• U.S. President Joe Biden pledged a $4.0Bn U.S. contribution to the World Bank's International Development Association fund for the world's poorest countries, two sources with knowledge of the commitment said on Monday.
• Biden announced the U.S. pledge during a closed session of the Group of 20 summit in Rio de Janeiro, according to sources who spoke on condition of anonymity. The amount is a record, substantially exceeding the $3.5Bn Washington committed during the previous IDA fund replenishment round in December 2021.
• A White House spokesperson in Washington declined to comment on the World Bank's IDA replenishment.
• It is unclear if U.S. President-elect Donald Trump, who has proposed cutting foreign aid in the past, will honour Biden's pledge as he and billionaire Tesla and SpaceX CEO Elon Musk sought to slash U.S. spending through a new government efficiency panel. An appropriation by the U.S. Congress to fund the commitment would not likely take place until after Trump takes office in January.

Source: (Reuters)

• The European Union has widened its sanctions against Iran over Tehran's support of Russia in its war with Ukraine, the European Commission said on Monday. The Commission said it had added the Islamic Republic of Iran Shipping Lines (IRISL) and its director Mohammad Reza Khiabani, among others, to its sanctions list.
• The fresh sanctions are against vessels and ports used for transporting Iranian-made Unmanned Aerial Vehicles (UAVs), missiles and related technologies and components. They include prohibiting any transaction with ports and locks owned, operated or controlled by the sanctioned individuals and entities.
• The Managing Director of Iran's Ports and Maritime Organization Ali Akbar Safaei condemned the fresh sanctions and denied the "European accusations" as "baseless", Iran's official IRNA News Agency reported on Monday.
• The EU is also sanctioning three Russian shipping firms - MG Flot, VTS Broker, and Arapax - for transporting Iranian weapons, including drone parts, across the Caspian Sea to resupply Russian troops in Ukraine.

(Source: Reuters)

• Dolla Financial Services Limited (Dolla) reported a 45.8% decline in its Q3 earnings, which resulted in a modest 3.5% increase in net profit to $339.64Mn for the nine months ended September 30, 2024. This was largely due to higher earnings in the first half of the year, which helped offset the weaker Q3 performance.
• Despite a 17.5% (or $52.62Mn) increase in interest income, the quarter’s profit decline was driven by higher interest expenses (+32.8%) and operating expenses (+26.5%).
• However, for the nine-month period, total interest income was $1.09Bn, reflecting a 23.1% (or $205.77Mn) year-over-year (YoY) increase, driven primarily by a 15% YoY growth in sales during H1 2024. Net interest income (NII) before expected credit losses (ECL) reached $903.52Mn, a 22.4% (or $165.53Mn) increase.
• However, this growth was tempered by higher expenses, which stemmed from ongoing investments in staff capacity to manage increased demand, along with regulatory, professional and advisory fees and enhanced marketing initiatives. Consequently, operating expenses rose by 18.9% or $79.37Mn to $499.52Mn.
• After the release of Q3 earnings, Dolla’s stock price fell 12.9% from $3.48 to $3.03, largely driven by heavy selling pressure and high trading volume (72.83 million shares) on the following trading day. Despite this decline, the stock has still appreciated 11.8% since the beginning of the year, closing Tuesday’s trading session at $3.03, reflecting strong performance earlier in the year. At this price, the stock trades at a P/B of 7.2x, above the Junior Market Financial Sector Average of 2.5x.

(Sources: DOLLA Financials & NCBCM Research)

• Jamaica’s Net International Reserves (NIR) stood at US$5,595.55Mn at the end of October 2024, 7.6% higher than September 2023, according to the Bank of Jamaica (BOJ). The improvement in the NIR reflects a 7.5% (or US$393.76Mn) increase in total foreign assets, along with a 1.8% decline (or US$1.26Mn) in Foreign Liabilities.
• The rise in foreign assets was due to growth in Currency and Deposits to US$3,660.67Mn from US$3,582.62Mn, Securities (+19.4% or US$316.74Mn). However, this was slightly tempered by a 1.8% (or US$366.69K) decline in both Special Drawings Rights and IMF Reserve Position balance (or US$676.53K).
• In October, the BOJ intervened in the foreign exchange market four times, injecting a total of US$120Mn in an attempt to stabilise the Jamaican dollar. This represented a slight decline from August when there were four interventions totalling US$140Mn. Despite these interventions, NIR rose for the second consecutive month.
• Jamaica’s October 2024 NIR remains relatively high and equates to 28.2 weeks of goods & services imports (26.3 weeks at the end of September 2024). At this level, the NIR is more than double the international benchmark of 12 weeks of imports.

(Source: BOJ)

• Latin American poverty levels fell to a 33-year low in 2023, led by progress in Brazil, the United Nations' Economic Commission for Latin America and the Caribbean (ECLAC) said.
• Latin America is marked by high inequality, limited social mobility, and weak social cohesion, underpinned by inadequate social policies and weak protection systems. As such, despite declining poverty rates, income inequality is high, according to the ECLAC report.
• ECLAC defines poverty as affecting those who do not have sufficient income to cover their basic needs, while extreme poverty includes people who do not have enough income to buy a basic food basket.
• Poverty in Latin America decreased in 2023 to affect 27.3% of the population, down 1.5 percentage points from the year before and more than a 5-point drop from 2020, when economies were severely impacted by the COVID-19 pandemic.
• Extreme poverty in the region still affects 10.6% of the region's population. Excluding Brazil, Latam's poverty ratio would have stood at 28.4%, closer to the 2022 figure.
• The report concluded that strengthening social protection systems is the key to adopting an integrated approach that can help reduce poverty and the various causes of inequality and boost social cohesion.
• The International Monetary Fund forecasts that GDP will increase by 2.1% for Latin American economies in 2024, which could potentially aid in further reducing poverty. ECLAC expects poverty to continue falling to 26.8% this year, while extreme poverty will be at 10.4%.

Source: (Reuters)

• In a bid to ensure opportunities are provided to locals, three Guyanese fabricators will be producing the fixtures for the Jaguar floating production storage and offloading vessel (FPSO). The three local fabrication companies are InFab, Zeco Group of Services, and Guyana Oil and Gas Support Services Incorporated.
• Guyana President Alistair Routledge said that as the industry continues to develop, it is vital that emphasis is placed on investing in the people and businesses of Guyana. The investment of the Jaguar FPSO, he said, brings the total investment in Guyana to over US$55 billion.
• The Jaguar FPSO is Guyana’s sixth oil platform and the latest under construction by SBM Offshore in partnership with the operator of the prolific Stabroek Block, ExxonMobil Guyana. It will initially produce 250,000 barrels daily, pushing Guyana’s total oil production beyond 1.3 million barrels daily.
• According to Bharrat, the growth in the oil and gas sector is unprecedented, and with opportunities being provided to locals, Bharrat urged local companies to ensure compliance with the local content law.

(Source: Guyana Newsroom)

• The U.S. Federal Reserve could carry out fewer interest rate cuts than previously expected next year should President-elect Donald Trump’s proposed global tariffs take hold, former Fed policymaker Loretta Mester said Tuesday.
• Mester indicated that the Fed’s outlook was set to change under the incoming Republican administration’s fiscal plans and that markets may be right in forecasting fewer than the four reductions previously forecasted. “Next year, the pace of the cuts will be affected by where they’re seeing fiscal policy,” she said during a panel at the annual UBS European Conference hosted in London.
• Trump vowed during his election campaign to intensify a trade war that began during his first term in office. Economists have warned that such measures could be inflationary. As a result, markets are now expecting 1 percentage point of cuts in the first half of 2025, followed by a further 25 basis point reduction in the second half of the year, according to median poll forecasts cited by Reuters.
• Economists polled by Reuters also expect a 25-basis point cut at the December 2024 meeting. That would take the fed funds rate to 3% to 3.25% by the end of 2025, slightly below the central bank’s median “dot-plot” projection.

(Source: Reuters)

• British shoppers faced renewed pressure on their budgets in October after grocery price inflation edged higher for the second month in a row, industry data showed on Tuesday. Market researcher Kantar said annual grocery price inflation was 2.3% in the four weeks to Nov. 3, having been 2.0% in the previous four-week period.
• UK supermarkets have warned that tax rises in the new Labour government's first budget last month, together with another rise in the national minimum wage, will be inflationary.
• Kantar said grocery sales rose 2.3% over the four-week period year-on-year to 11.6 billion pounds ($14.9 billion) - the biggest sales month of the year so far. The researcher said there were signs that some consumers were starting their Christmas shopping early.

(Source: Reuters)

• Bolstered by strong quarterly topline performances, TransJamaican Highway Limited (TJH) recorded net profit of US$21.99Mn for the nine months ended September 30, 2024, a 25.9% YoY increase. Revenue for the nine-month period grew by 9.2% or (US$5.07Mn) to US$60.4Mn, aided by higher traffic volumes and movements in the toll tariff, which was increased after its annual review.
• TJH incurred a marginal 0.5% increase in operating expenses to US$16.67Mn. Higher intangible amortisation expenses were partly offset by a reduction in repairs and maintenance activities throughout the period.
• However, administrative expenses rose more briskly by 16.6% (or US$1.00Mn), primarily due to salary changes following the JIO acquisition and restructuring exercise and the usual annual inflationary increments.
• In Q3, earnings increased by 24.9% (or US$1.61Mn), continuing the strong growth trend from Q1 and Q2. The Q3 performance was largely driven by a 8.5% (US$1.63Mn) increase in revenues. Additionally, a 5.8% reduction in operating expenses and a 3.4% decrease in finance costs due to ongoing quarterly debt principal repayments further supported the overall growth.
• TJH's stock price has increased by 33.6% since the start of the calendar year. The stock closed Monday’s trading session at $3.62 and currently trades at a P/E of 6.5x, which is below the Main Market Energy, Industrial, and Materials Sector Average of 10.4x.
• During the quarter, TJH completed negotiations with National Road Operating and Constructing Company Limited (NROCC) regarding the concession to operate and maintain Phase 1C of the Highway 2000 toll roads until November 20th, 2036. The addition of this new concession should enhance the company's portfolio by introducing a fourth toll road. Management anticipates this will provide a boost to TJH’s revenues by a further US$9Mn per annum, which should also result in higher earnings.

(Sources: TJH Financials & NCBCM Research)

• The Bank of Jamaica (BOJ) is taking steps towards increasing its operational resilience including relocating some of its operations to a recently acquired property in St. Andrew. The operations to be carried out at the new location will not include services to the public.
• Explaining the rationale for the decision to activate the operational centre in addition to its downtown Kingston headquarters, BOJ Governor Richard Byles noted that central banking functions are critical to business activity and government operations for the entire country and are required to facilitate business transactions between Jamaica and the rest of the world.
• “The location of the Bank on the Kingston waterfront makes it particularly vulnerable to geological activities such as earthquakes and to the potential effects of sea level rise either by itself or resulting from an earthquake or storm surges driven by tropical cyclones. As part of our risk management, BOJ plans for various eventualities and seeks to minimise the possibility of a complete shutdown of its operations in the event of a disaster,” Mr. Byles explained.
• “Building operational resilience and mitigating risks of various forms is especially critical as Bank of Jamaica prepares to assume wider prudential responsibilities for the regulation and supervision of the entire financial sector. With this in mind, planning for expansion at our current site while also ensuring adequate mitigation of risks to critical operational functions are not mutually exclusive.” Mr. Byles pointed out.

(Source: JIS)