• The European Union (EU) is expected to cut its growth outlook and raise its inflation forecast, as the Iran war creates what European Commissioner Valdis Dombrovskis described as a “stagflationary shock.”
• According to Dombrovskis, the European Commission’s spring forecast, due later this week, will show growth figures revised down and inflation figures revised up, reflecting the economic strain from higher energy prices and supply disruptions. Stagflation fears have intensified as a lasting settlement to the war remains elusive, while the Strait of Hormuz stays closed and oil prices remain above US$100 per barrel.
• The European Commissioner added that policymakers have less room to respond than during the pandemic. He noted that support measures should be temporary and targeted, rather than broad-based policies that could sustain high demand for fossil fuels.
• While the EU’s release of strategic oil reserves is ongoing, officials remain concerned that a prolonged conflict could create supply bottlenecks, including in areas such as innovation fuels.
• Furthermore, strategists and the International Energy Agency (IEA) warned that global oil inventories are shrinking rapidly, with depleted buffers raising the risk of future price spikes and possible shortages in Europe.
• The EU faces a difficult policy trade-off: cushioning households and firms from higher energy costs without worsening inflation or prolonging fossil-fuel demand, while weaker growth limits fiscal space.

(Source: CNBC)

• Given the challenging macroeconomic backdrop marked by the impact of Hurricane Melissa and heightened geopolitical tensions in the Middle East, first-quarter (Q1) 2026 results across Jamaica’s financial sector reflected a mixed earnings picture. While Sagicor Group Jamaica (SJ) Limited reported a sharp 53.7% decline in earnings to $1.87Bn due to unrealised investment losses and elevated insurance provisions, VM Investments Limited returned to profitability, supported by stronger investment activity and improved cost management despite still-subdued capital market conditions.
• Long-term insurance (LTI) remained SGJ’s largest earnings contributor, generating net profit of $2.08Bn, albeit lower than the $2.35Bn reported in Q1 2025, on the back of lower interest income earned and capital net gain. In contrast, the short-term insurance (STI) segment reported a marginal net loss of $0.02Bn compared to a profit of $0.87Bn in Q1 2025. The decline came as revenue gains (2.7%) were offset by a sharp rise in insurance service expenses (19.2%), which included additional provisions of approximately $0.77Bn recognised by Advantage General Insurance Company (AGIC) related to Hurricane Melissa claims.
• Commercial Banking emerged as one of the Group’s strongest-performing segments during the quarter, with earnings rising by 69.4% year-on-year to $0.83Bn. Revenues expanded by 13%, supported by higher net interest income and increased transaction volumes across card payment portfolios. Loan portfolio growth remained healthy, while deposits and other funding liabilities also expanded during the period.
• However, Investment Banking earnings declined sharply to $0.12Bn (77.8%) as net investment income fell by 29.1%. The weaker outturn primarily reflected the absence of one-off trading gains recognised in the prior year, coupled with persistently high short-term funding rates, which drove an increase in interest expense.
• Meanwhile, VM Investments Limited (VMIL) returned to profitability during the quarter, reporting consolidated net profit of $70.1Mn compared to a loss of $32.5Mn in Q1 2025. The recovery was bolstered by investment activity and tighter cost management despite subdued capital market conditions following Hurricane Melissa and the Middle East conflict.
• Operating revenues increased by $106.5Mn (16.8%), driven primarily by a 68.6% increase in gains from investment activities, which accounted for the majority of the improvement in total revenues. However, net interest income weakened significantly by 83.3% amid softer market conditions.
• Encouragingly, cost-containment measures continued to support the bottom line. Operating expenses declined by 9.0%, reflecting a 23.3% reduction in other operating costs. This comes as management continued to benefit from recently implemented cost-saving initiatives. Staff costs, however, increased by 9.5% due to inflation-related wage adjustments. Nevertheless, net operating income moved to a surplus of $77.53Mn in Q1 2026 compared to a deficit of $94.11Mn previously.
• VMIL earnings were also supported by contributions from associated companies, with the share of profit from associates totalling $25.5Mn. Although lower YoY (-41.8%), associate income continued to provide positive support and helped lift profit before taxation to $103.04Mn compared to a loss before tax of $50.26Mn in Q1 2025.
• As at the close of trading on May 14, 2026, SJ and VMIL’s ordinary share prices closed at $41.57 and $1.62, respectively, reflecting a 3.5% year-to-date increase for SJ and a 24.3% decrease for VMIL. At these prices, SJ and VMIL have a P/B ratio of 1.42x and 0.93x, respectively. SJ trades above the Main Market Financial Sector Average of 1.09x while VMIL trades below.

(Sources: SJ Financials, VMIL Financials & NCBCM Research)

• Supported by improving post-Hurricane Melissa conditions, Stationery & Office Supplies Limited (SOS) and OMNI Industries Limited (OMNI) both delivered stronger Q1 2026 (March 21, 2026) performances, aided by normalised operations and increased reconstruction activity.
• SOS recorded revenues of J$539.36Mn (+0.4%) for Q1 2026, representing the highest quarterly revenue in the company’s history. Revenues benefited from the normalisation of operations following disruptions caused by Hurricane Melissa, along with the successful commissioning of the new SEEK factory, which is now operating at full capacity.
• Operationally, SOS completed the rebuilding of its Montego Bay warehouse, which became fully operational in January 2026 following severe damage from Melissa. Management highlighted the official launch of the standalone SEEK factory as a major milestone that should support stronger production capacity and long-term growth opportunities throughout 2026.
• Direct costs down 9.3% allowed gross profit to rise to J$301.62Mn (+9.5%) with an associated increase in margins to 55.9% from 51.3%. However, total operating expenses rose 9.9%, given higher administrative and general expenses and an increase in selling and promotional expenses. Still, net profit increased by 7.1% to J$78.78Mn for the quarter supported by topline expansion and lower direct costs.
• For its part, OMNI continued to capitalise on elevated demand linked to post-Hurricane reconstruction activity and growth within Jamaica’s construction sector, posting a 179.7% increase in net profit to J$85.68Mn for Q1 2026.
• Quarterly revenues surged by 47.3% to J$693.30Mn, supported primarily by higher sales volumes in the construction segment, which accounted for 57% of total revenues. The company also benefited from increased domestic demand for storage products tied to post-Melissa rebuilding efforts.
• Direct sales (49.9%) moved in tandem with revenues as the company sourced certain raw materials from non-traditional suppliers to mitigate ongoing global logistics disruptions and supply chain delays stemming from geopolitical tensions. Despite these pressures, gross profit rose by 43.0% to J$259Mn as stronger sales volumes offset the increase in input expenses. However, gross margins fell from 38.6% to 37.4%.
• Operating expenses increased by 16.3% due to higher haulage expenses and additional depreciation charges associated with newly commissioned machinery. Even so, operating profit reached J$92Mn (+148%). In contrast, finance costs declined by 3.0% to J$6.2Mn, reflecting tighter debt management and improved financing efficiency. Combined with robust revenue growth, this supported a sharp improvement in profitability, with net margin profit reaching 12.4% from 6.5%.
• Looking ahead, OMNI is expected to remain a key beneficiary of Jamaica’s reconstruction phase following Hurricane Melissa, particularly through elevated demand for PVC pipes, roofing materials and electrical conduit products.
• As at the close of trading on May 14, 2026, SOS and OMNI’s ordinary share prices closed at $1.48 and $1.00, respectively, reflecting a 10.8% year-to-date decrease for SOS and a 1.0% increase for OMNI. These prices imply a P/E ratio of 24.67x for SOS, which is above the Junior Market Distribution Sector Average of 24.01x. However, OMNI holds a PE of 12.20x, below the Junior Market Distribution Sector Average.

(Sources: SOS Financials, OMNI Financials & NCBCM Research)

• Barbados has secured a US$260Mn precautionary credit line from the IMF, as Prime Minister Mia Mottley warned that escalating global conflict and oil market disruption could trigger economic shocks for the island.
• The country has cleared one of two stages in finalising the three-year stand-by arrangement, after reaching a staff-level agreement with the IMF. The arrangement is expected to go to the IMF’s executive board for approval in June 2026.
• Mottley described the credit line as an “insurance policy”, stressing that Barbados does not need the money now. Instead, the government wants immediate liquidity support available if external conditions create a balance of payments problem.
• Further, the prime minister noted that the arrangement is not a typical IMF programme with fixed disbursements. It is tied to Barbados’ home-grown economic programme and would allow access to all or part of the funds within 24 hours if needed.
• The country is preparing for a possible rise in inflation caused by reduced global oil capacity and the wider fallout from the Middle East war. Mottley said the government will ease its primary surplus target from 4.0% to 3.5% of GDP, creating roughly $80Mn in fiscal space. That additional space is expected to give the finance minister more flexibility to address priority areas such as health, security and coastal defence, while the government also considers other precautionary lending options amid geopolitical uncertainty and interest rate risks.
• By arranging IMF backstop financing before a crisis fully materialises, the government aims to protect fiscal stability, preserve investor confidence, and create room to respond if higher oil prices feed into inflation, utility costs, transportation, and food prices.

(Source: Barbados Today)

• The United States (U.S.) is eyeing Guyana’s bauxite industry, with U.S. Under Secretary of Economic Affairs, Jacob Helberg, confirming that opportunities in the sector were discussed during meetings with President Irfaan Ali.
• According to Helberg, discussions focused on expanding Guyana’s economic activity in bauxite through additional private investment, while also exploring infrastructure upgrades, including roads and potentially autonomous trucking technology, to improve logistics and increase Guyanese bauxite exports to global markets.
• Guyana’s bauxite industry recorded strong growth in 2025, expanding by an estimated 53.4%, with production reaching 3.9 million tonnes and export revenues rising to approximately US$144.1Mn. Helberg noted that bauxite remains a key area of interest because reserves are already known and investment activity is already underway.
• Beyond bauxite, the U.S. also expressed interest in supporting broader mineral exploration in Guyana. Helberg indicated that Washington sees potential for additional untapped mineral resources and discussed the possibility of using advanced surveying technologies to identify new reserves and support future mining development.
• A major part of Washington’s strategy is to encourage greater foreign investment and strengthen Guyana’s capacity to undertake advanced geological surveying and resource development. The US official suggested that increased foreign participation could help expand technical expertise and unlock broader mining potential.
• Discussions also extended to logistics and regional trade integration, with Helberg highlighting Guyana’s potential to become a logistics hub linking northern Brazil to the Caribbean and Panama trade routes. He noted that improved infrastructure and transport connectivity could significantly reduce shipping delays and improve access to international markets for both Guyana and northern Brazil.
• The U.S. interest in Guyana’s bauxite and broader mining sector reflects a growing strategic focus on securing access to critical minerals and strengthening supply chains outside of traditional geopolitical rivals.

(Source: Kaieteur News)

• The Bank of Japan (BOJ) is projected to raise ​its short-term policy rate to 2% from 0.75% by the end of 2027, as robust domestic demand will help ‌the economy absorb external shocks from the Middle East conflict, according to the Organisation for Economic Co-operation and Development (OECD) on Wednesday. The assessment lends support to the BOJ's recent hawkish tilt ahead of its June policy meeting, with the OECD arguing that higher inflation expectations, solid wage growth and a closed output gap justify continued rate hikes.
• "The Japanese economy is currently ​in a transitional period, shifting from three decades of near-zero inflation to an economy with rising prices and wages and growth supported ​by domestic demand," the Paris-based body said in a report.
• OECD Secretary-General Mathias ​Cormann, however, brushed aside concerns that the central bank may be acting too slowly to tackle the risk of excessively high inflation. "We don't think the ​BOJ is clearly behind the curve. Inflation expectations are anchored, and wage dynamics are strengthening," he told a news conference.
• On fiscal policy, Cormann urged Japan to discontinue its practice of regularly compiling supplementary budgets and instead limit their use to combat large economic shocks. OECD ‌expects Japan's ⁠economy to expand 0.7% in 2026 and 0.9% in 2027, slowing from an 1.2% increase last year. Inflation will likely converge towards the BOJ's 2% target in 2026-2027 with robust domestic demand underpinning economic growth.
• The recommendations come as the BOJ gears up for another hike in its short-term policy rate from the current 0.75%, with a recent slew of hawkish signals heightening the chance of action at its next meeting on June 15-16. While the ​BOJ has left few clues on ​how far it could raise ⁠rates, its latest estimates showed Japan's natural rate of interest stood in a range of around -0.9% to +0.5%.

(Source: Reuters)

• Britain's economy grew unexpectedly in March to cap another strong first quarter, suggesting it was in better ‌shape as the Iran war escalated, though economists said seasonal distortions were flattering the figures.
• Gross domestic product increased by 0.3% month-on-month in March, the Office for National Statistics (ONS) said, against expectations in a Reuters poll of economists for a 0.2% contraction.
• For the first quarter, the economy expanded by 0.6%, marking the third year ​running of conspicuously strong growth in the first quarter. Economists said measurement issues related to shifts in ⁠spending after the pandemic may be contributing to that pattern.
• Raj Badiani, economics director at S&P Global Market Intelligence, said the stockpiling ​of goods sparked by the Iran war may also have pulled forward demand in March.
• "Nevertheless, recession risks have risen, and we now ​expect the UK economy to contract mildly in the second and third quarters of this year," Badiani said, citing a coming inflation surge caused by higher oil prices and pressure on the Bank of England to raise interest rates.
• The ONS said partial spending data for April "pointed to some weakening ​going into the second quarter". It remains to be seen how renewed uncertainty in Westminster - with investors now unsure about the political ​future of Prime Minister Keir Starmer - will weigh on the economic outlook.

(Source: Reuters)

• A wave of dividend declarations from several major Jamaica Stock Exchange (JSE) Listed companies is poised to inject fresh liquidity into the hands of investors over the coming weeks. This could provide a timely cash flow boost for investors and households ahead of the traditionally high-spending summer period and upcoming back-to-school season.
• Leading the upcoming round of distributions, VM Investments Limited approved an interim dividend of J$0.02 per share payable on June 4, 2026, to shareholders on record as at May 25. This however, represents a reduction relative to its previous payout of J$0.053 per share. One day later, NCB Financial Group Limited is scheduled to pay interim dividend of $0.50 per ordinary stock unit for investors on record as at May 22^nd. The company has maintained the same payout level as its prior distribution
• The flow of shareholder returns will continue later in the month, with Fontana Limited having approved a dividend payment of $0.25 per share, unchanged from its last dividend payment in June 2025. The amount is payable on June 12, 2026, to shareholders on record as at May 28, 2026. Carreras Limited is also set to distribute an interim dividend of J$0.46 per stock unit on June 18, 2026, to shareholders on record as at May 27. Notably, the latest payout represents a 15% increase over its prior distribution, reinforcing Carreras’ longstanding reputation as one of the more consistent dividend-paying companies on the JSE, with a current dividend yield of approximately 6.1%.
• This will be followed by additional payouts from both Pan Jamaica Group Limited and regional conglomerate Massy Holdings Limited (MASSY), which have declared dividends payable on June 25 and June 26, respectively. PJAM declared a first interim dividend of J$0.175 per share down 33.4%, while MASSY announced an interim dividend of TT$0.0354 per share, unchanged from its last dividend amount. Both companies will pay shareholders on record as at May 29.
• Closing out the June payment cycle, Jamaican Teas Limited (JAMT) announced a capital distribution of J$0.025 per ordinary share, a 25.0% increase relative to JAMT’s September 2025 payout. This will amount to approximately J$54.5Mn, payable on June 30, 2026, to shareholders on record as at June 5.
• The momentum in shareholder distributions is also expected to carry into July, with Dolla Financial Services Limited (DOLLA) advising that its Board approved an interim dividend of J$0.037 per ordinary share, payable on July 13, 2026, to shareholders on record as at June 29. This amount, however, marked a 99.7% decline relative to DOLLA’s previous $0.06 payout which marked a 400% increase at that time. 
• The clustering of dividend payments across June and July could provide a meaningful seasonal boost to consumer liquidity, particularly as many Jamaican families begin preparing for the high-spending back-to-school period that traditionally intensifies during the summer months. The payments also come as households and small investors continue to navigate the aftereffects of Hurricane Melissa, which disrupted economic activity in several communities and added pressure to household budgets since late last year.
• Beyond their immediate cash flow benefits, the latest dividend declarations also reinforce the continued importance of dividend-paying equities within the Jamaican stock market, particularly for income-oriented investors seeking recurring returns alongside long-term capital appreciation. The announcements further highlight the earnings resilience and cash-generating capacity of several listed companies despite the challenging operating environment, which may continue to support investor confidence in the local equity market.

(Sources: JSE & NCBCM Research)

• Despite continued disruptions stemming from Hurricane Melissa, food distributor Everything Fresh Limited (EFRESH) delivered revenue growth for the quarter ended March 31, 2026 (Q1 2026). However, elevated financing costs and hurricane-related operational inefficiencies weighed on profitability, resulting in net profit attributable to shareholders falling to J$28.5Mn (33.1%).
• Revenue increased 3.2% year-over-year (YoY) to J$1.09Bn, supported by continued demand across its operations. Nevertheless, management noted that the business continues to experience lingering disruptions stemming from Hurricane Melissa, including challenges within the hospitality and tourism-linked segments that remain in recovery mode.
• Direct costs also rose at a faster pace than revenues during the quarter, increasing 5.2%. Accordingly, gross profits contracted by 3.7% to J$225.44Mn, while gross profit margins compressed by 150 basis points to 20.7%, down from 22.2%.
• On the operating expense side, administrative and selling expenses saw a marginal improvement (-0.7%), easing slightly to J$170.80Mn from J$172.0Mn in Q1 2025. As a result, the company improved its expense-to-sales ratio to 15.7%, compared to 16.3% in Q1 2025, partially offsetting the pressure from weaker gross margins.
• Nonetheless, operating profit declined 12.7% to J$55.01Mn, while finance costs increased to J$18.9Mn (+10.9%). The combined impact of lower gross profits and higher financing costs weighed on the bottom line. Consequently, net profit margins weakened to 2.6%, relative to 4.0% previously.
• With EFRESH’s US$2.31Mn bond maturing on June 30, 2026, the company is expected to refinance the facility through the capital markets via GK Capital Management Limited, as disclosed in its audited financials. The near-term maturity contributed to a 197.6% increase in current liabilities.
• EFRESH currently trades at a P/E of 54.87x, which is above the Junior Market Distribution Sector Average of 22.49x. The company’s share price has declined by 2.3% year-to-date to J$2.14 at the close of trading on May 13, 2026.

(Sources: EFRESH Financials & NCBCM Research)

• Radio Jamaica Limited (RJL), operating under the RJRGLEANER Communications Group brand, announced on May 12, 2026, that it has entered into a binding agreement with LP Azar Limited for the sale of its North Street property in downtown Kingston, including adjacent lots and parking areas.
• The divestment forms part of the media group’s broader restructuring and modernisation strategy as it seeks to streamline operations, improve efficiency, and sharpen focus on its core print, digital, and broadcast businesses.
• The proceeds from the transaction will support the continued consolidation of operations at the company’s Lyndhurst Road campus, reflecting an ongoing shift toward a leaner operational model amid the evolving media landscape. That said, the transaction remains subject to customary closing conditions and is expected to be completed within approximately 45 days.
• RJR’s ordinary share price closed trading at J$2.12 on May 13, 2026, reflecting a 2.6% decrease year-to-date.

(Sources: Jamaica Stock Exchange & NCBCM Research)