Productive Business Solutions Limited (PBS) has advised that their Board of Directors has declared a dividend in the sum of $125,430,411.02, which is payable to the J$Cumulative Preference Shareholders on July 13, 2018.

The government of Barbados this week will begin discussions with the International Monetary Fund (IMF) as it relates their and the government's debt with the IMF as well as those with domestic and foreign creditors.  In a press release, Finance Minister Ryan Straughn said Barbados’s negotiating team will work with IMF representatives from 2 to 12 July.   Straughn said the IMF officials had already started requesting data that Barbados was in the process of finalizing, such as the details on what was required to expand the economy over the next 10 years and the particular path to achieve sustainable growth. The official added that before 12 July, Barbados could have in place at least a working agreement. The government aims to get an IMF board agreement as soon as possible after the IMF team leaves Barbados on 12 July and goes through its internal review process in Washington. Prime Minister Mia Amor Mottley said on 1 June that Barbados’s public debt was as high as 171% of GDP and announced the suspension of external-debt payments and a debt restructuring, as reported.

Source: STIFEL

In our June 2018 Corporate Surveillance report, we highlighted the refinancing risk that Trinidad’s oil refinery, Petrotrin, faces on its 2019 global bonds. The company has a bullet payment totalling US$850Mn on these bonds, which falls due on August 14, 2019, and has discussed potential refinancing proposals with international investment banks. In light of the company's weak fundamentals and the rising interest rate environment, it is likely that the refinery will face high borrowing costs from creditors if it is to successfully refinance these bonds. The risk is further elevated by the fact that the government’s recent statements imply that it will not be providing a guarantee on Petrotrin’s debt. Evidence that the government is determined to have Petrotrin operate independently was given when the country’s Energy Minister Franklin Khan recently stated, at the opening ceremony of the 2018 Energy Resources Conference and Exhibition, that the state would not provide capital to Petrotrin and that it would have to rely on the private sector for capital injection.

The Bank of Jamaica (BOJ) on Wednesday June 27, 2018 announced its decision to lower its policy rate (the interest rate offered on overnight placements with Bank of Jamaica) by 50 basis points (bps) to 2%, effective June 28, 2018.

This increase in monetary policy accommodation reflects i) its assessment that inflation over the June 2018 to December 2018 quarters is likely to remain below the target of 4% to 6% and ii) the risk of projected inflation for first quarter 2019 not meeting previous expectations.  The measures were therefore aimed at fostering greater credit expansion and a faster pace of GDP growth which will support inflation returning to the target of 4% to 6%.  

This marks the third time the benchmark rates are being reduced since the start of the year.   The central bank previously cut rates by 25bps (to 2.75%) in February and more recently rates were slashed by another 25bps (to 2.50%) in May.

This downward trajectory in the BOJ policy rates reflects a key difference in policy direction between the BOJ and US Central Bank (The Federal Reserve or “The Fed”) which effected two policy rate hikes since the start of the year (25bps to 1.75% in March and 25bps to 2% in June).   This came on the back of more favourable outturn in key economic indicators such as GDP, unemployment and consumer spending and inflation.    In light of these stronger fundamentals and Trump’s stimulus package, consensus expectations are for inflation to trend upwards, above the target rate of 2%, thereby prompting further rate hikes.

With BOJ and Fed policy rates now equal at 2% and the likelihood of further divergence, there will no doubt be implications for the JMD to USD exchange rate.  With no differential between Fed and BOJ benchmark rates, we anticipate that investors will have a greater appetite for USD denominated assets going forward.   

Caribbean Flavours and Fragrances Limited (CFF) has advised of the Tax Administration Jamaica approval of CFF’s request to change their Company’s Accounting Terminal Date from June 30 to December 31, effective June 30, 2018, pursuant to Section 6 of the Income Tax Act.

The Company’s returns will be filed as follows:

Source: JSE

Kingston Properties Limited (KPREIT) has advised that under KPREIT’s share buyback programme, the Company purchased 5,000 KPREIT shares on June 19, 2018.

Source: JSE

Jamaica Stock Exchange (JSE) has advised that Mr. Ian McNaughton and Mr. Gary Peart have been re-elected Chairman and Deputy Chairman, respectively, of the Board of the Jamaica Stock Exchange, at a meeting of the Board of Directors of the Company held on June 21, 2018.

Source: JSE

Productive Business Solutions Limited (PBS) has advised that PBS wishes  to hold a meeting to declare a dividend payable to the Cumulative Preference Shareholders on June 29, 2018.

Source: JSE