• 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)

• European ministers will begin debating on Friday how and when to start trade negotiations with the United States, aware that U.S. President Donald Trump may impose punitive tariffs on EU car imports if the bloc waits too long.

• Germany is keen to start as soon as possible, while France is reluctant to engage with Trump.

• The United States and Europe ended a stand-off of several months last July when Trump agreed to hold off on car tariffs while the two sides looked to improve trade ties.

(Source: Reuters)

• Fitch Solutions expect consumer price growth to recover over the coming quarters as oil prices edge higher. However, producer prices are likely to remain subdued amid weakening demand.

• The surprise recovery in exports growth in January is not expected to be sustained over the coming months as tariffs are likely to remain in place while China and the US work to reach a trade deal.

• Strong support for credit growth over the coming months from looser monetary policy is also expected.

(Source: Fitch Solutions)

• For the third quarter ended December 31, 2018, JMMB Group limited recorded net profit of $3.02Bn (EPS: $1.82), which was 18% higher than the corresponding period last year.

• Notably, there was a 12.13% increase in net operating revenue from $12.28Bn in 2017 to $13.77Bn which was due mainly to an improvement in fees and commission, net interest income and foreign exchange trading gains.

• In particular, the company’s operating expenses for the period was $9.4Bn, which represented an increase of 8.9% over the corresponding period of 2017.

• JMMB’s stock price has lost 1.7% in value year to date and currently trades at a P/E of 13.51x earnings which is below the Main Market financial sector average of 18.07x earnings.

(JMMB Group Financials)

• For the year ended December 31, 2018, the bank recorded net profit of $2.80Bn (EPS: $0.66), which was $1.02Bn or 57% higher than the corresponding period of 2017.

• Notably, there was an 8.7% increase in revenue from $6.8Bn in 2017 to $7.4Bn which was due mainly to an improvement in fees and commission and continued net gains on foreign exchange trading.

• In particular, the company’s operating costs for the period was $9.1Bn, which represented an increase of $693.6Mn or 8% over the corresponding period of 2017.

• Sagicor’s Banks’s cumulative redeemable preference shares have remained unchanged at $1 and has a dividend yield of 8.25%.

(Source: Sagicor Bank Jamaica Financials)

• Although high taxes on Caribbean air travel remain a concern, the region’s tourism watchdog is cautiously optimistic that the industry is set to continue to deliver solid results into 2019.

• Delivering a review of the Caribbean tourism industry, Acting Director of Research and IT at Caribbean Tourism Organization (CTO) said with a strong performance during the last four months of 2018, including a robust showing by countries impacted by the 2017 hurricanes, “the evidence suggests that Caribbean tourism is on the upswing”.

• Despite registering a 6.3% decline, to reach 13.9Mn American tourists last year, the US remains the region’s largest source market for tourists. But it was Canada that outperformed all other markets last year with 5.7% growth or 3.9Mn visits, mainly due to seat capacity to the region.

• The CTO is projecting that tourist arrivals will increase by between six and 7% in 2019, as the damaged infrastructure in the hurricane-impacted destinations returns to capacity. Cruise arrivals are also projected to expand by a further 4 to 5%.

(Source: Barbados Today)

• Fitch Solutions expects more room to run for the nascent recovery in China’s foreign exchange reserves, which was extended for a third month in December 2018.

• Positive valuation effects from waning USD strength and a reduced need to support a stabilizing CNY are likely to outweigh subdued exports growth over the coming months.

• They are mildly bullish on the CNY in the short-term as positive sentiment could be bolstered further by an extension to the March 1 deadline for the U.S and China to agree on a trade deal.

(Source Fitch Solutions)

• British Prime Minister Theresa May is preparing to compromise with the European Union over the future of Ireland’s border, with just two weeks left to save her Brexit deal.

• On Thursday, members of the pro-Brexit European Research Group of Conservatives inflicted another embarrassing parliamentary defeat on the premier after they refused to endorse her approach to resolving the deadlock.

(Source Bloomberg)

• The Government plans to lobby the support of the international community, particularly the United States, for the Jamaican cannabis industry’s development.

• Industry, Commerce, Agriculture and Fisheries Minister, Hon. Audley Shaw, says this partly stems from a reluctance by local banks to fund the industry’s growth, due to fear of international de-risking, citing this as a major impediment with serious economic implications for Jamaica.

• The Minister stated that the government will be using all available diplomatic resources, including our Ambassador in Washington DC, to mount a lobbying effort to the Government of the United States, primarily through its Treasury Department, to address this very important matter.

• Mr. Shaw noted that while de-risking mainly affects smaller developing countries, like Caribbean states, the bigger developed nations “have managed to figure out a way” around the issue.

(Source: JIS)