Latest News

Poor Man’s Monetary Policy Lurks in a Low-Neutral Rate Future Published: 26 March 2019

  • New York Fed President John Williams and his co-authors concluded in their research that neutral interest rates had fallen across advanced economies thanks to demographics, slower productivity growth, and other factors.
  • With rate setting expected to stay at its current 2.25% to 2.5% target range -- roughly Williams’ current estimate of the neutral rate, it means the Fed policymakers will have less room to cut rates to stimulate growth come to the next recession than they’ve historically enjoyed.
  • Come the next downturn, officials will likely be “reduced to poor man’s monetary policy – changing the size and composition of the Fed’s balance sheet,” Citigroup’s Willem Buiter wrote in a March 19 note.
  • The euro area and Japan may enter the next recession with still-negative rates, and neutral rates are unlikely to save the day by rising anytime soon.

 (Source: Bloomberg)

Finance Minister Tweaks $14Bn Stimulus Package Published: 22 March 2019

  • Minister of Finance and the Public Service, Dr. the Hon Nigel Clarke, has announced changes to the recently announced $14-billion stimulus package.
  • Closing the 2019/20 Budget Debate in the House of Representatives on March 20, Dr. Clarke noted that the ad valorem Stamp Duty payable on any instrument pursuant to the Stamp Duty Act will be replaced with a flat stamp duty of $100 per document/parcel related to transactions valued below $500,000, and $5,000 per document related to transactions valued at $500,000 and more.
  • It is pertinent to note that the ad valorem calculation for Betting and Gaming tickets remains unchanged.

(Source: JIS)

Paramount Traders Limited (PTL) to Tap Market with $300Mn 8.75% Preference Share Published: 22 March 2019

  • The Company invites applications for up to 150,000,000 units of new 8.75% fixed rate cumulative redeemable preference shares due 2021, being offered at a price $2.00per share.
  • The offer opens on Thursday, March 28, 2019, and closes on Thursday, April 4, 2019.
  • Mayberry Investments Limited is acting as a sole lead broker to the Company for the offer.

(Source: PTL Prospectus)

Sandals’ ‘demands’ rejected Published: 22 March 2019

  • There is a possibility that the Jamaica-based Sandals Resorts International (SRI) could pull the plug on its highly publicized US$400 million Beaches project which has started at the old Almond property in St Peter.
  • Prime Minister Mottley, in her speech on Wednesday, said her administration has sought changes to the sweeping concessions the hotel chain was granted by the former administration when it first entered Barbados in 2013.
  • Mottley admitted, “We have reached a difficult moment in the negotiations that may result in the project being stalled or pulled.”

 (Source: Barbados Today)

Moody's affirms the Cayman Islands' Aa3 rating; maintains stable outlook Published: 22 March 2019

  • Moody's Investors Service ("Moody's") yesterday affirmed the Cayman Islands' Aa3 government bond and issuer ratings. At the same time, the rating outlook was maintained at stable.
  • The action reflects Cayman Island’s continued fiscal surpluses that have resulted in low and falling government debt metrics. The rating action also considers Cayman’s very high per-capita income which is balanced by the risks posed by its small, narrow economy that is susceptible to weather-related shocks. 
  • Additionally Moody’s also took into account Cayman’s strong institutional framework, reflecting a broad consensus on macroeconomic policies, supported by fiscal oversight from the UK.

(Source: Moody’s Investor Service

The bond market is flashing its biggest recession sign since before the financial crisis Published: 22 March 2019

  • The spread between 3-month and 10-year Treasury notes has fallen below 10 basis points for the first time since 2007.
  • An inverted yield curve, where short-term yields are higher than their longer-term counterparts, is considered a reliable recession signal.
  • The Federal Reserve this week said the U.S. economy is still strong but is facing challenges from global weakness.

(Source: CNBC)

US-China trade deal likely; carmakers can avoid tariffs with U.S. plants Published: 22 March 2019

  • U.S. President Donald Trump noted that trade negotiations with China were progressing and a final agreement "will probably happen," adding that his call for tariffs to remain on Chinese imported good for some time did not mean talks were in trouble.
  • He expected to keep a 25% tariff on European light trucks amid separate on-going trade talks with the European Union, but that company could avoid it by building factories in the United States.
  • The Trump administration is engaged in on-going trade talks with both the European Union and China as part of the President's "America First" agenda. Top U.S. officials are headed to Beijing in coming days amid a possible Trump summit with Chinese President Xi Jinping to seal any final deal.


PM Announces US$25-Million Project for MSMEs and Startups Published: 21 March 2019

  • Over the next five years, a total of US$25 million will be invested in a project designed to finance and aid innovation, entrepreneurship, and growth of micro, small, and medium-sized enterprises (MSMEs) and business startups.
  • Making the announcement during his contribution to the Budget Debate on March 19, Prime Minister Holness, said the initiative will be supported by a US$500,000 grant from the Inter-American Development Bank (IDB).
  • The objectives are to promote innovation and productivity among established MSMEs with high growth potential; promote sustainable and disruptive growth in scalable startups, and create sustainable startups and a strong support ecosystem for entrepreneurship.

 (Source: JIS)

NHT to Introduce Intergenerational Mortgage Published: 21 March 2019

  • The National Housing Trust (NHT) will be introducing an intergenerational mortgage programme in the upcoming fiscal year according to Prime Minister, the Most Hon. Andrew Holness,
  • This initiative, he said, will allow flexibility in how a family member can support a beneficiary in acquiring an NHT property.
  • The aim is for a younger sibling or child to agree to carry the mortgage obligation, subject to affordability when the older mortgagor retires or dies.

(Source: JIS)

Barbadian Budget Debate 2019 – NIR at US$1.1Bn up from US$400Mn Published: 21 March 2019

  • In the budget debate yesterday, the Prime Minister warned that the country can expect six more years of fiscal medicine before the economy can recover fully, less than six months into an International Monetary Fund austerity programme.
  • The bread-and-butter tourism industry has been slapped with increases in room rate levies which is expected to generate government revenues of $15Mn. There was also an increase in VAT on accommodation from 7.5% to 10%, which is expected to generate $27Mn in revenues.
  • Changes to property tax are also expected to generate revenues of $61.9Mn and there was an introduction of gaming tax; 20% tax on winnings and 17.5% on all gaming establishments.
  • On a more positive note, however, Prime Minister Mottley has noted that Barbadians will be able to open foreign currency bank accounts in Barbados from July as the administration begins to loosen nearly five decades of foreign exchange controls.
  • Prime Minister Mottley reported that the NIR has risen from just over $400Mn as of early 2018 to $1.1Bn as of March 20, 2019.

 (Source: Barbados Today)