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Inflation Undermining Economic Success In Cayman Published: 12 February 2019

  • In the latest figures from the Economics and Statistics Office recording the consumer price index at the end of September 2018, the rate of inflation last year averaged 3.8%, compared to the inflation rate in 2017 of 1.9%.

 

  • The increase in inflation throughout last year was fuelled by transport and housing costs, utilities and food. At the end of the third quarter, last year inflation was running at 3.5% higher than at the end of the same period in 2017. According to the ESO report, electricity alone accounted for an increase of more than 30%.

 

  • Inflation is now having a significant impact on the cost of living in Cayman and beginning to pose a real threat to the economy because of its impact on pensioners and those on low wages. But so far, the ministry of finance has not commented on the problem or what it plans to do about it.

 

(Source: Cayman News Service

Negotiators from both parties say they have a tentative deal to avoid a US government shutdown Published: 12 February 2019

  • Congressional negotiators say they have reached an agreement in principle to avoid a government shutdown before a midnight Friday deadline.

 

  • As always, President Donald Trump will hold the fate of any potential border security agreement in his hands.

 

  • The announcement came only minutes before the president took the rally stage in the Texas border city of El Paso to argue that "walls save lives" as he made the case for his proposed border barrier.

 

(Source: CNBC)

Negotiators from both parties say they have a tentative deal to avoid a US government shutdown Published: 12 February 2019

  • Congressional negotiators say they have reached an agreement in principle to avoid a government shutdown before a midnight Friday deadline.

 

  • As always, President Donald Trump will hold the fate of any potential border security agreement in his hands.

 

  • The announcement came only minutes before the president took the rally stage in the Texas border city of El Paso to argue that "walls save lives" as he made the case for his proposed border barrier.

(Source: CNBC)

Trump Wants to Meet With Xi ‘Very Soon’ Over Trade War, Adviser Says Published: 12 February 2019

 

  • The Trump administration said the U.S. president still wants to meet China’s Xi Jinping in an effort to end the trade war, a sign of optimism as negotiators from the world’s two-biggest economies start their latest round of talks this week.

 

  • Negotiators from the two countries are meeting this week in Beijing, with U.S. officials pressing China to commit to deeper reforms to a state-driven economic model that they say hurts American companies.

 

  • Uncertainty, whether the leaders will meet to finalize an agreement, has stoked concerns that negotiations are faltering as the March 1 deadline approaches. If there’s no deal by then, President Donald Trump has threatened to more than double the rate of tariffs on $200Bn in Chinese imports.

 

(Source: Bloomberg)

Cargo Handlers Limited Reports Dip in Q1 Profit Published: 08 February 2019

  • For the first quarter ending December 31, 2018, Cargo Handlers Limited (CHL) reported a net profit of $24.5Mn  (EPS: $0.07),  representing a 39.3% decline relative to the $40.3Mn reported one year prior.

 

  • While there was a 21.1% increase in revenue, due to increased cement thru-put across the port coupled with increased income generated from home-porting cruise vessels, the company’s performance was curtailed by a significant increase in expenses.

 

  • In particular, the company’s operating costs for the period was $74.2Mn, up 80% when compared with the corresponding period in 2017.   The company attributes this increase in costs to a $23.6Mn exchange loss on its US dollar investments.

 

  • CHL stock price has lost 0.4% of its value year to date and currently trades at a P/E of 37.4x earnings which is above the Junior Market average of 31.5x.

 

(Source: CHL Financials)

Research and Development to be Included in GDP Published: 08 February 2019

  • Come September 2020, the Government will be amending the format for measuring Jamaica’s gross domestic product (GDP), to include research and development as a subsector.

 

  • Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke, says this will entail incorporating the 2008 GDP measurement update under the United Nations System of National Accounts (SNA), being used by a number of countries, including the United States (US).

 

  • The SNA is the internationally agreed standard set of recommendations on how to compile economic activity measurements. The system is a coherent, consistent and integrated set of macro-economic accounts in the context of internationally agreed concepts, definitions, classifications and accounting rules.

 

(Source: JIS)

Market Bites Published: 08 February 2019

  • Yesterday’s trading session ended with more losers than winners with 56 stocks changing hands, of which 23 advanced, 27 declined and 6 held firm.

 

  • All major indices declined, with the JSE Junior Market Index leading the way with a -0.57% contraction to close at 3,156.02.

 

  • Trading was dominated by JMMB Group Limited 7.50% preference shares with 2.01Mn units traded (33.89%), followed by Jamaica Broilers Group with 1.53Mn units (25.93%) and WISYNCO Group Limited with 589,188 units (9.98%)

 

  • The top two advancers for the day were 138 Student living, which grew by +13.00% to close at $3.40, followed by SSL Venture Capital which grew by +11.43% to close at $1.95. The top losers on the day were Blue Power Group Limited which declined by -11.67% to close at $5.30 and Consolidated Bakeries (Purity) which declined by -13.79% to close at $1.75.

 

(Source: JSE, NCBCM Research)

‘Early days yet’ on BERT’s impact – CDB official Published: 08 February 2019

 

  • The jury is still out on whether the Barbados Economic Recovery and Transformation (BERT) programme will be enough to stem the tide of economic turmoil, the Caribbean Development Bank’s chief economist told journalists today.
  • The CDB’s Director of Economics Dr. Justin Ram said while it was critical that the Mia Mottley administration stick to its targets, it should also focus on improving the country’s ease of doing business and reduce joblessness among young people.
  • “Our assessment of the BERT programme, it is still early days, but the progress made thus far is very heartening,” Dr. Ram said at the CDB’s annual news conference at the regional development bank’s headquarters at Wildey.
  • Dr. Ram: “There is still some more that has to be done with respect to fiscal consolidation. Again, what would really propel the Barbados economy into a transformation is doing the institutional reforms that will seek to improve the ease of doing business. I cannot reiterate that enough.”
  • Pointing to the Grenadian and Jamaican experiences, the CDB official said obtaining economic growth was critical.

(Source: Barbados Today

Here we go again Published: 08 February 2019

  • Markets are having a rough time after Europe practically gave up on the whole idea of economic momentum for the time being and Tariff Man said he won’t meet Chinese President Xi Jinping before the March 1 expiry of the current truce.
  • Oh, and the trade cease-fire between the U.S. and EU? That’s not looking too good either. Net result: An already dubious rally is facing that familiar existential crisis.
  • Does Jerome Powell have the stock market’s back? Does easy money even work? All we know is it’s a good time to be in bonds.

(Source: Bloomberg)

Brent oil edges up, heads for weekly loss on slowdown worries Published: 08 February 2019

  • Benchmark Brent oil inched up on Friday but was heading for a weekly loss, pulled down by worries about a global economic slowdown, although OPEC-led supply cuts and U.S. sanctions against Venezuela provided crude with some support.
  • Weighing on financial markets were concerns that a trade dispute between the United States and China would remain unresolved, denting global economic prospects.
  • International Brent crude futures had erased earlier losses by 1036 GMT, gaining 12 cents to $61.75 per barrel. On the week, they are set for a loss of around 1.5 percent.
  • S. West Texas Intermediate crude futures stood at $52.53 per barrel, down 11 cents and looking at a 5 percent weekly slump, their steepest this year.
  • S. President Donald Trump said on Thursday that he did not plan to meet Chinese President Xi Jinping before a March 1 deadline set by the two countries to strike a trade deal.

(Source: Reuters