• Mexico has a plan to receive deported Mexicans from the U.S. if President-elect Donald Trump launches mass deportations of immigrants living in the U.S. illegally, Mexican President Claudia Sheinbaum said on Thursday, November 21, 2024.
• Sheinbaum added Mexico would put together a plan to show that deportations were not necessary, but she did not give details on how that would be done.
• "We will receive Mexicans, and we have a plan for it, but before that, we will work to demonstrate that they do not have to deport our compatriots who are on the other side of the border," Sheinbaum said. "On the contrary, they even benefit the economy of the United States."
• Trump has vowed mass deportations and a vast immigration crackdown as soon as he takes office on Jan. 20. He could call on everyone from the U.S. military to diplomats overseas to turn the pledge into a reality. However, Sheinbaum, who took office in October, has stressed the importance of humanitarian rights when dealing with migration, outlining a delicate balancing act with her future U.S. counterpart.
• Sheinbaum said this week she will eventually present Trump with a "humanistic approach" to controlling migration that addresses the root causes. Her cabinet is also set to meet to discuss issues facing Mexico under the incoming Trump administration including migration, trade and security.

(Source: Reuters)

• Global economic output would suffer a "sizeable" loss if trade became more fragmented and an immediate boost to inflation would only fade over a few years, the European Central Bank's chief economist Philip Lane said on Thursday.
• His comments marked the ECB's starkest warning yet about the potential consequences of a global trade war, a concern that has loomed large for investors since Donald Trump’s victory in the U.S. presidential election earlier this month, driven by his protectionist stance.
• "Trade fragmentation entails sizeable output losses," Lane said in slides prepared for a speech in Amsterdam. Lane envisaged a scenario in which global trade is increasingly divided between Western countries and a China-led East.
• His comments marked the ECB's starkest warning yet about the potential consequences of a global trade war, a concern that has loomed large for investors since Donald Trump’s victory in the U.S. presidential election earlier this month, driven by his protectionist stance.

Source: (Reuters)

• The number of Americans filing new applications for unemployment benefits fell to a seven-month low last week, suggesting that job growth likely rebounded in November after abruptly slowing last month amid hurricanes and strikes.
• It is, however, taking longer for laid-off workers to find new jobs, posing an upside risk to the unemployment rate. The report from the Labor Department on Thursday also showed unemployment rolls¹ swelling to levels last seen in late 2021.
• Labour market slack keeps the door open to a third interest rate cut from the Federal Reserve next month, despite a recent lack of progress in lowering inflation to its 2% target.
• "There is little evidence of large layoffs taking place," said Gisela Hoxha, an economist at Citigroup. "However, in a low hiring environment, those individuals that are laid off are finding it harder to get a new job and are remaining on unemployment benefits for longer, which implies an upside risk to the unemployment rate.

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¹Unemployment rolls refer to the number of people who are receiving unemployment benefits:

(Source: Reuters)

• For Q3 2024¹, Kingston Wharves Ltd. (KW) saw its earnings slashed by 21.7% year-over-year to close at J$760.9Mn as revenue growth (+4.2%) was outpaced by the increase in its cost of sales (+23.9%). This weaker Q3 performance weighed on the company’s earnings for the nine months ending September 30, 2024 (9M 2024) which dipped 4.3% to J$2.18Bn (EPS: $1.46).
• Due to slower growth in Q3, revenues for the 9M 2024 period totalled J$7.84Bn, reflecting an 11.3% year-over-year increase. Amid the slow revenue growth, the Logistics Services Division was the standout revenue performer. Booming demand for specialised logistics and warehousing drove logistics revenues up by 20.0% to J$2.90Bn and operating profits by 30.0% to J$1.10Bn during the 9M period.
• Conversely, operating profits from Terminal Operations slipped 14.0% to J$1.40Bn, despite a 7.0% revenue growth². The profit slip reflected higher depreciation and major infrastructure spending on upgrades to boost throughput capacity.
• Owing to slowed operating profit from Terminal Operations, KW’s 9M 2024 consolidated operating profit, was 2.35% lower than for 9M 2023, closing at J$954.50Mn. Higher finance costs for the quarter also dented 9M profits, doubling to $153.61Mn.
• Notwithstanding the profit dip, KW continues to invest in infrastructure, including a recent J$30.0Mn renovation of Berth 7, enhancing its capacity to handle larger vessels and boosting transhipment capabilities. Moreover, future upgrades are planned to improve terminal efficiency and customer experience.  
• Ultimately, KW’s infrastructure spending aims to maintain its market leadership in cargo receival, handling, warehousing, and delivery for domestic and regional markets.
• KW’s stock price has appreciated by 12.6% year-to-date. As of the end of Wednesday’s trading session, the company’s stock price closed at J$30.40, with a corresponding P/E ratio of 14.40x which is lower than the 23.07x average for the Main Market EIM³ Sector.

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¹July 1 - September 30, 2024

²Terminal operations represent over 60.0% of KW’s revenues.

³Energy, Industrials, and Materials.

(Source: NCBCM Research & KW Financial Statements)

• Prime Minister, Dr. the Most Hon. Andrew Holness, has outlined a comprehensive strategy to transition Jamaica towards robust and inclusive economic growth. The new policy statement comes after a decade of economic stabilisation and represents the Government’s focus on pursuing growth that creates tangible benefits for all Jamaicans.
• Reflecting on Jamaica’s economic journey, Prime Minister Holness highlighted the achievements recorded over the past decade, including a reduction in the debt-to-gross domestic product (GDP) ratio from 146.0% to under 70.0%, and a fall in the unemployment rate from 15.0% to a record low 4.2%.
• Dr. Holness declared “mission accomplished” on economic stability and said the Government is now pivoting towards transformative and inclusive growth. Key imperatives under the policy are Urban Renewal Tax Credit – revamping tax credits to attract private investments in underserved areas; National Infrastructure Fund – establishing a fund for public-private partnership projects; and Accelerated Tax Write-offs – incentivising businesses to modernise facilities and adopt advanced technologies¹.
• The Prime Minister also outlined the six pillars of the new growth agenda: Human Capital Development, Economic Diversification, Infrastructure Development, Reducing Red Tape, Safety and Security, and Inclusive Growth. He stated that ensuring no one is left behind is critical to this strategy, aligning with the Jamaica Social Protection Strategy.
• This new policy initiative aims to foster a more equitable economy that benefits all Jamaicans while ensuring sustainable growth for future generations.

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¹Other initiatives include the Removal of Taxes on Tips – aiming to reward service excellence in hospitality and service sectors; and the Consolidation of Payroll Taxes – moving forward with long-awaited tax reform.

(Source: JIS)

• Costa Rica's GDP is expected to grow 4.1% in 2024 and 3.6% in 2025, according to Fitch Solutions, up from earlier projections of 4.0% and 3.4% respectively. The upward revision in the forecast for GDP is in line with a slightly improved outlook for US economic growth by the agency.
• The improved outlook is also informed by recent data indicating that economic activity continued to hold up well during Q3 2024, with growth estimated at around 4.0% compared to an average of 4.3% over the first half of the year
• Private consumption will be the main contributor to growth, amid low inflation and a tighter labour market, while easing monetary conditions will sustain robust investment growth.
• Additionally, export growth will remain positive, but slow due to softer demand in the US and less favourable base effects for the tourism sector.
• Risks to the forecasts are mostly connected to dynamics in the US economy, with the potential for more protectionist and anti-immigration policies under Trump a key headwind for Costa Rica and the wider Central American region.

 (Source: Fitch Solutions)

• The Barbados pension system is facing a growing crisis, Central Bank Governor Dr Kevin Greenidge warned, with more than 28% of defined benefit plans underfunded and an average funding rate of just 84.1%. Addressing the Eckler Annual Pension Investment Conference, Greenidge pressed for urgent reform and innovation to ensure the system’s sustainability as Barbadians are living longer. According to the Pan American Health Authority, the life expectancy at birth in Barbados in 2024 is projected to be 76.3 years, 1.7 years higher than the 2000 life expectancy of 74.6 years.
• Greenidge emphasised the challenges facing the pension industry, particularly the impact of an ageing population and declining birth rates. “If our pension system is to remain a reliable source of financial security for retirees, it must adapt to changing demographics and economic conditions,” he said.
• The governor highlighted opportunities for pension funds to play a transformative role in national development. He encouraged stakeholders to consider strategic investments in key areas such as climate resilience, affordable housing, and green technology, which align with national priorities and promise stable long-term returns.
• He also pointed to government-led initiatives such as the Barbados Optional Savings Scheme Plus (BOSS Plus) as secure options for pension funds to grow assets, while bolstering economic growth. BOSS Plus offers a 4.5% return, presenting an opportunity for pension plans to strengthen their portfolios while contributing to economic growth.
• “Pensions are far more than financial instruments. They are a promise of security and dignity for all retirees. To fulfil that promise, we must strengthen governance, improve financial literacy, and embrace innovation. This is a shared responsibility, one that demands resilience, collaboration, and forward-thinking”, the governor added.

(Source: Barbados Today; PAHO)

• Japan's exports expanded faster than expected in October, led by a pick-up in chip equipment demand in China, though fears persist over potential U.S. protectionist trade policies that could hamper future shipments.
• Japanese businesses are weighing the impact of new and potentially hefty tariffs promised by U.S. President-elect Donald Trump that could disrupt international trade.
• Total exports in October rose 3.1% from a year earlier, data from the Ministry of Finance showed on Wednesday, rebounding from a 1.7% drop in September and outpacing a median forecast in a Reuters poll of a 2.2% increase.
• Exports to China led the recovery with a 1.5% gain due to strong demand for chipmaking equipment, while those to the United States, Japan's largest export destination, were down 6.2% on weak auto-shipments, the data showed.
• Kazuma Kishikawa, economist at Daiwa Institute of Research, warned that global demand remains weak. "In particular, U.S.-bound shipments are likely to take months to recover as it would take time for interest rate cuts to start to lift the economy," he said.

Source: (Reuters)

• British inflation jumped by more than expected last month to rise back above the Bank of England's 2.0% target. Underlying price growth gathered speed too, showing why the BoE is moving cautiously on interest rate cuts.
• Consumer prices rose by an annual 2.3% in October, pushed up almost entirely by an increase in regulated domestic energy tariffs, after a 1.7% rise in September which was the first time the inflation rate had fallen below the BoE's target since 2021.
• The British Pound Sterling strengthened by almost a third of a cent against the U.S. dollar after the data was published before losing most of those gains. Interest rate futures priced at a slightly slower pace of rate cuts and bond prices fell. The BoE's most recent forecast and a Reuters poll of economists both pointed to a weaker CPI reading of 2.2%.
• James Smith, research director at the Resolution Foundation think tank, said a rise had been expected as last year's energy price falls dropped out of the annual calculation and the price cap increased in October.

(Source: Reuters)

• After several consecutive quarters of decline, MailPac reported a 66.1% increase in Q3 net profit to $114.00Mn compared to $68.62Mn in the prior year. Despite the robust third-quarter recovery, Mailpac recorded a 10.1% ($20.52Mn) year-over-year (YoY) decline in earnings to $182.67Mn for the nine months ended September 30, 2024.
• At the end of Q3 2024, revenue totalled $732.03Mn, an 82.9% increase from the prior year. The strategic integration of MyCart Express, acquired in March 2024, as well as the continued performance of its core brands, were the primary drivers of the brisk topline growth.
• Further, operating expenses for the quarter surged to $224.15Mn (91.9%), reflecting higher operating costs with the amalgamation of MyCart Express, along with growth in operating expenses from its existing business.  Higher airline freight charges, system upgrades and restructuring initiatives, aimed at harmonizing the brands, were among the contributors to the increase in expenses.
• The acquisition of MyCart Express has positioned MailPac as the largest courier platform in the Caribbean, now delivering over 1.5Mn packages annually. Consequently, the company has been focusing on technological improvements to drive cost efficiencies and innovation. As these strategies continue to unfold, MailPac anticipates significant synergistic benefits, operational efficiencies, and enhanced revenue.
• MailPac’s stock price has increased by 10.5% since the start of the calendar year, closing Wednesday’s trading session at $2.42. At this price, the stock trades at a P/E of 26.89x, above the Junior Market Distribution Sector Average of 19.95x.

(Source: NCBCM Financial Research & FESCO Financial Statements)