• Image Plus Consultants Limited (IPCL) recorded a net profit of $236.43Mn for the year ended February 28, 2023, representing a 150.7% increase in profitability when compared to the $94.29Mn recorded over a similar period in 2022.
• Revenue for the year was up by 40.7% y-o-y to $1.09Bn mainly attributed to higher case count which increased by 18.3% (or 8,469 cases) to 54,840 over FY 2022. This increase was driven by the addition of on-call services in Q4 FY 2023 in Kingston and Ocho Rios as well as increases in interventional studies and high-value CT scans.
• Cost of sales increased by 38.7% (or $105.29Mn) in line with revenue growth, moving to $377.49Mn. However, the growth in COGS was outpaced by revenue growth resulting in a marginal increase in the gross margin to 65.5% up from 65.0% in 2022. Administrative expenses were 14.4% (or $52.46Mn) higher when compared to the $364.72Mn recorded in the same period of last year. This was largely due to expenses associated with one-off costs from its recent IPO (January 2023) and the relocation expenses of its Ocho Rios branch.
• IPCL’s stock price has increased by 8.0% since its IPO in January. The stock closed Wednesday’s trading session at $2.16 and currently trades at a P/E of 9.4x which is below the Junior Market Heath Sector Average of 16.0x.
• The outlook for the company is optimistic as it anticipates that it will be able to add two new modalities (mammography and MRI) by Q3 FY2024. This along with further growth in interventional studies is expected to contribute to the continued growth in its case count. Having listed on the Junior Market of the Jamaica Stock Exchange in 2023, IPCL benefits from a full tax holiday for the first five years and a 50% tax holiday in years 6 to 10. This should bode well for its bottom line and drive shareholder value over the next 10 years.

(Sources: JSE and NCBCM Research)

• The Ministry of Industry, Investment, and Commerce, through the Trade Board Limited, will be establishing an export academy. This facility is designed to provide free, online information and training for businesses, to boost their confidence to seek out export opportunities. Work on this facility is expected to commence in July 2023.
• Prime Minister, the Most Hon. Andrew Holness, made the announcement while delivering the keynote address during the opening ceremony for Expo Jamaica 2023 at the National Indoor Sports Centre in Kingston, on Thursday (April 27). Meanwhile, Mr. Holness said, the Trade Board is working to digitise its services and initiatives, with the aim of supporting exporters and facilitating ease of access to its provisions.
• Other initiatives in the pipeline include the Step-Up initiative and a market intelligence and trade compliance information platform. Mr. Holness said this online resource will facilitate the registration of businesses around the world while adding that “the Trade Board is working to support exporters”. Noting recent data indicating a 6% increase in local manufacturing, the Prime Minister said this signals the sector’s revival.
• Expo Jamaica, the Caribbean’s trade show, made its return after a two-year hiatus due to the COVID-19 pandemic. This year, it connected local manufacturers, producers, tourism industry players, and service providers with 660 local and international buyers from almost 30 countries.
• “We have a broad-based manufacturing industry here in Jamaica and I am certain that as a result of this expo and the exposure, this broad base of Jamaica’s manufacturing will increase even greater,” Mr. Holness said.

(Source: JIS)

• After decades of consistent deficits, Fitch expects Guyana's current account balance will maintain a wide surplus over the coming years, underpinned by strong growth in oil exports.
• Fitch estimated that the current account surplus reached 30.6% of GDP in 2022 (from a deficit of 28.9% of GDP in 2021) as the start of production at ExxonMobil’s second offshore operation in the Stabroek block in February 2022 drove a 159.4% increase in goods exports.
• The current account surplus will narrow to 24.9% of GDP in 2023 as oil-related capital investment, rising government spending and stronger household purchasing power fuel robust import growth.
• Nonetheless, with several new offshore projects due to come online, fueling greater oil exports, Fitch expects Guyana will post a wide current account surplus averaging 26.7% of GDP over 2023-2027.
• Additionally, the country’s capital account will remain in deficit over the coming years (the capital account flipped from a surplus of US$2.1Bn in 2021 to a deficit of US$3.7Bn in 2022) as oil companies recover costs, but healthy foreign direct investment (FDI) inflows and growing international reserves should minimise risk to Guyana’s external account stability over the coming years. 

(Source: Fitch Solutions)

• Brazilian President Luiz Inacio Lula da Silva's government published an executive order aimed at increasing revenue by taxing the capital income from financial investments obtained abroad by individuals who reside in Brazil.
• Income earned from January 1, 2024, will be considered for that purpose, said the text of the measure published on Sunday night that takes effect immediately. It must be voted on by Congress within four months to become permanent law.
• According to the text, income obtained abroad from financial investments will be taxed upon the sale or maturity of assets, while profits and dividends from controlled entities will be taxed on December 31^st of each year. The measure also includes the taxation of assets in trusts.
• Income up to 6,000 reais (US$1,203) will be tax-exempt, while income above that but below 50,000 reais will be taxed at 15%. Income exceeding 50,000 reais will be taxed at 22.5%.
• The Finance Ministry said the measure has the potential to collect around 3.2 billion reais (US$641Mn) in 2023, close to 3.6 billion reais in 2024 and 6.7 billion reais in 2025.
• The measure was published in an extra edition of the official gazette, but Lula did not mention it during his Labour Day speech last Sunday, where he pledged to introduce a new policy of real increases in the minimum wage and announced plans to raise the income tax exemption for lower-income earners.
• Leftist Lula's economic team has emphasized that the government will seek to balance public accounts by taxing those who should but are not paying taxes. However, Sunday's measure was not disclosed on official government channels.

(Source: Reuters)

• A fight between Republicans and Democrats over the debt limit ceiling could send the U.S. economy into a recession. Even if the standoff doesn't actually trigger a debt default, analysts say a much worse downturn could occur with perhaps 7.5 million people thrown out of work.
• Already some corners of the vast market for U.S. debt are feeling a sharp pinch after Treasury Secretary Janet Yellen on Monday said that by early June the government may run short of the money to stay current on its bills - whether they are payments owed to foreign or domestic investors in Treasuries, federal employees and contractors or Social Security pensioners.
• Total government spending on average is about $525 billion a month. A big chunk of that, about $225 billion on average in the first quarter, is deficit spending. Hitting the debt ceiling would mean the government could no longer run that budget shortfall, delivering an immediate blow to millions of Americans who rely on government money directly or indirectly.
• The market reaction from an unprecedented U.S. default would bludgeon away billions more in wealth, and while analysts have floated a few workarounds to keep money flowing, including invoking a constitutional provision that would likely face challenges in court, all are untested.
• Investors are taking the risk seriously. Yields on as much as $650 billion of Treasury securities maturing in the first half of June rocketed to record highs after Yellen's announcement, reflecting the increased chance that they may not be paid off on schedule. The cost to insure U.S. government debt against default has shot to the highest since the 2007-2009 financial crisis.
• Nationwide Chief Economist Kathy Bostjancic was already expecting a recession later this year, as the Federal Reserve's rapid-fire interest-rate hikes aimed at battling inflation raise borrowing costs for households and businesses and slow bank lending. All of that takes air out the economy's tires and could start to push up the unemployment rate, now at a historically low 3.5%.

(Source: Reuters)

• The European Central Bank raised interest rates by 25 basis points to 3.25% as expected on Thursday and signalled that more tightening would be needed to tame inflation. This announcement came a day after the U.S. Federal Reserve also raised its benchmark rate by a quarter of a percentage point – in its case to a 5.00-5.25% range – but hinted that could be the last in a historic series of hikes.
• "We are not pausing - that is very clear," ECB President Christine Lagarde told a press conference. "We know that we have more ground to cover." Lagarde said there were still big upside risks to inflation, notably from recent wage deals and high corporate profit margins, and that financial conditions were still not sufficiently tight. She noted that the bank's written statement made reference to future "policy decisions" in the plural, possibly suggesting more than one further hike.
• The ECB observed a slowdown in the eurozone after three consecutive 50 basis point increases, this data comes only days after eurozone banking data showed the biggest drop in loan demand in over a decade. That suggests previous rate rises are working their way through the economy and that ECB policies are now restricting growth.
• "Rate decisions will continue to be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission," the ECB said in a statement issued before the press conference.

(Source: Reuters)

• The Government intends to introduce new energy sources that will make power generation in Jamaica more reliable, available, and affordable. Speaking at the opening ceremony of Expo Jamaica 2023, at the National Indoor Sports Centre in Kingston on April 27, Prime Minister, the Most Hon. Andrew Holness, said the Government has embarked on a path to ensure that 50% of Jamaica’s energy is generated from renewable sources.
• “We are currently doing a new integrated resource plan to make sure that when we do introduce more green energy, up to 50%, that the entire grid is stable, and that the capacity has been increased,” Mr. Holness said.
• “So, we are looking at pumped hydro storage…looking at the Mahogany Vale project, which I announced as an important element in our energy mix. I have also met with the International Atomic Agency. Jamaica has to explore new technology in nuclear energy, small nuclear plants to generate energy in Jamaica, which will be cheaper, more stable and more affordable,” he added.
• As it relates to the Vale Project, in March 2023, funds were allocated in the budget to develop the dam as a national priority. The project will form part of a major integrated water and energy project utilising the well-established Pumped Hydro Storage and Hydro Electricity concepts, which the Prime Minister announced last year, to solve Jamaica’s water and energy problems and to make the island a truly green country.
• He also maintained that the Government is serious about insulating the economy from energy shocks and high energy prices. However, these initiatives will not all materialise in two years, and may take up to a decade to be completed.

(Source: JIS)

• Fitch Solutions maintains its forecast that real GDP in Barbados will grow by 4.9% in 2023, down from an estimated 10.0% in 2022.
• The company’s core view remains that exports will be the primary driver of headline growth, contributing 4.3 percentage points (pp) to GDP in 2023, down from 8.5pp in 2022 as it expects activity to moderate as global demand for foreign travel softens.
• Nonetheless, the ongoing post-pandemic recovery in tourism will sustain growth above historical averages over the coming quarters, though momentum will fade amid headwinds from weaker global growth and elevated inflation.
• Preliminary data show GDP growth reached 6.4% y-o-y in Q123, a deceleration from 9.5% in Q422, and Fitch expects growth momentum will continue to wane over the coming quarters for reasons previously mentioned.
• Nonetheless, Fitch still expects growth will remain comfortably above the pre-pandemic average of 0.7% over 2015-2019, driven primarily by the ongoing recovery in tourism, which comprised around 30% of the total economy in 2019.
• The risks to the short-term outlook are toward the downside given Barbados' sensitivity to external price shocks, particularly if there is disruption to international travel and tourism. 

(Source: Fitch Solutions)

• A technical mission from the International Monetary Fund (IMF) agreed to disburse US$527Mn to Costa Rica after completing the fourth review of the authorities' reform programme, it said on Friday, April 28.
• The agreement is subject to approval by the IMF Executive Board, contingent on the implementation of a prior action by the authorities linked to implementing the public employment law.
• The implementation of the public employment bill seeks to create a single framework for employment in the public sector, with eight salary scales. This initiative will make the current fragmented public salary system more equitable and efficient by ensuring fiscal sustainability, improving the equity and efficiency of the public administration, and strengthening social safety nets and tax compliance.
• The decision comes as Costa Rican authorities continued to move forward with their comprehensive economic reform programme, IMF said in a statement, adding the reforms aim to make the tax system more efficient and fairer, will strengthen social protections, and reduce labour market informality.
• Additionally, the IMF also said that Costa Rican authorities were moving forward with an "ambitious agenda to green the economy". In other words, the Costa Rican authorities aim to transition to an urban green economy by decarbonising its Greater Metropolitan Area through sustainable integrated urban planning.
• The country’s performance under the previous programme has been strong, and all quantitative targets have been met. There was broad agreement that the overall policy stance should remain focused on bringing inflation back to target (3% ± 1%) and keeping public debt on a firm downward path. This would help protect the poor (who are worst affected by high inflation) and could be achieved while still expanding targeted support for the most vulnerable.
• The financial institution also said it sees Costa Rica's Gross Domestic Product (GDP) growth moderating to 3.0% in 2023, after growing 4.3% last year. Headline inflation has also been on a steady downward path and is projected to be within the Central Bank of Costa Rica (BCCR)’s tolerance range around the target later this year. 

(Sources: IMF & Yahoo Finance)

• The Federal Reserve on Wednesday raised interest rates by a quarter of a percentage point and signalled it may pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political standoff over the U.S. debt ceiling, and monitor the course of inflation.
• The move marks a new stage of the U.S. central bank's management of the recovery from the COVID-19 pandemic, with what may be its final rate hike of the current tightening cycle and heightened attention to risks facing the economy.
• The unanimous decision lifted the Fed's benchmark overnight interest rate to the 5.00%-5.25% range, the tenth consecutive increase since March 2022.
• In an overt shift, the central bank no longer says it "anticipates" further rates will be needed, only that it will watch incoming data to determine if more hikes "may be appropriate."

(Source: Reuters)