• Jamaica is on track to achieve a 72.0% debt-to-gross domestic product (GDP) ratio by the end of the fiscal year, the lowest in 30 years. Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, disclosed while opening the 2024/2025 Budget Debate in the House of Representatives on Tuesday (March 12),
• He noted that the country’s debt could be as low as 64.0% of GDP by the end of April 2025, the lowest debt since 1976. He highlighted that Jamaica is enjoying 10 consecutive quarters of economic growth.
• In addition to noting that the country’s fiscal credibility has “improved dramatically”, Dr. Clarke said it has resulted in trust in Jamaica’s economic policymaking environment multiplying several folds and making the country “much more attractive to investment”.
• Citing the record-low unemployment rate of 4.2%, the Minister said the Government wants to create higher-value jobs by improving skills and boosting the educational outcomes of the population.

 (Source: JIS)

• Exxonmobil Guyana on Friday (March 15, 2024) announced that it has made an oil discovery at the Bluefin well in the Stabroek Block offshore Guyana. This marks the company’s first discovery of 2024 and signals its continued progress in tapping into Guyana’s vast oil and gas potential.
• The Bluefin well, drilled by the Stena Drillmax drillship in 4,244 feet (1,294 metres) of water, encountered approximately 197 feet (60 metres) of hydrocarbon-bearing sandstone. Situated about 8.5 kilometres southeast of the Sailfin-1 well, in the southeastern region of the Stabroek block, this discovery further bolsters ExxonMobil’s extensive exploration efforts in the area.
• The Bluefin discovery adds to the impressive tally of more than 30 discoveries already made on the Stabroek block since 2015, underlining the area’s rich oil potential. Notably, the Bluefin-1 exploration well is strategically located close to the Suriname border and lies six miles southwest of the Haimara-1 discovery, currently undergoing appraisal for potential gas development.
• This latest discovery reaffirms Guyana’s position as a key player in the global energy landscape and underscores ExxonMobil’s commitment to sustainable resource development in the region.
• The year-end goal is to reach a total cumulative output of 500 million barrels, marking a major milestone for Guyana since the start-up in the Stabroek Block five years ago.

 (Source: Guyana Chronicle)

• The government of Trinidad and Tobago is seeking to strengthen the country's financial buffers by $10 billion in the event of unforeseen economic developments. This was the rationale advanced by Finance Minister Colm Imbert as he piloted a motion to amend the Development Loans Act to increase the statutory limit of borrowing under this act by $10Bn from $65Bn to $75Bn.
• Speaking in the House of Representatives, at the Red House, Port of Spain, Friday (March 15, 2024), Imbert noted that since the Development Loans Act came into force in 1964, there have been several increases in the limit, with the last two increases in 2020 and 2021 done to counter the effects of the Covid19 pandemic and the consequential collapse in commodity prices.
• Imbert explained that the Government's current 'remaining headroom' under the Development Loans Act is just $2.5Bn as a result of the borrowings done under the pandemic.
• Given T&T’s potential vulnerability to the current tenuous geopolitical dynamics, the Government must maintain a level of flexibility that will allow it to quickly counter the effects of revenue contraction or unforeseen expenditure demands. This will mean maintaining a reasonable borrowing capacity. Accordingly, it will not be practical for this Government to have access to a maximum of only two and a half billion TT dollars, Imbert said.
• The minister stressed, however, that the increase in the limit would not imply an immediate increase in government spending as the government is only permitted to spend what has been appropriated in this year's budget.
• The proposed increase, therefore, is primarily due to the limited excess capacity that the government has and would give the Government sufficient room and flexibility to meet its current and emergent financing needs in the medium term. 

 (Source: Trinidad Express Newspaper)

• While bond investors expect the U.S. Federal Reserve to keep rates unchanged at its policy announcement this Wednesday, the market reaction could hinge on what Fed officials indicate about stubborn inflation and if their signals get more hawkish about the timing and extent of any easing this year.
• Stronger-than-expected economic growth and stickier inflation this year have led investors to push back expectations on the U.S. central bank's first rate cut to June, from May, and reduce bets on how many cuts are likely this year. Traders are now pricing in three 25-basis-point cuts, in line with Fed policymakers' median expectations in December.
• Benchmark 10-year Treasury yields rose to a one-month high of 4.328% on Monday and jumped from 4.052% a week ago as traders adjusted for a more hawkish Fed. In December, the Fed pivoted to a more dovish outlook on growing confidence that inflation was on track to its 2% annual target. Inflation has since picked up, though analysts note that recent hotter-than-expected consumer and producer price index reports likely reflected seasonal factors.
• After the Fed's January meeting, Powell said that the central bank wants more confidence that inflation will continue to decline before cutting rates. "The Fed doesn't want to break anything," said Padhraic Garvey, regional head of research Americas at ING. He added that when inflation gets closer to 2%, the Fed will likely "use that opportunity to get rates off the highs."
• In the meantime, the Fed may be cautious about the prospect of near-term rate cuts. "The main focus is which way they lean," said Stephen Gola, head of U.S. Treasuries Sales & Trading at StoneX Group. An unexpected uptick in unemployment last month could keep the Fed circumspect on growth, offsetting some inflation concerns.
• Another possibility is that Powell could adopt a more hawkish tone by referencing loose financial conditions as stock markets hit records and corporate credit draws enthusiastic demand.

(Source: Reuters)

• China's factory output and retail sales beat expectations in January-February, marking a solid start for 2024 and offering some relief to policymakers even as weakness in the property sector remains a drag on the economy and confidence.
• Monday's data join recent better-than-expected exports and consumer inflation indicators, providing an early boost to Beijing's hopes of reaching what analysts have described as an ambitious 5.0% GDP growth target for this year.
• Industrial output rose 7.0% in the first two months of the year, data released by the National Bureau of Statistics (NBS) showed on Monday. This was above expectations for a 5.0% increase in a Reuters poll of analysts and faster than the 6.8% growth seen in December. It also marked the quickest growth in almost two years. Retail sales, a consumption gauge, rose 5.5%, slowing from a 7.4% increase in December but beating an expected 5.2% gain.
• The eight-day Lunar New Year holiday in February saw a solid return of travel, which supported revenue from the tourism and hospitality sectors. That also led to a 3% growth in oil refineries to meet the strong demand for transport fuels.
• "Consumers were buoyed temporarily by festivities-related spending at this start of the year. Without decisive consumption-related stimulus, we think it would be difficult to sustain a robust consumer spending pace this year," Oxford's Loo said.
• Loo's cautious comments reflect a broader consensus among China watchers that Beijing has its work cut out in achieving its 2024 economic growth target of "around 5.0%". While the goal was similar to 2023, analysts note last year had a lower base effect due to COVID-19 curbs in 2022.

(Source: Reuters)

• For the first quarter ending January 31, 2024, Indies Pharma Jamaica Ltd. reported a net profit of $62.49Mn (EPS: $0.047), a 5.9% (or $3.46Mn) improvement over Q1 2023.
• Revenues grew 5.4% while direct expenses fell marginally (0.6%), causing gross profit to increase by 8.1% (or $14.22Mn). Indies Pharma implemented a new policy that enhanced the accuracy and efficiency of the inventory management process and contributed to the improvement in gross profit.
• However, the bottom line performance was tempered by an increase in administrative expenses of 29.7% (or $29.6Mn), as well as tax expenses.
• Of note, Indies completed its fifth year listed on the Junior Market in 2023, which marks the end of its 100% tax break. Starting this quarter, the company will start paying taxes on corporate profits at a rate of 5% for the next 5 years as it enters the second phase of its tax break.
• Indies Pharma’s stock price has decreased by 6.9% since the start of the year and closed Thursday’s trading session at $2.72 per share. At this price, the stock trades at a P/E of 17.0x earnings, which is above the Junior Market Distribution sector average of 14.0x earnings.

 (Sources: JSE and NCBCM Research)

• The Income Tax Act will be amended to increase the maximum participating voting share capital of companies listed on the Junior Stock Exchange from $500Mn to $750Mn.
• At the opening of the 2024/25 Budget Debate in the House of Representatives on March 12, Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, said the measures are in an effort to further facilitate growth of the micro, small and medium-sized enterprise (MSME) sector.
• It is anticipated that the increased threshold will have a positive impact on the stock market’s activity as more companies may seek to list to take advantage of the higher share capital.

(Sources: JIS and NCBCM Research)

• The upcoming 2025 general elections in Trinidad and Tobago (T&T) are unlikely to pose a threat to political stability and continuity.
• T&T is scheduled to hold general elections in mid-2025, where voters will elect all 41 seats in the House of Representatives for a subsequent 5-year term. For decades, politics in the market has been dominated by the two largest parties – the United National Congress (UNC) and the People’s National Movement (PNM) – with the latter securing majorities in the 2020 and 2015 elections. 
• That said, they may serve as an impetus for a more aggressive crackdown on crime, which continues to reach multi-quarter highs.
• Additional pressure may also be induced by the potential economic implications of high crime, which may potentially discourage tourist arrivals, a key source of income from Trinidad & Tobago, and thus reduce the PNM’s popularity in the upcoming elections. 
• However, other risks to T&T’s political stability are low thanks to strong ties with neighbouring countries and the US, low unemployment, and stable inflation. Overall, it is believed that other sources of risk to T&T’s political environment will remain manageable over the next few quarters. 

 (Source: Fitch Solutions)

• Real GDP growth in Latin America will slow from 2.1% in 2023 to 1.5% in 2024, weighed down by high real interest rates and a somewhat weaker external backdrop.
• The slowdown will be driven primarily by Brazil and Mexico, while Chile, Colombia, and Peru will each see a notable growth recovery compared to 2023.
• Most crucially, the slowdown from Brazil (2.9% growth in 2023 to 1.6% in 2024) and Mexico (3.1% to 2.5%) will drag down overall regional growth. Those two markets account for roughly 60% of regional GDP, with their performance often dictating the overall growth of Latin America.
• Among those that will see faster growth are three of the region’s larger markets: Chile (0.1% in 2023 to 2.0% in 2024), Colombia (0.6% in 2023 to 1.3% in 2024) and Peru (-0.6% in 2023 to 1.9% in 2024). Venezuela and Uruguay will also see an acceleration in growth, benefiting from the temporary removal of US sanctions and an agricultural recovery, respectively.
• Risks to the regional growth forecast lie to the upside, given Fitch’s recent upward revision of the US growth projection and solid high-frequency data out of Brazil.

 (Source: Fitch Solutions)

• U.S. retail sales rebounded less than expected in February, suggesting a slowdown in consumer spending in the first quarter amid rising inflation and high borrowing costs.
• This, however, is unlikely to spur the Federal Reserve to start cutting interest rates before June, as other data on Thursday showed a larger-than-expected increase in producer prices last month.
• The labour market also remains fairly tight. Fewer Americans applied for unemployment benefits last week and annual revisions to the weekly claims data showed laid-off workers were quickly finding new work and not spending as long a period on jobless benefits as had been previously thought.
• According to the Commerce Department’s Census Bureau, Retail sales rose 0.6% last month, and data for January was revised lower to show sales tumbling 1.1% instead of the previously reported 0.8%. Retail sales in December were also downgraded.
• In February, retail sales exhibited mixed trends, with a slight decrease in online sales and declines in various sectors such as clothing, health, personal care, and furniture stores. However, there was a notable rebound of 0.4% in food services and drinking places, suggesting some recovery in consumer spending in certain areas.
• Economists attribute these shifts to households prioritising essentials over discretionary spending, influenced by factors like high prices for food and gasoline. Despite some fluctuations, core retail sales remained stable, indicating consistent consumer spending patterns that align closely with GDP trends.
• However, on a year-over-year basis, retail sales overshot economists’ projections for February with a 1.5% increase versus a 0.8% projection. Sales were boosted by a 1.6% rebound in receipts at motor vehicles and parts dealers. Sales at gasoline stations increased 0.9%, reflecting higher prices at the pump. Receipts at electronics and appliance outlets surged 1.5%. Conversely, building material and garden equipment store sales rebounded by 2.2%.

(Source: Reuters)