• Eppley Limited (EPLY) has successfully applied for the graduation of its listed securities on the Jamaica Stock Exchange 
• Effective the 31st of December 2018, all securities listed on the junior market trading platform of the JSE will be listed on the main market of the JSE and will continue to trade on that platform 
• The company's graduation reflects its growth, increasing scope and ability to comply with the governance standard applicable to companies listed on the main market 
• At the point of graduation, the company will no longer benefit from the junior market tax incentive under the income tax act. Nevertheless, since it is an approved venture capital company under section 36A of the income tax act, it is not expected that its effective corporate tax rate will be adversely affected by the graduation. 

(Source: JSE Press Release)

• Bank of Jamaica announces its decision to lower the policy interest rate (the rate offered on overnight placements with Bank of Jamaica) by 25 basis points to 1.75 percent.
• This decision reflects the Bank’s most recent assessment that inflation could now fall below the lower limit of the 4.0 percent to 6.0 percent target in the latter half of 2019 and early 2020. There is also some risk that inflation could fall below 4.0 percent in December 2018.
• The inflation rate at November 2018, as reported by the Statistical Institute of Jamaica, was 4.1 percent, lower than the 4.7 percent recorded at October 2018 and the 4.9 percent in November 2017.

(Source: BOJ Press Release) 

On Wednesday, the Fed announced an increase in its benchmark interest rate by a quarter point to a target range between 2.25 to 2.5 percent, in a widely anticipated move. World equity markets slumped on Thursday after the U.S. Federal Reserve raised rates even as signs grow that global economic growth is slowing. Jitters over the Fed's move to largely keep guidance for additional hikes over the next two years spread from Asia to Europe. Major indexes fell to their lowest in two years and investors headed for the relative safety of government debt.

 (Source: CNBC)

Fitch expects that the fiscal deficit will widen to 4.0% of GDP in 2018 and 5.1% in 2019 on account of lower revenues as real GDP growth decelerates, and higher government outlays partly due to rising debt-servicing costs. A continued rise in debt levels over the coming years would put upside pressure of financing costs. However, the direct effect of higher interest rates on the budget will be limited in 2019. There is a growing possibility of a partial US government shutdown in December, but it is unlikely to alter our 2019 fiscal outlook materially.   

(Source: Fitch)

Fosrich Company Limited (FOSRICH) has issued 2 series of Notes during the week including a 6.75% Asset Backed Notes due 2020, valued at up to J$460Mn in the aggregate and a 9.50% Unsecured Notes due 2020, valued at up to J$200 million. FOSRICH further advised that this new facility replaces the existing J$460 million Mayberry facility and will be used to support the financing required for their new projects. These new projects include the completion of its Manufacturing segment which is expected to come on stream by late January. The new manufacturing business is expected to supply both the domestic and export markets. 

(Source: JSE)

CARICOM headquarters country, Guyana, thinks it is being short-changed in its relations with the United States Company, ExxonMobil. It is concerned over the terms of the Production Sharing Agreement (PSA) signed with the international major in 2016 relating to royalties and profits from the Stabroek block, which it now believes were over-generous.

(Source: Trinidad Express)

Barbados’s rapid implementation of an IMF backed fiscal adjustment programme will support capital inflows over the near-term, relieving pressure on its external accounts. However, Fitch believes the unresolved renegotiation of its external debt will continue to undermine business operations and investment over the coming quarters. An extended or acrimonious renegotiation poses downside risks to medium-term economic forecasts.

(Source: Fitch)

• Fitch expects the Belizean government led by Prime Minister Dean Barrow will face declining public support over the coming quarters due to elevated crime and weak economic activity. 

• Weak public support will undermine the administration’s efforts to reduce its substantial debt load over the coming years. 

• Belize earns a score of 64.0 out of 100 on our Short-Term Political Risk Index, ranking 20th out of 26 Caribbean economies and reflecting our assessment of weak social stability and a challenging policymaking environment.

 (Source: Fitch)

• On Wednesday Digicel said investors holding 94.7% of its 2020 bonds had agreed to a plan to exchange the bonds for debt maturing in 2022. A further offer to postpone the repayment of  the $1Bn bond due in 2022 by two years remains on the table, with a deadline falling on Friday for investors to accept the terms. 

• Mr O’Brien’s push to restructure these bonds prompted credit rating agencies Moody’s and Fitch to downgrade Digicel, which has debts of $6.7bn. A committee of bondholders had dismissed his original plan as “unacceptable”. But he sweetened the terms this month, improving the standing of $580m of the 2020 bonds by exchanging them for new senior secured bonds. 

• The interest rate will remain the same at 8.25 per cent. The plan to postpone the 2022 debt would increase the interest rate to 9.125 per cent from 7.125 per cent.

 (Source: The Financial Times)

• Access Financial Services Limited (AFS) has announced that it has completed the acquisition of 100% of the outstanding shares of Embassy Loans Inc., a Florida based auto equity finance company, at a cost of US$6.4M. 

• The transaction which was completed on December 14, 2018 was funded from the proceeds of a J$900M global bond which was issued in October 2018. 

• The acquisition of Embassy is in keeping with AFS’s long-term strategy to diversify the Company’s operations and revenue streams into markets where profitable opportunities for growth are identified and it provides a platform for expansion in North America.

(Source: JSE)