• After a prolonged period of contraction, the manufacturing sector in the United States experienced growth in March, marking the first positive trend in a year and a half. The growth in manufacturing was fueled by a significant uptick in production levels and an increase in new orders. However, despite the overall improvement, the employment situation in the sector remained subdued, with limited hiring and reports of sizable layoffs.

• One of the challenges accompanying the growth in manufacturing was the rise in input prices. This suggests potential inflationary pressures, which could have implications for both producers and consumers.

• The survey conducted by the Institute for Supply Management (ISM) provided further evidence of a recovering manufacturing sector. It indicated positive momentum and improving conditions within the industry.

• The PMI, a key indicator of manufacturing activity, reached a reading of 50.3 in March. This figure is significant as it surpasses the threshold of 50, indicating expansion in the sector. Despite the overall positive trend, there were lingering concerns within the sector. Some businesses noted an increase in suppliers' selectivity regarding orders, indicating potential supply chain challenges. Additionally, worries persisted about the impact of rising energy prices on manufacturing operations.

• The financial markets expect the Federal Reserve will initiate rate cuts in June. While the manufacturing rebound is a boost to economic growth prospects, the rise in raw material prices suggests goods inflation could pick up in the months ahead and will be factored into the Fed's monetary policy decision.

(Source: Reuters)

• China's economy, valued at $18.6 trillion, has shown resilience in recent months, with indicators suggesting it has sidestepped immediate risks of decline. This positive trend offers some relief to policymakers who are navigating economic challenges.

• Despite the optimism, there are hurdles in the path of reigniting economic growth. Analysts are sceptical about China's ability to sustainably transform its growth model. The failure to achieve a sustained recovery post-lifting COVID restrictions in late 2022 has raised doubts about the efficacy of current strategies.

• While China has implemented various policy measures to stimulate economic activity, such as directing banks to increase lending to specific sectors and reducing reserve requirements, there are concerns about the diminishing effectiveness of these policies. Questions arise regarding the long-term sustainability of China's growth trajectory if these measures prove insufficient.

• The property sector, which has historically been a cornerstone of China's economy, is facing challenges that could impact overall economic stability. Despite efforts to bolster the sector, concerns persist about its potential to derail economic growth. This underscores the necessity for identifying sustainable growth drivers beyond short-term stimulus measures to ensure economic resilience.

(Source: Reuters)

• Phase one of Caribbean Cement Company Limited’s (CCCL’s) US$40Mn expansion project, which will deliver an increase of up to 30% in production capacity, is progressing towards full completion next year. Managing Director, Jorge Martinez informed that the project has already created new local jobs and will be funded entirely by the company’s coffers.

• “When completed, this project will further reduce our carbon emissions and deliver increased output from 2,600 to 2,850 tonnes of clinker per day to meet the increased local demand for cement,” he said.

• He further noted that the company will also have the capacity to explore options for exporting to other countries within the Caribbean community and that these exports will benefit Jamaica’s economy through foreign currency income.

• First announced in 2022, the expansion and increased capacity project will strengthen the self-sufficiency of the national cement industry, reduce dependency on cement imports, and reinforce the company’s priority to serve the growth of the construction sector in Jamaica and the wider Caribbean.

• When the expansion is completed, Carib Cement’s existing cement production capacity will increase by approximately 300,000 metric tonnes.

• Caribbean Cement’s stock price has fallen by 4.9% since the start of the year, closing Wednesday’s trading session at $56.33. At this price, the stock trades at a P/E of 8.6x earnings, which is below the Main Market Energy, Industrials and Materials Sector Average of 16.0x earnings.

(Sources: Caribbean Cement and NCBCM Research)

• In line with shareholder approval received on December 6, 2023, Ciboney Group Limited has changed its name to Innovative Energy Group Limited. The Company will trade under the new listing/trading symbol ENERGY.

• The renaming follows the takeover of Ciboney by the Wiltshire Group and is a prelude to the company tapping the financial market for at least US$20Mn in the first instance to execute capital-intensive energy-sector projects.

• Ciboney Group was formerly a major investor in the Ciboney Hotels and Villas in Ocho Rios, St. Ann. However, the financial meltdown in the 1990s saw Ciboney's properties being sold off by the Financial Sector Adjustment Company (FINSAC), which was the majority shareholder in the distressed financial companies.

(Sources: JSE and NCBCM Research)

• The Presidents of Guyana and Suriname have instructed their respective officials to enter the next phase of the construction of a bridge over the Corentijn/Corentyne River linking the two countries.

• A joint statement issued following weekend talks between Presidents Dr. Irfaan Ali and his Surinamese counterpart, Chandrikapersad Santokhi noted that the officials will now engage in “discussions on prices, technical aspects, financing and operational modalities with the common goal of optimizing affordability and concessionality”.

• The bridge is expected to cost an estimated US$300Mn and the statement said that both leaders “reaffirmed the importance of this fixed link between their two neighbours in the broader context of South American connectivity, as part of the overall objective of regional integration and trilateral cooperation between Suriname, Guyana and Brazil”.

• ”From a bilateral perspective the Presidents of Suriname and Guyana recognised the importance of the historic and friendly relations between the peoples and governments of both countries. It was further recognised that both countries are currently poised to become major players in energy and food security in this region.

• ”Establishing a fixed link between the two neighbouring countries will undoubtedly increase the flow of people, strengthen agricultural cooperation, facilitate trade and investment and promote tourism, thereby contributing in a diversified manner to economic growth that is expected to deliver sustainable prosperity for both the Surinamese and Guyanese population,” the statement added.

(Source: Caribbean Today)

• Mexico's economy is seen growing between 2.5% and 3.5% this year and then expanding 2.0% to 3.0% in 2025, a draft budget from the country's finance ministry showed on Wednesday.

• Inflation in Latin America's second-biggest economy is expected to tick down to 3.8% this year, according to the draft, essentially meeting the central bank's target of 3%, plus or minus one percentage point. The expected 2024 inflation rate would also signal a slowdown from the 4.40% annualised growth rate in consumer prices in February.

• For 2025, the draft budget predicts that inflation will further ease to 3.3%. The document, which is used by lawmakers to plan future spending, also sees Mexico's peso trading at 17.8 pesos per dollar this year, and slightly weakening to 18.0 versus the U.S. currency next year.

• Average crude oil production this year is forecast at 1.85Mn barrels per day (bpd), rising slightly to 1.86Mn bpd in 2025. While the draft budget said the estimates refer to crude volumes, the government generally combines crude with condensate liquids in its figures.

• Official data shows that state-owned oil company Pemex pumped an average of 1.55Mn bpd of crude in February, its lowest level since 1979. Pemex's oil output, the sales of which are a major contributor to public finances, has been on a steady decline from its peak of 3.4Mn bpd two decades ago. Meanwhile, crude exports are expected to reach 967,600 bpd this year and drop to 958,400 bpd next year.

(Source: Reuters)

• U.S. banks could see a modest hit to their earnings due to the US$30.0Bn settlement to limit credit and debit card fees for merchants by payments networks Visa and Mastercard, Wall Street analysts said.

• The antitrust settlement announced on Tuesday is one of the largest in U.S. history. If approved by the court, it would resolve most claims in a nationwide litigation that began nearly two decades ago.

• Brokerage Evercore ISI said the move to reduce and cap interchange fees impacts issuing banks that generate revenue through the charges and will not be financially material to Visa and Mastercard. "The removal of anti-steering restrictions and by enabling competitive pricing, we could see merchants encouraging more cash transactions or cheaper debit transactions," it said.

• As part of the settlement terms, Visa and Mastercard have agreed to reduce swipe rates by at least four basis points - 0.04 percentage points - for three years and ensure an average rate that is seven basis points below the current average for five years.

• Wall Street analysts expect banks to absorb a large part of the revenue loss by sharing the impact with both card networks and trimming reward expenses.

(Source: Reuters)

• China's industrial firms posted higher profits in the opening months of the year, official data showed on Wednesday, reinforcing signs that an economic recovery was gaining traction, despite persistent sluggishness in the property sector.

• Profits at China's industrial firms jumped 10.2% in the first two months from a year earlier, National Bureau of Statistics (NBS) data showed, following a 2.3% profit decline for the whole of 2023.

• The surge comes on the heels of upbeat indicators earlier this month that suggest a stabilisation in Asia's largest economy. Overall gains remain tempered by the persistent fragility in China's property market, pointing to a divergence in the country's post-pandemic recovery.

• "After an upside surprise to industrial production to start the year, a further recovery of industrial profits sends another signal that we are indeed seeing a gradual recovery after a bottoming out last year," said Lynn Song, chief economist for Greater China at ING. "If the recovery of manufacturing continues, it would contribute toward reaching the 2024 growth target, but more supportive policies are still needed to sustain the momentum and recovery."

• State-owned firms recorded a 0.5% rise in earnings in January-February, foreign firms saw a 31.2% gain, while private-sector companies booked a 12.7% increase, the data showed.

• Zhou Maohua, an analyst at China Everbright Bank, expects continued gains in industrial earnings, but said their prospects could be dented by an uncertain global demand outlook, fluctuations in energy and other commodities prices and supply chain disruptions from geopolitical conflicts.

(Source: Reuters)

• Sygnus Credit Investments Limited (SCI) has advised that the company repurchased 2,400,000 JMD Ordinary shares on March 19, 2024, under the Company’s Share Buy-Back Programme.
• In a note to the Jamaica Stock Exchange (JSE), SCI advised that the purpose of the purchase was to enhance shareholder value and that the maximum intended repurchase is up to US$9Mn of SCI’s JMD and USD ordinary shares.
• The actual amount repurchased as at March 21 is a total of 136,525 USD Ordinary Shares and 4,878,274 JMD Ordinary Shares, equivalent to approximately US$433,000.00. This is inclusive of the units previously repurchased in June 2023.
• The company also noted that the source of funding for the purchase was the company’s cash flows, and the shares were purchased on the open market via its brokers.
• When a company buys back its shares from the stock market, it reduces the number of outstanding shares. Each shareholder of the remaining shares gets a larger portion of dividends paid and ultimately owns a greater stake in the company. Additionally, earnings per share (EPS) and return on equity (ROE) tend to rise, which may attract more investors, and given the increased scarcity of shares, this could drive up demand and potentially lead to an increase in the share price.

(Sources: JSE and NCBCM Research)

• Guyana has issued a call for international legislators to denounce Venezuela’s recent actions aimed at asserting control over the Essequibo region, a significant portion of the Caribbean Community (CARICOM) nation.
• Anil Nandlall, the Attorney General and Minister of Legal Affair underscored the imperative for parliamentary bodies worldwide to address Venezuela’s actions, stressing the importance of upholding international law and fostering diplomatic avenues for resolving conflicts.
• He emphasised that such condemnation is not merely a gesture of support to Guyana but a fundamental obligation in line with the principles of the Inter-Parliamentary Union (IPU) Assembly.
• Despite diplomatic efforts and interim measures imposed by the International Court of Justice (ICJ), Nandlall expressed concern over Venezuela’s recent legislative actions to annex a significant portion of Guyana’s territory.
• This move, he asserted, constitutes a breach of both legal obligations and the spirit of diplomatic agreements, further exacerbating tensions between the two nations.

(Source: Caribbean News Weekly)