• JPMorgan Chase & Co said on Monday it will buy most of First Republic Bank's assets after regulators seized the troubled lender over the weekend, marking the third failure of a major U.S. bank in two months. Under the deal, which came after an auction, JPMorgan will pay $10.6 billion to the U.S. Federal Deposit Insurance Corp (FDIC) for most of the assets of the San Francisco-based bank, whose failure is the largest since Washington Mutual in 2008.
• JPMorgan, already the biggest bank in the United States, has also entered into a loss-share agreement with the FDIC on single-family, residential, and commercial loans it bought, but will not take First Republic Bank's corporate debt or preferred stock. The deal allows for an orderly failure of First Republic and avoids regulators having to insure all the bank's deposits, as they had to do when two others collapsed in March.
• JPMorgan has been on a buying spree since 2021, acquiring more than 30 companies in deals totalling more than $5 billion. U.S. regulators have been slow to approve large bank deals in recent years, while the Biden administration has also cracked down on anti-competitive practices.
• First Republic disclosed last week that it had suffered more than $100 billion in outflows in the first quarter and was exploring options, increasing stress in the banking sector. Global banking has been rocked by the closure of Silicon Valley Bank and Signature Bank in March, while Switzerland’s Credit Suisse had to be rescued by rival UBS. First Republic shares tumbled 43.3% in premarket trading on Monday before they were halted. The bank’s stock has lost 97% of its value this year. JPMorgan shares rose 2.7%.

(Source: Reuters)

• One on One Educational Services Limited has recorded a net profit of $10.68Mn for the second quarter of the financial year ending February 28, 2023. This represents a 72.8% yoy increase. For the six months ending February 28, 2023, profit totaled $17.41Mn, up 96.2%.
• Revenue for the quarter was up by 17.5% yoy to $72.59Mn, which supported a 47.3% increase for the six months to $153.45Mn. This was mainly driven by increases in the business-to-customers (B2C) and business-to-business (B2B) revenue lines. The increase in revenues was also driven by new contracts acquired and ongoing contracts from the previous financial year.
• Additionally, the company benefited from economies of scale in executing projects, resulting in a $4.48Mn (27.4%) decline in direct costs for the quarter, 6.7% decline to $26.76Mn for the six months.
• The company’s bottom-line was; however, tempered by a $21.73Mn (63.0%) increase in operating expenses to $56.21Mn when compared to the same period in 2022. Operating expenses for the six-month period amounted to $110.09Mn, representing an increase of $43.62Mn or 65.6%. This was due to various factors, including staff cost for developing and expanding new products initiatives, promotional activities to increase awareness of the company’s products, software license fees to support its remote office operations and registration fees associated with the listing of the company.
• One’s stock price has decreased by 5.67% since the start of the calendar year. The stock closed Thursday’s trading session at $1.16 and currently trades at a P/E of 96.7x which is significantly above the Junior Market Others Sector Average of 22.3x. As the company moves forward with its growth strategy and takes advantage of the reopening of the economy, we expect to see an improvement in its earnings per share, which should help improve its P/E ratio.
• As the company moves into Q3, there is optimism surrounding its growth in all of its divisions. The launch of the OneAcademy and the continued expansion of the government and business divisions are expected to be key drivers of growth over the next quarter.

(Sources: JSE & NCBCM Research)

• For March 2023, output prices for producers in the Mining and Quarrying industry increased by 0.7%, while for the Manufacturing industry, prices decreased by 0.1% as indicated by the Statistical Institute of Jamaica (STATIN).
• The growth in the Mining and Quarrying industry index was mainly attributed to a 0.7% increase in the index for the major groups ‘Bauxite Mining & Alumina Processing’ and ‘Other Mining & Quarrying’. This is due primarily to the appreciation of the Jamaican dollar against the United States dollar. The index for the other major group ‘Other Mining & Quarrying’ moved up by 1.6% owing to an increase in operational cost.
• The index for the Manufacturing industry declined by 0.1% due to a fall of 1.8% in the ‘Refined Petroleum Products’ index. The industry’s movement was tempered by an increase of 0.2% in the index for the heaviest-weighted major group ‘Food Beverages & Tobacco’.  This was largely driven by the ‘Manufacture of Beverages and Tobacco’ group which rose by 0.4% due to higher raw material costs. The index for the group ‘Manufacture of Grain Mill Products, Starches and Starch Products’ recorded an upward movement of 0.2%, due to higher prices for cassava.
• For the point-to-point period March 2022 - March 2023, the index for the ‘Mining & Quarrying’ industry decreased by 14.7%, while the Manufacturing industry increased by 4.2%. Contributing to the decline in the prior was a fall of 15.3% in the index for the major group ‘Bauxite Mining & Alumina Processing’ as  Jamalco closed its plant for 10 months due to a major fire in August 2021. The company however completed phase one of its recovery a year later and the plant is expected to be fully operational by September 2023.

(Source: STATIN)

• Fitch forecasts Costa Rican real GDP growth will decelerate from 4.3% in 2022 to 2.8% in 2023 due to a challenging near-term US growth outlook – Costa Rica’s key export partner.
• Much of the deceleration will be driven by net exports, which will now contribute just 0.3 percentage points (pp) in 2023 compared to 3.1pp in 2022.
• The US is Costa Rica’s most important trading partner, typically serving as a destination for just under half of Costa Rica’s total goods exports and well over half of the country’s total annual visitors. The anticipated slowdown in the US will feed through to less growth in both goods and services exports in the months ahead.
• That said, domestic demand will keep headline growth roughly in line with the 10-year historical average (3.1%) as both inflation and unemployment fall.
• Furthermore, Fitch expects fixed investment growth will pick up on the back of the Banco Central de Costa Rica’s (BCCR) recent rate cuts.
• Fitch sees fairly sizable risks that the mild recession in the US could take place at the start of 2024 instead of Q423, in which case the drop in external demand for Costa Rica would be shallower than Fitch initially anticipate.  

(Source: Fitch Solutions)

• During the Sixth Meeting of the Forum of the Countries of Latin America and the Caribbean on Sustainable Development currently underway in Santiago, Chile, Senior Finance Minister, Dr Ashni Singh, said Guyana reaffirms its commitment to Agenda 2030, both in terms of the country’s national policy agenda and ‘our call to action by the international community’.
• This 2030 Agenda for Sustainable Development is a plan of action for people, the planet and prosperity. It seeks to strengthen universal peace in larger freedom through 7 Sustainable Development Goals and 169 targets.
• The Senior Finance Minister was part of the panel that addressed ‘Strategies to Advance Implementation of the 2030 Agenda for Sustainable Development in the Caribbean’. He took the opportunity at the forum to highlight two particular strategies to advance the national and sub-regional agenda in a manner fully consistent with Agenda 2030.
• “These most recent economic developments have placed Guyana in a position to accelerate the implementation of Agenda 2030, to which we are firmly committed. Indeed, even the most cursory examination of our successive national budgets in recent years will indicate very close alignment between national policy priorities and Agenda 2030,” the Minister posited.
• Guyana is currently spearheading CARICOM’s Food Security Agenda ‘25 by 2025’, which seeks to reduce CARICOM’s food import Bill by 25 per cent by 2025. The country has also outlined its second-generation Low Carbon Development Strategy (LCDS) as a successor to the first LCDS.
• “We in Guyana are under no illusion of the magnitude of the task before us if Agenda 2030 is to be successfully implemented. Indeed, notwithstanding our relatively strong fiscal position, the successful implementation of Agenda 2030 will require a level of investment that exceeds the still limited fiscal resources available. The challenge of financing sustainable development is further compounded when our inherent vulnerability especially to climate change and other external shocks is taken into account,” the Senior Finance Minister explained.

(Source: Guyana Chronicle)

• Canadian inflation excluding food and energy costs is expected to remain above 3% until the fourth quarter of this year, the median forecast of seven economists recently surveyed by Reuters showed, which could dash hopes of an early Bank of Canada shift to cutting interest rates.
• While Canadian inflation has cooled in recent months, much of the relief has come from lower energy prices, a volatile component that the BoC tends to exclude when making policy decisions. The readings for core, or underlying, inflation, such as the widely-tracked Consumer Price Index excluding food and energy, are showing greater persistence than the headline rate after price pressures spread from goods into slower-moving items, such as wages and services.
• "We suspect they (BoC) will only start trimming rates when they are convinced underlying inflation trends are set to move below 3%," said Doug Porter, Chief Economist at BMO Capital Markets. A lengthy period of high rates could force an increasing share of highly-indebted Canadians to reset their mortgages at levels that squeeze their finances. Canadians added record amounts of mortgage debt during the COVID pandemic, while the mortgage cycle is relatively short - typically five years versus 30 years in the United States.
• The BoC expects headline inflation to hit 3%, the top of its 1%-3% target range, by the middle of this year. Which is down from 4.3% in March. The BoC's ultimate destination for inflation is set at 2%. Still, the rise in inflation expectations could be another reason for the Canadian central bank to be cautious about easing rates. "Even if inflation expectations come back to 2%, they might not be anywhere near as anchored as they used to be," said Stephen Brown, senior Canada economist at Capital Economics. The BoC has played down the market's pricing of interest rate cuts in 2023 and said it is prepared to tighten further if needed to restore price stability.

(Source: Reuters)

• Investors are positioning for a regime change in global markets as the Bank of Japan (BOJ) edges closer to ditching the policies that depressed the yen for decades, thereby luring Japanese money back home.
• The BOJ, by flooding its financial system with cheap cash and keeping interest rates below zero for years, turned its currency into the ideal funding vehicle and sent trillions of dollars of Japanese cash overseas in search of better returns.
• It is now the last holdout in the global race to raise rates, but with Japanese inflation at multi-decade highs, the yen has steadily strengthened. That means portfolio managers are having to factor a stronger yen into global stock selection in a way they have not for years, with some even anticipating mergers and acquisitions as the Japanese market revs up.
• "The trigger for the revaluation of the Japanese markets is higher rates and then a stronger yen. It’s a market that has been undervalued for years and years and has been a value trap," said Carmignac's head of cross-asset Frederic Leroux.
• With Japanese inflation at its highest in four decades, excluding energy, the BOJ may consider ending its yield curve control (YCC) policy - through which it keeps long-term interest rates ultra-low by buying Japanese government bonds (JGBs) - sometime this year. "We are about to see a repatriation of assets back into Japan, and the numbers are really quite big," said Sam Perry, a senior investment manager at Pictet Asset Management. "This reversal could be really quite dramatic."

(Source: Reuters)

• The Global Digital Services Sector (GDSS) accounts for approximately 70% of businesses operating in the special economic zones (SEZs), making it the largest stakeholder group. This information was shared by Chief Executive Officer (CEO) at the Jamaica Special Economic Zone Authority (JSEZA), Kelli-Dawn Hamilton at a recent Jamaica Information Service (JIS) ‘Think Tank’.
• Hamilton highlighted that while the Authority has many roles to fulfil, a major focus is being placed on the GDSS, particularly relating to business process outsourcing entities. It was also highlighted that JSEZA has been collaborating with the Global Services Association of Jamaica (GSAJ) to ensure competitiveness.
• Topics such as artificial intelligence, metaverse, developments affecting the Internet of Things, Big Data, robotic process automation, and logistics will be discussed during the Outsource2Jamaica Conference slated for May 10 and 11 at the Jewels Grande Montego Bay. The conference will be held under the theme ‘Ahead of the Curve’.
• The BPO sector is regarded as one of the fastest-growing sectors and is important to the Jamaican economy because of its ability to provide sustainable jobs. Moreover, the sector has been pumping roughly US$890Mn (J$136Bn) into the Jamaica economy annually, which is equivalent to around 6% of GDP.
• The Special Economic Zone Authority will continue to discuss with the GSAJ, Port Authority of Jamaica, and Jamaica Promotions Corporation (JAMPRO) the next step for Jamaica to remain competitive in the global space as the shift to digital services continues.

(Source: JIS News)

• Local investors and manufacturers, particularly those in agro-processing, are being encouraged to capitalize on the benefits to be derived from the recently launched hot pepper value chain project.
• The initiative, titled ‘Improving Phytosanitary, Food Safety and Market Access Opportunities along the Hot Pepper Value Chain in Jamaica,’ evolved from a strategic collaboration with the United Nations Food and Agriculture Organization (FAO) and the Jamaican Government through the World Trade Organization (WTO) Standard and Trade Development Facility (STDF).
• It aims to strengthen Jamaica’s international competitiveness in the hot pepper industry and stakeholders’ technical and resource capabilities to have consistent local and international market access. Additionally, the project seeks to support sustainable and resilient practices within the sector. Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill noted that the project will result in greater market access and expanded trade.
• Referencing an FAO report, the Minister said data over the past five years indicate a 39 per cent growth in local production levels within the sector.
• Consequently, Senator Hill noted that all stakeholders must continuously seek to capitalize on market access opportunities and meet product demand, to maximize local exports and grow Jamaica’s economy.

(Source: JIS News)

• The average price of food and non-alcoholic beverages increased by 12.99% between March 2022 and March 2023, according to Guardian Media calculations of data published by the Central Statistical Office (CSO) on Sunday. This is lower than the 14.04% registered between February 2022 and February 2023, an indication of an easing in the increase in prices of food and non-alcoholic beverages.
• For the period March 2022 to March 2023, headline inflation was 7.34%; down from the 7.60% recorded in February and the 8.3% in January (year-over-year). Additionally, the food and non-alcoholic beverages decreased from 147.8 points in February 2023 to 146.1 points in March 2023, reflecting a decline of 1.2%.
• The general downward movement in the prices of pumpkin, tomatoes, melon, hot peppers, cabbage, melongene, carrots, pimento, celery, and parboiled rice, contributed significantly to the decline.
• However, this was offset by the general increases in the prices of chilled or frozen beef, fresh beef, chilled or frozen pork, cucumber, onions, oranges, table margarine, grapes, corn, and plantains.
• As inflation continues to become more palatable for consumers (CPI 2023: 4.8% y-o-y), Fitch Solutions expects that the Central Bank of Trinidad & Tobago will continue to leave its policy rate unchanged at 3.5% for the remainder of the year. This is in an effort to support borrowing and the continued post-pandemic economic recovery.

 (Sources: Trinidad and Tobago Guardian & Fitch Solutions)