• For the three-month period ended March 31, 2019, K.L.E. Group reported a net profit of $198,000 (EPS: $0.003) which represents a significant improvement over the $1.8Mn loss reported in the corresponding period of 2018.
• Improvement in the bottom line was partly attributed to a reduction in the cost of goods sold (17.6%) as well as a decline in the administrative and other expenses (6.4%).
• The stock has fallen 39.7% since the start of the calendar year. K.L.E. Group closed trading yesterday at $1.90 and currently trades at a P/B of 1.88x earnings which is below the Junior Market sector average of 3.85x.

(Source: K.L.E. Group Financials)

• The U.S. Treasury Department on Thursday tightened its pressure on Venezuela’s state-owned oil company by making clear that exports of diluents by international shippers could be subject to U.S. sanctions.
• The change, announced on the Treasury Department’s website, is the latest U.S. measure aimed at pressuring Venezuelan President Nicolas Maduro by limiting access to oil export revenue from PDVSA.
• PDVSA had long relied on imports of diluents from the United States to add to its extra-heavy oil to make the crude exportable. But that trade was banned in January, forcing the company to look abroad for other suppliers.
• The changing of the language puts international companies on notice that any continued engagement or transactions they have with PDVSA selling diluents is at risk, or subject to future potential sanctions.

 (Source: Reuters)

• The local sugar industry reportedly raked in US$27.1Mn in 2018, a 44.1% reduction from what was reported in 2017.
• The out-turn was attributed to a 28.0% decline in the volume of sugar exported and a decline in the average export price.
• The average export price for sugar declined by 22.4% to US$348.4 per metric tonne, compared to the US$449.2 per metric tonne it was being sold at in 2017.

 (Source: Guyana Chronicle

• Mexican negotiators persuaded President Trump to back down from his tariff threat by agreeing to an unprecedented crackdown on Central American migrants and accepting more-expansive measures in Mexico if the initial efforts don’t deliver quick results, according to officials from both governments and documents reviewed by The Washington Post.
• The enforcement measures Mexico has promised include the deployment of a militarized national guard at the Guatemalan border, thousands of additional migrant arrests per week and the acceptance of busloads of asylum seekers turned away from the U.S. border daily, all geared toward cutting the migrant flow sharply in coming weeks.
• Trump officials Monday described the accord as a breakthrough, and the president considered Mexico’s plan aggressive enough to suspend his tariff threat, even though he liked the idea of imposing the duties over howls from members of his own party.

(Source: The Washington Post)

• China dominates the global market for rare-earth metals and has been threatening to take them hostage in the deepening trade conflict. 
• Just the suggestion that Beijing could starve American factories of essential materials has sent rare-earth prices soaring over the past month, with dysprosium oxide, used in lasers and nuclear-reactor control rods, up by one-third.
• But the alarm overlooks the rise over the past decade of alternative sources of rare earths and ignores the difficulties China would face in implementing a ban, including the prospect of widespread smuggling and the likelihood of hurting countries that Chinese authorities may prefer not to alienate.
• President Trump, fresh from an immigration dispute with Mexico pivoted Monday to his stalled China trade talks. In a CNBC interview, the president who is expected to meet Chinese President Xi Jinping later this month in Japan said their “differences can be worked out very easily.”
• But Xi shows no sign of caving and may use rare earths as a bargaining chip.

 (Source: The Washington Post)

• State Minister for Industry, Commerce, Agriculture, and Fisheries, Hon. Floyd Green, says the Jamaica Stock Exchange (JSE) Junior Market has recorded significant gains over the 10 years since its establishment.
• He noted that the market has grown from one company listing with capitalization of $750Mn, to some 43 entities that have generated approximately $135Bn in capital.
• In addition, he noted that major increases have been recorded for contributions to Pay As You Earn (PAYE) from $200Mn to $500Mn over the decade; National Insurance Scheme (NIS) up 148%; National Housing Trust (NHT) up 137%; and General Consumption Tax (GCT) up 940%.
• The Junior Market, established in 2009, facilitates investments in legitimate small and medium-sized companies, whose shares trade on a special JSE platform, which enables the listed entities to raise capital, thereby positioning them to contribute to Jamaica’s economic growth and development.

 (Source: JIS)

• Moody's Investors Service ("Moody's") comments that the potential merger between BRF S.A. (Ba2 negative) and Marfrig Global Foods S.A. (B2 Stable) is credit positive because it will result in a company with larger scale, product, and geographic diversification.
• However, the merger will provide limited operational synergies given the different strategies and segments the companies operate.

(Source: Moody’s)

• The government of St Kitts and Nevis is projecting a 29% drop in revenue in 2019, according to the Caribbean Development Bank (CDB).
• In its outlook for St Kitts and Nevis for 2019, the CDB also stated that the government is targeting a lower primary surplus, with total revenue expected to decline by 8.1% and total expenditure likely to grow by 5.7%.
• The decline in revenue will be caused by a projected 29.1% contraction in non-tax revenue from mainly the Citizenship by Investment (CBI) receipts. While capital expenditure is expected to grow by 21.8%, with one-third of the funds being earmarked for improving the public infrastructure.
• Kitts primary surplus is projected to fall to 2.1% of Gross Domestic Product in 2019.

 (Source: Caribbean News Now)

• Employment in the public sector declined by 11.1% in 2018 due to lower recruitment in the core civil services.
• “There was lower recruitment in the core civil services by 0.5%, which represented 63.1% of total public sector employment,” recounted the Bank of Guyana in its 2018 annual report.
• In the rest of the public sector, employment fell by 29.4%. Employment in public corporations contracted on account of lower recruitment by the Guyana Sugar Corporation (GuySuCo) and financial institutions by 39.2% and 0.6% respectively.
• Despite the decline in employment, employment costs increased by G$5 million, moving to G$59.4Mn. This reflected developments in wages, salaries, and benefits of public servants.

(Source: Guyana Chronicle)

• Talks between the U.S. and Mexico are set to continue into a third day in a bid to reach an agreement that would stop the imposition of 5% tariffs on American imports from its southern neighbor on Monday.
• Mexican Foreign Minister Marcelo Ebrard confirmed that his government has offered to send about 6,000 national guard troops to Mexico’s southern border with Guatemala to help stem migration, while Vice President Mike Pence said it is still the U.S. plan to go ahead with the tariffs.
• He said he would talk to President Donald Trump over the weekend to update him on developments ahead of the deadline.

(Source: Bloomberg)