• Fitch predicts that Jamaica will continue to run budgetary surpluses in the coming years, with a broad political consensus supporting fiscal consolidation measures.
• Expectations are that the 2019/20 Budget, which includes modest increases to social and security spending and tax cuts for small businesses, will pass in the coming weeks. 
• With Jamaica running annual surpluses, Fitch Solutions forecast total government debt to fall to 87.3% of GDP in 2021, from 115.8% in 2017.

(Source: Fitch)

• LASCO Manufacturing Limited (LASM) recently completed the construction of a 65,000-square-foot warehouse at its White Marl complex at an approximate cost of US$5.2Mn.
• The commissioning of the warehouse has led to the streamlining and simplification of internal logistics operations, eliminated the need for external storage and costly double handling, and is already generating significant efficiencies and cost reductions, according to the company.
• LASCO is also in the process of expanding its dry products manufacturing plant by 12,000 square feet. Completion is slated for May 2019. The expected US$1.7Mn expansion aims to streamline additional manufacturing processes and significantly reduce costs.
• Combined, these initiatives are expected to increase the company’s productive capacity and reduce costs, which will bode well for its bottom line in coming quarters.

(Source: JSE

• Trinidad &Tobago, Aruba, Bermuda, Belize, Dominica, Barbados, and US Virgin Islands featured on the European Union’s latest blacklist for tax abuse and unfair tax competition globally.
• In terms of consequences, EU Member States have agreed on a set of countermeasures, which they can choose to apply against the listed countries, including increased monitoring and audits, withholding taxes, special documentation requirements, and anti-abuse provisions.
• In addition, new provisions in EU legislation prohibit EU funds from being channeled or transited through entities in countries on the tax blacklist.

 (Source: European Commission)

• Fitch Solutions forecast that Trinidad and Tobago’s (T&T) current account surplus will widen in 2019 due to an expanded traded goods surplus.
• Growing liquefied natural gas production will bolster export growth over the coming quarters.
• However, the view that T&T’s overall external position will remain under significant pressure is unchanged, with capital outflows forcing the Central Bank of Trinidad and Tobago (CBTT) to further draw down reserves.

(Source: Fitch)

• The world economy may be the rockiest it’s been since the financial crisis, yet there are reasons to expect the current slowdown will prove short-lived.
• Bloomberg Economics, Deutsche Bank AG and Morgan Stanley are among those whose economists reckon the slide will bottom out in this quarter or next before acceleration later in the year.
• The International Monetary Fund is still predicting global growth of 3.5% in 2019, a pretty good clip for this stage of the expansion.
• Deutsche Bank strategist Alan Ruskin also argues there is a reason to be more upbeat than the headlines suggest. China’s economy, for example, is five times its size in 2000, meaning a 6% growth rate now is equivalent to 30% back then.

(Source: Bloomberg)

• A meeting between President Donald Trump and President Xi Jinping to sign an agreement to end their trade war won’t occur this month and is more likely to happen in April at the earliest, three people familiar with the matter said.
• Despite claims of progress in talks by both sides, a hoped-for summit at Trump’s Mar-a-Lago resort will now take place at the end of April if it happens at all, according to one of the sources.
• “China is pressing for a formal state visit rather than a lower-key appearance just to sign a trade deal,” said the source.
• Trump acknowledged concerns in Beijing about the possibility of him walking away from a trade deal, offering to push back a summit with Xi until a final deal is reached.

(Source: Bloomberg)

• Indies Pharma recorded a profit of $46.90Mn (EPS: $0.04) for the first quarter ending January 31, 2019, which represents a 64.07% increase over the same period last year.

• Growth in revenues (+11.23%) and a reduction in direct costs (-15.7%) were the primary drivers of the robust net profit growth. Indies Pharma also recorded a foreign exchange gain of $716,791 in Q12019 relative to a loss of $1.87Mn in Q12018 and saw a significant reduction in finance costs.

• The stock has declined by 3.14% YTD and currently trades at a P/E of 28x earnings which is above the junior market average of 24.96x earnings.

(Source: Indies Pharma Financials)

• For the year ended December 31, 2018, VMIL reported a 15.22% year-over-year increase in its consolidated audited net profit to $539Mn (EPS: $0.27).

• The improvement in net profit was partly attributable to a 14.4% increase in interest revenues as well as a 35.21% increase in other operating revenue to $1.3Bn for the year.

• The stock has risen 3.46% since the start of the calendar year. The stock closed at $3.89 yesterday and currently trades at a P/E of 14.41x earnings which is below the Main Market Financial Sector Average of 16.58x.

(Source: VMIL Financials)

• The Eastern Caribbean Central Bank (ECCB) and the Barbados-based fintech company, Bitt Inc. (Bitt) have signed a contract to conduct a blockchain-issued Central Bank Digital Currency (CBDC) pilot within the Eastern Caribbean Currency Union (ECCU).

• This ECCB CBDC pilot is the first of its kind and will involve a securely minted and issued digital version of the EC dollar (DXCD).

• The DXCD will be used for financial transactions between consumers and merchants, including peer-to-peer transactions, all using smart devices. For example, an individual in St Kitts and Nevis will be able to send DXCD securely from his/her smartphone to a friend in Grenada in seconds and at no cost to either party.

(Source: The Anguillan)

• Fitch Solutions has revised its end-2019 policy interest rate forecast for Trinidad and Tobago (T&T) downwards from 5.75% to 5.25%.

• Weak economic activity, depressed inflation, and a pause in interest rate hikes by the US Federal Reserve (Fed) will lead the Central Bank of Trinidad and Tobago (CBTT) to take on a more dovish stance.

• T&T’s unfavorable economic outlook will outweigh concerns about its worsening interest rate differential with the US causing large-scale capital outflows according to Fitch.

(Source: Fitch)