• Consumer spending in the United States saw a significant increase in September, driven by higher purchases of motor vehicles and increased travel. This trend is expected to continue into the fourth quarter.
• The rise in consumer spending was accompanied by elevated inflation readings, particularly in services like housing. However, there is a belief that spending will cool off in early 2024 as accumulated pandemic savings are depleted.
• The strong consumer spending contributed to rapid economic growth, but it's unlikely to match last quarter's performance. Savings rates have dropped, and personal income has seen limited growth, which is causing concern about the sustainability of spending.
• Inflation remains a concern, with the Federal Reserve closely monitoring it. The Fed is expected to keep interest rates unchanged due to recent financial market conditions. Despite the inflation worries, some economists believe that U.S. households are financially healthy, with manageable debt levels and solid income.

(Source: Reuters)

• Dolla Financial Service Limited recorded a net profit of $102.47Mn for the quarter that ended September 30, 2023. This represents a 46.1% yoy increase in profitability. Furthermore, for the nine months ending September 2023, profitability also increased to $328.11Mn from $188.05Mn.
• Net interest income for the quarter was up by 51.4% yoy to $248.55Mn. This was driven by increased loan portfolio expansion. Similarly, net interest income for the nine months increased by 69.3% yoy $737.99Mn.
• Operating expenses, including expected credit losses, totalled $155.69Mn, marking a $59.77Mn or 62.3% YoY increase for the quarter ended September. On the same note, operating expenses including expected credit loss were 80.5% higher in the nine months ended September 2023, when compared to the same period of last year. This was primarily due to an increase in staff capacity, regulatory and professional fees and intensified marketing efforts.
• Dolla's stock price has decreased by 11.8% since the start of the calendar year. The stock closed Thursday’s trading session at $2.54 and currently trades at a P/E of 13.4x which is above the Junior Market Financial Sector Average of 13.1x.
• The company recently announced its plans to expand further in the region. The expansion of its operation in other territories is part of its strategy to enlarge the company’s loan portfolio, allowing it to generate income and profit for its shareholders. At the end of September, its loans receivables net of expected credit losses amounted to $2.6Bn, which represents a massive jump of 125%. The company recently struck a deal with real estate brokerage firm Century 21 Heave-Ho Properties Limited to become the preferred financing partner for short-term loans to its clients and agents, covering home purchase fees and incidentals.
• The financing arrangement is an extension of a previous pact signed between the two companies that will see Dolla Financial and its subsidiary Ultra Financier handing over real estate business to the brokerage, including powers of sale for foreclosures and sale of properties used as collateral for loan agreements. The partnership with Century 21 would make Dolla’s fifth partnership in recent times aimed at widening its client base.

(Sources: JSE & NCBCM Research)

• There was a 0.1% increase in output prices for producers in the Mining and Quarrying industry for September 2023, while prices in the Manufacturing industry went up by 1.2%.
• The increase in the Mining and Quarrying industry was mainly a result of the depreciation of the Jamaican dollar against its United States counterpart. The index for the other major group ‘Bauxite Mining & Alumina Processing’, also increased by 0.1%.
• The main contributor to the 1.2% increase in the Manufacturing industry was a 5.9% increase in the index for the major group ‘Refined Petroleum Products’, due mainly to higher fuel prices on the international market. The index for the heaviest-weighted major group within the industry, ‘Food, Beverages & Tobacco’, had a negligible increase. The group ‘Production, Processing & Preserving of Meats, Fish, Vegetables, Oils and Fats’ increased by 0.1% as a result of a 0.2% rise in the sub-group ‘Meat & Meat Products and Fish & Fish Products’. This was due to higher costs of production for processed meat during the review period
• For the period September 2022 – September 2023, the index for the Mining and quarrying industry increased by 6.5%. This was a result of a 6.6% rise in the index for the major group ‘Bauxite Mining & Alumina Processing’. The point-to-point index for the Manufacturing industry rose by 1.9%, due primarily to an increase of 2.7% in the index for the major group ‘Food, Beverages & Tobacco’. However, these movements were tempered by a 4.3% decline in the index for ‘Fabricated Metal Products excl Machinery & Equipment’.
• The Producer Price Index (PPI) is a significant economic indicator that tracks the average fluctuation in selling prices that domestic producers of goods and services experience over time. There was a minor dip in the PPI in June, however, the decision by OPEC+ to curtail oil supply could potentially further escalate producer prices. This is because a reduction in oil supply could drive up costs related to transportation and electricity.

(Source: STATIN)

• Guyana President, Irfaan Ali, wants Venezuela to know that his country will not tolerate what he described as the latter's "unlawful and unfounded claims to more than two-thirds" of its territory. He said Venezuela continues to undermine Guyana's territorial integrity, and warned the move has the potential to incite violence and threaten peace in the Caribbean.
• In a statement on Monday, Ali said his government had taken "careful note" of five questions issued by Venezuela's National Electoral Council, which are to be asked in the December 3^rd national referendum.
• Among those questions, he said, is one that "brazenly seeks the approval of the Venezuelan people of the creation of a new Venezuelan State consisting of Guyana’s Essequibo region, which would be incorporated into the national territory of Venezuela, and the granting of Venezuelan citizenship to the population."
• Ali said that this represents "nothing less" than an annexation of Guyana's territory and it is in "blatant violation of the most fundamental rules of the UN Charter, the OAS Charter and general international law.
• "Such a seizure of Guyana’s territory would constitute the international crime of aggression." He added, "The Government of Guyana categorically rejects any attempt to undermine the territorial integrity of the sovereign State of Guyana."
• Ali noted the idea that the Essequibo region should be "created" into a state with Venezuela is abhorrent. "Further, the government rejects the internationally unlawful act to put forward the ‘granting of citizenship and Venezuelan identity cards in accordance with the Geneva Agreement and international law.'" He also reiterated that no government or person has the right in international law to seize, annexe or take the territory of another country.
• In a statement in direct response to Ali, the Venezuelan government remarked that Ali's comments were offensive. It said his statement was "loaded with profound contempt for the Venezuelan people, its Bolivarian history and its right to express itself democratically, on matters of special national importance.
• "Venezuela insists on urging the Guyanese government to desist from its actions, both unilateral and subordinate to transnational capital and to seriously assume direct negotiations that will allow for a practical and mutually acceptable agreement between the parties, to resolve the territorial controversy, as was agreed to with the UK of Great Britain just before the birth of Guyana as an independent nation.", the statement also noted.

(Source: Trinidad and Tobago Newsday)

• Caribbean water utilities will be able to exchange real-time data on parts and materials through a pilot version of an innovative data-sharing platform launched by the Inter-American Development Bank (IDB). This will allow the participating utilities within this virtual community to expedite mutual aid and ultimately cut costs.
• Seven utilities from across the Caribbean, including the National Water Commission (NWC) in Jamaica, are participating in the data-sharing platform.
• Through Source of Innovation, the IDB has partnered with H2bid, Inc. to provide a one-year pilot version of this groundbreaking platform which is powered by AURSI. The H2bid/AURSI platform is a unique virtual community with a network effect that connects utilities across various sectors, including water, wastewater, gas, and electricity.
• The initiative aims to assist Caribbean water utilities by providing access to replacement parts, promoting the discovery of new technologies, sharing technical information, encouraging best practices exchange, and reducing waste through surplus item redistribution.
• This innovative pilot platform streamlines collaboration among Caribbean water utilities, helping them recover from climate-related disasters and address current supply chain challenges by expediting mutual aid during emergencies to restore service quickly.
• Users will have the opportunity to connect with their peers from other participating utilities through the virtual community. During the pilot phase, the IDB and participating utilities will explore the feasibility of expanding the pilot version to include a pooled procurement programme — a proven method for saving costs through bulk purchases.
• Representatives from the Caribbean Water and Wastewater Association, Caribbean Water & Sewerage Association, and Caribbean Development Bank actively participated in the pilot platform launch event, expressing their organisations' support for the virtual community and their strong desire to see it expand to include more Caribbean water utilities.

(Source: CariCris)

• The interest rate on the most popular U.S. home loan last week jumped to the highest since September 2000, marking its seventh straight weekly increase and driving mortgage applications to a 28-year low, a survey showed on Wednesday.
• The 7.9% average contract rate for a 30-year fixed-rate mortgage during the week ended Oct. 20 was up 20 basis points from the prior week, the Mortgage Bankers Association said.
• "Mortgage activity continued to stall, with applications dipping to the slowest weekly pace since 1995," MBA vice president and deputy chief economist Joel Kan said. "These higher mortgage rates are keeping prospective homebuyers out of the market and continue to suppress refinance activity."
• The cost of borrowing to buy a house has risen even as the Federal Reserve has put its inflation-fighting rate-hike campaign on pause, after lifting its benchmark policy rate from near zero in March 2022 to 5.25-5.50% in July of this year.
• The 30-year fixed rate mortgage is up 81 basis points since then, tracking a similar rise in the yield on the 10-year Treasury note, the main benchmark for longer-term U.S. borrowing rates.

(Source: Reuters)

• Barclays PLC is laying off dozens of staff in its U.S. consumer banking division as part of a global drive to cut costs, according to a source familiar with the situation.
• The redundancies account for about 3% of employees in the bank's U.S. consumer division, said the source, who declined to be identified discussing personnel matters. The staff were informed earlier this week, the person said. "We review our business on a regular basis to ensure we are operating as effectively and efficiently as possible," a spokesperson for Barclays said in a statement. "These decisions are never easy and employees whose roles have been impacted will receive a full range of transition services."
• Barclays on Tuesday said it would embark on a fresh round of restructuring in the coming months, as it looks to reduce costs and drive efficiencies across the bank in a bid to lift profits. The bank's shares nonetheless slid 6% on Tuesday as long-suffering investors in the British bank digested its downbeat outlook for its home market.
• Chief Executive C.S. Venkatakrishnan said the lender will update investors on the areas impacted when Barclays reports full-year results in February.
• The bank is already drawing up plans to cut hundreds of jobs in its domestic retail bank and cut staff in its investment bank, Reuters reported last month. Barclays' consumer, cards and payments business, which houses the U.S. division impacted by the latest job cuts, has been a source of strength for the bank in recent quarters as growth in credit card balances from its $3.8 billion acquisition of retailer Gap Inc's portfolio lifted revenues.
• The outlook for the business looks murkier now, however, with the bank warning on Tuesday that higher unemployment expectations in the U.S. could lead to customers missing payments

(Source: Reuters)

• LASCO Microfinance Limited, a subsidiary of LASCO Financial Services Limited, received approval of its application for licensing of its institution to operate as a microcredit institution, according to section 10 (3) (a) of the Microcredit Act, 2021, from the Bank of Jamaica.
• The Microcredit Act (‘the Act’) was passed in January 2021, with the aim of licensing and regulating microcredit institutions (MCIs) that provide financing to individuals as well as, micro, small and medium-sized enterprises.
• This brings the total number of licensed microcredit institutions to 21, of which 3 are listed companies on the JSE.
• This means that LASF through its subsidiary is authorized to continue its operations in lending to micro, small and medium-sized businesses and to individuals as defined under the Microcredit Act. Further, over time given the competitive nature of the microcredit financing market, these requirements will not only help to regulate the industry but also reduce exorbitant charges, which bodes well for customers.

(Source: JSE)

• GK Capital Management Limited, Lead Broker, has advised that the Additional Public Offering of ordinary shares in the capital of 138 Student Living Jamaica Limited was closed on October 23, 2023.
• The company is now preparing to move forward with using the funds raised to reduce a portion of its $4.2Bn debt stock. This will reduce its interest expenses, improve the bottom line and allow the company to consistently pay dividends to its shareholders.
• 138 Student Living offers long-term student accommodation in 1,464 rooms and short-term accommodation in 72 rooms at four locations on the UWI Mona Campus, under two Concession Agreements.

(Source: JSE)

• Suriname offered to swap $675 million of dollar bonds for new notes, including those linked to oil royalties, as the South American nation wraps up the final steps of its debt restructuring.
• The government invited investors of debt due in 2023 and 2026 to exchange their holdings for new 10-year bonds with a 7.95% interest rate, according to a Monday statement.
• Suriname will also issue notes that pay out after the government receives at least $100 million of oil royalties from an offshore reserve known as Block 58. Once that revenue threshold is reached, officials will allocate 30% of annual royalties to make payments on the instrument until it matures in 2050.
• This is the latest step in a restructuring process that’s been watched as a potential blueprint for other commodity-producing nations trapped in painful and protracted defaults.
• A committee of bondholders said they backed the deal, which will help the nation clear its default. The new security, dubbed a value recovery instrument, “is structured to ensure that Suriname will benefit from a significant majority of anticipated oil production proceeds while enabling noteholders to receive adequate repayment of their claims in a timely manner,” the group wrote in an email statement.
• The committee includes Franklin Templeton Investment Management, Eaton Vance Management, Grantham Mayo Van Otterloo & Co., Greylock Capital Management and T. Rowe Price Associates. Its members collectively hold more than the 75% threshold in each of the notes to trigger the collective action clauses and apply the restructuring terms to all outstanding notes, they said.
• Suriname has lingered in default for more than three years before striking an agreement with creditors in May. Its dollar bonds have surged 21% this year, among the top performers in emerging markets.

(Source: Bloomberg)