• Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, tabled the Third Supplementary Estimates for the fiscal year 2023/24 in the House of Representatives on Tuesday (September 26). In a statement to the House, Dr. Clarke said the estimates provide for a total expenditure of $1.094Trn, an increase of $58.2Bn over the second supplementary estimates.
• He indicated that financing of the estimates is programmed from a projected $43.1Bn increase in revenues and grants. This, the Minister pointed out, will primarily comprise increased tax revenues of $35.8Bn, non-tax revenues totalling $6.1Bn, and grants amounting to $1Bn.
• Clarke highlighted that the estimates reflect, among other things, allocations to facilitate the second-year implementation of the compensation restructuring for ministries, departments and agencies (MDAs) not accommodated in the second supplementary estimates.
• Provisions have been made for non-debt recurrent expenditure of $719.4Bn. This includes below-the-line sums, representing an increase of $39.1Bn over the second estimates; capital expenditure of $66.6Bn, representing an $8.7-Bn reduction on the previous allocation; and debt service of $308Bn, comprising interest payments of $170Bn, which represents an increase of $14.9Bn, and amortisation payments of $138Bn amounting to an increase of $12.9Bn.
• The additional $39.1Bn in non-debt recurrent expenditure is allocated as follows – $1.4Bn to recurrent programmes; $37.2Bn for compensation of employees; and $0.6Bn to other outflows, comprising loans to public bodies. He highlighted the net increase of $1.4Bn on recurrent programmes is, therefore, the end result of adjustments inclusive of $1.7Bn allocated for the holding of local government elections within the fiscal year.
• The minister also pointed out that $480Mn has been allocated to the Ministry of Economic Growth and Job Creation, of which $400Mn is for social housing and $80Mn to support the trucking of water by the National Water Commission (NWC) to drought-stricken areas. He advised that $420Mn has been allocated to the Ministry of Local Government and Community Development, of which $100Mn is programmed for the cleanup of town centres, $200Mn for community roads, $120Mn for indigent housing, and $60Mn for the trucking of water.
• Additionally, $1.6Bn has been allocated to support compensation restructuring payments for central government agencies as well as the Jamaica Urban Transit Company (JUTC), which will receive $472Mn, as well as $345Mn to the University Hospital of the West Indies; $395Mn to the Caribbean Maritime University; $120Mn to the Tourism Enhancement Fund; and $107Mn to the Ministry of Health and Wellness entities.
• As a result of this, the Central Government’s spend for fiscal year 2023/24 is, therefore, now estimated at $1.094Trn, up from $1.036Trn. A fiscal balance surpluses of 0.3% of GDP is projected to be generated from the operations of the Central Government in FY 2023/24 and FY 2024/25. Furthermore, a debt-to-GDP ratio of 74.2% is projected for end-FY 2023/24 and is expected to continue to decline gradually throughout the medium term to target of 60.0% or less by FY 2027/28.

(Source: JIS News)

• Present, Dr. Irfaan Ali has reaffirmed Guyana’s commitment to defending its sovereignty and sovereign rights over its territory, in light of recent objections raised by Venezuela regarding the local oil auction.
• Venezuela issued a statement challenging Guyana’s sovereignty, noting that certain maritime areas are not under Guyana’s sovereign rights, and any actions within these areas violate international law unless agreed upon with Venezuela.
• President Ali responded firmly, stating: “The Government of Guyana reserves the right to pursue economic development activities in any portion of its sovereign territory or any appurtenant maritime territories.”. He said too: “Any unilateral attempt by Venezuela to restrict the exercise by Guyana of its sovereignty and sovereign rights will be wholly inconsistent with the Geneva Agreement and the rule of international law.”
• In April of this year, the World Court ruled that the case Guyana brought before it seeking to affirm the validity of the 1899 Arbitral Award settling the boundaries between it and Venezuela was admissible. This meant that the court could move forward with hearing the substantive case on its merits, of whether the 1899 arbitral award settling the boundaries of the two countries is valid and binding.
• The ruling marked the second time that the international court has rejected jurisdictional objections raised by Venezuela.
• Guyana is seeking a final and binding judgement that the 1899 Arbitral Award, which established the location of the land boundary between then British Guiana and Venezuela, remains valid and that the Essequibo region belongs to Guyana and not Venezuela.
• Further to this, CARICOM in a recent statement outlined that it views the stated intention of Venezuela to “apply all the necessary measures” to prevent the operations licensed by Guyana in its waters, as a threat of the use of force contrary to international law. They expounded that this also is not in keeping with the long-standing position of the Latin American and Caribbean countries that the Region must remain a Zone of Peace.

(Sources: Guyana Chronicle & Caricom

• Britain's Institute for Fiscal Studies (IFS) estimated on Thursday that there was a 90% chance that public borrowing in four years would be higher than the government's budget watchdog has forecast.
• The IFS - a non-partisan think tank closely watched by politicians and economists - said borrowing in the 2027/28 tax year was likely to be 40Bn pounds ($49Bn) higher than the Office for Budget Responsibility (OBR) forecast in March, at 3.1% of gross domestic product rather than 1.7%.
• Finance Minister Jeremy Hunt will set out new OBR forecasts and budget plans on Nov. 22, when he will seek to reconcile lowering inflation with fellow Conservative lawmakers' desire for tax cuts ahead of a national election expected next year.
• Borrowing in the 2022/23 financial year totalled 128Bn pounds, or 5.1% of GDP, as Britain's government spent heavily on energy subsidies after Russia's invasion of Ukraine pushed up households' and businesses' heating bills.
• The IFS said OBR forecasts were unable to adjust for the tendency of British governments to borrow more during unexpected shocks such as the COVID-19 pandemic but to spend the benefits of any unexpected tax windfall.
• One solution could be to limit new tax and spending measures to a single fiscal event each year, rather than the current budget in the spring and fiscal update in the autumn, she said. Britain's opposition Labour Party - which is leading the Conservatives in opinion polls by a wide margin - said last week it would aim to limit tax and spending measures to a single budget event in November.

(Source: Reuters)

• Profits at China's industrial firms extended a double-digit drop for the first eight months, but the pace of declines eased slightly as a flurry of policy support steps has started to stabilise parts of the stuttering economy.
• The 11.7% year-on-year fall in profits narrowed from a 15.5% contraction for the first seven months. This outcome is in line with expectations and potentially suggests a modest recovery is beginning to take root for some businesses.  "This data reflected that domestic demand has stabilised and the demand and supply side has seen balanced recovery," said Bruce Pang, chief economist at Jones Lang Lasalle.
• NBS statistician Yu Weining said in an accompanying statement that "a series of policies to promote macroeconomic recovery" last month's underpinned earnings. Profits improved for 30 of 41 major industrial sectors during the period, with the losses in the raw material manufacturing industry narrowing significantly on rising commodity prices and recovered demand. Twenty-eight industries out of the 41 saw earnings dropping in the January-July period.

(Source: Reuters)

• TransJamaican Highway Limited (TJH) has announced an exciting development for its shareholders. On September 26, 2023, the company's Board of Directors declared an interim dividend payment of JMD$0.1866 per share.
• This dividend payment will be extended to shareholders on record as of the close on October 10, 2023, with the actual payment slated for October 25. Potential investors should note the ex-dividend date is set for October 09, 2023.
• As of September 26, 2023, the dividend yield stood at an impressive 7.3%, notably higher than its average yield of 6.3% since its listing on the stock exchange.
• This dividend declaration can be attributed to the company’s strong performance which came on the back of a significant reduction in operating expenses since the acquisition of Jamaican Infrastructure Operator (JIO), coupled with increased revenues driven by rate adjustments and increased traffic flow.
• That said, the company has reported a whopping 387% increase in year-to-date profit, and its cash generated from operations has surged by 71%. This financial robustness places TJH in a strong position in the market and augurs well for both current and potential investors.
• TJH's stock price has surged year to date by 99.3%, closing at $2.79 on September 27, 2023, with a P/E of 14.8x. Future prospects for TJH seem promising. The company aims to ride on the momentum of its recent JIO acquisition and has detailed plans to go cashless by 2028. By embracing technologies like debit and credit cards, along with the Central Bank Digital Currency (CBDC) for toll payments, TJH expects to boost operational efficiency. This digital transition can significantly reduce costs, positioning TJH at the forefront of technological advancement in the sector.
• The company remains vigilant in exploring opportunities to further its market position and extend its profitability horizon. A cornerstone of this expansion strategy involves the potential operation of the new leg of Highway 2000 East-West (‘Phase 1C’, 28km between May Pen and Williamsfield). With the recent completion of this new leg, TJH holds the right of refusal to purchase a Concession that allows it to either partially or fully own, manage, and operate this leg.

(Source: JSE)

• The House of Representatives, on Tuesday (September 19), passed legislation to provide for the integration of the functions of the Audit Commission into the Ministry of Finance and the Public Service.
• Portfolio Minister, Dr. the Hon. Nigel Clarke, who piloted the Financial Administration and Audit (Amendment) (no.2) Act, 2023, explained that the move is in keeping with the government’s policy on the categorisation and rationalisation of public bodies under the public-sector rationalization programme.
• This includes merging, closing and divesting entities and reintegrating others. The objective is to “achieve a reduction in their numbers as well as facilitate improved operational efficiencies”.
• The Audit Commission was established as a statutory body according to Section 33 (C), subsection one of the FAA Act. It is charged with evaluating the performance of audit committees within government departments to ensure their continued effectiveness, promoting best practices in the operation of audit committees, monitoring the performance of each audit committee against its Charter, and performing such other functions as are assigned to it by the Minister, among other things

(Source: JIS News)

• The Central Statistical Office (CSO) reported a 0.2% decrease in inflation for the month of August for Trinidad and Tobago, according to a release of its retail price index on Friday.
• The inflation rate, measured as a percentage change in the average all items index, for January to August 2023/2022 amounted to 6.2%, compared to 6.4% for the period January-July 2022/2023.
• The index for food and non-alcoholic beverages decreased from 147.5 in July to 147.0 in August, reflecting a decrease of 0.3%.
• Contributing significantly to this decrease was the general downward movement in the prices of tomatoes, white flour, parboiled rice, melongene, ochroes, soya bean oil, chilled or frozen chicken, celery, cheddar cheese and eddoes.
• However, the full impact of these price decreases was offset by the general increases in the prices of chilled or frozen beef or pork, fresh beef, whole chicken (fresh or frozen), Irish potatoes, plantains, green pigeon peas, steak (fresh) and garlic.
• Notwithstanding, though this August 2023 figure represents a month-on-month decrease, the country's inflation rate for August was 1.3 percentage points (pp) higher than the 4.9% recording during the period January-August 2022/2021.

(Sources: Central Statistical Office of Trinidad and Tobago & T&T Newsday)

• The informality of property is a historical evil that dates back more than 60 years with about 60% of the country’s properties not formally regularized or titled, said Héctor Pérez Mirambeaux, general director of the National Cadastre (DGCN).
• To face this problem, the DGCN, the Ministry of Finance, and the Inter-American Development Bank (IDB) launched the Project for the Development and Implementation of the Geographic Information System to strengthen cadastral information and improve access to services for the population.
• The system seeks to strengthen the process of land registration and titling while having a more reliable real estate inventory, allowing the application of valuation techniques that will positively impact revenue management and strengthen the cash availability of the treasury.
• The Vice-Minister of the Treasury, Derby de los Santos, said that by having a better capacity to know the cadastral information of the country, the State could simultaneously increase its revenue collection capacity. He emphasized that the investment to create this system is a loan of more than US$500,000 from the IDB.
• On the other hand, Ariel Zaltsman, IDB’s leading specialist in tax management, explained that this system is part of the Program to Improve the Efficiency of Tax Administration and Public Expenditure Management. As part of this program, the design of the geo-referencing application in an open-source tool and the acquisition of a geo-referencing tool and computer equipment have been financed so far.

(Source: Dominican Today)

• Oil is headed as high as $150 a barrel unless the U.S. government does more to encourage exploration, according to Continental Resources Inc., the shale driller controlled by billionaire Harold Hamm.
• Crude output in the Permian basin will one day peak as it already has in rival shale fields such as the Bakken region of North Dakota and the Eagle Ford in Texas, Continental Chief Executive Officer Doug Lawler said during an interview with Bloomberg TV. Without new exploration, “you’re going to see $120 to $150” oil, he said.
• “That’s going to send a shock through the system,” he said on the sidelines of Hamm’s first-ever American Energy Security Summit in Oklahoma City. Without policies encouraging new drilling, “you’re going to see more price pressure.”
• Sprinkled among pro-oil presentations from Republican presidential candidate Nikki Haley and Goldman Sachs Group Inc.’s David Solomon, shale executives issued calls for the Biden administration to adopt consistent policies that will allow them to drill more. Failure to do so, they warned, will lead to tighter energy supplies and higher prices. 
• Haley said she would seek to boost domestic energy production by expanding drilling, speeding up permitting and building interstate pipelines. She also vowed to roll back some energy subsidies and regulations and revive the Keystone XL project.

(Source: Bloomberg)

• Hedge funds increased their bearish bets mainly on U.S. stocks last week when the major stock indexes plunged, Goldman Sachs showed in a report. The bank said its clients mostly added short positions while also getting rid of long positions. Among sectors, consumer discretionary, industrials and financials were the most net sold.
• "Hedge funds have been pressing U.S. shorts in five of the past six weeks, and this week's notional short selling was the largest since Sept. 22," Goldman Sachs' prime brokerage team wrote.
• After a tumultuous week for stocks, as Treasury yields hit 16-year highs, all three major U.S. stock indexes posted weekly losses, with the S&P 500 and the Nasdaq registering their largest Friday-to-Friday percentage drops since March.
• Goldman Sachs also said hedge fund managers decided to unwind risk last week, mostly by selling long equity positions. "This week's notional de-grossing activity in Japan – long and short combined – was the largest since December 2021," the bank said.

(Source: Reuters)