Online Banking

Latest News

European Union And New Zealand Sign A Free Trade Deal That's Expected To Boost Trade By Up To 30% Published: 11 July 2023

  • The European Union signed a free trade agreement with New Zealand on Monday that the two sides expect will increase bilateral trade by up to 30% within a decade. New Zealand will gain up to 1.8 billion New Zealand dollars ($1.1 billion; €1 billion) in exports to the 27-country bloc every year, a government statement said.
  • The deal brokered over five years will cut NZ$248 million ($153 million; €140 million) a year in duties, a European Commission statement said. “New Zealand is a key partner for us in the Indo-Pacific region and this free trade agreement will bring us even closer together. With today’s signature, we have taken an important step in making the agreement a reality,” European Commission President Ursula von der Leyen said.
  • Duties will be removed on 91% of New Zealand’s goods exported to the EU from the start of the agreement, rising to 97% after seven years. The deal has yet to be ratified by the two sides' parliaments and a start date set.

(Source: Yahoo Finance)

House Approves Order for Five-Year Extension on Bauxite Industry Fuel Concession   Published: 06 July 2023

  • The House of Representatives, on Tuesday (June 27), approved the Bauxite and Alumina Encouragement (Relevant Concession Period) Order, 2023. The Order will facilitate further extension of the duty concession on fuel for the bauxite sector, for the next five years.
  • The Bauxite and Alumina Industries (Encouragement) Act was previously amended to grant the duty concession for the period July 1, 2018, to June 30, 2023. Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, informed that while the bauxite industry continues to make a tremendous impact on the economy, the sector continues to rely on the concession to remain afloat. Due to this, a policy decision was taken to extend the concession for an additional five years.
  • The Act allowed for this concession period to be amended simply by issuing an Order, subject to affirmative resolution after review of the needs of the industry, thus eliminating the need to embark upon elaborate legislative changes, going forward.  Dr Clarke noted that withdrawal of the benefit would have grave economic implications for Jamaica, inclusive of a potential closure of the industry.
  • However, he gave the assurance that the relevant engagements are ongoing to encourage the bauxite and alumina sector to reduce their dependence on the type of fuel being utilized, based on the Government’s move to utilize cleaner energy resources in all sectors.

 (Source: JIS)

 

Fosrich To Raise Up To $139 Million Through Rights Issue   Published: 06 July 2023

  • Electrical, lighting and PVC company Fosrich Limited is seeking to raise J$139.32Mn by way of a provisional allotment under a non-renounceable Rights Issue of 55,729,647 New Ordinary Shares.
  • Existing ordinary stockholders as of the record date (June 2, 2023) may participate. The offer, which allows existing shareholders to acquire new shares to be issued by the company, will open on July 11 and close on August 18, 2023.
  • Each existing ordinary stockholder on the record date will be provisionally allotted: One new ordinary share for every 90 existing ordinary stock unit(s) held on the record date (and so in proportion for any other number of existing ordinary stock units then held).
  • The new shares will be sold for $2.50, which is 11.1% higher than its market price ($2.25) at the close of day on Wednesday July 5, 2023.
  • The Company intends to use the proceeds to complete the second phase of the new 30,000 square foot Fulfilment Centre located at 76 Molynes Road as well as to pay the expenses associated with the Rights Issue, which it estimates will not exceed J$9 million inclusive of General Consumption Tax.

(Source: JSE)

Panama Heads Region In Economic Growth And One Of World’s Lowest Inflation Rates Published: 06 July 2023

  • The head of the Ministry of Economy and Finance (MEF), Héctor Alexander, highlighted Saturday, July 1, that in the region, Panama leads economic growth, while maintaining lower inflation.
  • "We have low inflation and, above all, what has been done in terms of public finances allows us to continue with investment grade (and pro-business) economic policies, being one of the few countries in the region that have it and one with the lowest level of risk, which benefits not only the government and its transactions but also to the operations that are carried out in Panama”, Alexander highlighted upon arriving for the installation of the National Assembly.
  • “The Panamanian economy has been growing very well, 15.8% in 2021 10.8% in 2022, and it is estimated that at the end of the year, growth will be 5%.”, Alexander detailed to the media on the outskirts of the chamber.
  • He added that Panama's economic growth continues to lead the region, and along with that, it can be said that the country also leads one of the lowest inflation rates, not only in Latin America but in the world, recording 2.6% in 2021, an estimated 2.1% for 2022 and a forecasted 0.5% for 2023.

(Source: Newsroom Panama)

Costa Rica Unlocks $519 Million From IMF For Economic Reform, Climate Programmes Published: 06 July 2023

  • Costa Rica has unlocked a total of around $519Mn for its economic reform programme and a climate and sustainability programme, the International Monetary Fund (IMF) said.
  • Around $274Mn went to the economic reform programme, which is one instalment in the more than $1Bn Costa Rica has received from the IMF under the arrangement, the fund said. Another $245Mn goes to the resilience and sustainability arrangement.
  • The Central American country met its fiscal targets by large margins, further strengthening debt sustainability, Kenji Okamura, acting chair of the IMF board, said in a statement.
  • Additionally, proposed tax reforms, including recently submitted legislation, will make the system more progressive, equitable, efficient, and environmentally friendly. The steady improvement in public debt management is also welcomed.
  • "While there is scope for further monetary easing in 2023, policies should remain attentive to risks to the inflation outlook," he added.
  • The IMF pegged Costa Rica's real gross domestic product (GDP) growth for this year at 3.0% and 3.2% in 2024.

(Sources: IMF & Reuters)

UK’s Service Sector Growth Loses Momentum In June   Published: 06 July 2023

  • June data indicated a sustained upturn in UK service sector output, but the rate of expansion eased to its weakest for three months amid a much softer rise in new orders. In contrast, staffing levels expanded at the fastest pace since last September as improving candidate availability helped to boost recruitment.
  • Service providers recorded another sharp increase in their average cost burdens. Rising salary payments offset falling energy and transportation bills. However, the latest overall rise in business expenses was the weakest for just over two years. Prices charged by service companies meanwhile increased at the second-slowest pace since August 2021.
  • At 53.7 in June, down from 55.2 in May, the headline seasonally adjusted S&P Global / CIPS UK Services PMI® Business Activity Index signalled a slowdown in service sector output growth to its weakest since March. The latest index reading marked five months of continuous business expansion across the service economy.
  • Survey respondents typically noted resilient business and consumer spending, despite pressure on budgets from elevated inflationary pressures. However, there were several reports citing weak demand from clients in the real estate and construction sectors, largely due to rising interest rates.
  • Employment numbers increased for the sixth consecutive month in June. The rate of job creation accelerated to its fastest since September 2022. Service providers widely noted that vacancies had become easier to fill. Additional staff recruitment helped to boost business capacity and in turn, resulted in an overall reduction in backlogs of work for the first time since January.

 

(Source: S&P Global)

Chinese Business Activity Growth Cools To A Five-Month Low In June   Published: 06 July 2023

  • The Chinese service sector showed signs of softening growth in June, according to the latest PMI data. Business activity and new orders both expanded at notably slower rates than seen in May, as some firms reported softer-than-expected market demand. Cost pressures meanwhile remained relatively subdued, with input cost inflation remaining below the series trend, while output charges rose only slightly.
  • Despite the softer increase in activity, firms added to their staffing levels at the quickest rate for three months. Recruitment in the sector was supported by a more positive outlook for the year ahead, with overall business confidence picking up for the first time in five months in June.
  • At 53.9 in June, the seasonally adjusted headline Caixin China General Services Business Activity Index slipped from 57.1 in May to signal a weaker upturn in service sector activity. Though solid, the rate of growth was the softest seen since the current period of expansion began in January.
  • The slower rise in business activity was often linked to softer than anticipated demand conditions. Although total new business continued to expand at the end of the second quarter, the rate of growth moderated to a six-month low and was modest overall. The new export business meanwhile expanded solidly, despite the rate of increase edging down to the softest since January. There were several reports that the sector continued to benefit from a revival in tourism and travel since the easing of pandemic restrictions.

(Source: S&P Global)

 

Elite Diagnostic’s Profits Dips Despite Growth in Revenues   Published: 05 July 2023

  • Elite Diagnostic Limited recorded a net profit of $6.09Mn for the quarter that ended March 31, 2023. This represents a 78.4% yoy decrease in profitability. Furthermore, for the nine months ended March 2023, net profit tumbled to $4.56Mn from $34.89Mn in 2022. Despite the higher revenues, profit declined because of increased expenses over the period under review. 
  • Revenue for the quarter was up by 25.6% yoy to $202.21Mn. This was driven by revenue-generating machines being back in service, allowing them to increase work hours to clear the backlogs. Similarly, revenue for the nine months increased by 25.9% yoy to $565.76Mn
  • Direct costs for the quarter and the nine months ending March 2023 were up 54.7% to $66.7Mn and 24.9% to $175.19Mn, respectively. This was due to the additional maintenance repair cost that was incurred for some machines that were out of operation since Q2.
  • Administrative expenses were up 29.4% yoy to $77.92Mn for the quarter, while for the nine months, it was up 35.6%, owing to higher operating expenses from the extended shifts to clear backlogs.
  • Additionally, depreciation was up 87.4% to $40.18Mn and 53.3% to $116.76Mn for the quarter and the nine months respectively.
  • Elite’s stock price has decreased by 30.2% since the start of the calendar year. The stock closed Wednesday’s trading session at $2.20 and currently trades at a P/E of 44.0x which is above the Junior Market Health Sector Average of 15.7x.
  • Going forward the company highlighted that it will implement a different strategy to ensure that the machines are brought back into service more quickly to minimize the reduction in projected daily revenues. Additionally, the installation of solar equipment at its Liguanea branch and subsequently at its Drax Hall branch is being coordinated to reduce its operating expenses in coming quarters.

(Source: JSE)

BOJ Reports Tightening Of Credit Conditions Published: 05 July 2023

  • The Bank of Jamaica has reported that overall credit conditions tightened during the March 2023 quarter relative to the previous quarter.
  • Responses to the central bank's Quarterly Credit Conditions Survey showed consumers were experiencing higher interest rates and more stringent credit terms. This indicates the pass-through effect of early tightening regimes by the BOJ.
  • The Bank's data also showed that the flow of new loans to the private sector declined by 12.7% in real terms as at April 2023.
  • The BOJ expects this reality to further push down inflation in the coming months.
  • The central bank says credit terms are expected to again tighten for the June 2023 and September 2023 quarters given responses from the survey. However, a marginal deceleration in the pace of tightening is expected towards the end of the year.

(Sources: RJR News and BOJ)

Remittances To Mexico Hit Record, But Strong Peso Softens Impact Published: 05 July 2023

  • Mexico brought in close to $5.7Bn in remittances in May, central bank data showed, breaking a monthly record that analysts cautioned was softened by the recent strength of the peso versus the dollar.
  • While Mexico records remittances in dollars, as most of the funds come from the United States, "a strong peso hurts remittances," said Goldman Sachs analyst Alberto Ramos.
  • Mexico's "super peso" is among the top-performing currencies this year, appreciating more than 13% against the U.S. dollar from May 2022 to May 2023. With a stronger local currency, recipients of funds from abroad receive fewer pesos when they sell the dollars they were sent.
  • Given the peso's appreciation against the dollar, when measured in local currency, remittances declined 2.2% year-on-year, Ramos said.
  • Nonetheless, Mexican President Andres Manuel Lopez Obrador has touted the economic boost remittances, which largely come from the United States, have brought to the country.
  • Last year, remittances to Mexico from abroad hit a record high of $58.5Bn, making Mexico the second highest remittance-receiving country, just behind India.
  • Despite the blow from the "super peso," the dollar amount of remittances sent in May rose almost 11% year-on-year.

(Source: Reuters)