• 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)

• British shoppers faced renewed pressure on their budgets in October after grocery price inflation edged higher for the second month in a row, industry data showed on Tuesday. Market researcher Kantar said annual grocery price inflation was 2.3% in the four weeks to Nov. 3, having been 2.0% in the previous four-week period.
• UK supermarkets have warned that tax rises in the new Labour government's first budget last month, together with another rise in the national minimum wage, will be inflationary.
• Kantar said grocery sales rose 2.3% over the four-week period year-on-year to 11.6 billion pounds ($14.9 billion) - the biggest sales month of the year so far. The researcher said there were signs that some consumers were starting their Christmas shopping early.

(Source: Reuters)

• Bolstered by strong quarterly topline performances, TransJamaican Highway Limited (TJH) recorded net profit of US$21.99Mn for the nine months ended September 30, 2024, a 25.9% YoY increase. Revenue for the nine-month period grew by 9.2% or (US$5.07Mn) to US$60.4Mn, aided by higher traffic volumes and movements in the toll tariff, which was increased after its annual review.
• TJH incurred a marginal 0.5% increase in operating expenses to US$16.67Mn. Higher intangible amortisation expenses were partly offset by a reduction in repairs and maintenance activities throughout the period.
• However, administrative expenses rose more briskly by 16.6% (or US$1.00Mn), primarily due to salary changes following the JIO acquisition and restructuring exercise and the usual annual inflationary increments.
• In Q3, earnings increased by 24.9% (or US$1.61Mn), continuing the strong growth trend from Q1 and Q2. The Q3 performance was largely driven by a 8.5% (US$1.63Mn) increase in revenues. Additionally, a 5.8% reduction in operating expenses and a 3.4% decrease in finance costs due to ongoing quarterly debt principal repayments further supported the overall growth.
• TJH's stock price has increased by 33.6% since the start of the calendar year. The stock closed Monday’s trading session at $3.62 and currently trades at a P/E of 6.5x, which is below the Main Market Energy, Industrial, and Materials Sector Average of 10.4x.
• During the quarter, TJH completed negotiations with National Road Operating and Constructing Company Limited (NROCC) regarding the concession to operate and maintain Phase 1C of the Highway 2000 toll roads until November 20th, 2036. The addition of this new concession should enhance the company's portfolio by introducing a fourth toll road. Management anticipates this will provide a boost to TJH’s revenues by a further US$9Mn per annum, which should also result in higher earnings.

(Sources: TJH Financials & NCBCM Research)

• The Bank of Jamaica (BOJ) is taking steps towards increasing its operational resilience including relocating some of its operations to a recently acquired property in St. Andrew. The operations to be carried out at the new location will not include services to the public.
• Explaining the rationale for the decision to activate the operational centre in addition to its downtown Kingston headquarters, BOJ Governor Richard Byles noted that central banking functions are critical to business activity and government operations for the entire country and are required to facilitate business transactions between Jamaica and the rest of the world.
• “The location of the Bank on the Kingston waterfront makes it particularly vulnerable to geological activities such as earthquakes and to the potential effects of sea level rise either by itself or resulting from an earthquake or storm surges driven by tropical cyclones. As part of our risk management, BOJ plans for various eventualities and seeks to minimise the possibility of a complete shutdown of its operations in the event of a disaster,” Mr. Byles explained.
• “Building operational resilience and mitigating risks of various forms is especially critical as Bank of Jamaica prepares to assume wider prudential responsibilities for the regulation and supervision of the entire financial sector. With this in mind, planning for expansion at our current site while also ensuring adequate mitigation of risks to critical operational functions are not mutually exclusive.” Mr. Byles pointed out.

(Source: JIS)

• Data from the Central Bank of The Bahamas’ Monthly Economic and Financial Developments (MEFD) for September 2024 revealed that in August, air arrivals softened by 3.5% compared to the same time last year, though cruise arrivals were up 24.8%.
• Total arrivals increased to 0.9 million visitors in August, up from 0.7 million visitors in the same period of 2023, according to data from the Ministry of Tourism. Sea passengers rose by 24.8% to 0.8Mn, which contributed to the outcome. However, air arrivals declined by 3.5% to 0.1Mn visitors, reflecting a moderation in bookings amid the increased hurricane season activity.
• Initial data revealed that the tourism sector’s gains during the review month were reflected more robustly in the cruise market. Conversely, stopover was more constrained by accommodation capacity, as well as partially disrupted by the busier than normal early start to the hurricane season, despite no direct impact on the archipelago.
• The Central Bank also noted that, in September, the short-term vacation rental market in the country saw room nights sold fall by 1.3% to 24,921 when compared to the same period in 2023. Additionally, occupancy rates decreased to 29.1% from 32.7% and hotel comparable listings decreased to 34% from 36% in that same period.
• Last month, Minister of Tourism, Investments and Aviation Chester Cooper expressed concern over the underperformance of stopover visits in September and October. However, he noted that the forward-looking projections for the remainder of the year suggest the country could still be on track to surpass last year’s visitor records, bolstered by cruise visitor numbers, which increased 19% year-over-year.

Source: (The Nassau Guardian)

• Finance Minister Colm Imbert has rejected claims published in certain sections of the media that the government has received a caution from the International Monetary Fund (IMF) on the distribution of foreign exchange (forex).
• In a November 10 statement, Imbert addressed public concerns about difficulties accessing foreign exchange, the government's decision to let the Trinidad and Tobago dollar float in line with IMF advice, and calls for direct government involvement in forex distribution. He also clarified that the decision to reopen a forex window at EximBank for essential imports followed pressure from the business community and a daily newspaper.
• He noted that the recommendation did not appear for the first time in the 2024 IMF Article IV report, as alleged in a daily newspaper report on November 10.
• At a November 5 news conference, Imbert stated that the ministry was in discussions with various chambers of commerce and the Trinidad and Tobago Manufacturers Association (TTMA) about potential changes to the forex distribution system. He explained that the Central Bank relies on an "honour system" when allocating US currency to local commercial banks, which in turn distribute it to customers.
• An alternative would be to allocate specific percentages of this distribution for SMEs (small and medium enterprises), as well as for medical expenses, education, travel, or imports needed by manufacturers.
• In a notice released on November 8, RBC announced a 66% reduction in the forex limits on its personal and business credit cards, effective December 1. Similarly, Republic Bank informed customers last September of changes that took effect that month, including a reduction in the US-dollar limit on its credit cards from US$10,000 to US$5,000 per cycle.

(Source: Trinidad & Tobago Newsday)

• European banks face an even tougher task to close an earnings gap on U.S. rivals, as Wall Street awaits a new era of financial deregulation under a second Donald Trump presidency. Lenders in the euro zone and Britain have been hobbled by poor profitability and weak economies since the 2008-09 global financial crisis, while U.S. banks have soared in value and stolen market share, especially in investment banking as European rivals retreated.
• Some banks had begun to claw back lost ground this year though. Until this week, European shares were outperforming U.S. peers, and hopes had grown that the U.S. would adopt some elements of the Basel III regulations requiring American banks to hold more capital, helping level the playing field.
• The U.S. banking industry is expecting Trump to usher in Republican regulators who ease capital rules and merger approvals and further dilute the contentious Basel III endgame proposal aimed at requiring big lenders to hold more capital. The pace of any deregulation will be determined by new regulators and key policymakers that Trump has yet to nominate, leaving the outlook highly uncertain.
• "We can also expect an uptick in regional bank mergers. Comparatively, European banks with their more restrictive regulatory oversight will be competing with one hand tied behind their backs." The long-anticipated wave of European banking mergers and acquisitions has resumed this year, marked by UniCredit's potential takeover of Commerzbank and Banco Bilbao Vizcaya Argentaria’s (BBVA’s) bid for Sabadell. However, neither deal is assured, as both face political challenges.
• According to Filippo Maria Alloatti, Head of Financials Credit at Federated Hermes, U.S. banks would likely be the main beneficiaries under Trump’s policies. Nevertheless, international banks with significant U.S. operations, such as Barclays, Deutsche Bank, and Union Bank of Switzerland (UBS), are also expected to experience "positive impacts."

(Source: Reuters)

• China's consumer prices rose at the slowest pace in four months in October, while producer price deflation deepened, even as Beijing doubled down on stimulus to support the sputtering economy.
• In its latest stimulus measures, the country's top legislative body approved a 10 trillion yuan ($1.4 trillion) package on Friday to ease local government "hidden debt" burdens rather than directly injecting money, as some investors had hoped. Analysts say the package will likely do little to boost economic activity, demand, and prices in the near term.
• The consumer price index (CPI) rose 0.3% from a year earlier last month, slowing from September's 0.4% rise and marking the lowest since June, data from the National Bureau of Statistics showed, short of the 0.4% increase forecast in a Reuters poll of economists.
• The highly anticipated stimulus plan passed on Friday by the standing committee of the National People's Congress may leave investors who speculated on a fiscal bazooka disappointed, as it fell short of expectations for strong policy steps to boost consumption and reflate the economy.
• Finance Minister Lan Foan indicated on Friday that more stimulus was coming, telling a press conference that tax policies to support the housing market would come soon and that the authorities were accelerating the work of recapitalising banks.

(Source: Reuters)

• After a weak first quarter, Lasco Distributors Limited (LASD) experienced a modest 4.1% growth in profits for Q2 2024 to $359.28Mn aided by topline growth and higher other income. However, subdued earnings in Q1 2024 meant that earnings were down for the first six months of the year. The overall performance was weighed down by higher operating expenses. 
• In Q2 2024, LASD saw a turnaround in earnings, supported by a 5.7% rise in revenues to $7.64Bn. This growth was fueled by robust gains in its export business (+25%) and pharmaceutical segment (+14%).
• However, this did not translate to its year-on-year performance. Increased costs related to sales and promotions, employee expenses, technology upgrades, and depreciation pushed operating expenses higher. Additionally, financing costs surged by 563.4%, further weakening its performance. Q1 results were particularly affected by supply disruptions, which limited product availability and caused a 19.1% decline in net profit.
• As a result, LASD reported lower net profits of $718.18Mn (-9.4%) for its H1 2024 reporting period.
• However, in the short term, the company plans to implement contingency measures to improve inventory levels, while mitigating the effects of supply challenges to meet demand. These actions, combined with disciplined cost management may drive future topline growth and improve profitability. LASD also remains committed to its investment and growth strategies, emphasising portfolio innovation, expanded capabilities, and stronger consumer communication and engagement.
• LASD’s stock price has appreciated by 20.9% since the start of the year closing Thursday’s trading session at $4.56. Currently, the stock trades at a P/E ratio of 11.68x, below the Main Market Manufacturing and Distribution Sector average of 13.51x.

(Source: JSE & NCBCM Research)

• The Government of Jamaica has begun assessing the damage caused by Tropical Storm Rafael, which impacted Jamaica between November 4 and 5.
• Prime Minister, Dr. the Most Hon. Andrew Holness, said preliminary figures indicate that the damage could range between $500Mn and $1Bn. “Our figures are preliminary; by the end of the day, we will have more refined figures to share with the public,” Dr Holness said, addressing Wednesday’s (November 6) post-Cabinet press briefing at Jamaica House.
• The Prime Minister noted that Jamaica has a multi-layered disaster risk response mechanism, which has placed the country in a position to fund the needed repairs.
• Meanwhile, Minister without Portfolio in the Ministry of Economic Growth and Job Creation with Responsibility for Works, Hon. Robert Morgan, in reporting on the storm’s impact, noted that there were 15 blocked roads, 10 flooded roads, minor damage to two roads, seven roads with single lane access and two roads that were impassable.
• He shared that the National Works Agency (NWA) has commenced providing access to blocked roads by way of single-lane traffic, adding that the next step will be to fully clear the blockages.

(Source: JIS)