• Trinidad and Tobago’s (T&T) fiscal deficit is forecast to narrow moderately in the coming years.
• However, the rating agency also sees a low ceiling for the government’s deficit reduction program due to rising interest payments and an election in 2020, which will likely precipitate increased spending.
• Fitch notes that there are significant downside risks to T&T’s fiscal targets as the on-going crisis in Venezuela threatens important revenue streams.

(Source: Fitch)

- Evidence is growing that the trade war between the U.S. and China is doing real harm to the global economy.

- Some analysts warn that some of the damage could be permanent - effectively meaning any rebound from a deal would not lead to a full recovery.

- This suggests that having raised expectations on the likelihood of a breakthrough, President Trump may not get the stock market rally he wants from an official end to the standoff.

(Source: Bloomberg)

• Brexit negotiators in the European Union are becoming increasingly pessimistic that sufficient progress can be secured this week to allow British Prime Minister Theresa May to win a crucial vote in Parliament next week.

• The EU believes that unrealistic expectations have built up in London and that U.K. negotiators are asking for the impossible.

• The country’s auto industry risks more damage in the event of a disorderly Brexit, with Toyota Motor Corp. warning it may end manufacturing there, joining other carmakers reviewing their U.K. operations.

(Source: Bloomberg)

• President Donald Trump regularly declares that he’s winning his trade wars. Yet the evidence is growing that the U.S. economy is a net loser so far.

• Economists from the Federal Reserve Bank of New York, Princeton University and Columbia University found that tariffs imposed last year by Trump on products ranging from washing machines and steel to some $250 billion in Chinese imports, were costing U.S. companies and consumers $3 billion a month in additional tax costs and companies a further $1.4 billion in deadweight losses.

• They were also causing the diversion of $165 billion a year in trade leading to significant costs for companies having to reorganize supply chains.

(Source: Bloomberg)

• “The environment facing China’s development this year is more complicated and more severe,” said Premier Li Keqiang. “There will be more risks and challenges that are either predictable or unpredictable and we must be fully prepared for a tough battle.”

• China sought to shore up its slowing economy through billions of dollars in planned tax cuts and infrastructure spending, with economic growth at its weakest in almost 30 years due to softer domestic demand and a trade war with the United States.

• The government is targeting economic growth of 6.0% to 6.5% in 2019, Premier Li Keqiang said at Tuesday’s opening of the annual meeting of China’s parliament, less than the 6.6% gross domestic product growth reported last year.

(Source: Reuters)

• Over the next decade, Fitch analysts expect the Bahamian economy will expand at a slow, but stable pace driven by rising tourism receipts. Economic growth will be capped by weak private consumption as well as the winding down of fixed investment in the tourism sector.

• The Bahamian government's fiscal position will improve over the next 10 years as a result of fiscal consolidation and improved tax collections.

• The current account deficit will narrow over our 10-year forecast period driven by service exports and lower global fuel prices.

(Source: Fitch Solutions)

• On March 1, 2019, Trinidad Petroleum Holdings Limited (TPHL), the successor company to Petrotrin, provided an investor presentation purposed with updating investors on recent developments and the state of the company since the restructuring announced on August 28, 2018.

• TPHL new issuer and obligor of Petrotrin’s   2019 and 2022 notes with upstream guarantees provided by each of the four subsidiaries: Heritage, Paria Guaracara and Petro. Co. of Trinidad and Tobago Limited.

• The implementation of the transformation plan has been on schedule. Following the transition, TPHL has amassed ample asset coverage with existing producing assets that consistently replenish reserves that have the capacity to service its debts

• No additional information has been provided on the financing of the 2019 notes that will become due in 2019. 

(Source: TPHL Investor Presentation)

• Sweet River Abattoir & Supplies Company Limited (SRA) was suspended from trading on March 4, 2019, after the company failed to produce their financial statements in keeping with the Jamaica Stock Exchange Junior Market Rules.

• The company has failed to satisfy on-going requirements pertaining to the filing of its Annual Report for the year ended March 31, 2018, which became due on July 29, 2018, and furnishing a disclosure regarding the renewal of a lease for its offices. As of February 28, 2019, SRA’s Annual Report is 214 days outstanding.

• The JSE has noted that SRA as a listed company of the JSE has also failed to convene its Annual General Meeting in accordance with the Companies Act of Jamaica which may cause reputational risk to the market.

(Source: JSE)

• For the year ended December 31, 2019, GraceKennedy Limited reported an uptick in audited net profit of $5.64Bn (EPS: $5.05), which represented an 18.2% increase on the $4.77Bn (EPS: $4.14) reported for the corresponding period of 2018.

• The performance over the period was supported by a 6% increase in overall revenue. There was also an improvement in the company’s profit before tax margin which improved 153bps from 5.6% to 7.13% over the period.

• GraceKennedy’s stock price has fallen by 3.34% since the start of the calendar year. The stock closed yesterday’s trading at $61.38 and currently trades at a P/E of 12.15x earnings which is below the Main Market Distribution & Manufacturing sector average of 18.22x earnings.

(Source: GraceKennedy Limited Financials)

• For the nine months ended January 31, 2019, Blue Power Group Limited reported a net profit of $136Mn (EPS: $0.21), which represented a 51% increase on the $90Mn (EPS: $0.14) reported for the corresponding period of 2018.

• The performance over the period was supported by a 10% increase in revenue. There was also significant appreciation in the JMD/USD exchange rate during the last quarter of 2018, which contributed to a decrease in the company’s input costs. This was reflected in the company’s gross margin which improved 127bps from 21.99% to 23.26% over the period.

• Blue Power’s stock price has fallen by 2.18% since the start of the calendar year. The stock closed the trading day at $4.93 and currently trades at a P/E of 19.64x earnings which is above the Junior Market Manufacturing sector average of 19.44x earnings.

(Source: Blue Power Group Limited Financials)