• Image Plus Consultants Limited (IPCL) reported a net loss of $16.25Mn for Q2 FY 2024/25, relative to $38.66Mn for Q2 2023. This contributed to an 85.0% decline in H1 2024/25 earnings to $15.40Mn ($102.77Mn in H1 2023).
• Revenues slipped 2.8% to $539Mn for the six months ended August, largely driven by reduced scan volumes, with a 6% overall decline across all modalities. Total scans for H1 2024 slowed to 26,955, down 6.2% from 28,729 the prior year. Slowing revenues reflects IPCL's operational challenges, particularly with its CT modality, which generates higher revenue per patient.
• CT scans dropped due to machine downtime at the Ocho Rios and Winchester branches. These units required CT tube replacements, but repairs were delayed due to protracted delivery timelines from the overseas manufacturer.
• The company’s MRI and mammography services, which were launched in August 2023 and February 2024 respectively, showed growth, though both fell short of expectations. Management continues to explore strategies to increase scan volumes, particularly in the competitive Kingston and St. Andrew markets.
• IPCL's direct costs fell by 5.5% for H1 2024 which supported an improved gross profit margin of 64.9% for H1 2024 relative to 63.8% in H1 2023.
• However, administrative expenses increased over the period, amid an 80% increase in depreciation due to new imaging equipment, a 14.5% rise in salaries to $165.04Mn due to increased staff count, and a 52.3% jump in utilities owing to the MRI unit in Ocho Rios.
• Despite the 85.0% earnings decline year to date, IPCL’s management expressed optimism about its H2 2024 performance, with efforts focused on optimising scan volumes and revenue growth across its service offerings.
• IPCL’s stock price has decreased by 20.0% since the start of the calendar year. The stock closed Thursday’s trading session at $1.60 trading at a P/E of 13.33x, below the Junior Health Sector Average of 20.5x.

(Source: JSE, NCBCM Research)

• Operators of micro, small, and medium-sized enterprises (MSMEs) are being urged to contribute to shaping Jamaica’s digital future. This appeal was made by Harold Davis, the Acting Chief Executive Officer (CEO) of the Jamaica Business Development Corporation (JBDC), during his recent appearance on the JIS TV program "Get the Facts."
• “Digital transformation is no longer a nice thing to have; it’s a need to have,” Mr. Davis said, as he outlined the transformative potential of the Digital Jamaica Project that is set to enhance the country’s digital landscape. He also emphasised the urgency of digital literacy, availability, and accessibility, noting that Jamaica must embrace a digital future to compete globally.
• According to a recent JBDC survey, only 33% of MSMEs are actively utilising digital tools and recognising the benefits of digitalisation. While the figure is a start, he described it as “modest”, as the JBDC aims to raise it to at least 80%. Mr. Davis further explained that while many MSMEs are present on social media, they often lack comprehensive digital solutions that could enhance their operational processes.
• Having analysed the data, the JBDC is committed to increasing the number of MSMEs that leverage digital tools to their advantage. “The JBDC is about general transformation of your business, making sure that your business moves into this space of being globally competitive. So, the first thing that we do is a robust 360 assessment of your business, as no one size fits all,” Mr. Davis explained.
• This assessment involves the JBDC conducting thorough evaluations of businesses to determine whether a viable business model exists and ensure that companies deliver on their value propositions.
• MSMEs are encouraged to view their digital journey in three phases: digitization, which converts analogue processes to digital formats; digitalization, which employs suitable tools for e-commerce, supply chain, and human resource management; and digital transformation, which entails a complete overhaul of business models to integrate digital solutions.

(Source: JIS)

• On Wednesday, October 16, 2024, the government of the Bahamas tabled the Domestic Minimum Top-Up Tax Bill 2024 in Parliament. The Bill seeks to introduce a 15% effective tax rate for in-scope multinational enterprises operating in The Bahamas with annual consolidated revenue at or above 750Mn Euros ($818Mn USD).
• Deputy Prime Minister Chester Cooper noted that at that threshold, very few Bahamian-owned and operated businesses would be impacted. Cooper noted that the bill is designed to align with the Organisation for Economic Cooperation and Development’s Global Anti-Base Erosion Rules. These rules are aimed at ensuring a global minimum level of income tax for large multinational enterprises.
• “In addition, with the passage of this bill, The Bahamas would be allowed to retain tax revenues on profits of these entities that would otherwise be subjected to top-up tax in another jurisdiction under the OECD’s Income Inclusion Rule (IIR) or the Under-Taxed Profit Rule. As a matter of policy, this administration has already stated that the lion’s share of the revenue from this bill would be dedicated to debt reduction and reducing the cost of living for ordinary Bahamians,” Cooper noted.
• He added that, in line with the options permitted by the EU Pillar Two directive, the draft DMTT (domestic minimum top-up tax) Bill provides for the introduction of a tax intended to be a “qualified domestic minimum top-up tax.”
• “This bill reflects comments received during the public consultation period, which was extended by two weeks and ended on September 30, 2024. During the debate, the government side would go through this bill in detail and provide an analysis of the policy considerations that went into it. The consultation paper foreshadowed the government’s intention to introduce some form of incentives to reduce the cost of doing business in The Bahamas. These incentives will be laid out in a companion piece of legislation,” said Cooper.
• “The government acknowledges the importance of developing this new regime, which would need to apply broadly across businesses in The Bahamas. Consequently, the view was taken that a separate bill be crafted to reflect the final position of the government and submitted for consideration during the mid-year budget exercise,” Cooper said.

(Source: Eyewitness News)

• Chile's central bank on Thursday, October 17, cut its benchmark interest rate by 25 basis points to 5.25%, extending an easing cycle since the middle of last year, and predicted further cuts if the economic picture for the world's top producer of red metal copper remains stable.
• The cut, a unanimous decision in line with forecasts, comes as inflation cools, but as the country faces a challenge to rev up growth. Copper output has been stalling in recent years.
• The bank said that if the economic scenario continued as expected, then the Andean country's interest rate "will see further reductions to meet its neutral level."
• Pantheon Macroeconomics' Chief Latin America Economist Andres Abadia said that he expected more cuts ahead, though greater external risks and shifting domestic conditions meant a pause in the easing cycle could not be ruled out. "For now, we expect further rate cuts in upcoming meetings, targeting at least 4.0% by the late second quarter of 2025," he said. "A pause in the normalisation cycle cannot be ruled out if external conditions deteriorate sharply."
• So far, domestic activity and demand indicators are consistent with forecasts, it said, pointing to a positive mining performance and "relatively stable" consumption and investment.
• Inflation forecasts for the coming year have edged down, it added, after inflation slowed to 4.1% in September, from 4.7% the previous month. The bank also reaffirmed its commitment to a flexible policy to bring inflation towards 3% within the next two years.

(Source: Reuters)

• The European Central Bank (ECB) cut interest rates by 25 basis points (bps) on Thursday for the third time this year, saying inflation in the eurozone bloc was increasingly under control, while the outlook for the economy was worsening¹.
• ECB president Christine Lagarde did not provide hints about future moves, but four sources close to the matter told Reuters a fourth cut in December is likely unless economic or inflation data turns around in the coming weeks. The U.S. elections, and the threat of fresh trade tariffs if Donald Trump is elected president, were seen as a major source of uncertainty, the sources said. Asked about that risk, Lagarde said any trade obstacles were a "downside" for Europe.
• However, she added that the ECB did not expect a recession at present and was still working on the assumption that the economy would stage a "soft landing", jargon for lower - but still positive - growth. The quarter-point cut brings the rate that the ECB pays on banks' deposits down to 3.25%. Money markets are almost fully pricing in three further reductions through next March.
• Prices grew by just 1.7% last month, falling below the 2.0% target for the first time in three years. While inflation may edge above the ECB's target by the end of this year, it is expected to hover around that level for the foreseeable future. The ECB noted pay rises are still supporting "domestic inflation" - that is growth in the price of services and goods that don't rely much on imports - but this too was waning.
• High interest rates have sapped investment and economic growth, which has been weak for nearly two years. The most recent data, including industrial output and bank lending, is pointing to more of the same in the coming months. A resilient labour market is also starting to show cracks, with the vacancy rate - or the proportion of vacant jobs as a share of the total jobs - falling from record highs. This has fuelled calls inside the ECB and from politicians from Germany to Italy to ease policy before it is too late.
• Nonetheless, some of the economic weakness is due to structural problems, such as the high energy costs and low competitiveness hobbling Europe's industrial powerhouse Germany. Lagarde repeated the ECB's customary call on Europe's politicians to push ahead with "ambitious" reforms to make the region's economy more productive, competitive and resilient.

(Source: Reuters)

• The number of Americans filing new applications for unemployment unexpectedly fell last week, but could remain elevated in the near-term amid the effects of Hurricanes Helene and Milton, obscuring the labour market picture.
• Initial claims for state unemployment benefits dropped 19,000 last week to a seasonally adjusted 241,000 for the week ended Oct. 12, the Labor Department said on Thursday.
• Economists polled by Reuters had forecast 260,000 claims for the latest week. Claims jumped to more than a one-year high in the prior week, attributed to Helene, which devastated Florida and large swathes of the U.S. Southeast in late September. The ebb in filings from Helene is likely to be offset by an anticipated deluge of claims due to Milton, which slammed into Florida weeks after Helene.
• A month-long strike by roughly 33,000 machinists at Boeing, which is having ripple effects on the planemaker's supply chain and its non-striking workforce, is also blurring the labour market view. Boeing had been struggling with a multitude of problems before the strike by its unionised West Coast workers and announced 17,000 job cuts last week.
• The claims report covered the week during which the government surveyed employers for the nonfarm payrolls component of October's employment report. Economists expect Federal Reserve officials won't place too much weight on the employment report when they meet in early November. The report will be released days before the Nov. 5 U.S. presidential election.
• Nonfarm payrolls increased by the most in six months in September, with the unemployment rate falling to 4.1% from 4.2% in August. The U.S. central bank last month cut its benchmark interest rate by an unusually large 50 basis points to the 4.75%-5.00% range, the first reduction in borrowing costs since 2020, highlighting rising risks to the labour market.

(Source: Reuters)

• The Board of Directors of iCreate Limited (transitioning to Kintyre Holdings (JA) Limited) has announced that the company has signed a Letter of Intent (LOI) to acquire a 20% equity stake in MVL, which operates Beach Club Resorts, Restaurants, and Lounges in the British Virgin Islands (BVI).
• This investment will provide iCreate with common shares that include full voting rights and entitlement to any dividends declared by the entity.
• MVL is a profitable company with strong cash flows that is looking to expand. The transaction is subject to satisfactory due diligence, including a review of MVL's financial statements, asset valuations, and legal documentation. Finalising the investment will depend on executing a definitive Share Purchase Agreement, which will disclose the agreed purchase price.
• The proposed name-change from iCreate Limited to Kintyre Holdings (JA) Limited marks the company's transformation from a digital and creative training entity to a diversified digital and creative group. This shift reflects its strategy to broaden its business lines.

(Source: JSE &NCBCM Research)

• Economist in the Ministry of Finance and the Public Service, Keenan Falconer, says the Government’s first structured securitisation transaction in the international capital markets is a sign of confidence by international investors in the quality of Jamaica’s financial instruments.
• The Government of Jamaica successfully raised US$480Mn by securitising assets associated with the Norman Manley International Airport (NMIA). Mr. Falconer clarified that securitisation involves transforming an asset into a financial security—an instrument with inherent value that typically generates interest—allowing it to be sold for revenue generation.
• “In this case, the Government has grouped together expected revenue sources over the next 12 years that are due to the NMIA and converted it into a bond, which is the security. They then sold this security to an investor or group of investors in the international capital markets,” he noted. Under the transaction, investors will have the right to collect revenue from those who owe money to the NMIA for the next 12 years, while the Government receives cash upfront from the sale.
• After accounting for transaction fees, the net proceeds will be used to reduce some interest costs on the national debt and to provide budgetary support for ongoing expenses, including funding government programs and paying wages and salaries. “Some of the funds will also be used to finance capital expenditure through greater spending on new infrastructure projects like the SPARK programme,” Mr. Falconer noted.
• This transaction means that the Government will now be able to receive cash to pursue its development objectives and implement initiatives announced in the Budget for the rest of the fiscal year. Furthermore, Mr. Falconer told JIS News that despite the issuance of a bond, which is a debt instrument, “this transaction means that Jamaica does not take on any additional debt”
• A special purpose vehicle (SPV), Kingston Airport Revenue Finance (KingAir) was created to oversee and manage the bond. The entity’s primary role is to collect the proceeds from the international investors paying for the bond, and to remit those funds to the Government of Jamaica, Mr. Falconer explained. As a result, the Government has granted KingAir rights to 52.33% of the revenue generated by the NMIA allowing the company to carry out its functions in exchange for the funds raised.

(Source: JIS)

• Brazil's government is preparing to cooperate more closely with the central bank on regulatory issues like cryptocurrencies and meal vouchers next year when the bank gets new leadership, following occasional differences over policy on such matters.
• Incoming central bank chief Gabriel Galipolo, whose term starts in January following his appointment by President Luiz Inacio Lula da Silva, has delivered a hawkish message on monetary policy, showing he is not shy about hiking interest rates despite Lula's repeated demands for lower borrowing costs.
• However, the two are likely to find more common ground on regulatory matters, where the central bank has sometimes been at loggerheads with the Finance Ministry in recent years.
• Three Finance Ministry officials described on condition of anonymity a series of frustrated discussions with the central bank on matters ranging from regulation of crypto assets to allowing global trading platforms to list Brazilian public debt. Two of the ministry sources said that collaboration had suffered as the central bank became more withdrawn from policy discussions since gaining formal autonomy under a 2021 law.
• One official pointed to concerns about crypto asset regulation, which is being handled by the central bank without coordination with the government. That has complicated Finance Ministry policy on regulating online gambling since many sites are operating with cryptocurrencies, the source said. The central bank said earlier this year it expected to finalize its proposed crypto regulations by the end of the year.
• On another front, the government plans to resolve a long-standing impasse over new regulations to open up competition in the 150Bn reais (US$26.5Bn) meal voucher market. For years, tech companies, including Mercado Libre (MELI.O), have been looking to take a bigger bite of the market dominated by companies such as Sodexo and Edenred (EDEN.PA), for meal cards that firms must provide for full-time workers.
• Despite the impasses, the ministry sources expressed hopes for more collaboration with Galipolo in charge. A central bank source said improved cooperation would reset the "tone" of the relationship. "I really hope we'll have more integration on issues that don't affect the central bank's core (inflation) mandate," said another ministry source. "I'm not saying we want a seat on the Monetary Policy Committee - that's not it.

(Source: Reuters)

• Fitch Solutions maintains its forecast that real GDP growth in Barbados will slow from an estimated 6.3% in 2023 to 3.1% and 2.1% in 2024 and 2025, respectively.
• While Fitch’s outlook suggests a continued growth slowdown from 11.3% in 2022, it will remain strong by historical standards (growth averaged 0.0% between 2010 and 2019) and is underpinned by the continued expansion of the tourism sector as well as an upbeat outlook for private consumption.
• Of note, slowing inflation, alongside a continued recovery in the tourism sector, will provide tailwinds to private consumption in 2024. Price growth remains benign, coming in at just 1.2% year-on-year (YoY) in July 2024, and Fitch expects this to remain the case in the coming months thanks to a continued easing of global commodity prices.
• Combined with falling unemployment, Fitch believes that real household incomes are likely to perform well this year, boosting spending levels. Additionally, overnight stays are up 14.5% YoY to August and will continue to support direct (and indirect) job creation, boding well for consumer spending.
• That said, risks to the growth projections are to the downside. Should political tensions in the Middle East escalate and prompt a surge in global oil prices, this would feed into higher inflation in Barbados, blunting real incomes and constraining household expenditure. This would also likely limit growth in tourist arrivals.
• Moreover, severe weather conditions remain an ever-present risk to the Barbadian economy, with hurricanes posing a threat to both critical infrastructure and tourist arrivals. 

(Source: Fitch Solutions)