• Iranian drone strikes on oil refineries in Saudi Arabia and Kuwait and on Qatar Energy’s Ras Laffan LNG complex, combined with Tehran’s announcement that it would close the Strait of Hormuz, sent shockwaves through global energy markets, pushing Brent crude briefly above $82 per barrel on March 2, 2026, and driving natural gas futures up about 40% in Europe and Asia. As a result of these global shocks, attention quickly turned to the implications for energy-dependent economies such as Cayman.
• The Cayman Islands is heavily exposed to products made from crude oil, such as petrol and diesel, because in addition to transport use, Cayman also generates most of its electricity from diesel oil, with a Caribbean Utilities Company (CUC) report noting “Our generators consumed approximately 40.6Mn gallons of diesel fuel and 109,833 gallons of lube oil in 2025 to meet electrical demand.”
• “CUC’s largest generating units operate on diesel, which means the company is closely tied to global fuel price movements,” said the company’s VP of Energy Operations Stephen Jay, who explained that although CUC does not source fuel directly from Middle Eastern producers, global crude market movements ultimately drive the cost of refined diesel and fuel prices in Cayman tend to move in step with broader international market trends.
• Beyond direct fuel costs, the global energy increases will also have less obvious impacts on Cayman, said Simon Cawdery, a director at HLX Management, noting that higher fuel costs raise shipping expenses and electricity costs, increasing company overheads and pushing up inflation, which “will be bad news for consumers in Cayman from a pure economics perspective”.
• Nevertheless, there are some silver linings for Cayman, as current market conditions for diesel show only a small increase, the islands are not heavy users of natural gas which insulates them from the most extreme price spikes, and the US, a net energy exporter whose key stock markets such as the S&P 500 rose slightly on Monday, has so far suffered little economic impact.

(Source: Cayman Compass)

• The large-scale United States (U.S.)-Israeli military campaign against Iran embodies U.S. President Donald Trump’s second-term foreign policy approach of being more interventionist overseas and embracing strategic military operations. Trump seeks to establish a foreign policy legacy that demonstrates US strength and corrects the perceived ‘failures’ of his predecessors.
• The U.S. actions in pursuit of these ambitious objectives, and Iran’s retaliation, have moved the conflict immediately to a scenario of a short-lived but large-scale campaign with significant implications for the Middle East and the global economy. Trump has committed to a campaign of up to 4-5 weeks and acknowledged that the lives of some American military personnel will be lost.
• This is a clear shift from his first-term foreign policy rhetoric, where he criticised previous U.S. interventions that lost lives, which BMI analysts believe highlights his more emboldened foreign policy approach this term and his recognition of the opportunity for his legacy from military action against Iran now.
• Domestic opinion could alter Trump’s calculus. Trump’s approval rating on foreign policy before the strikes on Iran was low, with only 40% of Americans approving of his approach. His approval ratings fell sharply in January after U.S. military action in Venezuela and his threat to take over Greenland. Despite an uptick in approval after the weekend's actions in Iran, the low approval generally signals Americans’ aversion to overseas military action. BMI expects Americans to be even more cautious of action in the Middle East, with protracted conflicts in Afghanistan and Iraq, as well as elevated energy prices, still fresh in their minds.
• Trump will also be sensitive to any negative economic impact from the conflict, especially the potential of higher U.S. inflation due to an oil price shock, as well as a sharp rise in bond yields. He is already under pressure on affordability (only 36% of Americans approve of his approach to inflation). Although BMI does not expect Trump to change course if the campaign proves short-lived, given little long-term price disruption, anything more protracted may do so.
• Of note, a prolonged campaign that causes a significant oil price spike to US$110-130 per barrel (/bbl) (from the baseline forecast of US$67/bbl for 2026) over the next quarter could increase average U.S. inflation by up to 1.1 percentage point (pp) from the 2026 forecast of 2.3%, which would be enough for Trump to change course and seek a quick end to the conflict.
• Finally, Congress is not expected to force Trump to end the conflict, despite it considering a war powers resolution this week. This is primarily due to the fact that enough members of Congress appear to support the administration’s military actions against Iran. If it did pass, the administration would still have a minimum of 60 days to end its actions without further Congressional approval. BMI does not expect that Trump would want to continue military action beyond that length of time, meaning such a vote would not change his strategy.

(Source: BMI, A Fitch Solutions Company)

• British consumer price inflation is set to average 2.3% ​in 2026, according to estimates ‌from the Office for Budget Responsibility (OBR), finance minister Rachel Reeves said in ​a budget update speech ​on Tuesday, March 3, 2026. In November, when Reeves announced ⁠a full budget, the OBR ​noted that it expected inflation of ​2.5% this year.
• Since then, inflation readings have come in lower than expected and ​are likely to fall close ​to the Bank of England's 2% target ‌in ⁠ The OBR expressed that it now expected inflation in 2027 and 2028 of 2.0%, in line ​with November's ​forecasts.
• The watchdog's ⁠forecasts were made before the recent escalation of ​conflict in the Middle ​East ⁠, which has pushed up global energy prices and raised concerns among ⁠investors ​about a fresh ​rise in inflation. The OBR noted that such an outbreak could have a "very significant" impact on the global and United Kingdom (U.K.) economies.
• The latest OBR forecast also showed growth estimates for both 2027 and 2028 have been revised up to 1.6%, from 1.5% previously. Gross domestic product (GDP) per person, an indicator of changes in living standards, is "marginally higher" than in the November forecast and is now forecast to grow by an average of 1.1% a year between 2026 and 2030. The unemployment rate is also expected to peak at 5.3% this year, up from 4.9% predicted at the Budget.
• Finally, the government's total tax take is forecasted to hit a "historic high" by 2030-31, rising to almost 38% of GDP. The "headroom", or buffer, that Reeves has against her rule not to borrow to fund day-to-day spending in five years' time has increased from £21.7Bn to £23.6Bn. This increase in the "headroom" could give Reeves "a bit more money to play with come the Budget in the autumn," said Paul Dales, chief UK economist at Capital Economics. "But that could be swamped by events in the Middle East raising U.K. inflation and weakening U.K. GDP growth."

(Sources: Reuters & BBC)

• Despite a strong start to the year, with earnings climbing 14.3% to $416.49M over the first nine-months (9M 2025), the Jamaica Stock Exchange Limited (JSE) reported an 11.3% decline in earnings to $440.08Mn for the financial year ending December 31, 2025 (FY2025). A weak fourth quarter, as revenues softened and operating expenses rose, fueled the downturn.
• Fourth quarter revenues fell 12.3% year-over-year to $615.86Mn, impacted by a sharp 54.7% drop in Cess¹ income, reflecting dampened market activity in the wake of Hurricane Melissa. Notably, market volume tumbled by 32.4% to 1.72Bn units during the period.
• Meanwhile, operating expenses (Opex) rose by 14.0% for the quarter, primarily driven by higher personnel costs. These increases were attributed to inflationary adjustments and the onboarding of new resources to support growth and improve service delivery. Additionally, property expenses climbed due to rising maintenance costs and necessary building repairs.
• With lower revenues and higher Opex in the quarter, operating profits declined by 73.6%, and operating margins narrowed from 30.0% to 9.0%. When added to its 9M earnings, operating margin slipped from 27.2% to 20.7%.
• Given that JSE regulates and operates the local stock exchange, its outlook will be intrinsically linked to activity in the primary and secondary markets. The Bank of Jamaica’s recent rate 25 basis point rate cut to 5.50%, and stabilising inflation could support a rebound in stock market activity. Moreover, the demand for building materials, consumer staples and logistics (BMCL) as well as financial services stocks post-Melissa could also contribute to greater trading activity as investors rebalance their portfolios. However, such a pivot will be gradual as investors still weigh the impact of the hurricane on their investment decisions.
• This, coupled with the anticipated launch of the new Micro Market in Q2 2026, and prospects of additional primary/secondary market activity, particularly with the new $750.00Mn capital threshold for junior market listings, could contribute to higher Cess and Fee income.
• JSE’s stock price has declined by 5.4% since the start of the year to close at $11.06 on Monday, March 2, 2026. At this price, it trades at a P/E of 17.6x, which is above the Main Market Financial Sector average of 15.2x.

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¹Cess income on the JSE refers to the revenue generated from a 35-basis point fee applied to all stock exchange transactions.

• Despite reporting robust topline growth in its financial year ending December 2025 (FY2025), Caribbean Cement Company Limited (CCC) recorded flat earnings of $5.92Bn (-0.6%) amid higher expenses.
• Annual Revenue totalled $31.55Bn (+13.0%), underpinned by a 7% increase in domestic sales volumes, as well as an increase in exports. CCC benefited from operational efficiencies realised in its Kiln expansion, which expanded capacity and improved supply reliability. Notably, the supply reliability allowed the company to satisfy domestic demand in Hurricane Melissa’s aftermath whilst still facilitating higher exports.
• Meanwhile, cost of sales increased by 16.7% to $19.05Bn, primarily reflecting expenses associated with the Company’s planned maintenance programme undertaken in the first half of the year (H1 2025). These activities temporarily constrained production efficiency and weighed on profitability, resulting in a gross margin of 33.0% during that period. However, following the completion of maintenance works in H2 2025, efficiency improved, bringing annual gross margins to 39.6%.
• Added to that, operating expenses grew by 5.5% to $3.19Bn, mostly reflecting increases in administrative, distribution and logistics expenses. This, coupled with a 41.0% dip in other income to $258.63Mn and a 21.4% increase in other expense, meant operating profits grew by 3.7%.
• Lastly, taxation charges increased by 21.2% to $2.20Bn. It reflects the cessation of tax incentives following the completion of the Company’s expansion programme. During the investment phase, the Government of Jamaica (GOJ) granted capital allowances, which made qualifying capital expenditures tax-deductible. With the expansion project finalised, these allowances tapered off, resulting in higher taxes.
• Despite a projected short-term recession following Hurricane Melissa, Jamaica’s transition to large-scale reconstruction is expected to drive sustained cement demand.
• Beyond the local market, CARICOM exports remain significantly underpenetrated, contributing less than 1% of total revenue in 2025. Management’s stated intention to expand into select regional markets presents a medium-term growth lever, particularly once domestic rebuilding demand begins to normalise.
• That said, there are downside risks to CCC’s outlook, including substitution with lower-cost building materials, and exposure to foreign exchange volatility.
• CCC's stock price has increased by 5.1% since the start of the year to close at $106.94 on Monday, March 2, 2026. At this price, it trades at a P/E of 15.4x, which is above the Main Market Energy, Industrials and Materials Sector average of 12.6x.

(Sources: JSE & NCBCM Research)

• Seprod Limited (Seprod) today announced the divestment of its subsidiary, International Biscuits Limited (IBL), in alignment with the Group’s ongoing portfolio optimisation strategy to enhance operational focus, strengthen its balance sheet, and deliver sustainable long-term value to shareholders.  International Biscuits Limited manufactures a portfolio of well-known products under its proprietary brands, including Butterkist and Snackables, and also undertakes co-manufacturing for third-party brands, including Ovaltine and Miss Birdie.
• Under the terms of the transaction, Seprod, through its distribution subsidiaries, will continue the local distribution of products manufactured by IBL. All existing export partnerships remain unchanged, ensuring continuity of supply and service across key regional and international markets. 
• Richard Pandohie, Chief Executive Officer of Seprod Limited, noted that the transaction represents a deliberate and strategic step in aligning its portfolio with its long-term growth priorities. The move is also expected to support earnings growth as the company pivots from high-overhead, capital-intensive manufacturing of IBL to focus on its high-margin distribution network.
• Seprod's stock price has declined by 5.4% since the start of the year to close at $79.41 on Monday, March 2, 2026. At this price, it trades at a P/E of 13.1x, which is above the Main Market Manufacturing Distribution Sector average of 12.6x

 (Sources: JSE & NCBCM Research)

• Barbados is taking steps to strengthen its position as a domicile for captive insurance through modernised legislation and improved business efficiency. These goals were highlighted at the launch of the Barbados Risk & Insurance Management Conference 2026 (BRIM 2026) by BIBA and its partners.
• Financial Services Commission (FSC) Chief Executive Officer, Warrick Ward, and BIBA president, Marlon Yarde, said efforts are ongoing to ensure Barbados maintains its position as a leading market for insurance investors, including the captive niche. This includes revamping legislation and working with partners such as Invest Barbados to target specialised investment areas.
• Ward noted that while there is still strong global interest in captive insurance and reinsurance, there remains a knowledge gap about how captives function, even in mature markets like Canada. He stressed the importance of stronger marketing and education efforts to attract the right investors and raise awareness of Barbados’ offerings.
• Yarde emphasised that Barbados is globally competitive from a cost perspective but must continue improving operational efficiency. Initiatives through Business Barbados are aimed at streamlining processes so the jurisdiction can attract more international business and enhance competitiveness.
• BIBA executive director Carmel Haynes highlighted opportunities for local entities, including cooperatives, to pool resources and establish captives or similar risk-sharing funds. She noted that while such models are common overseas, Barbados can adopt similar approaches to keep pace with global trends. She welcomed continued sponsorship support from firms including RBC Wealth Management, USA Risk Group, Summit Asset Management and WIM Wealth & Insurance Management, among others¹.

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¹Concorde Bank, Worldwide Reinsurance, DGM Captive Management Inc, Financial Services Commission, Active Re, Aon, SRS, Great Pacific and PricewaterhouseCoopers.

(Source: Nation News)

• While the state of play in the U.S.-Iran War remains highly fluid, BMI analysts expect that the conflict has the potential to impact Sub-Saharan Africa (SSA) via two primary transmission channels, namely, shifts in global investor sentiment and commodity price volatility.
• The Iranian authorities appear to have rolled back on unilaterally shuttering the Strait of Hormuz1; however, throughput has fallen sharply, driven by coercive signalling from Tehran, spiking insurance and freight costs, and risk avoidance by ship owners and operators.
• Given that around 25% of global oil trade flows through the Strait of Hormuz, Brent prices have risen sharply, currently hovering just shy of US$80 per barrel (/bbl) compared to US$72.5/bbl at close on February 27. Furthermore, given reports of attacks on tankers in the Persian Gulf and on oil facilities in Qatar and Saudi Arabia, there are increased risks that oil prices will rise further.
• Financial markets have also reacted broadly negatively to the conflict, though the scale of losses outside directly exposed regions has thus far been limited. The US Dollar has strengthened modestly, reflecting a mild safe‑haven bid, while the most pronounced declines have been in global equity markets, where risk aversion has driven losses.
• Emerging market (EM) equities have also sold off, and SSA currencies have broadly weakened, including the South African rand, Mauritian rupee, Ugandan shilling, and Zambian kwacha. Mauritius has also been hit particularly hard given its sensitivity to global freight and shipping costs, which have spiked amid rerouting and rising insurance premia.
• Crucially, any sharp and sustained reversal in global risk sentiment, which could trigger external pressures and currency depreciation, would pose the greatest risk to markets with large stocks of foreign‑currency liabilities, where this can translate quickly into domestic financial instability.

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¹The Strait of Hormuz is the world's most critical maritime oil chokepoint, with roughly 20-25% of global seaborne oil and 20% of LNG passing through it. Located between Iran and Oman, it is the sole sea passage from the Persian Gulf to the open ocean, essential for exporting oil from Saudi Arabia, Iraq, Qatar, and the UAE.

(Source: BMI, A Fitch Solutions Company)

• OPEC+ agreed a modest oil output boost of 206,000 barrels per day (bpd) for April on Sunday, March 1, 2026, just as the U.S.-Israeli war on Iran and Tehran's retaliation disrupted oil flows from key members of the producer group in the Middle East. OPEC+ has a history of raising oil output to cushion disruptions, but analysts said the group currently has little spare capacity to add to supply, except for its leader, Saudi Arabia and the United Arab Emirates, which will also struggle to export oil until navigation in the Gulf returns to normal
• Riyadh has been increasing oil production and exports in recent weeks by around 500,000 bpd in preparation for U.S. strikes on OPEC+ member Iran, sources have told Reuters. Oil, gas and other shipments from the Middle East via the Strait of Hormuz have come to a halt since Saturday after shipowners received a warning from Iran saying the area was closed for navigation. Hundreds of ships dropped anchor and were not moving on Sunday, and several ships came under attack.
• Despite fears of a glut that would weigh on prices, global benchmark Brent crude has rallied this year and jumped on Friday to $72.5/bbl, the highest level since July, on fears of a wider conflict in the Middle East.
• OPEC+'s output increase is unlikely to calm markets, said Jorge Leon, a former OPEC official who now works as head of geopolitical analysis at Rystad Energy. "Prices will respond to developments in the Gulf and the status of shipping flows, not to a relatively small increase in output." Similarly, OPEC analyst Helima Croft from RBC also expressed that the market impact from any OPEC output increase will be limited due to a lack of production capabilities outside Saudi Arabia.
• "A tighter market in the first quarter allows the group to continue increasing the quota; however, real barrels being added to the market will be a fraction of it," said Giovanni Staunovo, an oil analyst at UBS. OPEC+'s declining level of spare capacity might have been a factor behind the decision not to opt for a larger boost, he said. Of note, OPEC+ is said to have debated options ranging from 137,000 bpd to 548,000 bpd, according to five sources who declined to be named because they are not authorised to speak to the press.

(Source: Reuters)

• Fitch Ratings has removed National Commercial Bank Jamaica Limited's (NCBJ) Long- and Short-Term Foreign and Local Currency Issuer Default Ratings (IDRs) from Rating Watch Negative (RWN) and affirmed them at 'BB-' and 'B', respectively. Fitch also affirmed NCBFG's senior unsecured notes at 'B+' with a Recovery Rating of 'RR4'. The Rating Outlook for both issuers' Long-Term IDRs is Stable.
• Hurricane Melissa is expected to cause material economic damage and recovery costs, creating a challenging banking environment through 2026–2027 and pressuring financial metrics. However, Fitch views the impact on NCBJ as manageable and less severe than initially anticipated, with sufficient rating headroom to absorb near-term effects. The bank’s scale, diversified model and strong client relationships support pricing power and business generation during stress; total operating income reached US$604.0Mn (+15.3% YoY) as at Sep-2025.
• Asset quality remains stable, supported by diversification and effective risk management. The 90-day NPL ratio improved to 3.9% (from 4.2%) in Q1 FY2026 despite storm disruption, reflecting portfolio segmentation and repricing. While some system-wide deterioration may emerge with lagged hurricane effects, Fitch expects delinquencies and net charge-offs to remain contained over the rating horizon.
• Earnings resilience has been aided by asset-quality management and cost initiatives, though profitability weakened as operating profit/average assets fell to 0.8% (from a 1.2% four-year average) due to elevated impairment charges. Fitch expects only slight additional weakening by next fiscal year-end, with current ratings already incorporating pressured earnings.
• The group also maintains adequate capitalisation, supported by disciplined dividend upstreaming and aligned asset growth. Tangible common equity/tangible assets stood at 10.8%, and the capital adequacy ratio was 15.2%, comfortably above minimum requirements. Overall, capitalisation is expected to remain broadly stable over the rating horizon, with the mandatory reserve fund providing an added buffer.
• Liquidity strengthened despite expectations of deposit outflows, reflecting the bank’s position as the largest deposit taker with a diversified, low-cost base covering 63% of funding needs. The gross loans-to-customer deposits ratio improved to 69.2% (from 72.7%) in FY2025, supporting balanced funding. Liquidity is anticipated to remain robust as hurricane effects materialise, consistent with the current rating profile.
• NCBJ’s ratings remain closely linked to Jamaica’s sovereign rating given government support considerations. Consequently, downward pressure could arise if the bank’s tangible equity ratio falls sustainably below 10%, asset quality or profitability weakens, or the operating environment deteriorates, while an upgrade would likely require an improvement in the sovereign rating alongside the maintenance of a strong franchise, sound financial profile, and tangible common equity above 10% within a stronger operating environment.

(Source: Fitch Ratings)