and external balances in the near term, while the government’s ongoing revenue and expenditure reforms, and new energy projects coming on stream, underpin a gradual improvement in the fiscal and external positions over the medium term.
• However, the IMF noted that the outlook is subject to significant uncertainty, including due to the impact of the war in the Middle East. Delays in new energy projects or disruptions to production from mature fields could weigh on growth, while faster implementation of reforms under the Revitalisation Blueprint¹ and sustained investment could lift medium-term growth prospects.

_______________________

¹The "Revitalisation Blueprint" refers to a comprehensive national development and urban renewal plan launched by the government of Trinidad and Tobago. It is a strategic vision designed to reshape the economy, modernise communities, and create jobs through infrastructure, tourism, and cultural projects.

(Source: IMF)

• President Donald Trump again raised the prospect of renewed military action against Iran, threatening to resume strikes in the coming days after saying he had just called off a planned U.S. attack as part of Washington’s push for a deal to end the war. Trump said he hoped the U.S. would not have to “do the war,” but warned that Iran may face “another big hit” within a limited period, possibly by the weekend or early next week.
• The warning comes as Iran continues to resist U.S. demands to relinquish the remaining elements of its nuclear programme, despite weeks of U.S. and Israeli strikes that began in late February. Trump has repeatedly threatened, and then backed off from, renewed military action since a truce was agreed on April 8.
• At the same time, Vice President JD Vance struck a somewhat more positive tone, saying the U.S. had made progress and that Iran appeared to want a deal. However, he also warned that the next option would be restarting the military campaign.
• Domestically, the Republican-led U.S. Senate has signalled growing unease over continuing the war, with a procedural vote reflecting concern over a foreign conflict that is taking a mounting financial toll on Americans ahead of midterm elections.
• Market pressures remain elevated, as the conflict has shut down the Strait of Hormuz, a vital waterway for oil and gas flows, causing global energy prices and inflation to surge. Iran has maintained a chokehold over Hormuz, pushing U.S. fuel pump prices to their highest level in almost four years.
• U.S. Treasury yields on the longest-dated bonds rose to their highest level in almost two decades as investors assessed the war’s growing macroeconomic impact. Brent crude fell around 1% on Tuesday, May 19, 2026, and traded above US$110 per barrel, but remains more than 50% higher since the war began.
• Further underscoring the fragility of the truce, the UAE’s Barakah nuclear-energy plant was hit by a drone, causing a fire at a power station. Normal power was later restored at the plant, easing safety concerns after the drone attack. However, oil prices remain supported by disrupted supply, uncertainty around the Strait of Hormuz, and unresolved U.S.-Iran negotiations.

(Source: Bloomberg)

• Japan’s economy grew at an annualised 2.1% in the first quarter of 2026, beating analysts’ expectations of 1.7%. Growth was supported by improved consumption and strong exports.
• On a quarter-on-quarter basis, the economy expanded 0.5%, ahead of estimates of 0.4%. This also marked an improvement from the 0.3% expansion recorded at the end of 2025.
• However, the figures do not capture the full impact of the Iran war, which started at the end of February 2026. Oxford Economics said the Q1 GDP figures are “already in the rear-view mirror,” as high energy costs are expected to weigh on the economy ahead.
• Exports grew by a better-than-expected 11.5% year-on-year in March 2026, partly driven by a 29.3% jump in shipments of semiconductor equipment. This reflects continued support from robust IT demand. Still, higher energy prices and elevated uncertainty are expected to limit consumption and investment, even as exports provide some short-term support.
• The Bank of Japan has cut its FY2026 growth forecast to 0.5% from 1.0% and raised its core inflation outlook to 2.8% from 1.9%, warning that higher crude oil prices could weigh on corporate profits and real household incomes. In addition, Tokyo is reportedly likely to issue fresh debt for an extra budget to cushion the economic blow from the Middle East war, as the country subsidises energy bills.

(Source: CNBC)

• The March 2026 quarter earnings season is in full swing, and Local Manufacturing and Distribution (M&D) Stocks are grabbing early headlines. Main Market M&D stocks, Seprod Limited (SEP) and Carreras Limited, have kicked it off with strong quarterly earnings. At the same time, results are mixed for Junior Market M&Ds, with growth from Atlantic Hardware & Plumbing Company Limited (AHPC) and Fontana Limited (FTNA), met by a slowdown from Woodcats International (WOODCATS).
• Seprod Limited (SEP) posted a 94.0% surge in quarterly net profit to $1.65Bn, as one-off gains and lower taxation expenses outweighed the dip in the group’s revenues. Core revenues declined by 3.4% to $36.42Bn amid continued Hurricane Melissa drag on the Hotels, Restaurants, and Catering (HORECA) channel. With direct expenses down by 3.3% to $9.70Bn, gross profit closed at $9.72Bn (-4.0%), and gross margins narrowed from 26.7% to 26.6%. However, the one-off gain for the divestment of a subsidiary, International Biscuits Limited (IBL), saw the group’s other operating income jump 8-fold to $952.25Mn. This and $475.52Mn in tax savings contributed to the surge in earnings. The filings did not disclose the source of the tax savings.
• Carreras Limited (CAR) also puffed up strong earnings. Its net profit surged by 78.0% to $2.51Bn, driven by strong revenue growth and cost management. Revenue grew by 57.3% to $6.29Bn. While the cost of sales grew faster than revenues (+62.1%) and gross margins narrowed marginally from 59% to 58%, gross profits increased by 54.0% to 4.02Bn. Notably, CAR’s strong earnings continue to support its higher dividend distributions. On May 11^th, the company declared an interim dividend of $0.46 per share, payable on June 18^th to shareholders on the register at May 27th, which is 14.2% higher than the previous distribution.
• As at May 19^th, SEPROD traded at $82.78, is down 1.4% and has a 11.53x P/E ratio. Meanwhile, CAR traded at $22.44, which is up 23.90% YTD and trades at a P/E of 14.15x. Both stocks trade below the 17.35x peer average for Main Market M&D stocks.
• On the Junior Market Front, Atlantic Hardware & Plumbing Company Limited (AHPC) stood out, with earnings tripling to $74.25Mn on strong revenue growth, improved gross margins and lower finance costs. Revenues climbed 49.5% to $687.1Mn on robust post-Melissa demand. Operating expenses rose 74.4% to $116.8Mn on higher staff, lease and motor vehicle expenses tied to its agro-distribution expansion. Nonetheless, operating profit still advanced 27.9% to $97.5Mn, contributing to the bottom line. Notably, Finance costs decreased by 46.7% to $23.3 million, due to significant debt repayments from the previous year, aided by including funds from its February 2025 Jr Market IPO and the sale of the 7A Ashenheim Road property. Tax expenses were nil compared to $8.14 million in Q1 2025, reflecting the 100% tax break from its Jr Market listing. At $1.84, the stock is up 7% year-to-date, and its P/E ratio of 26.67x is above the 17.28x peer median for Energy Material and Infrastructure (EMI) stocks.
• Fontana Limited (FTNA) also grew its earnings to $114.1Mn (+11.0%), with revenue rising 17.7% to $2.63Bn on same-store sales growth and contributions from its four recently integrated Monarch Pharmacy locations. Gross margin held steady at 36.9%, although EBITDA softened to $795.2Mn from $857.2Mn as operating expenses rose 18.2% on one-time Monarch integration and amortisation charges. At $6.48, FTNA shares are down 16.88% YTD and its P/E ratio of 17.51x is marginally below the 23.34x average for Junior Market Distribution Stocks.
• Bucking the trend, Woodcats International Limited’s (Woodcats’) earnings splintered by 13.7% to $14.30Mn, as the trailing impact of Hurricane Melissa, other climatic factors, and sales seasonality weighed on top-line performance. Revenues declined 5.3% to $241.88Mn, while administrative expenses rose 7.8% to $67.73Mn on one-time costs tied to its recent Junior Market listing. Additionally, finance costs climbed 33.6% to $6.10Mn, further compressing the bottom line. While Woodcats paid $4.77Mn in taxes, it is set to benefit from a five-year income tax exemption as a newly listed Junior Market entity, which should enhance earnings going forward. The company is also set to gain from its plant modernisation program and the new "waste-to-revenue" initiative launched in Q1. Management is also exploring export opportunities in the Eastern Caribbean. However, rising oil and fuel prices may strain the supply chain and logistics costs, potentially impacting margins as the company balances pricing with customer relationships. At $0.73, Woodcat’s stock is down 12.0% YTD and trades at a P/E of 10.43x, which is below the 15.01x average for Jr Market Manufacturing Companies.

(Sources: Company Filings via the JSE & NCBCM Research)