• U.S. services sector activity unexpectedly accelerated in October to a more-than two-year high, and employment strengthened, giving more evidence that the economy is in solid shape as the nation headed to the polls to pick the next president.
• The Institute for Supply Management (ISM) said on Tuesday that its nonmanufacturing purchasing managers (PMI) index accelerated to 56.0 last month from 54.9 the prior month. It was the highest level since August 2022. Economists polled by Reuters had forecast the services PMI declining to 53.8.
• A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy. The ISM views PMI readings above 49 over time as generally indicating an expansion of the overall economy.
• The ISM survey's new orders measure eased to 57.4 in October from 59.4 in September. The ISM's prices paid measure for services inputs ticked down to 58.1 from the prior month's eight-month high of 59.4.
• ISM's measure of services employment rose to 53.0 in October, up from 48.1 in September, a signal of strengthening job growth. The reading appears at odds with last Friday's Labor Department report showing employers sharply slowed hiring last month, adding just 12,000 jobs.
• However, the report was widely seen as overstating job market weakness, given an ongoing Boeing strike that hammered manufacturing jobs and a pair of hurricanes that kept more than half a million people from work.

(Source: Reuters)

• Despite solid growth in total revenues and contained costs, Wigton Windfarm’s profits for the first six months of its financial year ending March 31, 2025 (H1 2025) softened in the absence of one-off income tax adjustments it experienced the prior year.
• In keeping with the Government of Jamaica's policy to facilitate growth in the renewable energy sector, Wigton benefitted from a one-off tax adjustment in H1 2024 given its operations in the renewable energy sector, which bolstered its financial performance. However, there was no tax adjustment for H1 2025, which led to a 38.6% dip in earnings. Excluding the one-off tax adjustment in H1 2024, earnings would have grown by 121.3% in H1 2025.
• Notably, the benefit was enacted within the financial year ending March 31, 2024, allowing the Company to file its 2023 tax return at a rate of 25% while making the relevant adjustments in its financial statements beginning in the second quarter of the financial year ending March 31, 2024.
• Total revenues (sales and other income) rose by 12.9% to J$1.42Bn for H1 2025, reflecting growth in other income to $0.42Bn (+105.6%) which more than compensated for a 4.9% decline in sales to $1.05Bn. Downtime of the wind turbines associated with Hurricane Beryl resulted in a 32.5% reduction in energy sales to $0.38Bn in Q2, weighing on the overall H1 energy production and consequently revenues. With the downtime caused by Beryl, Wigton made provisions for the anticipated proceeds from its business interruption insurance, which boosted other revenues, resulting in a 105.6% increase in other income.   
• Cost of sales (COGS) and general administrative expenses declined by 13.5% and 10.8% to J$228.79Mn and J$190.56Mn respectively for the review period. Continued expense management and operational efficiencies supported the reduction in direct costs. Finance expenses also declined by 13.1% YoY for H1 2025, as the Company continues to benefit from the March 2022 restatement of its Bonds, which introduced lower interest rates and quarterly principal payments.
• At the close of the stock market on November 4th, 2024, Wigton's share price stood at $1.06, implying a P/E ratio of 17.10x, which is above the peer average for the Energy, Industrials and Materials (EIM) industry¹ of 10.69x.
• Looking ahead, Wigton will concentrate on five (5) strategic pillars to achieve sustained profitable growth, one priority being growth through diversification. The company is focused on diversifying into other renewable energy solutions while improving operational efficiency and seeking solo or partnered investment opportunities. This shift is crucial for sustaining shareholder value and ensuring long-term growth by diversifying into new areas and expanding the company’s capabilities to improve earnings.

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¹The EIM industry consists of CCC, MPCCEL, WIG, TJH, KW, and BRG

(Sources: JSE & NCBCM Research)

• Minister of Education, Skills, Youth and Information, Senator Dr. the Hon. Dana Morris Dixon, affirmed the Government of Jamaica’s (GOJ’s) commitment to strengthening the country’s financial regulatory framework to safeguard citizens’ interests and ensure full compliance with global standards.
• Minister Morris Dixon was contributing to a debate on the Financial Services Commission (Amendment) Act, 2024 in the Senate on Friday, November 1, 2024. The Bill seeks to address deficiencies in existing laws to fight money laundering and ensure compliance with international anti-money laundering standards.
• Dixon noted that the legislation represents an essential step to modernise and strengthen Jamaica’s regulatory framework to respond to local needs and put its systems on par with international standards and best practices. She cited the tireless work done to implement policies and laws, which resulted in the country being removed from the Financial Action Task Force’s (FATF) Grey List on June 28 this year.
• Minister Moris Dixon also pointed to the Twin Peaks Model of Financial Regulation and Supervision as one measure in enhancing the country’s financial sector supervision and regulation. Under the twin peaks model, the Bank of Jamaica (BOJ) will be fully responsible for the prudential supervision of all bank and non-bank financial institutions. Meanwhile, the Financial Services Commission (FSC) will be transformed into a new regulatory entity that will supervise the market conduct of all bank and non-bank financial institutions to protect consumers.
• Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill, in piloting the Bill, said…the legislation gives Jamaica another regulatory tool to enhance financial sector stability and offer a greater level of protection for financial consumers.
• While the GOJ pushes for a stronger financial framework, Jamaica faces stability challenges like high interest rates and consequent credit and market risk increases, financial groups’ interconnectedness, climate, and cyber risk. These risks are prevalent in other Caribbean countries. That said, Jamaica has some specificities compared to its Caribbean neighbours like a developed security market and the significant role played by security dealers. Against this background, financial stability is equally as important as other policies requiring comprehensive strategies and the support of the government and other key stakeholders like the Central Bank to support financial stability.

(Sources: JIS, IMF & NCBCM Research)

• The Central Bank of the Dominican Republic (BCRD) released preliminary economic activity results for September 2024. The monthly indicator of economic activity (IMAE), a key indicator of robust economic performance, recorded a 4.7% expansion during September of this year, with an average year-over-year (YoY) growth of 5.1% from January to September 2024.
• This growth was largely due to the performance of construction (+4.4%) and free trade zone manufacturing (+6.5%), with exports under this regime amounting to US$6,404.1Mn in the referred period.
• Likewise, service activities experienced an accumulated increase of 5.3% relative to the same period of the previous year, among which financial intermediation (+7.9%), hotels, bars and restaurants (+6.3%), transportation and storage (+5.9%), real estate and rental activities (+5.7%) and communications (+5.1%) stood out.
• Financial intermediation’s real aggregate value grew by 7.9%, influenced by the 16.2% (or RD$309,554.3Mn) expansion of local currency credit granted to the private sector. While the added value of the hotels, bars, and restaurants activity increased by 6.3% primarily influenced by passengers’ arrivals through the different airport terminals.
• Of note, although mining declined by -6.1% from January to September, it increased by 8.5% in August and 16.9% in September, following increased gold production in the country’s main deposit.
• The overall performance occurred in an environment of price stability, supported by effective monetary and fiscal policies that have mitigated risks to Dom Rep’s economy.

(Source: Dominican Today)

• The Lodging Econometrics‘ (LE) Q3 2024 Latin America Construction Pipeline Trend report signals growth for the region’s hospitality industry. The pipeline currently stands at 642 projects and 104,513 rooms, representing robust year-over-year (YoY) increases of 11% in project count and 10% in room count.
• At the close of Q3 2024, Latin America had 269 projects with 47,151 rooms under construction, reflecting a 10% YoY rise in both metrics. Additionally, the number of projects scheduled to start construction within the next 12 months grew to 183 projects and 30,184 rooms, up 7% by project count and 9% by room count YoY. Even the early planning pipeline expanded, increasing 17% YoY to 190 projects and 11% YoY to 27,178 rooms.
• Mexico (229 projects/35,975 rooms) and Brazil (103 projects/15,731 rooms) accounted for a 52% of the total project count and 50% of the room count. The Dominican Republic followed with an all-time high of 59 projects/14,407 rooms, then Colombia with 27 projects/3,671 rooms.
• Looking at completed projects, the region saw 49 new hotel openings comprising 9,688 rooms through the third quarter. LE forecasts an additional 42 new hotels with 5,661 rooms to open in Q4 2024, bringing the total for the year to 91 new hotels and 15,349 rooms.
• Furthermore, projections point to a sustained growth trajectory, with 108 new hotels and 19,551 rooms forecast to open in 2025, followed by a further increase to 138 new hotels and 19,513 rooms in 2026.

(Source: Travel Daily News)

• Bond investors are keeping a defensive but neutral stance in managing portfolios ahead of this week's Federal Reserve policy meeting, which is being eclipsed by the too-close-to-call U.S. presidential election.
• Investors widely expect the U.S. central bank's policy-setting Federal Open Market Committee to cut its benchmark interest rate by 25 basis points to the 4.50%-4.75% range at the end of its two-day meeting on Thursday, which was delayed one day because of Tuesday's election. The Fed slashed its policy rate by a hefty 50 basis points when it launched its easing cycle in September.
• The election has been the focus for bond investors the last few weeks, more so than the Fed meeting. And until a winner is declared, investors are being cautious with their allocations, keeping their powder dry.
• Bond investors all year have been extending duration, or buying longer-dated assets, as they braced for Fed easing and possible recession. That remains the popular trade in bonds even after the election.
• If rates fall, bond prices will likely increase, and longer-dated notes and bonds have historically outperformed shorter-duration assets like cash and Treasury bills in rate-cutting cycles.
• Over the last few weeks, market participants said there has been some position-squaring among institutional investors in the futures market, suggesting caution, ahead of the election and Fed meeting. Asset managers use long contracts in Treasury futures to fulfil portfolio needs.
• Commodity Futures Trading Commission data showed asset managers have reduced net long positions on U.S. 10-year note futures that were at a record high as of Oct 1. Other players in Treasury futures have also reduced extreme long or short bets in the last few weeks.

(Source: Reuters)

• U.S. equity funds saw substantial outflows in the week to Oct. 30 as investors exercised caution ahead of Tuesday's presidential election and a Federal Reserve policy decision on Wednesday.
• According to LSEG data, investors divested a net $5.83Bn worth of U.S. equity funds during the week, the most since the seven days to Sept. 25. Investors ditched U.S. growth funds worth a net $4.06Bn in the largest weekly selloff since Oct. 2. Value funds also saw $2.19Bn of net outflows.
• The industrial, gold and precious metals, and healthcare sectors suffered net outflows of $779Mn, $392Mn and $278Mn, respectively. The consumer discretionary sector attracted $478Mn worth of net inflows.
• Investors snapped up U.S. bond funds for a 22nd week in a row, to the tune of $7.37Bn. They pumped $3.18Bn into U.S. short-to-intermediate investment-grade funds, the biggest amount in four weeks. General domestic taxable fixed income, and municipal debt funds also attracted a net $2.9Bn and $0.659Bn, respectively. A net $5.7Bn worth of U.S. money market funds was sold in the period, following about $30Bn worth of net purchases in the previous week. This could be due to investors exercising caution due to the upcoming U.S. presidential election and Federal Reserve policy decision, both of which add uncertainty and potential volatility.

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¹LSEG Data & Analytics, formerly Refinitiv, is an American-British global provider of financial market data and infrastructure. 

(Source: Reuters and NCBCM Research)

• Dampened by the impact of Hurricane Beryl, Carib Cement Company’s (CCC) earnings declined by 67.5% in its third quarter, However, buoyed by strong performances in Q1 and Q2, the company reported earnings of $4.91Bn, a 12.0% increase year on year.
• Despite strong revenue growth of 12.0% in Q1 and 7.1% in Q2, revenues rose just 1.0% as sales fell in Q3 as Hurricane Beryl disrupted production following a major maintenance shutdown. The shutdown led to a 11.2% decline in quarterly revenue, which weighed on the cumulative performance. With the falloff in production, there were several reports of cement shortages in the media during the quarter, which led to delays in construction activity.
• CCC’s cost of sales rose sharply, climbing 27.9% to J$4.45Bn in Q3, while total operating expenses increased by 5.5% to J$749.9Mn, largely due to higher costs associated with its planned maintenance in August aimed at boosting capacity and efficiency. These increased costs chipped away at Q3’s margins, putting pressure on the overall nine-month results.
• Despite Q3's setbacks from Berly, CCC expects to rebuild momentum in Q4, with supply levels expected to reach pre-Hurricane Beryl levels. This recovery, along with the company's ongoing investments in operational efficiency, should set a strong foundation for future performance.
• CCC is strategically positioning itself to meet market demand, especially in the western region of the island, aiming to capitalise on ongoing investments in infrastructure development in that region. Management anticipates that these moves will cement CCC’s position as a key supplier in the market.
• CCC’s stock price has risen by 21.8% since the beginning of the calendar year despite cement being unable to meet local demand. The stock closed Thursday’s trading session at $70.25, with a P/E ratio of 9.8x, higher than the Main Market Energy, Industrials and Materials Sector average of 9.5x.

Source: JSE & NCBCM Research)

• Monthly output prices for producers in the Mining & Quarrying industry increased by 0.5% for September 2024 relative to August 2024, while prices in the Manufacturing industry fell by 0.6%.
• The upward movement in the index for the Mining and Quarrying industry reflects a 0.5% increase in the index for the major group ‘Bauxite Mining & Alumina Processing’. The other major group, Other Mining & Quarrying’, increased by 0.1%. The depreciation of the Jamaican dollar relative to the United States dollar was the primary factor contributing to these increases.
• On the other hand, a 4.5% decrease in the index for the major category ‘Refined Petroleum Products’—given lower crude oil prices in the international market—was the primary factor behind the decline in the Manufacturing industry index. However, this overall decrease was offset by a 0.3% increase in the index for the major group ‘Food, Beverages & Tobacco.’ This increase was mainly driven by rises in the indexes for the categories ‘Manufacture of Other Food Products, (0.5%) and ‘Manufacture of Beverages and Tobacco (0.5%), resulting from general price increases and higher raw material costs.
• For the period September 2023 – September 2024, the point-to-point index for the Mining & Quarrying industry increased by 8.1%, and the point-to-point index for the manufacturing industry fell by 0.9%, reflecting the year on year decline in international oil prices.
• The Producer Price Index (PPI) is a significant economic indicator that tracks the average fluctuation in selling prices that domestic producers of goods and services experienced over time. Currently, the only industries being tracked are Manufacturing Industry and Mining and Quarrying.
• That said, with international oil prices being a key driver of the ‘Refined Petroleum Products’ category, escalating geopolitical tensions could impact the Manufacturing industry index in the near-to-medium term, if they result in a material rise in oil prices.

(Source: STATIN & NCBCM Research)

• The Panama Canal aims to regain vessel traffic carrying U.S. liquefied natural gas (LNG) to Asia as demand in that market rises and a new reservation system allows shippers to lock in slots, following a 65% decline in the transit of its second-most important segment, the Panama Canal Authority told Reuters.
• A U.S. LNG switch to Europe in the aftermath of Russia's invasion of Ukraine, combined with long waiting times and expensive fees to transit through Panama due to severe drought, has kept many LNG ships out of the canal.
• Many gas exporters continue to take longer routes around South America even after the waterway's authority lifted the restrictions this year. The canal is the shortest route to Asia for U.S. gas exporters, whose sales to Japan, China, South Korea, and India have grown substantially in the last decade.
• "In the case of LNG, we lost 65% (of traffic), which is the traffic that now goes through Cape Horn, compared to what we had last year, two years ago," said the Canal's administrator, Ricaurte Vazquez, in an interview in Panama City.
• Europe's large appetite for U.S. LNG and delays authorizing new LNG projects in the United States have been the main drivers of the switch, he added, although the canal's drought-related restrictions also played a key role, shippers said.
• Because the Panama Canal Authority charges a set fee per passage, it can be more convenient for U.S. producers to take longer routes to Asia depending on global LNG prices, delivery terms in contracts, and seasonal demand. However, a recovery in Asian LNG demand, likely to continue next year, might require increased shipments through the canal.

(Source: Reuters)