• Following the announcement more than 6 months ago, GraceKennedy has launched the share buyback plan where as much as one per cent of its shares over a period of one year will be bought back.
• The proportion amounts to about 9.9Mn units, which at current price are valued at around $700Mn.
• GraceKennedy, which has more than 990Mn outstanding shares said the transaction will be conducted on the open market through its stockbrokers in Jamaica as well as Trinidad & Tobago. The programme will be funded from its cash resources.
• Other companies that have recently embarked on share buybacks include JMMB Group Limited, Sygnus Investments Limited and First Rock Real Estates Investment.
• The rationale for this share buyback plan is centred on the fact that management believes that the company is trading below its economic value, and the share buyback will help unlock additional shareholder value.

(Source:  RJR News)

• One Great Studio Company Limited (1GS) successfully raised $338.63Mn in their Initial Public Offering (IPO) and is now listed on the Jamaica Stock Exchange’s Junior Market. The company’s IPO opened on August 28, 2023, and closed on August 29, 2023, and saw a 61% oversubscription of its initial share offer. The new Junior Market Company attracted over 3,600 applications to the IPO.
• With the successful listing of 1GS on the JSE’s Junior Market on Tuesday, September 19, 2023, the Company’s shares are now available for trading on the secondary market and will trade under the symbol 1GS.
• The Listing of One Great Studio increases the total listed companies to 49 on the Junior Market and the total number of companies listed on the JSE to 101 or 149 securities. Including the $338.63 million raised by 1GS, the total capital raised by the companies listed on the Junior Market now amounts to $21.23 billion, fulfilling the objective of the Junior Market, which is to enable access to equity capital.
• Also with this listing, the market capitalization of the Junior Market increased from $187.34Bn to $189.03Bn as of September 18.

(Source:  JSE)

• Brazil hopes to attract some 180 billion reais ($36.6 billion) of private investments in new rail and highway projects over the next three years, its Transport Minister Renan Filho told Reuters on Thursday.
• The minister travelled to Lisbon to present plans for the projects to European operators and investors, as part of a roadshow that will continue in Germany, the United Arab Emirates, India and China, he said.
• Filho said in an interview that Brazil's government will also invest some 80 billion reais during President Luiz Inacio Lula da Silva's 2023-2026 term. But roughly 35 tenders should draw over twice that much investment from the private sector.
• Brazil aims to expand its freight-focused rail system to carry 40% of exports by 2035, up from 17% currently, he said.
• Brazil's Transnordestina railway, which has been under construction for over 15 years but is only half completed, could be key to that expansion, said the minister, part of a powerful political family in the northeastern state of Alagoas.
• The Transnordestina was designed to carry commodities like soy, corn, iron ore and gypsum from the state of Piaui north to the northern port of Pecem and east to the port of Suape.
• Filho said the first stretch of the 1,700 kilometres (1,056 mi) project, the Piaui-Pecem connection, would be finished by the beginning of 2027. Construction of the full Pecem-Suape route will begin this year and is expected to be completed within five years.
• Filho said the national railway plan, set to be presented next month, would include six new passenger routes, including from the capital Brasilia to the central state of Goias and from Sao Paulo to Parana. Brazil currently runs just two inter-state passenger railways.

(Source: Reuters)

• In an attempt to stabilize prices, the Dominican Republic has suspended banana exports. Joel Santos Echavarría, Minister of the Presidency and president of the National Council for Food and Nutritional Sovereignty and Security (Conassan), said that the measure will be reviewed in 30 days.
• The decision, taken through Resolution 05-2023, establishes that the measure has been in effect from Monday, September 18, and will be reviewed in 30 days.
• The Dominican Republic is currently a major producer of bananas, especially organic. Its production is oriented for both the national and international markets.
• Notably, according to Ministry of Agriculture data, in 2016 the Dominican Republic became the world's leading exporter of organic bananas, which means that 63% of the total (approximately 17,000 hectares) dedicated to this crop has been certified as being free of pesticides or any other type of chemical.
• Since then, the price of bananas has plummeted by almost 35% of the Dominican Republic’s export price. The increase in freight, fertilizers and supplies such as boxes are among the increased cost factors. The aggravating circumstance is that the destination markets refuse to assume these cost increases.
• Furthermore, the gap between the price of organic and conventional bananas is getting closer every day, to the detriment of DR exporters, thereby resulting in lower earnings for banana exporters in the country.

(Source: Dominican Today)

• The Bank of England halted its long run of interest rate increases on Thursday as the British economy slowed, but it said it was not taking a recent fall in inflation for granted. A day after a surprise slowing in Britain's fast pace of price growth, the BoE's Monetary Policy Committee voted by a narrow margin of 5-4 to keep the Bank Rate at 5.25%.
• It was the first time since December 2021 that the BoE did not increase borrowing costs. "There are increasing signs of some impact of tighter monetary policy on the labour market and on momentum in the real economy more generally," the MPC said in a statement. It cut its forecast for economic growth in the July-September period to just 0.1% from August's forecast of 0.4% and noted clear signs of weakness in the housing market.
• Growth for the rest of the year was likely to be weaker than previous forecasts, the BoE said. Record growth in workers' pay, which has been a big concern for the central bank, was not backed up by other measures of the labour market, it noted, suggesting the BoE's policymakers expected it to slow down soon.
• "CPI inflation is expected to fall significantly further in the near term, reflecting lower annual energy inflation, despite the renewed upward pressure from oil prices," the BoE said. However, it said services inflation was expected to remain elevated. The BoE's decision to pause its rate hikes came a day after the U.S. Federal Reserve also opted to keep borrowing costs on hold. Last week, the European Central Bank raised rates but suggested it might be the last for now.

(Source: Reuters)

• Benchmark 10-year U.S. Treasury yields rose to 16-year highs on Thursday, a day after the Federal Reserve surprised investors by flagging the potential for an additional rate hike, and an expectation for fewer cuts next year.
• The U.S. central bank held interest rates steady, as was widely expected, and said that its benchmark overnight interest rate may still be lifted one more time this year to a peak 5.50%-5.75% range. It also now expects half a percentage point of rate cuts in 2024. As of June, Fed officials had expected to cut rates by a full percentage point next year.
• "It caught the markets by surprise because there was this sense that three months of encouraging inflation data would kind of bring down the temperature at the Fed," said Will Compernolle, macro strategist at FHN Financial in New York. "But, for a number of reasons, they still feel like they need to stay hawkish - they need to stay very ready to continue to be restrictive," Compernolle added.
• Fed chairman Jerome Powell on Wednesday said that a "solid" economy with still "strong" job growth will allow the central bank to keep that additional pressure on financial conditions through 2025 with much less of a cost to the economy and labour market than in previous U.S. inflation battles. He added that "we want to see convincing evidence really, that we have reached the appropriate level" of interest rates to return inflation to the Fed's 2% target.

(Source: Reuters)

• Fitch Solutions expects tourism growth in the Caribbean region to slow in 2024, after experiencing a solid two-and-a-half years of growth after the end of Covid lockdowns.
• Historically, tourism has been a major contributor to the GDP of Caribbean economies. As of 2021, Statista reported that travel and tourism brought in US$39.3Bn towards the Caribbean GDP, approximately 12.5% of the overall Caribbean GDP, with the largest tourism markets being the Dominican Republic, followed by Cuba, Puerto Rico, the Bahamas, Jamaica and Aruba.
• Some of the smallest island economies in the regions, such as those belonging to the Organisation of Eastern Caribbean States, are even more reliant on tourism, with travel and tourism contributing more than 40.0% of GDP in places like Antigua and Barbuda, St. Lucia, Anguilla, the British Virgin Islands, St. Kitts and Nevis and Grenada. 
• The expected recession in the United States which is expected to begin in Q224 will lower demand for Caribbean tourism, dragging down growth across the region. The strong reliance on tourism makes these markets exceptionally vulnerable to any shocks, as was demonstrated in 2020-21.
• This in turn will drive down growth across the region, as US tourism is a major driver of growth in most markets. There is likely to be a region-wide slowdown from 2.2% in 2023 to 1.7% in 2024. 
• Beyond 2024, given the anticipation for the US recession to be short and relatively mild, Fitch expects a rebound driven in part by the tourism recovery; and sees regional growth at approximately 2.4% (2023-2028).

(Source: Fitch Solutions)

• Colombian Finance Minister Ricardo Bonilla, who is also a director of the country's central bank, said on Wednesday he will ask the board to start cutting the benchmark interest rate at the board's meeting next week, citing a slowdown of inflation.
• Colombia's monetary policy authority has held the rate steady at 13.25% since June when it ended an upward cycle during which the board hiked its benchmark rate by 1,150 basis points in a bid to curb rampant inflation.
• "I'm going to insist the central bank start sending the message it's lowering rates from September, even if it's a very small reduction, but that the message starts being sent," Bonilla, one of the central bank board's seven directors, told reporters.
• "What we really need is to show that the trend of reducing inflation is what's important, not the size by which it's falling," he said, adding that Colombia's inflation will close the year at 9.2%.
• Most analysts expect the bank will hold the rate steady at its meeting on Sept. 29 because inflation is decreasing at a slower-than-expected rate.
• Colombia's 12-month inflation through Aug. 31 stood at 11.43%, almost four times the bank's 3% target.

(Source: Reuters)

• The U.S. Federal Reserve held interest rates steady on Wednesday but stiffened its hawkish stance, with another rate increase projected by the end of the year and monetary policy kept significantly tighter through 2024 than previously expected.
• As they did in June, Fed policymakers at the median still see the central bank's benchmark overnight interest rate peaking this year in the 5.50%-5.75% range, just a quarter of a percentage point above the current range which signals one more 25bps rate hike to take place at the November Fed policy meeting.
• The Fed's updated quarterly projections show rates falling by only half a percentage point in 2024 compared to the full percentage point of cuts anticipated at the meeting in June. With the federal funds rate falling to 5.1% by the end of 2024 and 3.9% by the end of 2025, the central bank's main measure of inflation is projected to drop to 3.3% by the end of this year, to 2.5% next year and to 2.2% by the end of 2025. The Fed expects to get inflation back to its 2% target in 2026, which is later than some officials had thought possible.
• "Inflation remains elevated," the rate-setting Federal Open Market Committee (FOMC) said in a policy statement that included projections incorporating stronger economic and job growth than prior forecasts and keeping prospects for a "soft landing" squarely in view.

(Source: Reuters)

• The Bank of Canada wanted to send the message that interest rates would not be coming down soon when it left them at a 22-year high after a policy meeting earlier this month, minutes published on Wednesday showed. The Bank of Canada (BoC) kept its key rate at 5% on Sept 6, noting the economy had entered a period of weaker growth, but said it could hike again should price pressures persist.
• A day later, Governor Tiff Macklem said interest rates may not be high enough to bring inflation back down to its 2% target even after 10 hikes of a total of 475 basis points since March of last year. The hawkish tone struck by the BoC since the latest rate decision was intentional, according to the minutes, or summary of deliberations, of the six Governing Council members.
• They "considered the possibility that their decision could be misinterpreted as a sign that policy tightening had ended and that lower interest rates would follow," the summary read. It continued: "They agreed that they did not want to raise expectations of a near-term reduction in interest rates, given that they only considered keeping the policy rate where it is or raising it further."
• The BoC emphasizes that core, or underlying inflation, has been sticky. Deputy Governor Sharon Kozicki said on Tuesday it was above a level consistent with achieving the 2% target. Also on Tuesday, official data showed headline inflation jumped to 4.0% in August from 3.3% in July and two of three of the BoC's core inflation measures also gained.
• After the August inflation data were released, money markets raised bets for a rate hike after the next policy meeting on Oct. 25. On Wednesday the markets saw a 43% chance of an increase, compared with 23% before the figures came out on Tuesday.

(Source: Reuters)