• In its recent statement, the Bank of Jamaica (BOJ) defends its actions taken in December 2021 to suspend the cambio and remittance operating licence of then Alliance Financial Services Limited (AFSL), an Alliance Investment Management Limited (AIML) - affiliated company. This notice comes following the Court’s ruling to dismiss the Bank’s charges against AIML.
• In addition to the suspension, the BOJ’s actions included the revocation of the authorisation granted to AFSL to operate in the Bank of Jamaica Fintech Regulatory Sandbox as a payment service provider, effective 3 December 2021.
• As stated at the time, the Bank says regulatory actions became necessary after the Financial Investigations Division (FID) charged AFSL’s principals and two AFSL-affiliated companies at the time (AIML and Alliance Finance Limited (AFL)) with several offenses under the Bank of Jamaica Act and the Banking Services Act.
• Bank of Jamaica maintains that its actions were necessary as the allegations at the time threatened the good order in the foreign exchange market and payment systems as well as the reputation and good standing of the Jamaican financial system internationally.
• It further noted that Alliance’s divestment of business was a strategy and activity pursued by the principals of Alliance as their own business decision and that the Bank of Jamaica had no part in that decision or transaction.

(Source: BOJ)

• Eppley has announced the appointment of Raymond Donaldson as the Chief Executive Officer, effective May 3, 2024.
• Jeffrey Brown will also join Eppley on May 3, 2024, as Chief Investment Officer and will work closely with Denise Gallimore, Vice President of Real Estate, and Samantha Summerbell, Assistant Vice President of Credit, to grow and expand Eppley’s investment efforts.
• Justin Nam has resigned as Eppley’s General Manager to pursue other interests after nearly a decade at the company. His resignation is effective May 31, 2024, and he will coordinate with Raymond and Jeffrey to facilitate a smooth transition.
• Raymond Donaldson has a 20-year career in banking and finance in Jamaica, the Bahamas, and the wider Caribbean. Most recently, Mr. Donaldson was Vice President of Corporate and Commercial Banking at National Commercial Bank. Prior to that, Mr. Donaldson served as Director of Corporate and Investment Banking in the Bahamas and Turks and Caicos at CIBC FirstCaribbean.
• Jeffrey Brown has held executive roles in banking in Jamaica and Barbados, mostly recently as Head of Loan Structuring and Syndications at National Commercial Bank and previously at CIBC FirstCaribbean, Scotiabank, and PricewaterhouseCoopers (PwC).

(Source: JSE)

• To strengthen its partnership with the Caribbean region, the European Union (EU) will be among the key investment stakeholders to participate in the upcoming Caribbean Investment Forum (CIF) that will be held in Georgetown, Guyana.
• Speaking at the formal launch of the forum last week, Joan Nadal Sastre, Head of Cooperation, Delegation of the European Union to Guyana, said the EU intends to be a “key business partner” with the region to achieve mutual sustainable goals.
• “The European Union wants to do more business with the Caribbean; we want more EU companies to see the Caribbean as an investment opportunity. We want to be a key business partner we have a lot to put on the table,” Sastre said. He noted that while the EU and the Caribbean have long shared a relationship, opportunities for further advancement are abundant.
• The CIF forum, which is slated for July 10 -12 at the Arthur Chung Conference Centre, will focus on a green economy transition, which will generate 400,000 additional high-paying jobs in the Caribbean, harnessing technology for agriculture in countries such as Guyana, Belize, Suriname, Trinidad and Tobago, and Jamaica, to further achieve food security targets. Further, digitalisation and technology will be among the topics to harness innovation to create well-paid jobs in the services sector.
• JoEllen Laryea, Manager of Partnerships, Advocacy and Reporting at the Caribbean Export Development Agency, said that CIF will be a key platform for attracting the right investors to the region.
• She further stressed the need for investment in sectors such as sustainable agriculture, technology innovation, and green economy transition, with a focus on fostering sustainable development and economic transformation in the Caribbean.

(Source: Guyana Chronicle)

• Brazil's consumer price increases are likely to have remained subdued in March, but some services continued to show worrying increases, leading economists to expect quicker disinflation to come from food and other goods, a Reuters poll showed.
• Last month, the annual variation of the headline IPCA index likely dropped closer to the midpoint of the wider official target for 2024 of 3% plus/minus 1.5 percentage points as a previous seasonal jump in education costs faded.
• It is forecast to register a 4.01% yearly rate and a monthly rate of 0.25% in March, against 4.5% and 0.83%, respectively in February, according to median estimates of 23 economists polled over April 3-9.
• "We are noting an expected increase in underlying services (0.50%) that continues to be a source of risk and should only start to slow down from April onwards," said Banco Santander economist Adriano Valladao P. Ribeiro.
• "Despite this, most core inflation measures are expected to improve in March, and in particular, we are projecting an increase of just 0.23% month on month for the average of the five main core readings.", noted Ribeiro.
• Much will also depend on the Brazilian real's resistance to the threat of higher currency volatility and the potential hit on consumer prices after the real fell to its lowest since October last week on growing doubts over future monetary policy.

(Source: Reuters)

• US consumer price index accelerated at a faster-than-expected pace in March, pushing inflation higher and likely dashing hopes that the Federal Reserve will be able to cut interest rates anytime soon.
• The CPI, a broad measure of goods and services costs across the economy, rose 0.4% for the month, putting the 12-month inflation rate at 3.5%, or 0.3 percentage points higher than in February, the Labor Department’s Bureau of Labor Statistics reported Wednesday. Economists surveyed by Dow Jones had been looking for a 0.3% gain and a 3.4% year-over-year level.
• Excluding volatile food and energy components, core CPI also accelerated 0.4% on a monthly basis while rising 3.8% from a year ago, compared with respective estimates for 0.3% and 3.7%.
• Energy rose 1.1% after climbing 2.3% in February, while shelter costs, which make up about one-third of the weighting in the CPI, were higher by 0.4% on the month and up 5.7% from a year ago. Expectations for shelter-related costs to decelerate through the year have been central to the Fed’s thesis that inflation will cool enough to allow for interest rate cuts.
• Increasing inflation was also bad news for workers, as real average hourly earnings were flat on the month and increased just 0.6% over the past year, according to a separate BLS release. The report comes with markets on edge and Fed officials expressing caution about the near-term direction for monetary policy. Central bank policymakers have repeatedly called for patience on cutting rates, saying they have not seen enough evidence that inflation is on a solid path back to their 2% annual goal. The March report likely confirmed worries that inflation is stickier than expected.
• Markets had expected the Fed to start cutting interest rates in June, with three reductions in total expected this year, but that shifted dramatically following the release. Traders in the fed funds futures market pushed expectations for the first cut out to September, according to CME Group calculations.
• Multiple Fed officials in recent days have expressed skepticism about lowering rates. Atlanta Fed President Raphael Bostic told CNBC that he expects just one cut this year, likely not coming until the fourth quarter. Governor Michelle Bowman said an increase may even be necessary if the data does not cooperate. Further, Liz Ann Sonders, chief investment strategist at Charles Schwab opined that “There’s not much you can point to that this is going to result in a shift away from the hawkish bent” from Fed officials. As such, in her view, a June cut is “definitively off the table.”

 (Source: CNBC)

• The NFIB's Small Business Optimism Index reaching its lowest level in over a decade signals significant concerns among small-business owners. This decline reflects a combination of factors impacting the economic landscape, including inflationary pressures and uncertainties surrounding market conditions.
• The report highlights a notable uptick in worries about inflation among small-business owners. With 25% of respondents citing it as their primary concern, this reflects the tangible impact of escalating input costs and rising wages on businesses' bottom lines. The consequent increase in average selling prices underscores the efforts of businesses to offset these inflationary pressures.
• Despite broader job growth in March, small businesses are facing challenges in recruitment. This is particularly evident in sectors such as transportation, construction, and services, where there is a pronounced scarcity of both skilled and unskilled labour. This shortage not only impedes business operations but also suggests potential constraints on further economic expansion.
• The persistently high inflation, which exceeds the Federal Reserve's target, raises questions about the central bank's response. There are anticipations that the Fed may opt to lower interest rates to counteract inflationary pressures and support economic stability. However, the timing and extent of such measures remain uncertain, leaving businesses in a state of flux as they navigate evolving monetary policies and economic conditions.

(Source: Reuters)

• Tourism Minister, Hon. Edmund Bartlett, has emphasised the importance of Jamaica’s Tourism Strategy and Action Plan (TSAP) in generating the stakeholder capacity to respond to the industry’s new architecture.
• He was speaking during the opening session of the Tourism Strategy and Action Plan Consultation Workshop for Kingston and St. Andrew, at the Spanish Court Hotel in New Kingston on Thursday (April 4).
• The TSAP, being executed through a partnership with the Inter-American Development Bank (IDB), is geared towards boosting socio-economic development and investment, building the local tourism industry’s resilience to climate change and reducing the sector’s contribution to climate change. It also aims to diversify Jamaica’s inbound tourism and promote the industry’s knowledge-based and technology-enabled development.
• Bartlett also highlighted the TSAP’s importance in making tourism more inclusive and more of an enabler of economic growth and development in Jamaica. He underscored the need to increase local production, which is critical in enabling Jamaica to retain a larger ratio of tourist dollars.
• Notably, with the tourism industry having already welcomed over 1 million visitors within the first two months of the year, it is progressing towards its ambitious goal of welcoming 5 million visitors and generating $5 billion in earnings by 2025.

(Sources: JIS and NCBCM Research)

• For the period January to November 2023, Jamaica’s total spending on imports was valued at US$6,982.0Mn, representing a 1.6% or US$113.5Mn decrease relative to last year, while earnings from total exports were valued at US$1,862.7Mn, 12.1% above export earnings in the corresponding 2022 period.
• Lower imports of “Raw Materials/Intermediate Goods” and “Fuels and Lubricants”, which declined by 5.0% and 13.9%, respectively, were the primary drivers of the reduction in imports.
• Meanwhile, an 86.5% increase in “Crude Materials (excl. Fuels) exports drove the export gains in overall exports from the island. Domestic exports increased by 12.0% to US$1,405.6Mn compared to US$1,254.9Mn for the 2022 period, while re-exports increased by 12.4% to value US$457.1Mn.
• A country’s total exports consist of both domestic and foreign goods, with the foreign goods being referred to as re-exports. Re-exports involve the exportation of foreign goods in the same state as previously imported, while domestic exports represent goods produced within the country.
• Jamaica’s overall trade deficit improved by 5.8% ($314.5Mn) compared to the corresponding period of the previous year, moving from $5,433.8Mn in 2022 to $5,119.3Mn.
• The value of imports for January to November 2023 from Jamaica’s five main trading partners, the United States of America (USA), China, Brazil, Japan, and Colombia, was US$4,282.1Mn or 61.3% of total imports. This represents a 1.3% decline compared to the US$4,339.1Mn spent for the corresponding 2022 period due largely to lower imports of “Mineral Fuels”.
• The top five destinations for Jamaica’s exports were the USA, Puerto Rico, Latvia, and the Russian Federation and Iceland. Export revenues from these countries increased by 10.9% to US$1,269.3Mn.

(Sources: STATIN and NCBCM Research)

• The Telecommunications Services of Trinidad and Tobago (TSTT) has announced plans to invest more than $160Mn in upgrading its network over the next 12 months. The announcement was made at its recent investor call to share its results for the quarter ended December 31, 2023,
• A new standard, which allows customers to make voice calls on their cellphones and surf the internet simultaneously at regular speeds, Is among the changes that TSTT hopes to introduce by next year.
• 'Over the next 12 months, TSTT will seek to improve nationwide connectivity as it prioritises enhancing customers' experience with its brands and suite of services. The company will direct a considerable amount of its efforts and resources towards enhancing its network, with the goal of building the nation's most advanced infrastructure with unsurpassed reliability and security. According to TSTT, the investment will go towards further deployment of LTE (Long-Term Evolution) at 80 additional sites and advanced wireless service (AWS) at 40 sites. This will ensure that customers always have access to the fastest data and the best call quality.
• TSTT said it is also actively testing VOLTE (Voice over LTE), with the anticipation it will be ready for rollout in the coming year.
• 'Moving forward, our sights are set on beefing up network reliability, bolstering brand trust, and fortifying TSTT's cybersecurity stance,' TSTT's acting chief executive officer Kent Western said. TSTT said it is well-positioned to sustain profitability while serving the growing needs of its customers and building a superior network to support it.

 (Source: Trinidad Express Newspapers)

• The government of Barbados may have to allocate millions of dollars to continue bailing out some cash-strapped state-owned enterprises (SOEs).
• A new Fiscal Risk Statement from the Ministry of Finance says there is evidence that several SOEs, including the Barbados Agricultural Development Marketing Inc. (BADMC), the Caribbean Broadcasting Corporation (CBC), and the Transport Board are likely to be short of cash and other liquid resources needed to pay their debts this year.
• The authorities say this means that “given the traditional reliance on Government to settle arrears of the SOEs in times where they have been cash-strapped, there is a high risk that these entities may require unbudgeted subventions during the fiscal year 2024/25”.
• In the 2024 Fiscal Risk Statement, which is a requirement of the Public Finance Management Act of 2019, the Ministry of Finance said “weak revenue growth for most commercial enterprises and a high reliance on Government subventions to meet operating expenses have meant consolidated net losses of commercial, public enterprises before subventions”.
• “A number of SOEs have been deemed insolvent as current assets are unable to cover liabilities. Additionally, some commercial entities’ revenues have not fully rebounded post-peak pandemic,” it reported.
• The bailing out of these SOEs would have the impact of increasing the amount of government expenditure and could impact the fiscal progress made by the sovereign through its BERT (Barbados Economic Recovery and Transformation) Program.
• Notably, for the nine months (April - December) of FY2023/24, the government recorded an overall deficit of $9.1Mn (-0.1% of GDP) due to higher global interest rates pushing up interest expenses on the country’s variable rate external debt along with increases in wages & salaries, as well as grants to public institutions. However, higher transaction-based tax receipts coupled with prudent non-interest spending allowed the authorities to meet its primary surplus target with a primary surplus of $434.3Mn (3.7% of GDP).

(Source: Nation New & NCBCM Research)