• Fuel distributor FESCO reported a 68.4% increase in its September 2024 (Q2 2025¹)  earnings, reflecting the impact of its downward revision to its Q2 2024 results and revenue growth outpacing costs.
• FESCO’s Q2 2024 results were adjusted to align with the audited figures for the fiscal year ending March 31, 2024 (FY24). These adjustments included a 0.3% revision to sales and cost of goods sold (COGS). As a result, Q2 2024’s gross profit was revised down from $379.88Mn to $329.07Mn – a decrease of $50.81Mn – which impacted the company’s bottom line. As a result, net profits for Q2 2024 were revised down by 36.3% to $101.12Mn, setting a lower base for growth in Q2 2025.
• Additionally, Q2 2025 earnings growth was also supported by revenue growth outpacing costs. Buoyed by a 13.4% increase in the volume of fuels sold, including both traditional fuels and LPG, revenues increased by 10.1% year-over-year to J$7.93Bn. Direct costs rose by 8.7%, supporting a +38.3% increase in gross profit to J$455.1Mn.
• Operating expenses rose by 19.8% to J$251.5Mn, reflecting its expanded operations, additional retail locations², and increased business acquisition and development costs. Finance costs (net) were also higher because of higher interest on debt and bonds, net of interest income and foreign exchange gains. Staff costs increased to J$95.5Mn, up J$25.7Mn year over year, due to an expanded workforce required for new retail locations and operational growth.
• Looking ahead, the Company has commenced construction of its service station on Spanish Town Road, FESCO Oval. FESCO Oval will be a company-owned company-operated service station and will increase its retail presence within the Kingston and St Andrew (KSA) region. It is slated to open in September 2025.
• YTD, Fesco’s shares are down 4.06%; however, following the release of Q2 earnings, the company’s share price increased marginally to $3.67 (+0.5%). At $3.67, the stock trades at a P/E of 22.82x, which is above the Junior Market Distribution Sector Average of 19.90x.

(Source: NCBCM Research & FESCO Financial Statements)

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¹ FESCO’s year end is March 2025

² Operating locations including the additions of: FESCO Kitson Town, FESCO Hayes, FESGAS Bernard Lodge and FESGAS Naggo Head

• LIAT (2020) Ltd has announced the launch of its inaugural flight to Georgetown, Guyana (GEO) on November 19, 2024. This new Antigua-Guyana route will offer increased connectivity across the region, strengthening ties between the Eastern Caribbean and South America.
• According to a press release by LIAT (2020), the introduction of the new route marks a significant milestone in the airline’s expansion strategy, offering a crucial link between the Caribbean and Guyana’s emerging markets. The LIAT expansion also offers even greater opportunities for travellers from regions such as Canada, Europe, and the Middle East to reach Guyana through the Caribbean.
• Georgetown, Guyana’s capital and economic hub, is a key destination for business and leisure travellers alike.
• Oneidge Walrond, Minister of Tourism, Industry, and Commerce for Guyana, explained that the increased airlift, coupled with the government’s investments in airport infrastructure, will unlock new opportunities for economic growth and development.
• Furthermore, operating with an enhanced fleet of aircraft, LIAT20 continues to be a key driver of economic development and regional integration.

(Source: Guyana Chronicle)

• As was widely anticipated, the Bank of Mexico’s (Banxico’s) Board of Governors voted in a unanimous decision to reduce the overnight rate by 25bps to 10.25%, bringing the cumulative amount of loosening since the cutting cycle began in April to 100bps.
• In its statement, the Banxico Board noted recent peso weakness following Donald Trump’s election victory but also commented that this weakness has been reasonably contained relative to prior episodes and that financial market volatility more generally has subsided.
• Policymakers saw little downside risk from pushing ahead with their cutting cycle, particularly considering easing core inflation pressures that are a function of softness in economic activity.
• Expectations are for another 25bps cut in December, with the overnight rate to be lowered to 8.00% (up from previous forecasts of 7.50%) by end-2025 in response to officials’ concerns about weakness in economic activity that will likely outweigh fears about the inflationary impact of peso depreciation linked to Donald Trump’s return to the White House.
• Risks to the forecasts are tilted to the upside, though there is a case to be made for Banxico to facilitate FX depreciation if Trump pushes ahead with tariff plans, given its role as a shock absorber.

(Source: BMI)

• U.S. President Joe Biden pledged a $4.0Bn U.S. contribution to the World Bank's International Development Association fund for the world's poorest countries, two sources with knowledge of the commitment said on Monday.
• Biden announced the U.S. pledge during a closed session of the Group of 20 summit in Rio de Janeiro, according to sources who spoke on condition of anonymity. The amount is a record, substantially exceeding the $3.5Bn Washington committed during the previous IDA fund replenishment round in December 2021.
• A White House spokesperson in Washington declined to comment on the World Bank's IDA replenishment.
• It is unclear if U.S. President-elect Donald Trump, who has proposed cutting foreign aid in the past, will honour Biden's pledge as he and billionaire Tesla and SpaceX CEO Elon Musk sought to slash U.S. spending through a new government efficiency panel. An appropriation by the U.S. Congress to fund the commitment would not likely take place until after Trump takes office in January.

Source: (Reuters)

• The European Union has widened its sanctions against Iran over Tehran's support of Russia in its war with Ukraine, the European Commission said on Monday. The Commission said it had added the Islamic Republic of Iran Shipping Lines (IRISL) and its director Mohammad Reza Khiabani, among others, to its sanctions list.
• The fresh sanctions are against vessels and ports used for transporting Iranian-made Unmanned Aerial Vehicles (UAVs), missiles and related technologies and components. They include prohibiting any transaction with ports and locks owned, operated or controlled by the sanctioned individuals and entities.
• The Managing Director of Iran's Ports and Maritime Organization Ali Akbar Safaei condemned the fresh sanctions and denied the "European accusations" as "baseless", Iran's official IRNA News Agency reported on Monday.
• The EU is also sanctioning three Russian shipping firms - MG Flot, VTS Broker, and Arapax - for transporting Iranian weapons, including drone parts, across the Caspian Sea to resupply Russian troops in Ukraine.

(Source: Reuters)

• Dolla Financial Services Limited (Dolla) reported a 45.8% decline in its Q3 earnings, which resulted in a modest 3.5% increase in net profit to $339.64Mn for the nine months ended September 30, 2024. This was largely due to higher earnings in the first half of the year, which helped offset the weaker Q3 performance.
• Despite a 17.5% (or $52.62Mn) increase in interest income, the quarter’s profit decline was driven by higher interest expenses (+32.8%) and operating expenses (+26.5%).
• However, for the nine-month period, total interest income was $1.09Bn, reflecting a 23.1% (or $205.77Mn) year-over-year (YoY) increase, driven primarily by a 15% YoY growth in sales during H1 2024. Net interest income (NII) before expected credit losses (ECL) reached $903.52Mn, a 22.4% (or $165.53Mn) increase.
• However, this growth was tempered by higher expenses, which stemmed from ongoing investments in staff capacity to manage increased demand, along with regulatory, professional and advisory fees and enhanced marketing initiatives. Consequently, operating expenses rose by 18.9% or $79.37Mn to $499.52Mn.
• After the release of Q3 earnings, Dolla’s stock price fell 12.9% from $3.48 to $3.03, largely driven by heavy selling pressure and high trading volume (72.83 million shares) on the following trading day. Despite this decline, the stock has still appreciated 11.8% since the beginning of the year, closing Tuesday’s trading session at $3.03, reflecting strong performance earlier in the year. At this price, the stock trades at a P/B of 7.2x, above the Junior Market Financial Sector Average of 2.5x.

(Sources: DOLLA Financials & NCBCM Research)

• Jamaica’s Net International Reserves (NIR) stood at US$5,595.55Mn at the end of October 2024, 7.6% higher than September 2023, according to the Bank of Jamaica (BOJ). The improvement in the NIR reflects a 7.5% (or US$393.76Mn) increase in total foreign assets, along with a 1.8% decline (or US$1.26Mn) in Foreign Liabilities.
• The rise in foreign assets was due to growth in Currency and Deposits to US$3,660.67Mn from US$3,582.62Mn, Securities (+19.4% or US$316.74Mn). However, this was slightly tempered by a 1.8% (or US$366.69K) decline in both Special Drawings Rights and IMF Reserve Position balance (or US$676.53K).
• In October, the BOJ intervened in the foreign exchange market four times, injecting a total of US$120Mn in an attempt to stabilise the Jamaican dollar. This represented a slight decline from August when there were four interventions totalling US$140Mn. Despite these interventions, NIR rose for the second consecutive month.
• Jamaica’s October 2024 NIR remains relatively high and equates to 28.2 weeks of goods & services imports (26.3 weeks at the end of September 2024). At this level, the NIR is more than double the international benchmark of 12 weeks of imports.

(Source: BOJ)

• Latin American poverty levels fell to a 33-year low in 2023, led by progress in Brazil, the United Nations' Economic Commission for Latin America and the Caribbean (ECLAC) said.
• Latin America is marked by high inequality, limited social mobility, and weak social cohesion, underpinned by inadequate social policies and weak protection systems. As such, despite declining poverty rates, income inequality is high, according to the ECLAC report.
• ECLAC defines poverty as affecting those who do not have sufficient income to cover their basic needs, while extreme poverty includes people who do not have enough income to buy a basic food basket.
• Poverty in Latin America decreased in 2023 to affect 27.3% of the population, down 1.5 percentage points from the year before and more than a 5-point drop from 2020, when economies were severely impacted by the COVID-19 pandemic.
• Extreme poverty in the region still affects 10.6% of the region's population. Excluding Brazil, Latam's poverty ratio would have stood at 28.4%, closer to the 2022 figure.
• The report concluded that strengthening social protection systems is the key to adopting an integrated approach that can help reduce poverty and the various causes of inequality and boost social cohesion.
• The International Monetary Fund forecasts that GDP will increase by 2.1% for Latin American economies in 2024, which could potentially aid in further reducing poverty. ECLAC expects poverty to continue falling to 26.8% this year, while extreme poverty will be at 10.4%.

Source: (Reuters)

• In a bid to ensure opportunities are provided to locals, three Guyanese fabricators will be producing the fixtures for the Jaguar floating production storage and offloading vessel (FPSO). The three local fabrication companies are InFab, Zeco Group of Services, and Guyana Oil and Gas Support Services Incorporated.
• Guyana President Alistair Routledge said that as the industry continues to develop, it is vital that emphasis is placed on investing in the people and businesses of Guyana. The investment of the Jaguar FPSO, he said, brings the total investment in Guyana to over US$55 billion.
• The Jaguar FPSO is Guyana’s sixth oil platform and the latest under construction by SBM Offshore in partnership with the operator of the prolific Stabroek Block, ExxonMobil Guyana. It will initially produce 250,000 barrels daily, pushing Guyana’s total oil production beyond 1.3 million barrels daily.
• According to Bharrat, the growth in the oil and gas sector is unprecedented, and with opportunities being provided to locals, Bharrat urged local companies to ensure compliance with the local content law.

(Source: Guyana Newsroom)

• The U.S. Federal Reserve could carry out fewer interest rate cuts than previously expected next year should President-elect Donald Trump’s proposed global tariffs take hold, former Fed policymaker Loretta Mester said Tuesday.
• Mester indicated that the Fed’s outlook was set to change under the incoming Republican administration’s fiscal plans and that markets may be right in forecasting fewer than the four reductions previously forecasted. “Next year, the pace of the cuts will be affected by where they’re seeing fiscal policy,” she said during a panel at the annual UBS European Conference hosted in London.
• Trump vowed during his election campaign to intensify a trade war that began during his first term in office. Economists have warned that such measures could be inflationary. As a result, markets are now expecting 1 percentage point of cuts in the first half of 2025, followed by a further 25 basis point reduction in the second half of the year, according to median poll forecasts cited by Reuters.
• Economists polled by Reuters also expect a 25-basis point cut at the December 2024 meeting. That would take the fed funds rate to 3% to 3.25% by the end of 2025, slightly below the central bank’s median “dot-plot” projection.

(Source: Reuters)