• The Antigua and Barbuda government says it remains confident that the new regional airline, LIAT (Leeward Islands Air Transport Services ) 2020, will begin commercial operations early next month.
• However, the government says it is still awaiting a response from the Barbados-based Caribbean Development Bank (CDB) regarding its call for the bank and regional shareholder governments in the bankrupt airline to relinquish their interest in an escrow fund. This fund will be used to make the severance payments owed to the former employees. The shareholder governments of the former airline are Antigua and Barbuda, Barbados, Dominica, and St Vincent and the Grenadines.
• A statement issued after the weekly cabinet meeting noted that the ministers 'held a very brief discussion on LIAT (2020) and the possible start-up date for its re-commencement of commercial flights. 'Although a precise date has not yet been decided, the cabinet is confident LIAT will take to the skies in early August 2024,' the statement said.
• The commencement of LIAT operations would mean more direct flights to Antigua and Barbuda, boosting tourism numbers for 2024-onwards. This would result in greater growth across the tourism sector and related sectors, as well as greater economic growth for the dual island.
• Currently, Antigua and Barbuda is forecasted to grow by 5.8% in 2024, up from 4.2% in 2023, driven by a rebound in tourism (e.g. Antigua’s hosting of the UN’s Small Island Developing States Conference and co-hosting of the T20 Cricket World Cup) and construction activity; two of the major contributors to gross domestic product (GDP).

 (Sources: Trinidad Express Newspaper & NCBCM Research)

• China surprised markets by cutting major short and long-term interest rates on Monday, its first such broad move since August last year, signaling intent to boost growth in the world's second-largest economy just days after a Communist Party leadership meeting.
• The cuts to the central bank's key short-term policy rate, its market operations rates and benchmark bank lending rates came after China reported weaker-than-expected second-quarter economic data last week and its top leaders met for a plenum that occurs roughly every five years.
• The country is verging on deflation and faces a prolonged property crisis, surging debt and weak consumer and business sentiment. Trade tensions are also flaring, as global leaders grow increasingly wary of China's export dominance.
• "The cut today is an unexpected move, likely due to the sharp slowdown in growth momentum in the second quarter as well as the call for 'achieving this year's growth target' by the third plenum," said Larry Hu, chief China economist at Macquarie.
• Additionally, the People's Bank of China (PBOC) said on Monday it would cut the seven-day reverse repo rate to 1.7% from 1.8% and would also improve the mechanism of open market operations.
• Minutes later, China cut benchmark lending rates by the same margin at the monthly fixing. The one-year loan prime rate (LPR) was lowered to 3.35% from 3.45% previously, while the five-year LPR was reduced to 3.85% from 3.95%. That was the first cut to the rate since August 2023.
• Ju Wang, head of Greater China FX & rates strategy at BNP Paribas, said that growing expectations for the Federal Reserve to start cutting interest rates also gave the PBOC room to ease its policy, given the pressure the yuan has been under because of a wide yield gap with the dollar.

(Source: Reuters)

• A jump in British household savings since the COVID-19 pandemic appears here to stay and cannot be fully explained by higher interest rates or unemployment fears, according to the country's statistics agency.
• The Office for National Statistics (ONS) showed Britain's households saved 11.1% of their income in the first three months of this year, up from 5.8% in the final quarter of 2019. This was the highest rate since 2010, excluding the start of the pandemic when it spiked to 27.4%.
• Britain's persistent increase in the household savings rate contrasts with the United States and, to a lesser extent, the euro zone. The U.S. personal savings rate is just under 4%, around 3 percentage points lower than in 2019. The euro zone's savings rate of 14.7% is above Britain’s but has increased by less since 2019.
• The savings rate represents the percentage of household income after taxes and benefits that is not spent. Employers' pension contributions and changes in the value of retirement savings also count as income.
• Excess savings built up by British households since the pandemic are now in the range of 143Bn to 338Bn pounds ($185Bn to $437Bn), the ONS said. "UK households have been reluctant to spend these accumulated savings, unlike in the U.S. where it has been an important factor in supporting household consumption and economic growth," it further added.
• Retail volumes are still just below pre-pandemic levels, and a decision to spend past savings or a lower savings rate in the future would boost consumer demand and could fuel inflation. Of the increased saving rate since 2019, ONS analysis suggested more than 40% reflected higher interest rates and changed earnings expectations.
• Bank of England interest rates rose from 0.1% to 5.25% between December 2021 and August 2023, making it costlier to borrow and more rewarding to save. Financial markets expect the central bank to cut rates only slowly over the next 12 months.
• However, Under 10% of the increase in the savings rate was extra precautionary saving driven by fears of unemployment. But that left almost half the increase due to 'other factors' which the ONS said could include geopolitical worries or economic concerns not directly related to unemployment or interest rates.

 (Source: Reuters)

• TransJamaican Highway Limited (TJH) has advised that the Cabinet of the Government of Jamaica (GOJ) has approved the National Road Operating and Constructing Company Limited (NROCC) to accept TJH’s financial offer of US$20,300,000 plus potential Upside Formula amounts, to acquire the concession to operate and maintain Phase 1C of the Highway 2000 toll roads until November 20th, 2036. The government’s acceptance is subject to contract and additional conditions.
• This is in keeping with the Right of First Refusal granted to TJH contained in the Second Amended and Restated Concession Agreement dated January 29, 2020 with NROCC.
• Phase 1C is the recently completed extension of Highway 2000 between May Pen and Williamsfield. TJH operates and maintains the remaining elements of Highway 2000 consisting of Phase 1A (between Caymanas and Sandy Bay), Phase 1B (between Sandy Bay and May Pen) and the Portmore leg.
• TransJamaica stands to gain from this transaction as the Phase 1C road is a major thoroughfare along the south coast and will significantly reduce motorists’ travel time to Kingston from Mandeville. Increased traffic flows have bolstered and will continue strengthening the company’s topline. Management anticipates that Phase 1C will provide a boost to TJH’s revenues by an additional US$9Mn per annum which should also result in higher earnings,
• TJH’s stock price has increased by 14.0% since the start of the calendar year. The stock closed Thursday’s trading session at $3.09 and currently trades at a P/E of 9.0x, which is below the Main Market Energy, Industrial, and Materials Sector Average of 10.3x.

(Sources: JSE & NCBCM Research)

• PROVEN Group Limited has announced that Mr. Christopher Williams, the long-standing CEO of PROVEN Management Limited (“PML”) and co-founder of PROVEN Group Limited (PGL) will retire from his role in PML’s day-to-day operations effective January 31, 2025.
• Christopher Williams has served as President and CEO of PROVEN Management Limited since its inception. January 31, 2025 will mark the fifteenth anniversary of the Group, which has benefited from his dynamic and visionary leadership.
• While retiring from daily executive operations, Williams will remain a significant shareholder, active director of PML, and member of the Investment Management Committee.
• Additionally, he will continue to sit on the board of directors of several of PGL’s subsidiaries. In these capacities, Williams’ expertise, strategic insight, and guidance will remain an invaluable asset to the ongoing growth and success of the Group.
• PGL’s stock price has decreased by 14.9% since the start of the calendar year. The stock closed Thursday’s trading session at $19.14 and currently trades at a P/E of 6.19x which is above the Main Market Financial Sector Average of 12.74x.

(Source: JSE & NCBCM Research)

• The Dominican Association of Free Trade Zones (ADOZONA) is celebrating the record-breaking export results published by the General Directorate of Customs (DGA) for June 2024. The sector achieved a new high with exports totalling US$0.75Bn, marking a 4.6% increase compared to the same period last year. Overall, total exports for June 2024 rose by 8.6% from June 2023, reaching US$1.13Bn.
• ADOZONA President Luis José Bonilla Bojos highlighted the significance of these results, stating that they reaffirm the vital role of Free Trade Zones in driving economic growth and job creation in the Dominican Republic.
• “These results reflect the continued commitment of the export sector and its ability to adapt and grow in a dynamic global environment. ADOZONA is proud that our sector can contribute significantly to the sustainable economic development of our nation, promoting investments and generating opportunities for all Dominicans,” said Bonilla Bojos.
• In the first half of 2024, total exports amounted to US$6.33Bn, showing a 3.1% growth compared to US$6.15Bn in the same period of 2023. Domestic exports reached US$1.92Bn, slightly below the previous year while Free Trade Zone exports hit a record US$4.26Bn, reflecting a robust growth of 6.8% compared to US$3.99Bn by June 2023.
• Annualized exports from Free Trade Zones over the past 12 months reached a historic record of US$8.3Bn. If this trend continues, exports could exceed US$8.5Bnn by the end of 2024, marking a significant milestone in the sustained growth of the export sector.

(Source: Dominican Today)

• Speaker after speaker at the launch of a regional arm of a global network for collaboration in cyber security lamented the shortage of cyber security experts in Trinidad and Tobago (T&T), amid a plethora of cyber-attacks. The Caribbean chapter of the International Information System Security Certification Consortium (ISC2) was launched on July 16 at the Hyatt Regency, Port of Spain.
• Devon Seale, chairing the event, said the group aimed to equip professionals with the knowledge to safeguard their data and to build resilience. "In the past two years we have been bombarded by many cyber-attacks," Seale said. "Cyber security is a shared responsibility."
• He warned that all the current protection against cyber-attacks will become null and void when cyber-attacks are launched by combining artificial intelligence (AI) and quantum computing. Such attacks, he said, will crack into systems by brute force, by going through all possible permutations of code until finding one that works. Quantum computing uses quantum mechanics to solve problems too complex for classical computers.
• The region has seen ransomware attacks double between 2022-2023, he said, costing US$1Bn, that otherwise could have been used for things like healthcare.
• Given the threat,  Governments need to facilitate the creation of opportunities to build and develop human competencies to lessen the likelihood of cyber-attack or ransomware attacks.

(Sources: Trinidad and Tobago Newsday & NCBCM Research)

• U.S. economic activity expanded at a slight-to-modest pace from late May through early July. Firms are expecting slower growth ahead as they also reported signs the jobs market continues to soften. The softening job market aligns with the Federal Reserve's recent pivot to more keenly assessing slowing labour market demand to ensure it doesn't wait too long before cutting interest rates.
• "Economic activity maintained a slight-to-modest pace of growth in a majority of districts this reporting cycle," the Fed said in its survey released on Wednesday, which polled business contacts across the central bank's 12 districts through July 8.
• "Expectations for the future of the economy were for slower growth over the next six months due to uncertainty around the upcoming election, domestic policy, geopolitical conflict, and inflation," the Fed survey said.
• The Fed's analysis, released roughly every six weeks, comes as Fed Chair Jerome Powell and his colleagues emphasised that risks on inflation and jobs are now in balance. Earlier on Wednesday two top Fed officials said interest rate cuts are "getting closer," remarks that appear to set the stage for a lowering of borrowing costs in September.
• Fed officials recently have said the labour market has come into better balance thanks to an influx of workers, many of them foreign-born, a development also represented in Wednesday's report. The Boston Fed said Cape Cod contacts noted normal levels of availability of foreign-born workers through short-term visa programs, which support the seasonal labour demand in the area.
• The Fed is trying to engineer a so-called "soft landing" for the economy, in which economic growth gradually slows and the unemployment rate remains as inflation, which spiked to a 40-year high two years ago, returns to the Fed's 2% target rate.
• The unemployment rate hit a 2.5-year high of 4.1% in May, with annual wages growing at the slowest pace in three years amid an expanding labour pool, the latest government data showed.

(Source: Reuters)

• The European Central Bank kept interest rates unchanged as expected on Thursday, with its president Christine Lagarde saying a move in September was "wide open".
  Investment indicators point to muted growth in 2024, she continued, noting that the eurozone had probably grown at a slower pace in April-June than the 0.3% of the first quarter.
• The euro was left unchanged by Thursday's decision, which had been telegraphed by policymakers in recent weeks. Now, the focus shifts to September's meeting, which will come at around the time that markets also see the U.S. Federal Reserve cutting.
• The ECB's key concern is that domestic prices, particularly for services, are moving sideways, while relatively quick wage growth threatens to perpetuate inflation above the ECB's target.
• The economy also remains relatively weak, with a string of surveys pointing to anaemic growth, easing fears that buzzing summer activity, particularly in tourism, will further fuel price pressures.

(Source: Reuters)

• Consumer prices rose 1.1% in June 2024, with the All Jamaica Consumer Price Index (CPI) rising from 134.9 in May to 136.4 in June.
• The main contributor to this movement was a 1.4% increase in the index for the heaviest weighted division, ‘Food and Non-Alcoholic Beverages’. The index for the class ‘Vegetables, tubers, plantains, cooking bananas and pulses’ rose 6.8% during the month on the back of higher prices for some agricultural produce, primarily vegetables, such as cabbage, carrot, tomato and yam.
• The inflation rate was also impacted by an 0.8% increase in the index for the ‘Housing, Water, Electricity, Gas and Other Fuels’ division, which was largely influenced by higher electricity rates. Higher cost of rent also contributed to the increase; with actual rent increasing by 0.4% and imputed rent up by 1.0%. However, the overall inflation was tempered by a 1.8% fall in the index for the ‘Water Supplies and Miscellaneous Services related to the Dwelling’ due to lower water and sewage rates.
• Additionally, there was a 1.3% increase in the index for the ‘Transport’ division mainly due to the revised fare structure of the Jamaica Urban Transit Company Limited (JUTC).
• Given the sharp increase in consumer prices for June, the point-to-point inflation rate was 5.4%. This was 0.2 percentage points higher than the 5.2% recorded for May 2023 to May 2024. The divisions making the largest contribution to the point-to-point inflation rate were ‘Food and Non-Alcoholic Beverages’ (4.0%), ‘Transport’ (11.1%) and ‘Housing, Water, Electricity, Gas and Other Fuels’ (5.4%). The calendar year-to-date inflation rate as of June 2024 was -0.3%.
• At its last monetary policy meeting in June, the BOJ kept its policy rate at 7.00% and agreed to start gradually easing its monetary policy stance. However, with the recent passage of Hurricane Beryl, disruption to produce supplies could put upward pressure on food prices. This upward pressure could delay the BOJ’s plans to ease rates as food prices are a key component in Jamaica’s CPI basket. The next policy decision will be on the 20th of August.

(Sources: STATIN & NCBCM Research)