• The U.S. Congress on Tuesday laboured against a tight deadline to write a massive bill, funding military, homeland security and a range of other government programs following a deal reached by congressional leaders and the White House. Failure to act by midnight Friday would mean that many federal offices will be ordered to begin shutting down some operations.
• The package was expected to cover about three-quarters of the $1.66 trillion in discretionary government spending for the fiscal year ending Sept. 30. The last sticking point in closed-door negotiations was funding for the Department of Homeland Security, as a surge in migrants at the U.S.-Mexico border has become a significant issue in the election rematch between Democratic President Joe Biden and his Republican predecessor Donald Trump.
• It was unclear whether a fifth stop-gap funding bill since September might be sought to keep federal agencies operating seamlessly until the large bill can be enacted into law. President Biden promptly welcomed the deal, posting on X: "The House and Senate are now working to finalise a package that can quickly be brought to the floor, and I will sign it immediately."
• In addition to Homeland Security and the Pentagon, the bill would fund the State Department and other agencies, including the Treasury Department's Internal Revenue Service as it prepares for its April 15 taxpayer filing deadline. Earlier this month, Congress funded several other agencies, including the Agriculture, Transportation, Justice and Interior Departments.
• However, more fights lie ahead as the nation's $34.5 trillion national debt grows. Biden and House Republicans earlier this month laid out proposed budgets for the next fiscal year, which begins in October, which offered sharply contrasting priorities.

(Source: Reuters)

• Canada's inflation rate surprisingly cooled in February to its slowest pace since June 2023, and the closely-watched core inflation measures eased to more than two-year lows, data showed on Tuesday. This prompted investors to increase their bets on a June rate cut.
• Money markets increased their bets for a first 25 basis point rate cut in June to more than 75%, from 50% before the inflation data. The bets for an April rate cut increased to over 28% from 18% before the numbers were released.
• Annual headline inflation cooled to 2.8% last month, beating analyst expectations for a 3.1% rise and below a 2.9% increase in January. During the month, the consumer price index rose by 0.3%, less than a forecast 0.6% rise.
• Canadians in February benefited from softer price growth in food purchased from stores and a drop in cellular plans and internet services prices, which were the main contributors. The rise in grocery prices eased to 2.4%, slower than the headline inflation rate for the first time since October 2021. Offsetting the inflation deceleration in February was a year-over-year increase in gasoline prices, which rose 0.8% in February after a 4% decline in January, Statscan said.
• The Bank of Canada's (BoC) preferred measures of core inflation edged down to their lowest levels in more than two years. CPI-median slowed to 3.1% from 3.3% in January, while CPI-trim decreased to 3.2% from 3.3%. In January, the central bank projected headline inflation to remain around 3% in the first half of 2024, before cooling to 2.5% by the end of the year. It will update its forecasts next month. The BoC’s next rate announcement is on April 10.

(Source: Reuters)

• The average price paid for goods and services by Jamaican consumers fell in February 2024, as reflected in a 0.6% reduction in the All-Jamaica Consumer Price Index (CPI). The downward movement in the index for the ‘Food and Non-Alcoholic Beverages’ division (1.1%), was a result of lower prices for some agricultural produce such as cabbage, carrot, escallion, tomato, sweet potato, and yam.
• Also contributing to the decline in the February 2024 CPI was a fall of 1.6% in the index for the ‘Housing, Water, Electricity, Gas and Other Fuels’ division due to lower electricity rates, which resulted in a 4.7% fall in the index for the group ‘Electricity, Gas and Other Fuels’.
• However, the overall decline in the CPI for February was tempered by an increase of 0.3% in the index for the ‘Transport’ division. The largest contributor to the increase in the division’s index was the group ‘Operation of Personal Transport Equipment’, which had an upward movement of 1.1% due mainly to higher petrol prices.
• With the favourable movements in February, point-to-point inflation rate (February 2023 – February 2024) was 6.2%, down from 7.4% in January. Fiscal year-to-date inflation rate was 6.6%, while the calendar year-to-February inflation was -0.7%.
• Despite the easing of price pressures in February, the BOJ’s Monetary Policy Committee is likely to maintain the central bank’s policy rate at 7.00% when it meets on March 28^th, as it continues to monitor the pass through effects of previous rate adjustments.
• On a positive note, so far this month local produce prices have continued to decline, on the back of improved supplies. However, there are risks that inflation could trend upward in subsequent months, given the anticipated PPV fare increase in April, as well as an increase in international commodity prices and shipping costs, which have already started to increase this month.

(Sources: STATIN & NCBCM Research)

• Jamaica is on track to achieve a 72.0% debt-to-gross domestic product (GDP) ratio by the end of the fiscal year, the lowest in 30 years. Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, disclosed while opening the 2024/2025 Budget Debate in the House of Representatives on Tuesday (March 12),
• He noted that the country’s debt could be as low as 64.0% of GDP by the end of April 2025, the lowest debt since 1976. He highlighted that Jamaica is enjoying 10 consecutive quarters of economic growth.
• In addition to noting that the country’s fiscal credibility has “improved dramatically”, Dr. Clarke said it has resulted in trust in Jamaica’s economic policymaking environment multiplying several folds and making the country “much more attractive to investment”.
• Citing the record-low unemployment rate of 4.2%, the Minister said the Government wants to create higher-value jobs by improving skills and boosting the educational outcomes of the population.

 (Source: JIS)

• Exxonmobil Guyana on Friday (March 15, 2024) announced that it has made an oil discovery at the Bluefin well in the Stabroek Block offshore Guyana. This marks the company’s first discovery of 2024 and signals its continued progress in tapping into Guyana’s vast oil and gas potential.
• The Bluefin well, drilled by the Stena Drillmax drillship in 4,244 feet (1,294 metres) of water, encountered approximately 197 feet (60 metres) of hydrocarbon-bearing sandstone. Situated about 8.5 kilometres southeast of the Sailfin-1 well, in the southeastern region of the Stabroek block, this discovery further bolsters ExxonMobil’s extensive exploration efforts in the area.
• The Bluefin discovery adds to the impressive tally of more than 30 discoveries already made on the Stabroek block since 2015, underlining the area’s rich oil potential. Notably, the Bluefin-1 exploration well is strategically located close to the Suriname border and lies six miles southwest of the Haimara-1 discovery, currently undergoing appraisal for potential gas development.
• This latest discovery reaffirms Guyana’s position as a key player in the global energy landscape and underscores ExxonMobil’s commitment to sustainable resource development in the region.
• The year-end goal is to reach a total cumulative output of 500 million barrels, marking a major milestone for Guyana since the start-up in the Stabroek Block five years ago.

 (Source: Guyana Chronicle)

• The government of Trinidad and Tobago is seeking to strengthen the country's financial buffers by $10 billion in the event of unforeseen economic developments. This was the rationale advanced by Finance Minister Colm Imbert as he piloted a motion to amend the Development Loans Act to increase the statutory limit of borrowing under this act by $10Bn from $65Bn to $75Bn.
• Speaking in the House of Representatives, at the Red House, Port of Spain, Friday (March 15, 2024), Imbert noted that since the Development Loans Act came into force in 1964, there have been several increases in the limit, with the last two increases in 2020 and 2021 done to counter the effects of the Covid19 pandemic and the consequential collapse in commodity prices.
• Imbert explained that the Government's current 'remaining headroom' under the Development Loans Act is just $2.5Bn as a result of the borrowings done under the pandemic.
• Given T&T’s potential vulnerability to the current tenuous geopolitical dynamics, the Government must maintain a level of flexibility that will allow it to quickly counter the effects of revenue contraction or unforeseen expenditure demands. This will mean maintaining a reasonable borrowing capacity. Accordingly, it will not be practical for this Government to have access to a maximum of only two and a half billion TT dollars, Imbert said.
• The minister stressed, however, that the increase in the limit would not imply an immediate increase in government spending as the government is only permitted to spend what has been appropriated in this year's budget.
• The proposed increase, therefore, is primarily due to the limited excess capacity that the government has and would give the Government sufficient room and flexibility to meet its current and emergent financing needs in the medium term. 

 (Source: Trinidad Express Newspaper)

• While bond investors expect the U.S. Federal Reserve to keep rates unchanged at its policy announcement this Wednesday, the market reaction could hinge on what Fed officials indicate about stubborn inflation and if their signals get more hawkish about the timing and extent of any easing this year.
• Stronger-than-expected economic growth and stickier inflation this year have led investors to push back expectations on the U.S. central bank's first rate cut to June, from May, and reduce bets on how many cuts are likely this year. Traders are now pricing in three 25-basis-point cuts, in line with Fed policymakers' median expectations in December.
• Benchmark 10-year Treasury yields rose to a one-month high of 4.328% on Monday and jumped from 4.052% a week ago as traders adjusted for a more hawkish Fed. In December, the Fed pivoted to a more dovish outlook on growing confidence that inflation was on track to its 2% annual target. Inflation has since picked up, though analysts note that recent hotter-than-expected consumer and producer price index reports likely reflected seasonal factors.
• After the Fed's January meeting, Powell said that the central bank wants more confidence that inflation will continue to decline before cutting rates. "The Fed doesn't want to break anything," said Padhraic Garvey, regional head of research Americas at ING. He added that when inflation gets closer to 2%, the Fed will likely "use that opportunity to get rates off the highs."
• In the meantime, the Fed may be cautious about the prospect of near-term rate cuts. "The main focus is which way they lean," said Stephen Gola, head of U.S. Treasuries Sales & Trading at StoneX Group. An unexpected uptick in unemployment last month could keep the Fed circumspect on growth, offsetting some inflation concerns.
• Another possibility is that Powell could adopt a more hawkish tone by referencing loose financial conditions as stock markets hit records and corporate credit draws enthusiastic demand.

(Source: Reuters)

• China's factory output and retail sales beat expectations in January-February, marking a solid start for 2024 and offering some relief to policymakers even as weakness in the property sector remains a drag on the economy and confidence.
• Monday's data join recent better-than-expected exports and consumer inflation indicators, providing an early boost to Beijing's hopes of reaching what analysts have described as an ambitious 5.0% GDP growth target for this year.
• Industrial output rose 7.0% in the first two months of the year, data released by the National Bureau of Statistics (NBS) showed on Monday. This was above expectations for a 5.0% increase in a Reuters poll of analysts and faster than the 6.8% growth seen in December. It also marked the quickest growth in almost two years. Retail sales, a consumption gauge, rose 5.5%, slowing from a 7.4% increase in December but beating an expected 5.2% gain.
• The eight-day Lunar New Year holiday in February saw a solid return of travel, which supported revenue from the tourism and hospitality sectors. That also led to a 3% growth in oil refineries to meet the strong demand for transport fuels.
• "Consumers were buoyed temporarily by festivities-related spending at this start of the year. Without decisive consumption-related stimulus, we think it would be difficult to sustain a robust consumer spending pace this year," Oxford's Loo said.
• Loo's cautious comments reflect a broader consensus among China watchers that Beijing has its work cut out in achieving its 2024 economic growth target of "around 5.0%". While the goal was similar to 2023, analysts note last year had a lower base effect due to COVID-19 curbs in 2022.

(Source: Reuters)

• For the first quarter ending January 31, 2024, Indies Pharma Jamaica Ltd. reported a net profit of $62.49Mn (EPS: $0.047), a 5.9% (or $3.46Mn) improvement over Q1 2023.
• Revenues grew 5.4% while direct expenses fell marginally (0.6%), causing gross profit to increase by 8.1% (or $14.22Mn). Indies Pharma implemented a new policy that enhanced the accuracy and efficiency of the inventory management process and contributed to the improvement in gross profit.
• However, the bottom line performance was tempered by an increase in administrative expenses of 29.7% (or $29.6Mn), as well as tax expenses.
• Of note, Indies completed its fifth year listed on the Junior Market in 2023, which marks the end of its 100% tax break. Starting this quarter, the company will start paying taxes on corporate profits at a rate of 5% for the next 5 years as it enters the second phase of its tax break.
• Indies Pharma’s stock price has decreased by 6.9% since the start of the year and closed Thursday’s trading session at $2.72 per share. At this price, the stock trades at a P/E of 17.0x earnings, which is above the Junior Market Distribution sector average of 14.0x earnings.

 (Sources: JSE and NCBCM Research)

• The Income Tax Act will be amended to increase the maximum participating voting share capital of companies listed on the Junior Stock Exchange from $500Mn to $750Mn.
• At the opening of the 2024/25 Budget Debate in the House of Representatives on March 12, Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, said the measures are in an effort to further facilitate growth of the micro, small and medium-sized enterprise (MSME) sector.
• It is anticipated that the increased threshold will have a positive impact on the stock market’s activity as more companies may seek to list to take advantage of the higher share capital.

(Sources: JIS and NCBCM Research)