• Risks to the Mexican, Canadian and American economies are piling up amid a chaotic implementation of U.S. tariffs that has created deep uncertainties for businesses and decision-makers, according to Reuters polls of economists taken this week. U.S. inflation risks, which were already rising, have worsened, leaving the Federal Reserve on the sidelines for several months at least, while for Mexico, Canada and the U.S., recession risks are also mounting, the surveys found.
• U.S. President Donald Trump's administration has threatened 25% tariffs on imports of goods from its two neighbouring trading partners and on Thursday removed them temporarily for a second time in only about six weeks of government.
• This has made it nearly impossible to forecast growth, inflation and interest rates well into the future, economists say, even leaving the immediate Bank of Canada rate decision on March 12 - already likely to be nuanced - too difficult to call for some.
• Economists at top banks and research institutions spoke of chaos when reached out for forecasts, with many expressing exasperations over Trump's on-again-off-again approach to trade policy. "Given this is so uncertain and that there are new announcements every hour or so, it's kind of unclear what the environment is going to look like. It's hard to deny the risk of a recession has intensified," said Jonathan Millar, senior U.S. economist at Barclays in New York.
• Until now, economists have been loath to entirely factor into their forecasts the Trump administration's volte-face on global trade policy, and the added uncertainty over how the change is being implemented is making forecasting even more difficult. Some are even running dual scenarios, one with tariffs and one without, but without much conviction about which is most likely.
• However, nearly every economist - 70 of 74 - polled this week across Canada, the U.S. and Mexico who answered a separate question said the risk of a recession in their respective economy had increased, suggesting the outlook had soured considerably across the continent. The International Monetary Fund said on Thursday U.S. tariffs, if sustained, would have a significant adverse impact on Mexico and Canada.

(Source: Reuters)

• Former central banker Mark Carney won the race to become leader of Canada's ruling Liberal Party and will succeed Justin Trudeau as prime minister, official results showed on Sunday. Carney will take over at a tumultuous time in Canada, which is in the midst of a trade war with longtime ally the United States under President Donald Trump and must hold a general election soon.
• Carney, 59, took 86% of votes cast to beat former Finance Minister Chrystia Freeland in a contest in which just under 152,000 party members voted. "There's someone who's trying to weaken our economy," Carney said of Trump, spurring loud boos at the party gathering. "He's attacking Canadian workers, families, and businesses. We can't let him succeed."
• Trudeau announced in January that he would step down after more than nine years in power as his approval rating plummeted, forcing the ruling Liberal Party to run a quick contest to replace him. "Make no mistake, this is a nation-defining moment. Democracy is not a given. Freedom is not given. Even Canada is not a given," Trudeau said.
• Carney, a political novice, argued that he was best placed to revive the party and to oversee trade negotiations with Trump, who is threatening additional tariffs that could cripple Canada's export-dependent economy. Trudeau has imposed C$30 billion of retaliatory tariffs on the United States in response to tariffs Trump levied on Canada. "My government will keep our tariffs on until the Americans show us respect," Carney said.
• Carney's win marks the first time an outsider with no real political background has become Canadian prime minister. He has said his experience as the first person to serve as the governor of two G7 central banks - Canada and England - meant he was the best candidate to deal with Trump. The prospect of a fresh start for the Liberal Party under Carney, combined with Trump's tariffs and his repeated taunts to annex Canada as the 51st U.S. state, led to a remarkable revival of Liberal fortunes.

(Source: Reuters)

• Carreras Limited (CAR) huffed and puffed and blew through the financial year, registering a 40.9% year-on-year increase in earnings to $6.23Bn for its 2024 financial year¹. CAR’s robust net profit was driven by healthy revenue growth and lower cost of goods sold (COGS).
• The company generated J$19.55Bn in revenues for FY2024, 11.5% higher than the year before. This represents its highest revenue to date and reflects the high demand for its recently launched products (Vuse Go & Vuse Go Max disposable vapes), coupled with a price increase from the second quarter.
• Augmenting the solid topline performance, COGS declined marginally by 3.2% YoY to $8.66Bn, resulting in its gross profit increasing to J$10.89Bn (+26.9%). Meanwhile, operating expenses increased by 8.8% largely due to higher distribution and administrative costs amid higher sales volumes and a broader industry-wide increase in security costs as the company invests in ensuring workforce and asset safety.
• Carreras continues to demonstrate a strong dividend track record with a dividend yield of 8.30%.
• With its strong financial performance and track record of high dividend payments, Carreras’ stock price has increased by 21.0% year to date, closing at J$15.78 per share on Thursday. With the price appreciation, Carreras’s P/E though still below its peers, is converging towards the peer average. The stock trades at a P/E of 12.29x versus the 13.45x Main Market Manufacturing & Distribution Average.

^{_________________________________
1}Caribbean FY2024 report compared the 12 months ended December 2024 to the 9 months ended December 2023 because it changed its financial year-end from March 31 to December 31 to align its reporting period with that of its parent company, British American Tobacco plc. Hence, NCBCM adjusted the 2023 figures to reflect the 12 months ended December 2023 by including the quarter ended March 2023.

(Source: CAR Financial Statements & NCBCM Research)

• For FY2024, GraceKennedy Limited (GK) reported net profit of $8.86Bn, a 5.8% increase over the prior year. GK’s performance reflects solid revenue growth, moderated by rising direct & operating expenses and finance costs.
• Revenues totalled $167.04Bn, representing a 7.8% increase over FY2023. This was largely driven by $131.68Bn from its Food segment (+7.3%), which benefitted from higher volumes and price adjustments. Expansion in its Insurance ($17.49Bn; +13.4%) and Banking & Investments ($11.00Bn; +14.4%) segments also supported revenue growth. However, Money Services declined by 2.5% to $8.62Bn reflecting increased competition in the sector and weaker remittance inflows into the economy.
• Regionally, Jamaica remained GK’s largest revenue generator with $96.72Bn, amid robust domestic demand, followed by the United States and Canada, contributing $21.63Bn and J$8.37Bn, respectively.
• Fueled by higher staff costs, reflecting salary adjustments and inflationary pressures, Direct and operating expenses rose by 7.7% to J$159.06Bn from J$147.46Bn in 2023. Advertising and marketing spending also increased by 21.6% to $4.76Bn, as GK boosted promotional activities to support revenue growth. Rising transportation and distribution costs, tied to both higher sales volumes and ongoing supply chain pressures also contributed to the increase.
• Lastly, finance costs were up 13.0% to $1.95Bn, largely driven by $1.01Bn from the Banking & Investments segments (+28.3%) and the insurance segment of $1.83Bn (+51.4%). The higher finance costs coincide with a YoY increase in the group’s financial liabilities (+6.4%).
• Since the start of the year, GK’s share price has declined by 6.9% to $73.48 and has a P/E of 8.72x, which is below the main market average of 12.58x.

(Source: GK Financial Statements & NCBCM Research)

• Guyana has asked the International Court of Justice to order Venezuela not to proceed with plans to hold elections in the disputed region of Esequibo, saying a vote would violate a prior court ruling, the Guyanese foreign ministry said.
• Venezuela will hold provincial elections on May 25, including for state governors. The government of President Nicolas Maduro last year passed a law creating a new state in the disputed territory, despite the ongoing case at the ICJ over which country Esequibo belongs to and a 2023 court order that Venezuela avoid actions that change the status quo in the territory.
• Guyana said in a statement that the United Nations' top court should prohibit Venezuela from conducting elections in the 160,000-square-km (62,000-square-mile) area, which it said "flagrantly violates" the 2023 order. Guyana said it also requested expedited hearings to prevent what could be "serious and irremediable prejudice" to its rights.
• The Venezuelan communications ministry did not immediately respond to a request for comment. Tensions rose last weekend in the dispute over Esequibo – which comprises more than two-thirds of Guyana – when Guyana said a Venezuela coast guard patrol entered its waters and approached an output vessel in an offshore oil block managed by ExxonMobil.
• The Venezuelan government said the waters they entered are a maritime zone pending delimitation in accordance with international law. A final ICJ decision on the dispute could take years.

(Source: Reuters)

• Brazil's economy is forecast to have moderated in the final quarter of last year due to slower growth in private consumption and investment, a Reuters poll showed. The economy expanded by 0.5% in October-December over the previous three-month period, according to the median estimate of 21 economists polled February 26-March 3. The yearly rate was estimated at 4.1%
• A 0.5% rise would imply a deceleration from 0.9% in the third quarter. "This step down was... led by slower (private) consumption and the first decline in investment in over a year," J.P. Morgan analysts wrote in a report. "Solid government consumption, a slightly positive contribution from net exports, and inventories should have contributed to a positive growth rate at the end of last year."
• The flip side of Latin America's No.1 economy's reliance on federal spending is increased fiscal worries, which have led to a selloff in the markets. At the same time, foreign direct investment increased less than the current account deficit last year, limiting Brazil's economic expansion. On the supply side, LCA 4intelligence economist Bruno Imazumi said he projected quarterly rises of 0.4% in services, 0.1% in industry, and 1.8% in agriculture.
• "Within services, we will see a still strong number for financial intermediation, insurance, supplementary pension and related services subsector," he added. Overall, the gross domestic product data to be released on Friday will probably confirm that economic growth closed 2024 well above weaker initial market estimates.
• Analysts had already upgraded their forecasts throughout last year to account for a solid job market and increased social spending, which countered the negative effect of high interest rates. In January, the latest consensus estimate of a Reuters poll pointed to annual growth of 3.4% for 2024, more than double the 1.6% rate seen at the start of last year.
• For 2025, Brazil's government cut its forecast to 2.3% last month as the central bank continued its monetary tightening cycle. The economic team also lifted inflation projections. Still, a senior government official said last week that the administration would not take exceptional measures to boost growth and reaffirmed its commitment to Brazil's fiscal framework.

(Source: Reuters)

• The number of Americans filing new applications for unemployment benefits fell more than expected last week, suggesting that the labour market remained stable in February, though turbulence lies ahead from tariffs on imports and deep government spending cuts.
• That was flagged by other data on Thursday, March 6, showing layoffs announced by U.S.-based employers jumped in February to levels not seen since the last two recessions amid mass federal government job cuts, cancelled contracts and fears of trade wars.
• "Evidence is mounting that elevated uncertainty about the outlook for federal policies and still-tight monetary policy is pushing redundancies higher," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.
• Initial claims for state unemployment benefits dropped 21,000 to a seasonally adjusted 221,000 for the week ended March 1, the Labor Department said. Economists polled by Reuters had forecast 235,000 claims for the latest week. The decline reversed the prior week's surge, which had lifted claims to a two-month high and was blamed on snowstorms and difficulties adjusting the data for seasonal fluctuations around the Presidents Day holiday.
• A separate unemployment compensation for federal employees (UCFE) program, which is reported with a one-week lag, showed applications rising to a four-year high of 1,634 from only 614 during the week ending February 15.
• For now, the overall labour market continues to plod along. The Federal Reserve's "Beige Book" report on Wednesday described employment as having "nudged slightly higher on balance" since mid-January. Labour market stability is critical to the U.S. central bank's ability to keep interest rates unchanged while policymakers monitor the economic impact of tariffs and an immigration crackdown.

(Source: Reuters)

• Donald Trump pulled back from his trade war with Mexico on Thursday, March 6, temporarily delaying tariffs on many goods from the country once again, but he continued to attack Canada.
• Two days after imposing sweeping tariffs on all imports from his country’s closest trading partners, the US president announced that duties on a wide range of products from Mexico would be shelved until April.
• Trump has already softened the attack on Canada and Mexico, granting carmakers a one-month reprieve after they warned of widespread disruption.
• After a call with Claudia Sheinbaum, the Mexican president, Trump declared that “Mexico will not be required to pay Tariffs on anything” that falls under an existing trade deal between the US, Mexico and Canada known as USMCA. Tariffs are not paid by countries but by importers – in this case, US companies – who buy products from businesses in the targeted countries.
• “This Agreement is until April 2nd,” Trump wrote on his Truth Social platform on Thursday. “I did this as an accommodation and out of respect for President Sheinbaum. Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl.”
• The abrupt reversal and reprieve for Mexico raised immediate questions about the future of the Trump administration’s tariffs on Canada. Trump pointedly attacked Justin Trudeau, his Canadian counterpart, shortly before announcing the temporary exemption for Mexican exports.

(Sources: Reuters)

• Local Cement manufacturer, Carib Cement Company Limited (CCC) generated J$5.95Bn in earnings for FY2024, 5.9% higher than in FY2023. Marginally higher topline performance – notwithstanding Hurricane Beryl¹,   marginally lower direct costs and higher financial income which compensated for increases in operating expenses, were behind the modest growth in earnings.
• Revenues came in at J$27.91Bn, 0.7% higher year-over-year as increases in sales of cement, clinker and other goods and services locally, in the Caribbean and Central & North America largely neutralized by an 11.2% decline in Q3 sales. The Q3 sales decline occurred because Hurricane Beryl and intense weather delayed the resumption of production after its annual maintenance shutdown.
• Cost of goods sold (COGS) fell marginally (0.5%) and supported a 3.9% gross profit improvement to J$11.58Bn. The marginally lower COGS, reflect lower direct costs in Q1, Q2 and Q4, which were largely offset in Q3 when raw material costs were higher as production eventually rebounded following Beryl and the company purchased cement during its scheduled maintenance shutdown.
• Unlike COGS, operating costs climbed by 5.7% due to higher administrative, selling, distribution and logistics expenses. Despite this, operating profit still increased by 1.4% to J$8.58Bn.
• Looking ahead, CCC’s management remains confident about the future, particularly the growth potential within the local construction sector. Moreover, the completion of CCC’s major kiln expansion project, now in its final stages, is expected to further strengthen its market leadership, minimise supply disruptions from unexpected events like natural disasters and allow a sustainable cement export programme, which will bring additional foreign exchange earnings.
• Year-to-date, CCC’s stock price is up 2.94%, closing at J$84.05 on Tuesday and a P/E of 11.72x.  This is below the Main Market Energy, Industrial and Materials Sector average P/E of 13.93x.

__________________

¹Hurricane Beryl and other adverse weather conditions that disrupted cement production and resulted in lost sales during the second half of the financial year.

(Source: CCC Financial Statements & NCBCM Research)

• Supreme Ventures Limited (SVL) recorded net earnings of J$1.78Bn for FY2024, down 26.7% from FY2023 as rising expenses, increased finance costs, and a dip in other income weighed on the bottom line.

• SVL’s profit dip came despite a 3.5% increase in total revenues to J$52.67Bn. Higher revenues were supported by stronger performance in non-fixed odd wagering games and steady results from fixed odd wagering games net of prizes. However, Hurricane Beryl induced an approximately J$1.0Bn loss in gross ticket sales, which impeded the year-over-year growth and impacted its receivables portfolio.
• Other income was also down 25.9% to $0.67Bn amid lower gains on its financial assets.
• Direct costs rose by 3.2% to J$40.32Bn, driven by higher payouts for betting prizes, increased agent commissions, and greater contributions to regulatory bodies. These rising costs put pressure on margins, though gross profit still edged up to J$12.34Bn.
• Higher direct costs were compounded by operating expenses, which climbed 7.9% to J$9.11Bn. This reflected higher staff costs, increased spending on marketing and business development, and larger outlays for repairs and maintenance. These rising overheads weighed on operating profit, which declined by 8.3% to J$3.56Bn.
• With SVL’s stock price closing at J$19.06 at the end of Tuesday, the stock is down 23.0% year-to-date. This implies a P/E of 28.20x, which is higher than the 12.53x main market average.

(Source: SVL Financial Statements & NCBCM Research)