• China's latest trade truce with the United States removes one big deterrent for foreign investors who've been circumspect all year about investing in a stock market that's outrun most other major ones with its strongest annual run since 2019. Foreign money managers have so far been both measured and selective participants in a rally that has pushed Chinese stocks to multi-year highs, fearful of pressures from deflation, weak consumption in the world's second-largest economy, and trade tensions.
• Thursday's deal between China and U.S. President Donald Trump removes one source of worry, to an extent. The year-long truce is the longest the two feuding sides have had in a fractious relationship, and it reduces import tariffs on China, removes some controls on Chinese rare earths exports, and allows Chinese firms to receive some U.S. technology. Beyond those encouraging headlines, the specifics of the deal left markets unimpressed and analysts pointing to the breakthrough and commitment to cooperation as the best part of the truce.
• "I don't think this trade deal changes anything dramatically, but it helps move the needle on encouraging offshore investment in China," said Kristina Hooper, New York-based chief market strategist at the Man Group.
• Boosted by policy measures and Chinese artificial intelligence forays, its blue-chip stock index is up by a fifth this year, while the more accessible Hong Kong Hang Seng index is one of the world's top performers this year, with 31% gains, bigger than Nasdaq's 3%. But foreign money has played it safe, staying in sectors around AI and China's self-sufficiency initiatives while avoiding broad exposure.
• Relative to its economic might, which is a fifth of world GDP, China is underowned. Data from financial services firm Morningstar showed large global funds, on average, had a 1.43% exposure to China at the end of September.

(Source: Reuters)

• The euro zone economy grew a touch more quickly than expected in the third quarter, lifted by buoyant growth in France and Spain that more than offset faltering exports and persistent struggles in Germany's oversized industrial sector.
• The economy of the 20 nations sharing the euro expanded by 0.2% in July to September, Eurostat data showed, beating expectations for a 0.1% increase in a Reuters poll and confirming the bloc's resilience despite stagnation in Germany and Italy. On an annualised basis, the economy grew by 1.3%, Thursday's data showed, ahead of expectations for 1.2% and a level economists consider to be around its natural rate of growth without stimulus.
• "The mood about the economy seems decently optimistic at the moment, despite ample downside risks clearly weighing on the outlook," ING economist Bert Colijn said. "We do expect a gradual acceleration of growth over the coming year but remain cautious about marking this as the start of a growth spurt." Spain remained the best performer among the bloc's largest economies, growing 0.6% in the quarter, in line with forecasts, while France expanded by 0.5%, beating expectations for 0.2%. Germany and Italy both stagnated.
• Thursday's figures ease pressure on the ECB to cut interest rates any further in the near term as they confirm the central bank's longstanding view that the economy is proving resilient to this year's unusual spike in uncertainty. Backing the resilience narrative, unemployment held at a near-record low of 6.3% in September, according to separate Eurostat data.
• Germany, which has broadly stagnated for the past three years as its industry lost competitiveness, remains the bloc's problem child, but a massive increase in government spending is likely to prop up growth. While trade tensions, lingering uncertainty, and Chinese dumping of surplus goods could still weigh on growth in the months ahead, economists remain relatively upbeat about the outlook. Further, ECB projections suggest the third quarter may have been the worst for some time.
• Growth could pick up as past interest rate cuts work their way through the economy, households sit on ample savings, Germany boosts spending, uncertainty over tariffs eases, and inventories continue to run low. Business activity, as measured by a key Purchasing Managers' Index (PMI) survey, is already showing a pick-up, while sentiment in Germany, the bloc's biggest economy, is improving and businesses are becoming more optimistic, partly due to lower tariff uncertainty. But any growth pick-up is likely to be modest as the rigid structure of the euro zone economy limits activity, say economists, who predict growth in the 1.2% to 1.5% range for years to come.

(Source: Reuters)

• Educational technology firm EduFocal Limited announced a significant change to its external audit team. The company confirmed that Baker Tilly Strachan Lafayette, which had served as external auditors since 2021, has voluntarily withdrawn its services effective Tuesday, September 23, 2025.
• To ensure continuous financial oversight, EduFocal's Board of Directors filled the vacancy, appointing Garcia Campbell & Associates as the Company’s new auditors. This was executed under the authority of Article 189 of the company's recently adopted Articles of Incorporation, which allows the Board to fill a casual vacancy until the next Annual General Meeting.
• EduFocal's shares were suspended from trading on the Jamaica Stock Exchange (JSE) on June 2, 2025, for the continued failure to file its 2024 Audited Financial Statements, which remain outstanding as of October, having been originally due on March 1, 2025
• The first half of the year saw significant corporate shifts, including the resignation of the long-standing Chairman and the abolition of the Chief Financial Officer (CFO) role as part of a move toward a "leaner and more agile" organisational structure.
• With Audited Financials still outstanding, the company’s shares have remained suspended since June 02, 2025, where it closed at $0.22 per share.

(Sources: JSE and NCBCM Research)

• Fitch Solutions forecasts that Jamaica's current account will remain in surplus in the near and medium term, albeit declining from 2.0% of GDP in 2025 to 1.1% in 2026. The surplus is expected to be supported primarily by a solid tourism sector outlook and stable remittance inflows.
• While year-to-date stopover arrivals have fallen by 2.9%, Q2 2025 saw a modest rebound in total arrivals and Q3 2025 is showing continued strength. Furthermore, visitor spending rose 2.7% y-o-y in Q1 2025, lifting services exports by 2.2%. Meanwhile, remittances increased by 3.7% y-o-y from January to June 2025, which is expected to continue to expand broadly in line with US nominal GDP growth.
• However, domestic demand strength will see Jamaica’s current account surplus narrow in the near and medium terms, underpinned by domestic macroeconomic indicators. Despite expected increases in bauxite/alumina production and favourable energy price moves, the merchandise trade deficit is expected to widen due to increased domestic demand for imports. Additionally, recovery and strength in Jamaica’s construction and mining sectors will push up capital goods imports in 2026. Finally, after years of successful fiscal consolidation, Jamaica’s government is expected to increase public investment and spending in the near and medium term, supporting domestic demand and narrowing the current account surplus further.
• The country's external position poses limited risk to macroeconomic stability, demonstrated by a significant decline in overall external debt to 60.1% of GDP in Q1 2025 (from 64.9% a year prior) and a falling share of short-term debt. The Bank of Jamaica's foreign reserves are robust and growing, reaching US$6.2Bn in September 2025, which covers an estimated 7.4 months of imports, reflecting a stronger buffer relative to the 6-month buffer in the prior year
• The net international investment position¹ (NIIP) continues to improve, easing from a high of −155% of GDP in 2019 to −100.8% in 2025. Notably, foreign liabilities are shifting toward more stable direct investment, though downside risks remain from potential worsening global economic conditions, especially in the US – Jamaica’s key trading partner. These potential worsening conditions could result in lower-than-expected remittance flows and declining tourism receipts in Q4 2025 and 2026, thereby narrowing Jamaica’s current account surplus more substantially than expected.

____________________________

¹The Net International Investment Position (NIIP) is a financial metric that represents the difference between a country's external financial assets and its external financial liabilities at a specific point in time.

(Source: Fitch Solution)

• Mexico's annual inflation rate likely slowed in the first half of October, supporting bets the central bank of Latin America's second-largest economy will continue to cut its benchmark interest rate through the end of this year.
• The median average forecast of 11 analysts polled by Reuters suggested annual inflation edged down to 3.7% in the period, after four consecutive fortnights of increases. Core inflation, an index that strips out highly volatile products, likely dropped to 4.24%, the poll found, which would mark its lowest annual level since the first half of August. These forecasts would lift headline inflation by 0.35% and core inflation by 0.19% compared to the prior two weeks. Mexico's statistics agency is set to release the official data on Thursday.
• Mexico's central bank last month cut its benchmark rate for the tenth consecutive time, bringing it down to 7.5%. The central bank's board is expected to consider further cuts going forward.
• It did not say how big the coming cuts would be, but the market expects quarter-percentage-point reductions in each of its rate decisions next month and in December, which would bring the benchmark rate to 7% by the end of 2025
• The bank's Deputy Governor Jonathan Heath, who has opposed recent rate cuts from inside the board, said in a recent interview that the central bank should not rush rate cuts until it is certain inflation is resuming a clear downward trend.

(Source: Reuters)

• Amid the mix of perennial, long-term issues and new ideas, Cayman’s Minister of Finance and Economic Development, the Hon. Rolston Anglin, presented the Government’s Strategic Policy Statement (SPS) for 2026–2028 during the First Sitting of the Second Meeting of the 2025-2026 Session of Parliament in October 2025. The SPS outlines the Government’s medium-term fiscal framework and strategic priorities, ensuring that national resources are managed responsibly while delivering programmes that improve the lives of Caymanians.
• The statement includes a combination of physical projects, such as building new roads, with theoretical concepts, like digital transformation. For example, the Submarine Cable Modernisation Project aims to find a long-term solution to Cayman’s dependence on two ageing subsea data cables. By enhancing the “resilience of critical information and communications technology infrastructure”, the project could also enable a key economic diversification aim: “implement digital transformation”.
• Likewise, the National Beach Resilience Plan is an infrastructure project that will support the proposed update to the National Tourism Plan. Other tourist-related concepts that will overlay the infrastructure support include eco-tourism, a focus on the Sister Islands and cultural tourism.
• That said, much of the document repeats long-standing aims that were mentioned in previous administrations’ policy statements. Affordable housing remains a key challenge for this government, just as it did for governments past. One way this administration hopes to help lower-income Caymanians buy houses is by offering government guarantees to make mortgages more accessible. Another measure in the document is to build more affordable housing. Again, this will be underpinned by infrastructure, with multiple real estate experts highlighting the need for the East-West Arterial extension to open up less expensive land for the development of affordable housing. However, environmentalists and government bodies are still in disagreement over the potential route.
• That said, not all of the government’s plans are underpinned by infrastructure. There are many regulatory or conceptual improvements identified in the statement that could have an even greater impact than a new road or cable. These include policies that aim to make external trade more efficient, along with the target of earning qualified jurisdictional status from the US National Association of Insurance Commissioners.
• Looking ahead, according to the SPS, Cayman’s economy is expected to expand by 2.6% in 2025; and to grow by 2.2%, 2.5%, and 2.2% in 2026, 2027, 2028 respectively, supported by financial services, infrastructure and tourism.

(Sources: Cayman Compass & Radio Cayman)

• U.S. President Donald Trump hit Russia's two biggest oil companies with sanctions in a sharp policy shift on Moscow's war in Ukraine, prompting global oil prices to rise by 5% on Thursday, October 23, 2025, and India to consider cutting Russian imports.
• The sanctions target oil giants Rosneft and Lukoil, which, between them, account for more than 5% of global oil output, and mark a dramatic U-turn by Trump, who said only last week that he and Russian President Vladimir Putin would soon hold a summit in Budapest to try to end the war in Ukraine.
• But Trump, in his latest about-face on the conflict, said on Wednesday that the planned summit was off because it would not achieve the outcome he wanted and complained that his many "good conversations" with Putin did not "go anywhere". "We cancelled the meeting with President Putin — it just didn't feel right to me," Trump told reporters at the White House. “It didn’t feel like we were going to get to the place we have to get. So I cancelled it, but we’ll do it in the future.”
• Russia called the new U.S. sanctions unproductive and signalled that its conditions for ending its war in Ukraine - terms which Kyiv and many European countries regard as tantamount to surrender - remain unchanged. The conflict raged on as European Union leaders and Ukrainian President Volodymyr Zelenskiy met in Brussels on Thursday to discuss funding for Ukraine, with momentum building to use frozen Russian assets to provide a 140 billion euro ($163 billion) loan to Kyiv.
• Moscow said it would deliver a "painful response" if the assets were seized. Russian drones attacked the Ukrainian capital for a second night, wounding nine people, officials said, while Russian air defence forces were reported to have shot down 139 Ukrainian drones.
• Unveiling the oil sanctions, Scott Bessent, the U.S. Treasury Secretary, made clear Washington was targeting Russia's ability to fund what has become Europe's biggest land war since World War Two and was ready to take further action.
• "Given President Putin’s refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine," Bessent said in a statement. "We encourage our allies to join us in and adhere to these sanctions."
• Russian oil and gas revenue, currently down by 21% year-on-year, accounts for around one quarter of its budget and is the most important source of cash for Moscow's war in Ukraine, now in its fourth year. However, Moscow's main revenue source comes from taxing output, not exports, which is likely to soften the immediate impact of the sanctions on state finances. Maria Zakharova, a spokeswoman for the Russian Foreign Ministry, shrugged off the likely impact, saying Moscow had developed what she called a "strong immunity" to such restrictions.

(Source: Reuters)

• Bank of England Deputy Governor Sam Woods, on Wednesday, October 22, 2025, rejected calls from the banking industry to further relax rules on bank leverage, despite growing pressure from the government to reduce regulatory burdens to boost the UK's economic growth.
• The British government is seeking to soften some finance industry regulations to boost the country's sluggish growth and compete more effectively with the U.S., where supervisors are taking steps to ease banks' capital rules.
• Woods, speaking before UK ministers and industry leaders at an annual regulatory gathering in London's financial centre, said some measures being suggested could allow a sharp increase in bank leverage and weaken safeguards designed to prevent excessive risk-taking. "Taking higher-rated government bonds out of the leverage framework carries real risk," Woods said, adding that it would risk forgetting lessons from the collapse of Silicon Valley Bank in 2023, when its large holding of long-term government bonds made it vulnerable as they lost value when interest rates rose.
• The UK's Prudential Regulation Authority, which oversees banks and which Woods heads as CEO, has proposed raising the threshold at which the leverage ratio applies. Woods said core protections for the banking system would not be sacrificed in the name of competitiveness.
• The leverage ratio, introduced after the 2008 financial crisis, sets a minimum level of capital banks must hold relative to their total exposures, regardless of asset risk. It is designed to limit borrowing and ensure banks can absorb losses.
• Banking industry group UK Finance has argued that gilts (UK government bonds) should be excluded. It noted that lenders hold fewer domestic government bonds than European and U.S. peers, partly because the leverage ratio treats gilts as full exposures despite their low-risk profile.
• Woods said removing sovereign bonds from the framework would "largely eliminate sovereign risk from the bank capital regime" and warned that, unless offset by other capital requirements, it could expose banks to interest rate shocks if large bond holdings were sold off in stressed conditions. The Bank of England has committed to a review of capital requirements in December.

(Source: Reuters)

• Despite Caribbean Cream Limited (Kremi) adding more scoops to its revenue in the second quarter ended August 31, 2025, rising costs caused a 77.2% year-over-year (YoY) net profit drip to $4.21Mn.
• Q2 Revenues increased by 12.9% to $825.56Mn, driven by increased demand from third-party contractors, which was supported by consistent stock levels to meet the demand.
• However, contract labour, waste disposal costs, and extended lease obligations ballooned Cost of Sales by 25.0% $565.27Mn. As a result, gross profits declined by 6.6% to $260.28Mn, and gross margins dipped by 6.6 percentage points to 31.5%
• The gross profit decline was somewhat offset by higher incomes, rising from $0.91Mn to $2.71Mn and lower operating expenses, which chilled by 2.3% to $226.58Mn, but finance costs countered, increasing by 34.2% to $30.79Mn, reflecting higher interest and lease interest expenses. Notably, its lease liabilities more than tripled to $259.96Mn.
• Ultimately, Keremi’s lower Q2 2025 earnings, coupled with its $13.65Mn loss for Q1 2025, translated to a $9.45Mn loss for 6M 2025. This represents a meltdown from the $33.89Mn profits in 9M 2024.
• While a strong holiday season could mean additional revenue increases, Kremi’s overall performance will depend on its ability to manage costs effectively.
• Kremi's stock price has fallen 25.6% since the start of the calendar year. The stock closed Friday’s trading session at $1.62 and currently trades at a P/B of 0.9x, which is below the Junior Market Manufacturing Sector Average of 1.4x.

(Sources: JSE and NCBCM Research)

• Last Week, the Jamaica Stock Exchange (JSE) had a mix of regulatory and strategic headlines, featuring an update on Edufocal’s delayed financials, key governance changes at two companies and dividend considerations.
• EduFocal Limited (LEARN) remains under regulatory scrutiny, after advising of a further delay in filing its Audited Financial Statements for 2024, which were originally due in March. The company has formally requested an extension to submit the completed financials by October 30, 2025. Trading activity of its ordinary shares remains suspended.
• Edufocal’s experience mirrors that of Kintyre Holdings Limited (KNTYR), which also faced challenges submitting timely financials. The experiences of both companies underscore the challenges that smaller companies often face in meeting the regulatory and governance requirements of being listed. Meanwhile, Jamaica Broilers Group Limited (JBG) 2025 Audited and Q1 2026 financial statements remain outstanding due to its ongoing review of its US operations. The company now anticipates that these submissions will be made on or before October 31, 2025.
• Additionally, two companies announced new directors: Knutsford Express Services Limited (KEX) appointed Mr. Larren Peart as an Independent Director. At the same time, Caribbean Assurance Brokers Limited (CABROKERS) welcomed Ms. Odene James to its board, reflecting a push toward enhanced governance and expertise.
• Lastly, Mayberry Group Limited (MGL) and A.S. Brydens & Sons Holdings (ASBH) had dividend updates. MGL announced that its Board of Directors will meet on October 23, 2025, to formally consider the payment of a dividend to Ordinary Shareholders, while ASBH declared preference dividends of US$0.0150 for preference shareholders on record as at October 31, 2025. ASBH’s preference dividends will be paid on November 14, 2015.

(Source: JSE)