• MPC Caribbean Clean Energy Limited (MPCCEL) has advised that on September 4, 2019, the Board of Directors of the Company will consider a resolution for an offer of rights issuance of additional Class B shares.

(Source: JSE)

• Science, Energy and Technology Minister, Hon. Fayval Williams, says the overwhelming response to the sale of shares in Wigton Windfarm to the public by the Government, clearly demonstrates that Jamaicans have the appetite to invest in the energy sector.
• She was speaking at a bond-signing ceremony between NCB Capital Markets Limited and New Fortress Energy (NFE), at the AC Marriott Hotel in Kingston, on Tuesday.
• Against the background of the Wigton IPO response, Mrs. Williams said plans by NFE to issue a bond to raise US$185 million is welcome.
• The proceeds will be used to complete the combined heat and power plant being built at Clarendon-based bauxite and an alumina refinery, Jamalco.
• The Liquefied Natural Gas (LNG)-powered facility, which is slated for completion in 2020, will supply steam for the refinery’s operations and electricity to the Jamaica Public Service Company (JPS).

 (Source: JIS)

• During the first half of 2019, the economy grew 4.7%, below its potential, notes the Central Bank in its Open Page report.
• In the report, which explains the impact of the uncertainty experienced in the international environment caused by the trade war between the United States and China, the Central Bank notes that according to the Consensus Forecast, the Dominican Republic would continue to lead the regional growth with 5.3% during 2019.
• On the economy’s performance Open Page indicates that “in the domestic sphere, the pace of expansion of economic activity has moderated beyond what was expected in recent months, due to the deterioration of conditions at an international level and uncertainty factors of a domestic nature, characteristic of the pre-electoral cycle, which have conditioned the consumption and investment decisions of economic agents.”

 (Source: Dominican Today)

• According to the Ministry of Finance’s half-year report, there was a decline in the first six months of lending to the agriculture sector. The Ministry explained that the decline in this sector, of 2.1%, to GY$13.1Bn resulted mainly from a contraction in lending for sugarcane and livestock production of 35.4% and 19.8%, to $0.9Bn and $1.4Bn, respectively.
• Total credit to the private sector increased by 5.7% to GY$238.8Bn over the review period, faster than the past three years. This was supported by an expansion in loans and advances to individuals and businesses, except for businesses in the agriculture sector
• Lending to households recorded robust growth of 13.5%, to reach $32Bn – stronger than the past two years, and was supported by an increase in loans and advances for all purposes, with the exception of other durable goods and travel.
• There was also an expansion in real estate mortgages, which surpassed the half-year growth rate in each of the past three years, resulting from an increase in lending of 5.0% and 14.7% for private dwellings, and industrial and commercial properties, respectively.

(Source: Kaieteur News)

• It looks like the trade-talk clouds that have kept markets on edge this week are here to stay at least a bit longer. The White House says not to expect a deal anytime soon and China says it could retaliate on the planned tariff hike from U.S. President Donald Trump – though it prefers not to.
• “China has ample means for retaliation, but thinks the question that should be discussed now is about removing the new tariffs to prevent escalation,” Commerce Ministry spokesman Gao Feng told reporters Thursday. Higher tariffs on Chinese exports to the U.S. are due to come into force on Sept. 1, and some retaliatory measures from Beijing are already planned.
• Meanwhile, Trump’s trade adviser Peter Navarro said negotiators from China are set to come to Washington in September to talk about the big changes the U.S. is asking for, but it’s “unlikely anything quick will happen.”

(Source: Bloomberg)

• Get ready for more turbulence in the pound as the risk of a chaotic Brexit increase.  A measure of expected swings over the next three months surged to near the highest this year and the pound continued to fall after it took a beating on Wednesday’s blockbuster Brexit news.
• Watch for the currency to react to political headlines as lawmakers trying to block no-deal spar with Prime Minister Boris Johnson over his plan to suspend Parliament. Things feel a bit more harmonious in Italy, where bonds surged and equities outperformed as the country’s president tapped Giuseppe Conte to form a new government, excluding right-wing League leader Matteo Salvini from power for now.
• That might sound familiar: for the last 18 months, Conte has led an unstable coalition that collapsed in chaos earlier in August. Now he’s got until next week to form a coalition with support from rival parties the Five Star Movement and the Democratic Party in order to avert the possibility of fresh elections which could put Salvini in power.

(Source: Bloomberg)

• On August 27, 2019, the Bank of Jamaica announced that it will be lowering the policy interest rate (the rate offered on overnight placements with Bank of Jamaica) by 25 basis points to 0.50%, effective Wednesday, 28 August 2019.
• Although BOJ anticipates that inflation will average 4.3% over the next 8 quarters, it has decided to cut the rate because of the likelihood that inflation will fall below the lower limit of the 4.0%-6.0% target range at various points over the period if there is no policy response.
• The Central Bank’s inflation forecast is also influenced by the continued impact of low domestic demand conditions relative to the economy’s capacity; slower growth among Jamaica’s main trading partners; and declines in international commodity prices. It also accounts for the impact of imminent changes in the fuel mix in the domestic energy sector on electricity rates.
• BOJ’s decision to cut the rate is intended to stimulate a faster expansion in private sector credit, which should lead to higher economic activity, consistent with the inflation target. This action will support inflation returning more quickly to the center of the target.

(Source: BOJ)

• For the three months concluded July 2019, Blue Power Group Limited reported a 25.9% decline in profits to $50.72Mn (EPS: $0.08).
• The overall performance in net profit for the period was impacted significantly by a 58.3% (or $13.42Mn) decrease in net financial income which was as a result of reduced foreign exchange earnings.  Moreover, there was 3.8% (or $12.51Mn) increase in the cost of revenue which outpaced the 1.7% ($7.47Mn) growth in sales and added to the contraction in the company’s bottom line.
• The stock has risen 88.1% since the start of the calendar year and closed yesterday’s trading session at $9.48. The stock currently trades at a P/E of 43x earnings which is significantly above the Junior Market Manufacturing sector average of 27x.

 (Source: Blue Power Financials)

• Fitch does not expect a stabilization of inflation or the bolívar Soberano (VES) until a new government is in power in Venezuela.
• However, the research agency revised down its forecast for inflation to average 143,106.5% y-o-y in 2019, and for the exchange rate to average VES16,197.6/USD, as the lifting of currency controls and implementation of higher reserve requirements has eased some upward pressures.
• Both inflation and the exchange rate would improve significantly in 2020 under the base case of a new government coming to power, though there is a substantial risk that the PSUV-led government will remain through that year.

(Source: Fitch)

• Economic activity growth in El Salvador is expected to decelerate as remittance growth slows in line with a slowdown in the US.
• Investment opportunities remain limited by security concerns, though the potential for Chinese investment is emerging.
• Downside risks to El Salvador’s growth stem from the potential for a greater than expected slowdown in the US, as well as the impact of US policy toward Central America.

(Source: Fitch)