• Canada's annual inflation rate accelerated more than expected to 2.0% in October as gas prices fell less than the previous month, data showed on Tuesday, likely diluting chances of another large rate cut in December.
• Prices for goods rose 0.1% on a year-over-year basis in October, following a 1.0% decline in September. In contrast, prices for services decelerated in October, rising 3.6%, the smallest yearly increase since January 2022. Over the past three years, prices for goods rose 10.2%, while prices for services increased 14.2%.
• Karl Schamotta, Chief Market Strategist at Corpay, believes the Bank of Canada will likely opt for a smaller quarter-point increase in December. He expects signs of economic resilience to support policy expectations into 2025. However, underlying price pressures are continuing to ease. If the upcoming GDP release on November 29 and the jobs report on December 6 show softer results than today's report, policymakers may take more aggressive action to reduce the gap between current rates and the neutral rate^[1]. This gap is estimated to be between 2.75% and 3.25%.

Source: (Reuters & Statistics Canada)

• Britons started new businesses last year at the slowest rate since 2010, a potential warning sign for longer-term economic growth and productivity, according to official data published on Monday.
• The number of new businesses started in the United Kingdom fell to 316,000 in 2023 from 337,000 in 2022, according to the Office for National Statistics.
• This reduced the 'business birth rate' - the number of new businesses started as a percentage of the total number trading, from 11.5% to 11.0%, the lowest since 2010. Fewer businesses closed too, with 309,000 shutting their doors in 2023, down from 349,000 in 2022, lowering the 'business death rate' to 10.8% from 11.9%, the lowest since 2020.
• Many economists view falling rates of business creation and destruction as bad for productivity growth and long-term improvements in living standards, as older businesses often find it harder to adopt better business models or new technology.

(Source: Reuters)

• Consumer prices fell to a 3-year low in October, according to data from STATIN. The point-to-point inflation rate for October 2023 and October 2024 was 4.9%, the lowest since June 2021, when the reopening of economies caused a spike in global demand and supply chain challenges that led to a surge in prices for imported goods.
• October’s low inflation outturn primarily reflects lower prices in the ‘Housing, Water, Electricity, Gas and Other Fuels’ division (+3.5%), which was partially offset by higher costs for the ‘Food and Non-Alcoholic Beverages’ (+5.3%) and ‘Transport’ (+9.1%) divisions.
• Growth in the ‘Housing, Water, Electricity, Gas and Other Fuels’ division was due mainly to increases in the prices of ‘Imputed Rentals for Housing’ (+6.2%) and ‘Water Supply and Miscellaneous Services Relating to the Dwelling’ (+7.8%) spurred by higher rental prices and water and sewage rates.
• The ‘Food and Non-Alcoholic Beverages’ division continued to be impacted by higher prices in the ‘Fruits and Nuts’ (+17.5%) and ‘Vegetables, tubers, plantains, cooking bananas and pulses’ (+5.7%), due to the lingering effects of Hurricane Beryl and the recent heavy rains on the supply of some produce.
• Higher prices in the Transport division were driven by a 15.4% increase in the ‘Passenger Transport Services’ class, resulting from a 19% rise in taxi fares in October 2023, and the fare restructuring by the Jamaica Urban Transit Company effected May 2024.
• At 4.9%, Jamaica’s inflation is comfortably within the BOJ’s target range of 4.0%-6.0%. With the path for inflation over the next eight quarters likely to be lower, it could set the stage for another rate cut at the next meeting of the Monetary Policy Committee on November 21. Currently, the policy rate stands at 6.50% after 2 consecutive 25 basis points cuts, which is significantly higher than the 0.5% rate in June 2021.
• Still, the US Federal Reserve’s (US Fed’s) interest rate pathway may be a constraint on the magnitude of future BOJ rate cuts, as Jamaica’s central bank walks the interest rate differential tightrope to help moderate inflation. Projections for the US Fed's 2025 rate cut trajectory have moderated due to the potential impacts of a Trump presidency. Proposed policies such as corporate tax cuts, deregulation, broad tariffs, and mass deportations could stimulate US inflation. This, in turn, could drive up Jamaica's imported inflation, complicating the Bank of Jamaica's (BOJ) short-term policy rate projections.

(Source: STATIN)

• Fuel distributor FESCO reported a 68.4% increase in its September 2024 (Q2 2025¹)  earnings, reflecting the impact of its downward revision to its Q2 2024 results and revenue growth outpacing costs.
• FESCO’s Q2 2024 results were adjusted to align with the audited figures for the fiscal year ending March 31, 2024 (FY24). These adjustments included a 0.3% revision to sales and cost of goods sold (COGS). As a result, Q2 2024’s gross profit was revised down from $379.88Mn to $329.07Mn – a decrease of $50.81Mn – which impacted the company’s bottom line. As a result, net profits for Q2 2024 were revised down by 36.3% to $101.12Mn, setting a lower base for growth in Q2 2025.
• Additionally, Q2 2025 earnings growth was also supported by revenue growth outpacing costs. Buoyed by a 13.4% increase in the volume of fuels sold, including both traditional fuels and LPG, revenues increased by 10.1% year-over-year to J$7.93Bn. Direct costs rose by 8.7%, supporting a +38.3% increase in gross profit to J$455.1Mn.
• Operating expenses rose by 19.8% to J$251.5Mn, reflecting its expanded operations, additional retail locations², and increased business acquisition and development costs. Finance costs (net) were also higher because of higher interest on debt and bonds, net of interest income and foreign exchange gains. Staff costs increased to J$95.5Mn, up J$25.7Mn year over year, due to an expanded workforce required for new retail locations and operational growth.
• Looking ahead, the Company has commenced construction of its service station on Spanish Town Road, FESCO Oval. FESCO Oval will be a company-owned company-operated service station and will increase its retail presence within the Kingston and St Andrew (KSA) region. It is slated to open in September 2025.
• YTD, Fesco’s shares are down 4.06%; however, following the release of Q2 earnings, the company’s share price increased marginally to $3.67 (+0.5%). At $3.67, the stock trades at a P/E of 22.82x, which is above the Junior Market Distribution Sector Average of 19.90x.

(Source: NCBCM Research & FESCO Financial Statements)

___________________________________
¹ FESCO’s year end is March 2025

² Operating locations including the additions of: FESCO Kitson Town, FESCO Hayes, FESGAS Bernard Lodge and FESGAS Naggo Head

• LIAT (2020) Ltd has announced the launch of its inaugural flight to Georgetown, Guyana (GEO) on November 19, 2024. This new Antigua-Guyana route will offer increased connectivity across the region, strengthening ties between the Eastern Caribbean and South America.
• According to a press release by LIAT (2020), the introduction of the new route marks a significant milestone in the airline’s expansion strategy, offering a crucial link between the Caribbean and Guyana’s emerging markets. The LIAT expansion also offers even greater opportunities for travellers from regions such as Canada, Europe, and the Middle East to reach Guyana through the Caribbean.
• Georgetown, Guyana’s capital and economic hub, is a key destination for business and leisure travellers alike.
• Oneidge Walrond, Minister of Tourism, Industry, and Commerce for Guyana, explained that the increased airlift, coupled with the government’s investments in airport infrastructure, will unlock new opportunities for economic growth and development.
• Furthermore, operating with an enhanced fleet of aircraft, LIAT20 continues to be a key driver of economic development and regional integration.

(Source: Guyana Chronicle)

• As was widely anticipated, the Bank of Mexico’s (Banxico’s) Board of Governors voted in a unanimous decision to reduce the overnight rate by 25bps to 10.25%, bringing the cumulative amount of loosening since the cutting cycle began in April to 100bps.
• In its statement, the Banxico Board noted recent peso weakness following Donald Trump’s election victory but also commented that this weakness has been reasonably contained relative to prior episodes and that financial market volatility more generally has subsided.
• Policymakers saw little downside risk from pushing ahead with their cutting cycle, particularly considering easing core inflation pressures that are a function of softness in economic activity.
• Expectations are for another 25bps cut in December, with the overnight rate to be lowered to 8.00% (up from previous forecasts of 7.50%) by end-2025 in response to officials’ concerns about weakness in economic activity that will likely outweigh fears about the inflationary impact of peso depreciation linked to Donald Trump’s return to the White House.
• Risks to the forecasts are tilted to the upside, though there is a case to be made for Banxico to facilitate FX depreciation if Trump pushes ahead with tariff plans, given its role as a shock absorber.

(Source: BMI)

• U.S. President Joe Biden pledged a $4.0Bn U.S. contribution to the World Bank's International Development Association fund for the world's poorest countries, two sources with knowledge of the commitment said on Monday.
• Biden announced the U.S. pledge during a closed session of the Group of 20 summit in Rio de Janeiro, according to sources who spoke on condition of anonymity. The amount is a record, substantially exceeding the $3.5Bn Washington committed during the previous IDA fund replenishment round in December 2021.
• A White House spokesperson in Washington declined to comment on the World Bank's IDA replenishment.
• It is unclear if U.S. President-elect Donald Trump, who has proposed cutting foreign aid in the past, will honour Biden's pledge as he and billionaire Tesla and SpaceX CEO Elon Musk sought to slash U.S. spending through a new government efficiency panel. An appropriation by the U.S. Congress to fund the commitment would not likely take place until after Trump takes office in January.

Source: (Reuters)

• The European Union has widened its sanctions against Iran over Tehran's support of Russia in its war with Ukraine, the European Commission said on Monday. The Commission said it had added the Islamic Republic of Iran Shipping Lines (IRISL) and its director Mohammad Reza Khiabani, among others, to its sanctions list.
• The fresh sanctions are against vessels and ports used for transporting Iranian-made Unmanned Aerial Vehicles (UAVs), missiles and related technologies and components. They include prohibiting any transaction with ports and locks owned, operated or controlled by the sanctioned individuals and entities.
• The Managing Director of Iran's Ports and Maritime Organization Ali Akbar Safaei condemned the fresh sanctions and denied the "European accusations" as "baseless", Iran's official IRNA News Agency reported on Monday.
• The EU is also sanctioning three Russian shipping firms - MG Flot, VTS Broker, and Arapax - for transporting Iranian weapons, including drone parts, across the Caspian Sea to resupply Russian troops in Ukraine.

(Source: Reuters)

• Dolla Financial Services Limited (Dolla) reported a 45.8% decline in its Q3 earnings, which resulted in a modest 3.5% increase in net profit to $339.64Mn for the nine months ended September 30, 2024. This was largely due to higher earnings in the first half of the year, which helped offset the weaker Q3 performance.
• Despite a 17.5% (or $52.62Mn) increase in interest income, the quarter’s profit decline was driven by higher interest expenses (+32.8%) and operating expenses (+26.5%).
• However, for the nine-month period, total interest income was $1.09Bn, reflecting a 23.1% (or $205.77Mn) year-over-year (YoY) increase, driven primarily by a 15% YoY growth in sales during H1 2024. Net interest income (NII) before expected credit losses (ECL) reached $903.52Mn, a 22.4% (or $165.53Mn) increase.
• However, this growth was tempered by higher expenses, which stemmed from ongoing investments in staff capacity to manage increased demand, along with regulatory, professional and advisory fees and enhanced marketing initiatives. Consequently, operating expenses rose by 18.9% or $79.37Mn to $499.52Mn.
• After the release of Q3 earnings, Dolla’s stock price fell 12.9% from $3.48 to $3.03, largely driven by heavy selling pressure and high trading volume (72.83 million shares) on the following trading day. Despite this decline, the stock has still appreciated 11.8% since the beginning of the year, closing Tuesday’s trading session at $3.03, reflecting strong performance earlier in the year. At this price, the stock trades at a P/B of 7.2x, above the Junior Market Financial Sector Average of 2.5x.

(Sources: DOLLA Financials & NCBCM Research)

• Jamaica’s Net International Reserves (NIR) stood at US$5,595.55Mn at the end of October 2024, 7.6% higher than September 2023, according to the Bank of Jamaica (BOJ). The improvement in the NIR reflects a 7.5% (or US$393.76Mn) increase in total foreign assets, along with a 1.8% decline (or US$1.26Mn) in Foreign Liabilities.
• The rise in foreign assets was due to growth in Currency and Deposits to US$3,660.67Mn from US$3,582.62Mn, Securities (+19.4% or US$316.74Mn). However, this was slightly tempered by a 1.8% (or US$366.69K) decline in both Special Drawings Rights and IMF Reserve Position balance (or US$676.53K).
• In October, the BOJ intervened in the foreign exchange market four times, injecting a total of US$120Mn in an attempt to stabilise the Jamaican dollar. This represented a slight decline from August when there were four interventions totalling US$140Mn. Despite these interventions, NIR rose for the second consecutive month.
• Jamaica’s October 2024 NIR remains relatively high and equates to 28.2 weeks of goods & services imports (26.3 weeks at the end of September 2024). At this level, the NIR is more than double the international benchmark of 12 weeks of imports.

(Source: BOJ)