• Economic Programme Oversight Committee (EPOC) Co-Chair, Keith Duncan, believes Jamaica is and will be in good stead to manage its affairs after the borrowing relationship with the International Monetary Fund (IMF) concludes later this year. He was addressing journalists during EPOC’s media briefing New Kingston on Tuesday, February 26.

• Duncan noted that Jamaica will have sufficient net international reserves, debt levels will be down, tax revenues are buoyant, and the country will continue to run primary surpluses, so that debt to gross domestic product [GDP] ratio can be reduced to 60 percent in fiscal year 2025/26.

• Jamaica’s fiscal performance remains positive and the economic programme is poised for success, based on the outcomes of select quantitative performance criteria and indicative targets under the IMF Precautionary Stand-By Arrangement (PSBA) for the first nine months of the 2018/19 fiscal year.

(Source: Jamaica Information Service)

• For the nine-month period ending December 31, 2018, Lasco Financial Services Limited reported an unaudited net profit of $267.7Mn (EPS: $0.21), representing a 20.9% increase relative to the $221.6Mn profit (EPS: $0.18) reported in the corresponding period of 2017. These results reflect the progress of the business one year after the acquisition of Scotia Jamaica Microfinance Limited now renamed LASCO Microfinance Limited.

• The year to date income from core activity increased by 50% from $1,088Mn to $1,629Mn whereas other income grew by 248% to $190Mn. This resulted in an overall increase in income of $618.4Mn. All business lines continue to contribute positively to the increase in revenues.

• Operating expenses for the nine-month period grew by 55% from $819Mn to $1,271Mn when compared with the previous financial year. This is mainly due to the expenses from the subsidiary and general growth in business which would not have been reflected in the previous year.

• Lasco Financials stock price is up approximately 2.89% since the start of the calendar year, closing yesterday’s trading session at $4.63. At this price the stock is trading at a P/E of 19.50x which is below the Junior Market Financial Sector average of 20.79x.

(Source: Lasco Financial Services Limited Financials)

• Moody’s is urging further “restraint” in The Bahamas’ public spending while predicting that the government will miss the 1.8% deficit target set by the Fiscal Responsibility Act for 2018-2019.

• The credit rating agency, in an update that accompanied its upgrading of The Bahamas’ outlook from “negative” to “stable”, warned that the government’s $237Mn deficit objective was still “attainable” but would likely require further spending curbs between now and end-June to hit the target

• Moody’s also gave more conservative economic growth projections for The Bahamas than the International Monetary Fund (IMF), forecasting that gross domestic product (GDP) will expand by 1.9% in 2019 following 2%growth last year. The IMF had projected 2.1% and 2.3%, respectively.

(Source: Tribune 242)

• Minister of Labour Colin Jordan gave the indication that Barbados may need more skilled individuals in light of projected investments and job creation, stopping short of saying whether Barbados would need to import new talent to meet the anticipated demand.

• “As we execute the growth and transformation aspects of our Barbados Economic Recovery and Transformation plan, we will have to make sure in the public sector, in the private sector, and in the third sector – civil society – we have the requisite workers and skills to drive our economy,” he said.

(Source: Barbados Today)

• Political realignment in Mexico's Congress will further strengthen the ruling coalition of President Andrés Manuel López Obrador (AMLO), with the qualified majority for constitutional change within reach for a number of initiatives.

• However, the Senate will offer a counterweight to AMLO’s policy agenda, as Morena’s lack of a two-thirds majority will require compromise on any potential constitutional reforms.

• Fitch Solutions notes mounting risks from regulatory changes, especially in the energy sector, which threaten investment and may lead to a further downgrade of its growth forecasts.

(Source: Fitch Solutions)

• Britain has an agreement at the World Trade Organization to remain within the WTO’s Government Procurement Agreement after it leaves the European Union, Britain’s mission said.

• Britain is a member of the GPA, whose members open up their combined $1.7 trillion government procurement markets to each other’s firms, by virtue of its EU membership.

• Membership would “ensure that British taxpayers and public sector organizations, including government departments, continue to benefit from increased choice and value for money on contracts which are open to international competition.          

• Staying in the GPA is important so that British companies can bid for government work in the United States, the European Union, and Japan, and their firms can retain access to Britain’s procurement market.

(Source: Reuters)

• For the six-month period ending December 31, 2018, Fontana Limited reported a un-audited net profit of $174Mn (EPS: $5.81), representing a 3% increase relative to the $169Mn (EPS: $5.63) reported one year prior.

• This performance is attributable, in part, to a 7.2% improvement in revenues over the period. However, this revenue was partially offset by a 9.6% increase in operating expenses due mainly to expenses for the strengthening of the management team and infrastructure in preparation for the company’s medium to long term growth. New positions were also added in Marketing, Brand, Beauty, Inventory and Pharmacy operations.

• Fontana closed yesterday’s trading session at a price of $3.85, representing 105% increase in its value since being listed on the Junior Market on January 8, 2019. At this price, Fontana is trading at a P/E of 11.81x earnings which is below the Junior Market average of 34.09x.

(Source: Fontana Limited Financials)

• For the six-month period ending December 31, 2018, Caribbean Producers Limited (CPJ) reported an unaudited net loss of $US1.1Mn (EPS: $0.11), representing a 30% decline relative to the US$1.6Mn profit (EPS: $0.10) reported one year prior.

• Notably, revenues declined marginally over the period. However, the company delivered a strong recovery of US$484k in revenue during the month of December.

• CPJ’s stock price is down approximately 3.5% since the start of the calendar year. The stock currently trades at a price to book ratio of 1.77x which is below the Junior Market Distribution average of 3.68x.

(Source: Caribbean Producers Limited Financials)

• Fitch Solutions expect Trinidad & Tobago's (T&T) economy will continue its modest recovery over the coming quarters, supported by rising natural gas production. However, non-energy sector growth will remain tepid, restricted by an overvalued exchange rate and private firms' poor access to credit.

• The external accounts will remain weak over the coming quarters; as a real interest rate disadvantage vis-a-vis the US drives capital outflows. As a result, the pegged exchange rate will remain under pressure.

• Risks are weighted to the downside, as the island remains exposed to potential storms and risks to tourism access. The fiscal deficit will most likely narrow in light of rebounding energy sector revenues. However, public financing needs will continue to strain the domestic financial system.

• Moreover, flooding across Trinidad & Tobago (T&T) will complicate the government's efforts to contain expenditure growth in its 2019 budget. Relief efforts and public pressure stemming from the flooding will raise downside risks to our fiscal forecasts

(Source: Fitch Solutions: Country Risk Report)

• According to Fitch, the Dominican Republic will be a regional out-performer in real GDP growth in the coming quarters. Robust construction, manufacturing and tourism activity, supported by close ties to the US economy, will drive growth.

• Robust economic growth will support revenues and narrow the Dominican Republic's fiscal deficit in the coming quarters. Elevated social spending and public investment, however, will partially limit the impact of accelerating revenue growth.

• The Banco Central de la República Dominicana (BCRD) will likely hike its benchmark interest rate in 2019 in order to partly preserve its interest rate differential with the US and minimize pressure on the Dominican peso.

(Source: Fitch Solutions: Country Risk Report)