Profit at Caribbean Cement Company declined 23.6% for the year ended December 31, 2019, moving to $1.88Bn (EPS: $2.21) at the end of 2019, down from $2.47Bn (EPS:2.90) in 2018.
The decline in profit was primarily as a result of a 201.0% ($427.60Mn) increase in losses on foreign exchange. Additionally, operating expenses increased 12.7% (or $280.70Mn), while financial expenses grew 32.6% (or $216.96Mn).
The stock has fallen 22.0% YTD and closed Tuesday’s trading session at $65.04. At this price, the stock currently trades at a P/E of 29.4x which is above the Main Market Industrial and Material sector average of 23.0x.
The Planning Institute of Jamaica (PIOJ) is reporting gains under the country’s long-term National Development Plan – Vision 2030 Jamaica. Director General, Dr. Wayne Henry, made the disclosure while reporting on the 2018 targets during the PIOJ’s recent quarterly briefing at the Institute’s head office in New Kingston.
Henry said with respect to Goal 3 – ‘Jamaica’s Economy is Prosperous’ – much of the development gains were attributed to macroeconomic improvements.
He noted that tourism and agriculture also showed progress, pointing out that the former met the majority of the 2018 targets.
The Director General said notable progress was also made in the business environment, “as the 2018 target for [reducing the] employment rate was surpassed”.
Additionally, he said the 2019 out-turn “continues this trend, with the second consecutive year of record-low unemployment rates”.
The Banco Central de la República Dominicana (BCRD) will implement one 25 basis point cut in 2020 to 4.25%, as low inflation and a more dovish US Federal Reserve support expansionary monetary policy.
Fitch has revised up the 2020 inflation forecast from 3.1% to 3.5% in 2020, amid increasing food prices, but believe lower energy prices will keep levels of Dominican inflation contained.
Risks are weighted heavily to the downside, as the outbreak of the Covid-19 (coronavirus) could strain domestic growth and put increasing pressure on the central bank to adopt additional easing.
Fitch Solutions will maintain their view that the Central Bank of Trinidad and Tobago (CBTT) will hold its monetary policy rate at 5.00% through end-2020 amid low inflation and weak economic growth.
Declining food prices will keep low inflation anchored, and a narrowing interest rate differential with the US will reduce pressure on the CBTT to increase rates.
Risks to the end-2020 interest rate forecast are weighted to the downside as the sustained spread of the Covid-19 (coronavirus) could spur monetary easing.
The Federal Reserve slashed interest rates by half a percentage point on Tuesday, a bold attempt to give the US economy a jolt in the face of concerns about the coronavirus outbreak.
It was the first unscheduled, emergency rate cut since 2008, and it also marks the biggest one-time cut since then. The new benchmark interest rate is a range of between 1% and 1.25%.
Although the fundamentals of the US economy remain strong, "the coronavirus poses evolving risks to economic activity," the central bank said in a statement.
The emergency rate cut came as somewhat of a surprise: Although the stock market soared Monday in expectation of a rate cut (the market predicted a 100% chance of a cut in March), the Fed and other central banks had seemingly pooh-poohed the notion as recently as Tuesday morning.
Although a rate cut won't cure infections or fix broken supply chains, "it will help boost household and business confidence," Powell noted.
As COVID-19 reaches more than 60 countries, the World Bank Group is making available an initial package of up to $12 billion in immediate support to assist countries coping with the health and economic impacts of the global outbreak.
Through this new fast track package, the World Bank Group will help developing countries strengthen health systems, including better access to health services to safeguard people from the epidemic, strengthen disease surveillance, bolster public health interventions, and work with the private sector to reduce the impact on economies.
The COVID-19 support package will make available initial crisis resources of up to $12 billion in financing — $8 billion of which is new — on a fast track basis. This comprises up to $2.7 billion new financing from the International Bank for Reconstruction and Development (IBRD); $1.3 billion from the International Development Association (IDA), complemented by re-prioritization of $2 billion of the Bank’s existing portfolio; and $6 billion from the International Finance Corporation (IFC), including $2 billion from existing trade facilities. It will also include policy advice and technical assistance drawing on global expertise and country-level knowledge.
Central Bank Governor, Richard Byles, says the prospects for the Jamaican economy continue to be “generally positive”.
“Fiscal performance is strong, public debt continues to decline at a steady pace in line with the fiscal responsibility law… we have a sustainable current account of the balance of payments… and our [international] credit ratings have been upgraded,” he said.
Among the other key positive macroeconomic indicators Mr. Byles highlighted were adequate levels of net international reserves, totaling some US$3.1 billion and non-borrowed reserves amounting to US$2.6 billion, which is above the Government’s target.
He further noted that Jamaica’s employment rate continues to improve while market interest rates remain “generally low”.
Mexico’s central bank slashed its growth forecast for this year and said it will take longer than expected for inflation to slow to target, suggesting policy makers have limited room to lower borrowing costs to stimulate the economy.
Banco de Mexico said in its quarterly report Wednesday that the economy will grow as little as 0.5% in 2020 and inflation will reach its target in the first quarter of 2021, later than a previous estimate of the final quarter of this year.
Policy makers see the economy growing between 0.5% and 1.5% this year, down from 0.8%-1.8% in the previous estimate. The central bank also cut growth forecasts for next year, to 1.1% to 2.1% from a previous 1.3% to 2.3%.
Brazilian markets are heading lower for a second day amid mounting concern about the impact of the coronavirus outbreak as it reaches Latin America.
Futures on the Ibovespa equity index were down more than 2% after stocks posted the biggest tumble, since May 2017, on Tuesday. The biggest exchange-traded fund tracking Brazilian stocks fell 2.5% in pre-market trading.
The real weakened 0.3% to an all-time low of 4.4629 per dollar even as the central bank stepped in to support the currency for a fourth time in two weeks.
The yield on the benchmark 10-year Treasury note resumed its slide on Thursday and fell to a new record low as concerns over the impact of the coronavirus dogged financial markets around the globe.
The 10-year Treasury yield dropped 3 basis points to 1.27% for the first time ever while the 30-year yield slipped a similar amount to 1.779%. The 10-year rate has fallen 20 basis points since Monday in a reflection of global demand for the relative safety and positive yield U.S. debt offers. Bond yields fall as prices rise.
The move lower in yields also reflects traders’ expectations the Federal Reserve will step in at some point and cut rates. However, many economists doubt the central bank will deliver such relief and whether it will be effective.
The coronavirus, which began in Wuhan, China, has spread across the globe in recent weeks and sparked fears that it could hamper global economic activity if unchecked by effective government intervention.
