• China's factory output and retail sales beat expectations in January-February, marking a solid start for 2024 and offering some relief to policymakers even as weakness in the property sector remains a drag on the economy and confidence.
• Monday's data join recent better-than-expected exports and consumer inflation indicators, providing an early boost to Beijing's hopes of reaching what analysts have described as an ambitious 5.0% GDP growth target for this year.
• Industrial output rose 7.0% in the first two months of the year, data released by the National Bureau of Statistics (NBS) showed on Monday. This was above expectations for a 5.0% increase in a Reuters poll of analysts and faster than the 6.8% growth seen in December. It also marked the quickest growth in almost two years. Retail sales, a consumption gauge, rose 5.5%, slowing from a 7.4% increase in December but beating an expected 5.2% gain.
• The eight-day Lunar New Year holiday in February saw a solid return of travel, which supported revenue from the tourism and hospitality sectors. That also led to a 3% growth in oil refineries to meet the strong demand for transport fuels.
• "Consumers were buoyed temporarily by festivities-related spending at this start of the year. Without decisive consumption-related stimulus, we think it would be difficult to sustain a robust consumer spending pace this year," Oxford's Loo said.
• Loo's cautious comments reflect a broader consensus among China watchers that Beijing has its work cut out in achieving its 2024 economic growth target of "around 5.0%". While the goal was similar to 2023, analysts note last year had a lower base effect due to COVID-19 curbs in 2022.

(Source: Reuters)

• For the first quarter ending January 31, 2024, Indies Pharma Jamaica Ltd. reported a net profit of $62.49Mn (EPS: $0.047), a 5.9% (or $3.46Mn) improvement over Q1 2023.
• Revenues grew 5.4% while direct expenses fell marginally (0.6%), causing gross profit to increase by 8.1% (or $14.22Mn). Indies Pharma implemented a new policy that enhanced the accuracy and efficiency of the inventory management process and contributed to the improvement in gross profit.
• However, the bottom line performance was tempered by an increase in administrative expenses of 29.7% (or $29.6Mn), as well as tax expenses.
• Of note, Indies completed its fifth year listed on the Junior Market in 2023, which marks the end of its 100% tax break. Starting this quarter, the company will start paying taxes on corporate profits at a rate of 5% for the next 5 years as it enters the second phase of its tax break.
• Indies Pharma’s stock price has decreased by 6.9% since the start of the year and closed Thursday’s trading session at $2.72 per share. At this price, the stock trades at a P/E of 17.0x earnings, which is above the Junior Market Distribution sector average of 14.0x earnings.

 (Sources: JSE and NCBCM Research)

• The Income Tax Act will be amended to increase the maximum participating voting share capital of companies listed on the Junior Stock Exchange from $500Mn to $750Mn.
• At the opening of the 2024/25 Budget Debate in the House of Representatives on March 12, Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, said the measures are in an effort to further facilitate growth of the micro, small and medium-sized enterprise (MSME) sector.
• It is anticipated that the increased threshold will have a positive impact on the stock market’s activity as more companies may seek to list to take advantage of the higher share capital.

(Sources: JIS and NCBCM Research)

• The upcoming 2025 general elections in Trinidad and Tobago (T&T) are unlikely to pose a threat to political stability and continuity.
• T&T is scheduled to hold general elections in mid-2025, where voters will elect all 41 seats in the House of Representatives for a subsequent 5-year term. For decades, politics in the market has been dominated by the two largest parties – the United National Congress (UNC) and the People’s National Movement (PNM) – with the latter securing majorities in the 2020 and 2015 elections. 
• That said, they may serve as an impetus for a more aggressive crackdown on crime, which continues to reach multi-quarter highs.
• Additional pressure may also be induced by the potential economic implications of high crime, which may potentially discourage tourist arrivals, a key source of income from Trinidad & Tobago, and thus reduce the PNM’s popularity in the upcoming elections. 
• However, other risks to T&T’s political stability are low thanks to strong ties with neighbouring countries and the US, low unemployment, and stable inflation. Overall, it is believed that other sources of risk to T&T’s political environment will remain manageable over the next few quarters. 

 (Source: Fitch Solutions)

• Real GDP growth in Latin America will slow from 2.1% in 2023 to 1.5% in 2024, weighed down by high real interest rates and a somewhat weaker external backdrop.
• The slowdown will be driven primarily by Brazil and Mexico, while Chile, Colombia, and Peru will each see a notable growth recovery compared to 2023.
• Most crucially, the slowdown from Brazil (2.9% growth in 2023 to 1.6% in 2024) and Mexico (3.1% to 2.5%) will drag down overall regional growth. Those two markets account for roughly 60% of regional GDP, with their performance often dictating the overall growth of Latin America.
• Among those that will see faster growth are three of the region’s larger markets: Chile (0.1% in 2023 to 2.0% in 2024), Colombia (0.6% in 2023 to 1.3% in 2024) and Peru (-0.6% in 2023 to 1.9% in 2024). Venezuela and Uruguay will also see an acceleration in growth, benefiting from the temporary removal of US sanctions and an agricultural recovery, respectively.
• Risks to the regional growth forecast lie to the upside, given Fitch’s recent upward revision of the US growth projection and solid high-frequency data out of Brazil.

 (Source: Fitch Solutions)

• U.S. retail sales rebounded less than expected in February, suggesting a slowdown in consumer spending in the first quarter amid rising inflation and high borrowing costs.
• This, however, is unlikely to spur the Federal Reserve to start cutting interest rates before June, as other data on Thursday showed a larger-than-expected increase in producer prices last month.
• The labour market also remains fairly tight. Fewer Americans applied for unemployment benefits last week and annual revisions to the weekly claims data showed laid-off workers were quickly finding new work and not spending as long a period on jobless benefits as had been previously thought.
• According to the Commerce Department’s Census Bureau, Retail sales rose 0.6% last month, and data for January was revised lower to show sales tumbling 1.1% instead of the previously reported 0.8%. Retail sales in December were also downgraded.
• In February, retail sales exhibited mixed trends, with a slight decrease in online sales and declines in various sectors such as clothing, health, personal care, and furniture stores. However, there was a notable rebound of 0.4% in food services and drinking places, suggesting some recovery in consumer spending in certain areas.
• Economists attribute these shifts to households prioritising essentials over discretionary spending, influenced by factors like high prices for food and gasoline. Despite some fluctuations, core retail sales remained stable, indicating consistent consumer spending patterns that align closely with GDP trends.
• However, on a year-over-year basis, retail sales overshot economists’ projections for February with a 1.5% increase versus a 0.8% projection. Sales were boosted by a 1.6% rebound in receipts at motor vehicles and parts dealers. Sales at gasoline stations increased 0.9%, reflecting higher prices at the pump. Receipts at electronics and appliance outlets surged 1.5%. Conversely, building material and garden equipment store sales rebounded by 2.2%.

(Source: Reuters)

• The recent findings from the Bank of England indicate that within the private credit market, defaults have remained relatively low compared to lending to riskier borrowers. S&P Global anticipates that defaults among European speculative borrowers may escalate to 3.75% by June, yet the expected surge in corporate restructurings hasn't materialized, surprising many in the industry.
• Peter Marshall, co-head of European restructuring at investment bank Houlihan Lokey, notes the absence of widespread corporate restructurings, sparking curiosity within the market. This phenomenon is attributed to the flexibility in lending and the utilization of intricate refinancing structures by private credit funds, as reported by multiple sources to Reuters.
• Deloitte's analysis reveals that a significant portion of European private debt deals involve only one lender, granting them considerable control over the terms and interest rates. Some funds, like those represented by Patrick Marshall of Federated Hermes, are adjusting loan terms such as covenant headroom to defer stress, albeit potentially resulting in lower recoveries.
• Collaborative efforts between private credit funds and company owners are also highlighted as a strategy to circumvent losses. Meanwhile, the prevalence of payment-in-kind facilities (PIKs) and debt refinancing, as observed by credit intelligence provider Reorg and Deloitte respectively, underscores the creative measures taken to manage debt obligations.
• The integration of private debt funds into the banking ecosystem is increasingly apparent; with practices like leverage deployment mirroring those in the U.S. Ares Management's substantial fundraising further accentuates the growing investable capital in the private credit sphere, albeit accompanied by potential risks during market downturns.
• In light of these developments, there are discussions about the necessity of further regulation to ensure stability within the private credit market.

(Source: Reuters)

• Jamaican Teas Limited announced that it entered into an agreement on 12 Mar 2024 to sell its Bell Road tea factory to a third party purchaser.  
• Completion of the sale will take place in April 2024 and Jamaican Teas will continue to occupy the premises until August 2024, by which date its tea packing operations will relocate to the Group’s premises in Temple Hall, St. Andrew. The Temple Hall property comprises some 60,000 square feet of factory buildings on about three acres of land.
• The factory expansion will allow the company to focus even more on exports, while concurrently addressing demand in its home market. With this expansion, the company expects its distributors to deepen their market penetration by expanding the customer base and the number of locations, especially in the United States.
• JAMT’s stock price has decreased by 5.9% since the start of the calendar year, closing Wednesday’s trading session at $2.37. At this price, the stock currently trades at a P/E of 21.55x earnings, which is roughly in line with the Junior Market Manufacturing Sector Average of 21.57x.

(Sources: JSE and NCBCM Research)

• Effective April 2024, the personal income tax threshold will move from $1.5Mn to $1.7Mn. This was announced by Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, while opening the 2024/25 Budget Debate in the House of Representatives on Tuesday (March 12). Dr. Clarke said the measure will cost approximately $9Bn.
• He also announced a reverse tax credit for all Jamaicans who earn under $3Mn. “The reverse tax credit means for every registered taxpayer who earns under $3Mn, the Government will provide a reverse tax credit of $20,000.
• “We have a total of 570,000 Jamaicans, today, who contribute to the Jamaican society through statutory deductions, and some through personal income tax who will benefit from this measure,” Dr. Clarke told the House. The cost of this programme will be $11.4Bn.
• This increase in the tax threshold should support growth in real disposable incomes, and fuel consumer demand which augurs well for corporate revenues and profits.

(Sources: and NCBCM Research)

• Guyana’s justice sector is undergoing significant transformation with the introduction of alternative dispute resolution methods and streamlined plea bargaining, aiming for greater efficiency and adaptability.
• Attorney-General and Minister of Legal Affairs, Mohabir Anil Nandlall, S.C., said several new pieces of legislation have been presented in the National Assembly to achieve this. Speaking at the opening ceremony of the Restorative Justice Practitioners Training, at the Police Officers’ Mess Annex in Georgetown, AG Nandlall highlighted the massive benefits that these approaches will have on citizens and businesses.
• Last year, the government tabled the Arbitration Bill and the Criminal Procedure (Plea Discussion, Plea Agreement, Plea Assistance Agreement) Bill of 2023, taking another tangible step in providing faster and more amicable alternatives to traditional litigation.
• Arbitration allows disputing parties to reach an agreement with the help of neutral arbitrators, potentially saving time and money. The bill will allow for top-class arbitrators and companies offering arbitral services to set up in Guyana.
• Meanwhile, the revamped Criminal Procedure Bill is designed to tackle the backlog of cases currently straining the system. It will allow for plea agreements to be made between defendants and state prosecutors before a guilty verdict, expediting resolutions and freeing up court resources for more serious cases.
• Having been scrutinized for its lacklustre judicial system in the past, these reforms demonstrate Guyana’s commitment to streamlining easier access to resolution disputes; aiming at reducing the level of scepticism and apprehensions that international investors may have.
• Over time, this could result in not only greater efficiency but also greater foreign direct investments from smaller companies if they are of the belief that in the event of a local dispute, matters can be resolved quickly and efficiently.

 (Source: Guyana Chronicle)