• There is a segment of the market that thinks too much attention is paid to every single utterance of the world’s central bankers. Cue, today: The financial world is tying itself in knots trying to decipher the somewhat hawkish comments of recently dovish hawkish Fed Chair Jerome Powell, who gave a brief but positive assessment of the economy at an event on Wednesday.

• Look, it’s perfectly clear: Depending on various stuff, they could hike, cut or maybe hold. Still confused? Don’t feel bad. Even former Fed head honcho Janet Yellen has no idea what’s next. And since we’re talking policymakers, the Bank of England meets today and is expected to neither cut nor raise while telling us they stand ready to cut or raise.

• At least one central bank is in the mood to shake things up: Indian policymakers delivered a surprise cut today.

(Source: Bloomberg)

• Peru will run modest current account deficits in the coming quarters as a wide primary income shortfall and increasing demand for imports will offset export growth.

• In the longer term, however, increasing extractive sector production will help narrow the current account deficit.

• Fitch has revised its 2019 and 2020 current account deficit forecasts to 1.7% and 1.6% of GDP respectively, from 1.4% and 1.2% previously, reflecting a less bullish outlook for copper prices.

(Source: Fitch)

• Fitch expects economic policy continuity in Jamaica over the coming years, as a broad political consensus supports the IMF-backed reforms implemented under Prime Minister Andrew Holness.

• Orthodox economic policies, including central bank reform, will support the business environment, underpinning our constructive long-term economic outlook.

• However, security concerns will continue to threaten social stability and we note that public demands for services may limit the scope of further fiscal consolidation. 

(Source: Fitch)

• For the first quarter ending December 31, 2018, Barita Investments Limited (BIL) reported a net profit of $108.43Mn (EPS; $0.24), which represents 379.7% improvement on the result one year earlier.

• The performance over the period was primarily driven by a fair value gain of $198.4Mn on its equity portfolios.      The improvement in the results was also supported by an improvement (up 53%)  in net interest income, resulting from a significant (25.7%) decrease in interest cost of repurchase agreements. Fee and commission income was also up 35.4%, benefitting a  growth in total assets under management and a strengthening of its investment banking capabilities. 

• BIL closed yesterday’s trading session at a price of $51.13 per share.  At that price, the company trades at a P/E 43.7x earnings which is above the 17.5x  average for its financial market peers. 

(Source: BIL Financials)

• Fitch expects the political and economic crisis in Venezuela will have spillover effects on neighboring Trinidad & Tobago (T&T), exacerbating political gridlock.

• Public support for the government will be further undermined by a weak economy and growing security concerns.

• Prime Minister Keith Rowley is likely to face a challenging re-election campaign in 2020 that will dampen the likelihood of a compromise in 2019.

(Source: Fitch)

• San-Fernando-Based Trinity Exploration and Production (E&P) plc now estimates its oil discovery at Galeota (TGAL) to be around 700 million barrels (mmbbbls), a company executive confirmed in a January 23 telephone interview. First announced in 2013 as 115 million barrels (mmbbbls), the find is located offshore Point Galeota in southwest Trinidad.

• Investors on the London Stock Exchange, where Trinity is listed, rewarded confirmation of the good news in the company’s January 15 operational update, with a 45-per cent spike in Trinity’s stock, from 11 pence per share (a 12-month low on December 24, 2018) to 16 pence per share. It closed trading at 14.6 pence per share Friday (Feb. 1, 2019).

• For the first phase of field development, the company is looking to develop the relevant infrastructure which would help it to achieve a medium-term onshore and offshore production target of over 7,500 bopd.

• Assuming other producers remain at current levels, this would make Trinity the country’s second top privately-owned oil producer, behind only Perenco (10,476 bopd); and above BP (6,804 bopd) BHP Billiton (4,679 bopd), Touchstone (projecting 2,000 bopd) and EOG Resources (1,385 bopd).

(Source: Trinidad Express)

• The U.S. trade deficit fell to $49.3 billion in November, the first decline after five straight months of increases.

• President Donald Trump has made closing the gap a major priority.

• On a year-over-year basis, the gap rose by 10.4 percent.

(Source: CNBC)

• Donald Trump called for bipartisanship in his State of the Union address -- on his terms.

• The president offered Democrats nothing in exchange for their votes to build his promised wall on the Mexican border, while he excoriated them for their positions on abortion, blocking his nominees in the Senate and “ridiculous partisan investigations.”

• In a speech delivered in the interlude between one partial government shutdown and the possible start of another, Trump didn’t meet his opposition in the middle so much as lay the groundwork for even more hostilities if they don’t concede.

• He offered no new plan to avoid a second shutdown and drew another line in the sand on his proposed border wall.

(Source: Bloomberg)

• The BOJ yesterday conducted a flash sale of an additional US$30Mn through its B-FXITT foreign exchange intervention and trading tool.  Total eligible bids were $58.20Mn with an average weighted price of 136.43. 

• This follows the sale of an initial US$20 million in January and US$30Mn last Friday, which brings total sales so far this year to US$80Mn.   These operations, the Bank says are aimed at “offsetting the effects of excessive daily volatility in the foreign exchange market in recent weeks.”

• In the meantime, the Jamaican dollar continues to lose value against the US Dollar.   The currency closed at 137.062 against the US yesterday, representing a loss of 1.06 day-over-day when compared with Friday’s result.

(Source: BOJ, NCBCM Research)

• Yesterday’s trading session ended with more winners than losers with 53 stocks trading of which 20 advanced, 19 declined and 14 traded firm.

• All major indices experienced marginal declines, except for the Junior Market Index which advanced slightly (+1.46%%) to close at 3,189.56.

• Trading was dominated by Sagicor Group Jamaica Limited with 5.55Mn units traded (20.84%), followed by Scotia Group Jamaica Limited with 4.89Mn units (18.70%) and NCB Financial Group 3.59Mn (13.51%). A total of 26.64Mn units were traded on the market which represents a value of $1.15Bn.

• The top two advances for the day were Derrimon Trading Company Limited, which grew by +13.03% to close at $2.95, followed by Berger Paints Jamaica Limited which grew by 5.00% to close at $21.00. The top losers for the day were Proven Investments Limited JA which declined by -22.80% to close at $27.02 and AMG Packaging and Paper Company Limited which declined by 5.58% to close at $2.54.

(Source: JSE, NCBCM Research)