• Tropical Battery (TROPICAL) announced its intention to graduate from the Junior Market to the Main Market of the Jamaica Stock Exchange (JSE) before the end of this year, subject to regulatory approvals.
• JSE’s listing requirements set a $500Mn maximum participating equity capital J$500m for a junior market company post-IPO and during its life on the Junior Market. Since its Junior Market listing in September 2020, Tropical Battery has experienced substantial growth with a total market capitalization of $2.8Bn meaning it surpassed the junior market's $500Mn capital requirement given that a minimum of 20% of each company must be sold at IPO.
• Additionally, revenue is forecasted to grow more than threefold, from $1.8Bn in 2020 to $5.7Bn for this fiscal year ending September 30, 2024, with over 50% of its revenue earned in US dollars.
• TROPICAL’s strategy comprises transforming from a battery and automotive distributor into an energy solutions provider across Jamaica and the Caribbean. It has pursued this through acquisitions, organic growth, new services, and partnerships, supported by new subsidiaries focused on electric vehicles, renewable energy, and financial products. Reflective of this strategy, TROPICAL has a presence in Jamaica, the Dominican Republic, and the United States (Silicon Valley, California).
• In addition to graduating to the local main market, Management indicated that once the company continues to show significant growth, it intends to eventually list the company on the US market.
• Management anticipates that the benefits of transitioning to the Main Market would include increased visibility and credibility both locally and internationally, a broader investment base, access to more capital to fund strategic initiatives, enhanced corporate governance and continued growth and expansion. However, transitioning to the main market after just 4 years on the junior market implies that TROPICAL would miss out on 6 years of tax benefits, given the 10-year tax incentive offered to junior Market companies.

(Sources: JSE & Tropical Battery)

• IronRock Insurance Company Limited (ROC), resumed trading of its ordinary shares, effective Tuesday, July 23, 2024.
• IronRock filed its outstanding 2023 Audited and 1st Quarter (Q1) Financial Statements on July 22, 2024, therefore remedying its breaches of the JSE’s Junior Market Rule Appendix 2, Part 4 (1) (e) & 4 (2) (e). As a result, the JSE has lifted the suspension of trading in the ordinary shares of ROC, as the Company is now compliant.
• ROC’s Q1 2024 results saw insurance revenue increase by 29% over Q1 2023 to $401.4Mn, driven by successful reinsurance treaty renewals and growth in Marine Cargo. Its net profit rose to $5.52Mn (net profit margin of 1.4%) from a loss of $11.63Mn in Q1 2023.
• Likewise, Audited results showed FY2023 insurance revenues increased by 40.7% to $1.40Bn and net profit increased 149.7% to 83.94Bn at a net margin of 6.0% up from 3.4% in FY2022.
• ROC’s stock price closed at $2.18 before its suspension on July 2nd. In light of the positive financial performance and resumed trading activity, ROC’s share price has since increased by 37.6%, closing Monday’s trading session at $3.00. At this price, the company trades at a P/E of 6.4x, which is below the Junior Market Financial Sector Average of 14.2x.

(Source: JSE and NCBCM Research)

• The Export-Import Bank of the United States (EXIM) has formalized a significant partnership with the Republic of Trinidad and Tobago, marking a milestone in US-Caribbean relations. EXIM President and Chair Reta Jo Lewis recently met with Trinidad and Tobago’s Prime Minister Keith Rowley and Minister of Finance and the Economy Colm Imbert to sign a Memorandum of Understanding (MOU) valued at US$500Mn.
• The agreement aims to develop opportunities and support financing across several key sectors including maritime domain awareness, cybersecurity, renewable energy, and water sanitation. 
• In addition to the MOU, EXIM has extended a $150Mn Letter of Interest to Trinidad and Tobago’s Ministry of Finance. A Letter of Interest (LI) is an indication of Ex-Im Bank's willingness to consider financing for a given export transaction. This $250Mn funding is designated for acquiring maritime vessels and aircraft to enhance the nation’s maritime domain awareness, search and rescue capabilities, and border security. 
• The funds should facilitate access to US-manufactured goods and services, along with technical support, for various national needs including security, renewable energy, climate change mitigation, and small business support. 
• The MOU and LI reflect a significant boost in confidence from the US towards Trinidad and Tobago’s government and its people.

(Sources: Caribbean National Weekly and EXIM)

• As labour shortages continue to affect all sectors across Guyana, a recent Investment Climate Report released by the United States (US) State Department has found that the country has a major informal economy that accounts for between 30 and 50 per cent of the job market.
• According to the report, the major informal economy was partly due to many Guyanese pursuing self-employment in unregulated jobs. Additionally, businesses continue to report significant challenges in staff recruitment and retention.
• Noting that the private sector has repeatedly called for immigration reform to increase the supply of skilled labour, the US report said companies entering Guyana should consider training and capacity-building opportunities for their employees.
• It was further documented that Guyana’s labour market is tightening due to high investments in the oil and gas sector. Moreover, the Local Content Act “creates pressure on an already tight labour market by offering legal protections and incentives for Guyanese companies to service the oil and gas sector, fueling the flight of labour and investment to the industry and raising the risk of the resource curse.”
• It also found that Guyana’s brain drain was evident, noting that “at 89 per cent, Guyana has one of the highest emigration rates in the world for nationals with a university degree.” Notably, professionals like nurses and teachers were found to be emigrating in high numbers. Nevertheless, it has recognized efforts being employed by the Government to address the situation.

(Source: iNews Guyana)

• Federal Reserve efforts to overhaul a key emergency lending facility historically viewed with anxiety by banks are now being joined by potential congressional action. On Friday, Democratic Senator Mark Warner introduced legislation, to overhaul the Fed's discount window, a long-running tool that provides fast, collateralized loans to deposit-taking banks.
• Despite the Fed working to make sure banks are ready and willing to use the discount window, banks have long shunned it, fearing that using it will send a signal of distress to their peers. That long-standing stigma stood out in March 2023 when several banks ran into trouble and spurred fears about the overall state of the banking system.
• Since then, Fed officials have been seeking to make sure banks are prepared to use the discount window and have signalled some confidence their efforts are working. Warner's bill could bolster that as it would mandate all, but the smallest banks, to test their discount window access and require regulators to reflect banks' ability to use the facility when evaluating their liquidity.
• The discount window "has deficiencies that have led to severe stigma, increasing the risk of banking panics and deposit runs," former New York Fed President William Dudley said in Warner's statement announcing the bill. "This bill will provide a good basis for regulators to implement operational improvements and reduce frictions that hinder the effectiveness of [the] discount window."
• Earlier this month, Dallas Fed President Lorie Logan said more than 5,000 deposit-taking banks did the paperwork needed to access the discount window, with banks having pledged $3 trillion in collateral for potential loans, up from $1 trillion last year.

 (Source: Reuters)

• Optimism about global growth prospects this year and next is building among hundreds of economists polled by Reuters. Risks are still tilted toward higher inflation, even as they cling to their forecasts for interest rate cuts.
• While most major central banks successfully tamed sky-rocketing inflation rates with rapid rate hikes last year, a resilient global economy with strong employment and wage growth has kept risks of a price pressure resurgence alive.
• A 56% majority of the economists (114 of 202) that participated in a global poll covering nearly 50 top economies said inflation was more likely to be higher than they forecast for the remainder of the year than lower. So too with rates.
• The global economy was forecast to grow 3.1% in 2024 and 2025, an upgrade from the 2.9% and 3.0% forecast in an April poll, roughly aligning with the International Monetary Fund's latest prediction.
• Growth rates for 24 of the 48 top economies surveyed were upgraded from three months ago. 13 of the 24 were developed economies, where there were concerns about flagging demand while the remaining were 11 in emerging economies.
• 18 economies saw a downgrade and 6 were left unchanged. Still, according to the survey, economists expect the U.S. Fed, and the Bank of England, to cut rates twice this year and the European Central Bank thrice.

 (Source: Reuters)

• According to data on the Producer Price Index (PPI) released by the Statistical Institute of Jamaica (STATIN), output prices in the Mining and Quarrying industry increased by 0.6% for June 2024 due to a similar 0.6% increase in the index for the major group ‘Bauxite Mining & Alumina Processing’.
• For the Manufacturing industry, there were gains in the major groups: 'Food, Beverages & Tobacco' saw a 1.2% rise, 'Chemical and Chemical Products' went up by 0.6%, and 'Paper and Paper Products' increased by 1.5%. However, these were offset by a 1.1% decline in the index for 'Refined Petroleum Products', which resulted in an over gain in the index for the Manufacturing industry of 0.6%.
• Despite the June 2024 increase in the index, the point-to-point index for the Mining & Quarrying industry declined by 2.9%. This was a result of a 3.2% fall in the index for the major group ‘Bauxite Mining & Alumina Processing’.
• The point-to-point index for the Manufacturing industry increased by 3.4%. Increases in the major groups 'Refined Petroleum Products' (10.8%) and 'Food, Beverages & Tobacco' (2.6%) contributed to this upward movement.
• Geopolitical tensions in Europe and the Middle East could disrupt oil prices and supply chains, raising producer costs. However, the global shift to renewables and increased oil production, especially by the US, might lower demand and prices. Additionally, OPEC+ plans to unwind voluntary cuts sooner than expected, raising concerns about market absorption in 2025.
• 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 industries being tracked are Manufacturing Industry and Mining and Quarrying.

(Sources: STATIN & NCBCM Research)

• The Government of Jamaica has moved to provide temporary relief from customs duty and General Consumption Tax (GCT) on goods imported for rehabilitation works linked to Hurricane Beryl. The relief will run from July 4 to August 23
• The Ministry of Finance and Planning noted that the move arose from the activation of the Disaster Risk Management Act and the impact of Hurricane Beryl on Jamaica.
• The Minister of Finance and the Public Service approved goods, which the Commissioner of Customs is satisfied are being imported for relief and rehabilitation, to be relieved of import duty and general consumption tax.
• This is in accordance with 30B of the Second Schedule to the CustomsTariff and section 47 of the GCT Act.
• These suggest that the Minister has the authority to waive, remit, or refund all or part of the tax payable under this Act to a person liable for tax, upon receiving a written application from them. This can be done if the Minister deems it justifiable in the given circumstances. Any such waiver, remission, or refund may be conditional upon terms and conditions the Minister considers appropriate.
• Beryl became the earliest storm to develop into a Category 5 hurricane in the Atlantic and peaked at winds of 165 mph (270 kph). It weakened to a still-destructive Category 4, with maximum sustained winds of 150 mph, just hours before impacting Jamaica on Wednesday, July 3, 2024.

 (Source: Caribbean National Weekly)

• Consumer price inflation (CPI) in Barbados will fall to an estimated average of 3.9% in 2024 and 3.0% in 2025, owing mainly to stabilising commodity prices says Fitch Solutions. This forecast is down significantly from average price growth of 5.0% in both 2022 and 2023.
• Slowing inflation will provide support to real household incomes, private consumption, and wider economic growth in Barbados. Real GDP growth is forecasted to grow by 3.1% in 2024 and 2.1% in 2025.
• That said, despite accelerating consumer spending due to the impacts of a robust tourism sector and recovering real incomes, core inflation will be kept in check by government fiscal austerity efforts, which are in line with International Monetary Fund (IMF) loan conditions.
• However, risks to price growth are tilted to the upside, with the potential for any commodity-price driven shock to push up inflation and slow Barbados’ economic recovery. As an island economy, Barbados imports 95% of its energy (mainly hydrocarbons) and around 85% of its food from abroad and is therefore highly exposed to the global rise in commodity prices.

(Source: Fitch Solutions)

• Consumer prices in Brazil rose more than expected in the month to mid-July on higher transportation costs, official data showed on Thursday, July 24, likely sealing the deal for the central bank to keep interest rates on hold at a policy meeting next week.
• Prices, as measured by the IPCA-15 index, were up 0.30% in the period, statistics agency IBGE (Brazilian Institute of Geography and Statistics) said, slowing from 0.39% in the previous month but overshooting the 0.23% increase forecast by economists polled by Reuters.
• In the 12 months to mid-July, inflation in Latin America's largest economy stood at 4.45%, up from 4.06% the month before and exceeding the 4.38% expected by economists in the Reuters poll.
• Jason Tuvey, an economist at Capital Economics, said that coming alongside fiscal concerns and recent weakness of the Brazilian real, the latest inflation data backed a view that the central bank will not resume rate cuts this year.
• Brazil's central bank targets inflation at 3%, plus or minus 1.5 percentage points. Last month, the monetary authority unanimously halted a rate-cutting cycle, citing higher inflation expectations and fiscal struggles.
• The next decision is scheduled for July 31, and markets believe the bank will maintain its key rate at 10.50%.

 (Source: Reuters)