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SME eSmart- Powering Your Potential Find out more today by calling: (868)-627-8879 ext. 228 or email: [email protected]
▪ Government of Barbados rating downgraded to CariBBB-
▪ Saint Lucia Electricity Services Limited’s rating reaffirmed at CariBBB
▪ Endeavour Holdings Limited’s rating reaffirmed at CariA+
▪ Gulf City Limited’s rating reaffirmed at CariA+
▪ National Flour Mills Limited’s rating reaffirmed to CariA-
▪ Telecommunications Services of Trinidad and Tobago Limited’s rating reaffirmed to CariA
▪ Colonial Fire and General Insurance Company Limited’s initial rating assigned at CariA
▪ Home Mortgage Bank’s rating reaffirmed at CariA
▪ NCB Financial Group Limited’s initial corporate credit rating assigned at CariA
▪ National Commercial Bank Jamaica Limited’s rating upgraded to CariBBB+
▪ NCB (Cayman) Limited’s initial corporate credit rating assigned at CariA
▪ The Government of the Commonwealth of Dominica placed on Rating Watch – Developing
▪ Dominica AID Bank’s rating downgraded by 1-notch and placed on Rating Watch – Negative
OUR UPCOMING WORKSHOPS!
IFRS 9 for Banks & Other Financial Institutions 31st January 2018 Trinidad
Benefits of a CariCRIS Rating to an SME:
Latest Rating Actions by CariCRIS
▪ Access a loan or line of credit from a financial institution
▪ Access credit from international suppliers
▪ Improve your business operations for greater efficiency and
profitability
DATE
WORKSHOP
COUNTRY
Please visit our website at www.caricris.com for the detailed Rationales on these and other ratings
CariCRIS’ credit ratings and daily Newswire can also be found on the Bloomberg Professional Service.
REGIONAL
Trinidad and Tobago
T&TEC examines rate hike to offset $bn annual wage bill
The T&T Electricity Commission has been operating at a loss for the past
seven years and its chairman is saying that the board of directors is now
looking at whether there is need to trim the fat at the utility which has
close to 3,000 employees an annual wage bill of over a billion dollars.
RBC TT profits jump 60%
RBC Royal Bank (Trinidad and Tobago) has recorded an after tax profit of
$191.3 million for its financial year ended October 31, 2017.
TTNGL dips $0.67
Overall Market activity resulted from trading in 16 securities of which 4
advanced, 6 declined and 6 traded firm.
Nedco offers VSEP
EMPLOYEES of State-owned National Entrepreneurship Development
Company Ltd (Nedco) have been offered Voluntary Separation (VSEP)
options.
A new airline to Tobago? ...company seeking investors
THE Chief executive officer of Sterling Tobago Airways Limited, which is
seeking investors to establish an air bridge to rival Caribbean Airlines,
believes that his company could make a TT $24million profit within a year
of operations.
Grande businessmen back Toco Highway
Sangre Grande residents have given a positive vote for the proposed
highway from Cumuto to Toco to help alleviate some of the travel
struggles of many making the inter-island transit. There have been many
hiccups with finding a reliable ferry source between the two islands for
many months. The only inter-island vessel is now the Trinidad and Tobago
Express, the TT Spirit has been dry docked.
Republic Financial Holdings records $340M profit
Republic Financial Holdings Ltd (RFHL) has recorded TT$340 million in profit
attributable to shareholders for the quarter ending December 31, 2017.
Barbados
IMF warns economy is slowing down
The performance of the Barbados economy is predicted to worsen this
year, dealing a staggering blow to Government’s efforts to generate
confidence in the electorate.
Haynes: Pay increase not recommended right now
Governor of the Central Bank of Barbados Cleviston Haynes today
warned Prime Minister Freundel Stuart that a pay rise for public servants
would deal a crippling blow to Government’s fiscal adjustment efforts.
Jamaica
High-level EU team arrives in Jamaica today
STEFANO Manservisi, director-general for International Cooperation and
Development in the European Commission, based in Brussels, is leading a
high-level European Union team to Jamaica, starting today.
STATIN says unemployment at its lowest in a decade
THE Statistical Institute of Jamaica (STATIN), in a release yesterday, said
that the declining unemployment rate is at 10.4 per cent, the lowest it has
been since October 2008.
Guyana
27 expressions of interest in GPL’s natural gas power plant
At least five Chinese companies are among 27 firms which have
expressed interest in operating the Guyana Power and Light (GPL)’s
natural gas-fired power plant, under a 25-year agreement, in Demerara.
Dominica
Jolly’s to acquire Oil of Ojas
“I had a divine dream, a revelation”. Twenty-two years ago, this was the
motivation behind Mr. Anthony Toulon’s creation, Oil of Ojas. A household
name in Dominica and the region, many people store a bottle in their
medicine cabinet. Today, in a bid to strengthen its foothold as a
manufacturer of safe and trusted all natural products, Jolly’s
Manufacturing and Toulon agencies announces that Jolly’s
manufacturing, a subsidiary of the parent company, Jolly’s Pharmacy will
acquire this multi-purpose essential oil.
Dominica continued
More jobs added to gov’t job program
The government is to expand a program that will be providing jobs to
residents in the wake of Hurricane Maria, Prime Minister Roosevelt Skerrit
has announced.
Gov’t donates $3.7-million for Clear Harbor renovation
The Government of Dominica has donated $3.7-million which will go
towards the renovation of sheds which house the Clear Harbor Call
Center which is located at the Industrial Estate in Canefield.
The Bahamas
$1m Factoring Scheme In Sme Funding 'Firsts'
A "first ever" $1 million accounts 'factoring' scheme aims to aid "well over
100" Bahamian small businesses immediately following its summer 2018
launch. Omni Financial Group, the Bahamian payments solutions provider,
yesterday hailed its partnership with the Inter-American Development
Bank (IDB) as potentially boosting cash flow, growth and customer base
for local micro, small and medium-sized enterprises (MSMEs). With the IDB's
Multilateral Investment Fund (MIF) providing the financing, Omni will
effectively act as its 'executing agency' by making small loans secured
against the accounts receivables (debts) owed to qualifying Bahamian
MSMEs by their clients.
Rbc's Middle Class Mortgage Appetite 'Severely Diminished'
A ROYAL Bank of Canada (RBC) executive yesterday said its appetite to
lend mortgages to middle and lower class Bahamians was "substantially
diminished" due to inadequate market infrastructure. Tim Rider, RBC
Caribbean's senior vice-president of sales, told the Royal Fidelity Economic
Outlook that as a result the Canadian-owned bank was now focused on
"affluent" borrowers when it came to home lending. With many potential
borrowers too heavily indebted to take on a mortgage, Mr Rider also
pointed to the continuing absence of a Bahamian Credit Bureau as an
example of 'inadequate market infrastructure'.
Gb Chamber Chief Fears More Closures
THE Grand Bahama Chamber of Commerce's president yesterday
expressed concern that further Freeport businesses may close following
the Prime Minister's more downbeat appraisal on the Grand Lucayan sale.
St. Lucia
Government provides update on investment projects for the South
The south of the island is earmarked for several major projects which have
already commenced or will commence in 2018.
St. Kitts and Nevis
Minister Grant lauds Development Bank for spreading the national
economic pie
When the Verchilds High School held its 25th anniversary dinner on
Saturday evening December 16 last year, the organising committee did
not have to look far for a venue. From a business standpoint their locality
had come of age, as the event that catered for nearly 200 persons was
held in Old Road.
Haiti
Brothers Investment Group International wants to invest in the country
Saturday at the Sinai Temple in Hollywood, Florida, the "Brothers
Investment Group International, LLC" a private community development
company, dedicated to improving Haitian-American communities,
composed of 200 members of the Haitian Millionaires Club, had gathered
for its first Haitian Millennium Gala more than 1,000 participants.
Other Regional
Geothermal energy can fuel the future of the Eastern Caribbean
Analysis by Judith Ephraim from the OECS Commission for the London
School of Economics and Political Science
US overtakes Cayman Islands in financial secrecy index
The United States has pushed the Cayman Islands into third place in the
global financial secrecy charts from the Tax Justice Network. The US is now
listed as the second largest tax haven in the world, behind Switzerland.
Eastern Caribbean-Southeast Asia Economic and Cultural Chamber
appoints business envoy to Middle East and Pakistan
Dr Hussain Farooq, president of HF Corporation, a citizenship and
investment advisory firm, has been appointed as the official business
envoy to Middle East and Pakistan by the Eastern Caribbean-Southeast
Asia Economic and Cultural Chamber.
INTERNATIONAL
United States
Oil rises as OPEC compliance eclipses boom in US output
Oil prices rose on Thursday after a survey showed OPEC’s commitment to
its supply cuts remains in place, even as U.S. production topped 10 million
barrels per day for the first time since 1970.
Dollar bounce only brief despite more hawkish Fed
The dollar briefly clawed back some of its recent falls on Thursday after the
Federal Reserve said inflation was likely to rise this year, but with expected
monetary tightening priced in, traders are waiting to see if upcoming
data will give the greenback more than a brief respite.
United Kingdom
All Brexit economic forecasts were wrong, British minister says
Brexit minister David Davis rekindled a debate about the credibility of the
government’s own forecasts by saying on Thursday that every economic
prediction on the British economy since the EU referendum has been
wrong.
Sterling climbs as investors' political jitters ease
Sterling strengthened on Thursday, recovering from losses earlier in the
week, as concerns over Prime Minister Theresa May’s leadership eased
and expectations grew that the Bank of England to take a more hawkish
tone in its meeting next week.
Europe
European shares slip at end of strong month
European shares fell on Wednesday as investors locked in profits at the
end of a strong month while results from some of the region’s biggest
names also weighed.
German industrial workers stage second 24-hour strike
Industrial workers in Germany began a second day of 24-hour strikes over
pay and working hours on Thursday, affecting companies including
carmakers Volkswagen (VOWG_p.DE) and Ford (F.N).
Japan
Nikkei rises for first time in 7 days, helped by softer yen, upbeat earnings
Japan’s Nikkei share average rose on Thursday, rebounding from a six-day
losing streak and pushing most sectors into positive territory, as a weaker
yen and upbeat corporate earnings drove the benchmark index higher.
Japan steelmakers' profits surge; Kobe Steel reinstates forecast
Japanese steelmakers, led by Nippon Steel & Sumitomo Metal Corp, on
Thursday reported a surge in nine-month earnings, shrugging off an
industrial quality scandal as Kobe Steel reinstated its annual net profit
forecast.
Global
Equities battle rising global bond yields to snap end-Jan losing streak
European stocks rose on Thursday after three days of losses, although U.S.
and German bond yields near multi-year highs checked gains in world
stock markets and kept them from testing recent record highs.
Factories start 2018 on solid footing
Factories across the globe got off to a strong start this year, with
manufacturing activity in most countries gaining momentum and hitting
multi-year highs.
South Korea complains to U.S. about tariffs on washing machines, solar
panels
South Korean trade representatives have made a strong complaint to the
United States about the “unfairness” of its safeguard measures against
imported washing machines and solar panels, the Asian nation’s trade
minister said on Thursday.
T&TEC examines rate hike to offset $bn annual wage bill Thursday 1st February, 2018 – Trinidad and Tobago Guardian
The T&T Electricity Commission has been operating at a loss for the past
seven years and its chairman is saying that the board of directors is now
looking at whether there is need to trim the fat at the utility which has
close to 3,000 employees an annual wage bill of over a billion dollars.
Officials of the public utility company appeared before the Public
Accounts Committee of Parliament yesterday when concerns were raised
about issues of productivity, and absenteeism at the company which has
been unable to pay its bills to the National Gas Company for the supply of
natural gas.
T&TEC chairman Keith Sirju admitted the company has been operating at
a loss since 2011. He said the annual wage bill stood at $900m, overtime
claims $120m and payment to contractors was $100m.
The utility’s financials came into focus yesterday when Sirju and Ramsook
and other top company officials appeared before the PAC to discuss the
audited financials of the commission for the period 2012 to 2015.
Sirju revealed that from 2011 to present, T&TEC’s income cannot meet its
expenditure, “every year for the past seven years we are running at a loss
that’s a hurdle that has to be overcome.”
He said the Board is now looking at “whether there is fat to be trimmed.”
And the Board is also looking at “whether it is related to the price at which
we sell electricity which has not been adjusted for eight years.”
In recent times, two other public utilities have come into the public
microscope. WASA’s management has also admitted that the company
was overstaffed by as much as 2,000 workers and TSTT which has been a
profitable state enterprise has began to cut costs by closing several of its
outlets.
The action by TSTT has prompted protests by the representing
Communication Workers’ Union.
TSTT says it has offered the workers the opportunity to be redeployed
elsewhere and given other opportunities.
T&TEC General Manager Kelvin Ramsook told the parliamentary
committee yesterday that the utility is now in discussions at the Ministry of
Labour with the Oilfields Workers’ Trade Union seeking to reclassify
contract “drivers” as craftsmen to increase the pool of crews and to
increase productivity.
“We don’t want to send anybody home. Through attrition, people will go
but I have 215 people with the position ‘drivers’ that I could have 100 two-
man crews. The craftsman can get higher pay if he gets to a technical
level he does not have to lose his job,” Ramsook said.
He said they had looked at other territories including Jamaica, Barbados
and Florida Flight and Power. “We have given the evidence, we not
saying we sending anybody home. We will train those who want to be
trained,” he said.
The matter is now at the Ministry of Labour, he said, adding that “this will
significantly solve the productivity issue that we have, what we want are
linesmen, electricians, crew supervisors, all of them must be able to drive a
vehicle and get on the job site.”
The issue of absenteeism at the Commission was so drastic that the
company had to “cut pay for people on leave.”
“When we do checks, you on leave (sick leave) but you out there doing
something else. When you are home you should be recuperating and
going to the doctor,” he said.
In addition, the utility, which says it places a high priority on the reliability
of supply to customers, is paying for 400 megawatts of electricity which it is
not using and is also facing an increase in the price for natural gas which
it pays to NGC. T&TEC owes NGC billions of dollars for natural gas.
STATE COMPANIES OWE $M
While T&TEC moves on the average consumers by disconnecting their
electricity supply at a cost, the PAC heard that it’s not the same for State-
related companies which owe millions.
Sirju said, “the breakdown shows a lot of delinquent customers, WASA, TSTT
sometimes Petrotin and the like.”
The TSTT debt was put at $51 million and is part of a dispute for pole rentals
which the Commission hopes will be resolved soon.
Sirju admitted that one of the challenges the Commission faces is that it
cannot turn off power from WASA.
A private company Desalcott which provides water to WASA owes T&TEC
$36 m.
Ramsook told the PAC that in analysing the records, 23 per cent of the
Commission’s expenditure is “related to salary and wages,” but the
majority is related to conversion and gas generation, where the utility has
“little control over.
NEW INITIATIVES
The Commission plans to introduce solar street lights in the Manzanilla
area. Ramsook said, “the process is completed and we are waiting for
final approval.”
Ramsook said 1.5 per cent of the population is without electricity and for
consumers with power the Commission strives to ensure that power
outage last no longer than an average one and a half hours. In Tobago,
the average is 2.7 hours, something which he said the Commission is
hoping to improve to get to the national average of 1.5 hours.
<< Back to news headlines >>
RBC TT profits jump 60% Thursday 1st February, 2018 – Trinidad and Tobago Guardian
RBC Royal Bank (Trinidad and Tobago) has recorded an after tax profit of
$191.3 million for its financial year ended October 31, 2017.
The profit represents a 59 per cent increase from its 2016 figure when the
company registered net income after tax of $119.8 million.
Commenting on the bank's 2017 performance managing director Darryl
White said that strong risk management and cost containment initiatives
bolstered its financial position
"We were able to improve earnings through improved asset quality from
our sound risk management practices and lowered structural costs from
ongoing cost management initiatives. The Bank continues to be well
capitalized with a capital adequacy ratio of 15.1 per cent which exceeds
regulatory requirements"
According to White's statement, cost management initiatives led to a
reduction in the bank's non-interest expenses by $33.9 million, which
resulted in a 6.2 per cent improvement in RBC's efficiency ratio year on
year.
He added that the bank was able to improve its 2017 business
performance through "core asset growth, improved asset quality and
operating efficiency, despite the continued economic challenges in
addition to lower margins from a highly competitive local market"
<< Back to news headlines >>
TTNGL dips $0.67 Thursday 1st February, 2018 – Trinidad and Tobago Guardian
Overall Market activity resulted from trading in 16 securities of which 4
advanced, 6 declined and 6 traded firm.
Trading activity on the First Tier Market registered a volume of 326,314
shares crossing the floor of the Exchange valued at $9,272,160.64.
TTNGL was the volume leader with 96,007 shares changing hands for a
value of $2,576,828.80, followed by Guardian Holdings with a volume of
93,718 shares being traded for $1,608,752.25.
Trinidad Cement Limited contributed 46,495 shares with a value of
$173,821.25, while Republic Financial Holdings added 41,534 shares
valued at $4,215,701.00.
Bourse Brazil Latin Fund registered the day's largest gain, increasing $0.30
to end the day at $8.40.
Conversely, TTNGL registered the day's largest decline, falling $0.67 to
close at $26.84.
On the Mutual Fund Market 8,154 shares changed hands for a value of
$161,200.60.
Clico Investment Fund was the most active security, with a volume of
7,654 shares valued at $157,000.60.
Clico Investment Fund declined by $0.39 to end at $20.51.
<< Back to news headlines >>
Nedco offers VSEP Wednesday 31st January, 2018 – Trinidad Express Newspapers
EMPLOYEES of State-owned National Entrepreneurship Development
Company Ltd (Nedco) have been offered Voluntary Separation (VSEP)
options.
The offer was made by chairman Clarry Benn at a special staff assembly
yesterday at the Atrium, El Socorro.
The main purpose of the meeting was to bring staff up to date on
decisions taken by the board to restructure and rebrand the company,
Nedco said in a statement last night.
Benn said it had become necessary to take these steps to ensure that
Nedco can discharge its mandate in an environment which calls for
'acute sensitivity and responsiveness to prevailing social and economic
conditions'.
The board was also mindful of comments and recommendations made
by the Public Accounts (Enterprises) Committee, whose members
expressed grave concerns over Nedco's level of efficiency, productivity
and overall viability, the company stated.
Nedco promotes development of new and existing small and medium-
sized enterprises whose needs cannot be met by traditional lending
agencies.
The decision to restructure and rebrand the organisation emanated from
recommendations of PricewaterhouseCoopers (PWC) which conducted
a financial and operational assessment of Nedco immediately following
appointment of the new board in December 2015.
The PWC assessment highlighted the fact that Nedco's income from its
core business- loans and training-was insufficient to cover its operating
costs.
Two programmes
Employees have been apprised of the rationale for the restructuring and
the process to be followed in submission of applications for voluntary
separations which have offered two programmes catering to permanent
employees who are (a) less than 55 years of age and those who are 55
years or older with less than ten years' service; (b) those who are 55 years
and over with more than ten years of service as at April 30.
Receipt of applications for both VSEP programmes commences today
and closes on February 28, allowing approved applicants to exit the
company by May 1.
<< Back to news headlines >>
A new airline to Tobago? ...company seeking investors Wednesday 31st January, 2018 – Trinidad Express Newspapers
THE Chief executive officer of Sterling Tobago Airways Limited, which is
seeking investors to establish an air bridge to rival Caribbean Airlines,
believes that his company could make a TT $24million profit within a year
of operations.
And within five years, it could be more than TT$100 million.
In a letter to potential investors, Raymond McMillian made a case by
highlighting the poor state of the existing air bridge, which he said has
been a sour point for more than 30 years.
” The facts speak for themselves. Tobago has developed at a much faster
pace in the last five years, than previously. The infrastructure such as
roads, drinking water, electricity supplies, conference facilities and hotel
hospitality are at an acceptable level. The present difficulty in getting to
Tobago, defeats all of the investments above resulting in the entire
economy being frustrated.
The recent press release from the existing carrier Caribbean Airline (CAL),
stated that with a 30-minute delay, their performance was at 86 percent
(above industry standards). One then wonders why almost on a weekly
basis do we have passengers stranded and having to overnight at the
airport after waiting for hours on end, for a 20-minute flight. If there is a
simple shift in the ability of citizens, business individuals & holiday visitors to
get to Tobago with greater ease and less frustration, the entire economy
will experience the well awaited “economic explosion”.”
According to the proposal to investors, the answer is simply another carrier
to meet the demand left unsatisfied by CAL, providing the confidence for
individuals to travel, enjoy Tobago and return to their respective
destinations reliably and on time.
“It is because of our first-hand experience of the continual frustrations
which gave rise to the birth of Sterling Tobago Airways Limited trading as
“Tobago Airways”. Our tagline: seamless service, affordable price.
We are a team of energetic and dynamic citizens who have come
together to make a difference in complimenting CAL's efforts in brining
passengers to Tobago thus bridging the existing gap” states the brochure
to potential investors.
Why invest? The company gave reasons.
• Return on Investment (ROI) at above industry average. For
investments of USD100,000 and above, the returns are negotiated
on a case by case basis. All others will range between 7% to 15%
per annum.
• Special Loyalty club benefits for frequent fliers.
• Special discounts for bulk buying of tickets for monthly travel.
• Opportunity to network with businesses from around world through
our international connections.
Benefits to Tobago & the wider community of Trinidad and Tobago were
listed as brand awareness to an international audience, International
Aviation School to be located in Tobago, the foreign flight crew will be
based in Tobago, opportunities for shareholding to the average citizenry,
invisible earnings to the State's Gross Domestic Product, CSR -
opportunities to give back to our society, and international marketing of
Trinidad & Tobago to the world by our charter services.
Sterling Tobago Airways Limited stated that its initial contract (AMIC) is
with Airline Solutions Limited, a company registered in London, UK. Aircraft
Fuel is not included in the AMIC contract.
The board has agreed to “buy in” ground handling services from
Swissport, the industry leading supplier internationally.
The company also stated: “The projections are based on 90% occupancy,
given our proposed contracts with key industries, we are confident this
can be achieved".
<< Back to news headlines >>
Grande businessmen back Toco Highway Thursday 1st February, 2018 – Trinidad and Tobago Newsday
Sangre Grande residents have given a positive vote for the proposed
highway from Cumuto to Toco to help alleviate some of the travel
struggles of many making the inter-island transit. There have been many
hiccups with finding a reliable ferry source between the two islands for
many months. The only inter-island vessel is now the Trinidad and Tobago
Express, the TT Spirit has been dry docked.
Environmental activist group Fishermen and Friends of the Sea (FFOS) had
obtained an interim injunction barring the Government from continuing
work on the first phase of the $400M Churchill Roosevelt Highway
Extension to Manzanilla.
Yesterday, Works and Transport Minister Rohan Sinanan met with the
Sangre Grande Chamber of Commerce and burgesses to determine the
pros and cons of the proposed highway. The meeting took place at the
Sangre Grande Regional Corporation where stakeholders voiced their
opinions.
Sinanan said the highway was a one time deal that would benefit all
residents in the eastern peninsula. “If we don’t dream the dream and
make it happen, it will continue to be a pie in the sky,” he said.
Sinanan said while Sangre Grande was one of the largest constituencies in
the country, it was also the poorest. He said the new highway would bring
in much needed economy, employment and opportunities for the
residents.
“This is a highway to open up the eastern seaboard. It would take a while
until completion, but we know once it is started it would create jobs and
other opportunities for the people in Sangre Grande. Ninety-nine per cent
of them supported the highway in Sangre Grande. I don’t know where the
other one per cent is from, but we will find them and convince them that
this is the way to go,” he said.
As to an alternative means of Transport on the Tobago air bridge, Sinanan
said he did not know the major players involved. It was reported that
Raymond McMillan, chief executive officer of Sterling Tobago Airways
Limited felt that Caribbean Airlines needed some competition.
“I don’t know who are the major players, I have asked for a response, but I
have not seen the brochure. As of now I have no information on who are
the players, what approvals they have and who they are in contact with,”
Sinanan said. He said to open the air bridge to a private company they
would have to go through the TT Civil Aviation Authority and follow all
requirements.
<< Back to news headlines >>
Republic Financial Holdings records $340M profit Thursday 1st February, 2018 – Trinidad and Tobago Newsday
Republic Financial Holdings Ltd (RFHL) has recorded TT$340 million in profit
attributable to shareholders for the quarter ending December 31, 2017.
Announcing the results last Thursday, RFHL chairman Ronald Harford said
the improvement in profitability was driven mainly by better performance
in the group’s overseas territories.
"The profitability of the TT subsidiaries declined because of an increase in
loan impairment expense of $34 million and increase in taxation of $14.4
million, arising from the five percent higher tax rate."
Republic Bank TT is one of RFHL's subsidiaries.
The $340 million profit represents an increase of $10.2 million or 3.1 per
cent over the corresponding period in 2016. Total assets of RFHL stood at
$70 billion at December 31, 2017, an increase of 2.2 per cent over total
assets as at December 2016 and 1.5 per cent over September, 2017.
The RFHL chairman also said he remains optimistic that despite the
economic challenges in several key markets, the sound performance
achieved in this quarter will continue for the remainder of the financial
year.
<< Back to news headlines >>
Jolly’s to acquire Oil of Ojas Wednesday 31st January, 2018 – Dominica News Online
“I had a divine dream, a revelation”. Twenty-two years ago, this was the
motivation behind Mr. Anthony Toulon’s creation, Oil of Ojas. A household
name in Dominica and the region, many people store a bottle in their
medicine cabinet. Today, in a bid to strengthen its foothold as a
manufacturer of safe and trusted all natural products, Jolly’s
Manufacturing and Toulon agencies announces that Jolly’s
manufacturing, a subsidiary of the parent company, Jolly’s Pharmacy will
acquire this multi-purpose essential oil.
In light of technological advancements and rapid innovation that has
caused a resurgence in the field of manufacturing, Mr. Toulon believed
that maintaining competitiveness was significant and contemplated on
the sustainability of his creation.
Thus, in an effort to preserve his special formula which stemmed from a
dream and maintain the integrity of the brand, Mr. Toulon saw Jolly’s
Manufacturing as a deserving successor. “I looked around Barbados,
Trinidad, Antigua, St. Lucia and Martinique but Jolly’s had a track record
of pushing my product for over 20 years”, remarked Mr. Toulon.
Mr. Toulon believes that Jolly’s Manufacturing has the pre-requisites and
suitability to develop the product, making it much more international. He
stated, “That due to new investments the company has made including
quality adherence and modern equipment, he believes Jolly’s
Manufacturing is taking manufacturing to another level”.
Managing Director of Jolly’s Pharmacy, Dr. Orrin Jolly commented, “Oil of
Ojas is to me, one of the best manufactured products in Dominica. He
affirmed the high standard of the product and reflected on the oil’s
regional distribution.
Among plans for the newly acquired product, Jolly’s Manufacturing will
fund the testing of Oil of Ojas in France to ensure that the product is sold
and marketed in the EU territories. Mr. Toulon will remain an advisor to the
company while Ms. Lou Ann Jno Baptiste who is currently completing a
Master’s degree in Analytical Chemistry, will return to facilitate the
advancement and development of the product.
Jolly’s Manufacturing is the manufacturer of locally made products
including Bay Off Insect Repellent Cream and Spray, Babylis Male and
Female Adult Deodorant, Babylis Cream and MB ointment.
<< Back to news headlines >>
More jobs added to gov’t job program Tuesday 30th January, 2018 – Dominica News Online
The government is to expand a program that will be providing jobs to
residents in the wake of Hurricane Maria, Prime Minister Roosevelt Skerrit
has announced.
Earlier this month, Skerrit announced that the cabinet has taken the
decision to create 1,100 jobs to engage those made redundant and
displaced by the hurricane.
Skerrit said 100 more jobs will be added to the program.
“We’ve taken the decision to bring it to 1,200 jobs in the public service
and this is a direct response to the fallout due to the passage of Hurricane
Maria,” he said.
He said these jobs will be for those who lost their jobs in the private sector
and it might take some time before the private sector gets on its feet
again.
“Several of our brothers and sisters in Dominica would have lost their jobs
from the private sector,” he noted. “If the private sector firm is not
operational, we don’t expect them to keep staff for any period of time.
Some of the private sector firms will take some time to get back on their
feet: they have to reconstruct, they have to rebuild, they have to restock,
some of them, they are still waiting for their insurance money …”
The Prime Minister said a decision was taken to “maintain the dignity and
the sanity of these people who were affected by the hurricane.”
The program is expected to begin in March with funds from the island’s
CBI Program.
<< Back to news headlines >>
Gov’t donates $3.7-million for Clear Harbor renovation Tuesday 30th January, 2018 – Dominica News Online
The Government of Dominica has donated $3.7-million which will go
towards the renovation of sheds which house the Clear Harbor Call
Center which is located at the Industrial Estate in Canefield.
This was announced by the Chairman of the Dominica Agricultural
Industrial and Development (AID) Bank Martin Charles.
Charles was speaking at bank’s post-Hurricane Maria press conference at
the bank’s conference room on Tuesday morning.
“We are also thankful to the government for making available some $3.7-
million for restoring and refurbishing of the sheds occupied by Clear
Harbor at the industrial estate in Canefield,” he stated.
He noted that Clear Harbor is one of the single largest employers on the
island and therefore the refurbishment of the facility was critical.
He said that the Prime Minister’s (Roosevelt Skerrit) decision on donating
the funds came following a site visit to the facility with the members of the
Board of Directors of the AID Bank and its management team.
“Prior to this announcement the Prime Minister ensured that a generator
was made available to Clear Harbor weeks after Maria so that they could
have commenced their operations,” Charles remarked.
Meantime, Charles has expressed his gratitude towards the Government
of Dominica for the millions which have been invested in the bank over
the years especially through the Citizenship By Investment (CBI) Fund.
He said that the government has ensured that Dominica’s economy will
recover by lending to the productive sectors.
Charles said that as a result of the government’s investment it would
create: “an increased employment, the control and production of the
food import bill and increase revenue and foreign exchange earnings.”
The site in which Clear Harbor operates at the Canefield Industrial site is
owned by the AID Bank.
<< Back to news headlines >>
IMF warns economy is slowing down Wednesday 31st January, 2018 – Barbados Today
The performance of the Barbados economy is predicted to worsen this
year, dealing a staggering blow to Government’s efforts to generate
confidence in the electorate.
The International Monetary Fund (IMF) is forecasting jaundiced 0.5 per
cent growth this year, on the heels of a less-than-impressive 0.9 per cent
last year.
In a statement released today just as Central Bank Governor Cleviston
Haynes was reporting on the economy, the IMF said “growth is slowing
reflecting increased pace of fiscal consolidation”.
It said the flagging economy was in need of a stronger macroeconomic
framework and bolder structural reforms in order to achieve fiscal and
debt sustainability, address the large financing needs, build adequate
international reserves, and boost growth.
The Washington based lending agency added that the low growth was as
a result of ongoing fiscal adjustment and “policy uncertainty related to
the forthcoming elections”.
“Large fiscal deficits, high debt, and low reserves are posing challenges,”
it said in the statement that followed the conclusion at the end of last
week of its Article IV Consultation with Barbados.
Haynes announced today that the fiscal deficit had been reduced to 3.7
per cent of gross domestic product (GDP) or $399.5 million between April
and December last year, 33 per cent lower than the $596.1 million for the
same period the previous financial year.
At the same time, overall debt fell to 145.9 per cent of GDP, from 147.5
per cent the previous year.
However, the IMF suggested that the deficit had not fallen nearly as much
as it would have liked, stating that “the larger than expected fiscal deficit
is increasing funding challenges”, while it called for “sustained action to
bolster reserves”, which slumped to $410 million, or 6.6 weeks of import
cover at the end of December.
It also made mention of the slashing by the Central Bank of its financing of
Government to a mere $96.8 million between April and December,
compared to $714.5 million for the corresponding period for fiscal year
2016/2017.
But the lending agency expressed concern about the increased reserve
requirements by commercial banks for holding Government securities,
stating that the added requirements had increased the banks’ exposure
to sovereign risk.
At the same time the IMF called on Government to enhance regulatory
and supervisory frameworks, especially for non‑bank financial institutions,
“to strengthen the anti-money laundering/combating financing of
terrorism regime, and to proceed with legislative amendments to increase
Central Bank independence”.
“Directors encouraged the authorities to continue efforts to phase out
direct financing of the Government by the Central Bank and to reorient
monetary policy towards supporting the fixed exchange rate regime,” the
statement said.
The international lending institution report also emphasized the need for a
comprehensive restructuring of state owned enterprises, saying this was
critical in order to address structural imbalance in the public sector, “in
particular by reducing Government transfers”.
“Priority should be given to defining clear objectives for state owned
enterprises reform and implementing the Public Financial Management
and Audit Act, as well as other measures,” said the IMF directors, who also
insisted that changes be made to the size and delivery of social
programmes in an effort to “contain their cost and ensure their long‑term
viability”.
“Directors emphasized that stronger and deeper structural reforms are
critical to unlock the economy’s growth potential and maintain
macroeconomic stability. They underscored that reforms should focus on
strengthening the business environment, facilitating economic
diversification, and improving the efficiency and effectiveness of public
service delivery. Directors supported the authorities’ efforts in improving
the timeliness and quality of economic data,” the statement added.
<< Back to news headlines >>
Haynes: Pay increase not recommended right now Wednesday 31st January, 2018 – Barbados Today
Governor of the Central Bank of Barbados Cleviston Haynes today
warned Prime Minister Freundel Stuart that a pay rise for public servants
would deal a crippling blow to Government’s fiscal adjustment efforts.
In delivering his 2017 economic review, Haynes said modest progress
made over the last nine months in reducing the public sector wage bill
would be wiped out by additional expenditure at a time when the
emphasis must be on reducing spending.
“We want to be able to reduce expenditure at this point rather than to
increase expenditure. I don’t know if I need to say anymore,” he said in
response to questions about whether Government would be able to
afford to give public servants an increase.
“An increase in wages at this time, the question is how are we going to
finance it? We already have difficulty financing the existing expenditure,
so if you have an increase in wages and expenditure at this point, what is
going to be the source of that financing? We are setting ourselves up for
what I would call a very disorderly adjustment because in the absence of
financing what you get is a further build up in arrears in the system,”
Haynes warned.
The National Union of Public Workers (NUPW) is demanding a 23 per cent
pay rise and a $60 million lump sum as a coping subsidy, which it said
Government workers need to help them cope with the rising cost of living
which resulted from the austerity measures introduced here last year,
including the hike in the National Social Responsibility Levy from two to ten
per cent on all imported and locally produced goods.
At the same time, the Barbados Workers’ Union wants a 15 per cent
increase for its members in the public service, but has all but abandoned
the idea of a subsidy.
The NUPW last month rejected a $49 million lump sum offer, which
Permanent Secretary in the Ministry of the Civil Service Alyson Forte
yesterday said was not the final offer, but was put on the table for
discussion.
Forte also told Barbados TODAY he was awaiting word from Stuart on how
much more Government was willing to offer the workers.
However, the Central Bank Governor today stood firm in his opposition to
an increase in wages.
“We have to move in a direction of being able to eliminate arrears in the
system rather than a further build up. Therefore, adding expenditure is not
going to help in that particular situation. And I need not spell out the other
balance of payments potential that is created by increased wages at this
point,” Haynes said.
Acknowledging that it had been “a long time” since public servants had
received a pay rise – ten years – Haynes said “the broader picture” should
be considered, stressing that Government would have to find ways to
make up for the increase in expenditure occasioned by a salary increase.
The top economic advisor reported that while Government expenditure
rose by $9.9 million between April and December 2017, there were
modest savings on goods and services, along with wages and salaries.
Central Bank figures showed that at the end of the review period wages
and salaries stood at $579.2 million, down from $583.7 million at the end of
the corresponding period the previous year.
The increase in expenditure was as a result of hikes in interest payments,
transfers and subsidies, as well as grants to individuals and public
institutions.
<< Back to news headlines >
High-level EU team arrives in Jamaica today Thursday 1st February, 2018 – Jamaica Observer
STEFANO Manservisi, director-general for International Cooperation and
Development in the European Commission, based in Brussels, is leading a
high-level European Union team to Jamaica, starting today.
Foreign Minister Senator Kamina Johnson Smith, in a release yesterday,
said Manservisi will lead the high-level delegation to Kingston from
February 1 to 2 for regional and bilateral talks with several high-level
government representatives from Jamaica and the wider Caribbean.
“Mr Manservisi's visit comes at an important juncture, especially as we
prepare for a new chapter in the rich history of development cooperation
between the EU and the African, Caribbean and Pacific (ACP) Group, of
which Jamaica is a founding member,” she said.
Jamaica recently held the chair of the CARIFORUM group within the ACP
and is scheduled to assume the presidency of the ACP during the period
February 1 to to July 31, 2018.
During the visit, Manservisi will meet with Prime Minister Andrew Holness,
Senator Johnson Smith, Minster of Justice Delroy Chuck and Minister of
Finance Audley Shaw. These meetings, the statement said, will address
aspects of the EU/Caribbean/Jamaica relationship, the CARIFORUM-EU
Economic Partnership Agreement (EPA) as well as cooperation in the
areas of security, justice and energy. He will also hold meetings with
representatives of EU Member States and with development partners.
A highlight of the visit will be the grant financing signing ceremony
involving the IDB and the Government of Jamaica. The grant will support
a multimillion-dollar energy management and efficiency programme.
Today, Manservisi will deliver a public lecture entitled: The EU and the
Caribbean: a proposal for a modern partnership beyond 2020 at the
University of the West Indies. He will also tour sections of downtown
Kingston, including the Ward Theatre and Justice Square.
Ambassador Malgorzata Wasilewska, head of the EU Delegation in
Jamaica, meanwhile, has underscored that “having a strong EU-
CARIFORUM relationship is crucial for achieving the Sustainable
Development Goals, particularly for Small Island Developing States”. The
visit, said the ambassador, is designed to demonstrate the valuable
outputs of the very successful partnership with Jamaica across multiple
sectors.
Manservisi's visit is the first to Jamaica by a high-level EU representative in
11 years.
The European Union, comprising 28 member states, is the world's largest
grant donor. Between 2014 and 2020, the EU is committed to providing
euro 46 million to Jamaica. The EU's priorities in the Caribbean are citizen
security, protecting the environment, curbing climate change, health with
special emphasis on improving maternal and child health and improving
the management of public finances.
<< Back to news headlines >>
STATIN says unemployment at its lowest in a decade Thursday 1st February, 2018 – Jamaica Observer
THE Statistical Institute of Jamaica (STATIN), in a release yesterday, said
that the declining unemployment rate is at 10.4 per cent, the lowest it has
been since October 2008.
STATIN, the Government's statistics agency, said that the youth
unemployment rate of 25.4 per cent was also the lowest since January
2008, while female employment continues to increase.
In addition, it noted that at October 2017, most of the persons who
gained employment were non-government employees.
According to the information included in the 2017 Labour Force Survey,
the number of persons employed in October 2017 was 1,206,800, which
was 27,300 (2.3 per cent) more than the 1,179,500, recorded in October
2016. For males, employment had increased by 5,300 (0.8 per cent)
between October 2016 (663,600) and October 2017 (668,900), while
female employment increased by 22,000 (4.3 per cent) from 515,900 to
537,900 over the same period.
The release said that the unemployment rate for October 2017 was 10.4
per cent, which was 2.4 percentage points lower than the rate of 12.9 per
cent for October 2016. This decrease was driven by a larger decline in the
female unemployment rate. Male unemployment rate declined by 1.6
percentage points (from 8.9 per cent to 7.3 per cent) and for females the
decrease was 3.4 percentage points (from 17.5 per cent to 14.1 per cent).
In the employed labour force, the occupation group 'Clerks' increased by
7,900 people (9.4 per cent), from 83,700 in October 2016 to 91,600 in
October 2017. Increases in employment were also observed in the groups
'Skilled Agricultural and Fishery Workers' and 'Elementary Occupations' by
6,200 and 5,200 persons respectively over the same period.
For males, the occupational group 'Elementary Occupations' accounted
for the largest increase of 5,100 (6.7 percent) over the period, moving
from 75,800 in October 2016 to 80,900 in October 2017. For the same
period, the largest gain for females (8,800 or 6.5 percent), was in the
group 'Professionals, Senior Officials and Technicians'
The number of persons employed in the group “Health & Social Work” was
32,500, a 28.0 per cent (7,100) increase over October 2016. The industry
group “Manufacturing” had the largest increase in the number of males
(5,400), moving from 49,200 to 54,600 over the period. For females, the
industry group “Health & Social Work” accounted for the largest increase
of 8,000 (44.4 percent) over the period, moving from 18,000 in October
2016 to 26,000 in October 2017.
<< Back to news headlines >>
Geothermal energy can fuel the future of the Eastern Caribbean Wednesday 31st January, 2018 – Caribbean News Now
Analysis by Judith Ephraim from the OECS Commission for the London
School of Economics and Political Science
LONDON, England — The London School of Economics and Political
Science has teamed with Judith Ephraim and the staff from the
Sustainable Energy Unit of the Organisation of Eastern Caribbean States
(OECS) Commission for an analysis on the future of geothermal energy in
the Caribbean.
Though geothermal energy is a more involved and expensive undertaking
than other renewables, its significant benefits make it an ideal way for the
Eastern Caribbean to gain greater energy independence, reduce energy
costs, and achieve sustainable development.
The islands of the Eastern Caribbean are renowned for their natural
beauty and rich culture. But the volcanic origin of these islands has not
only created breathtaking scenery, it could soon provide the solution to
the region’s quest for clean, renewable, and affordable energy.
Like most small island developing states (SIDS), the countries of the
Organisation of Eastern Caribbean States (OECS) spend a large part of
their earnings on imported fossil fuels to meet their energy needs, yet they
also boast high levels of solar radiation, good wind regimes, and
impressive geothermal potential.
Across the world, the cost of energy has a major influence on quality of
life. Energy represents a significant cost to households, businesses, and
states. Reductions in the cost of technologies such as solar have led to
promising growth in the renewable energy sector, but to make this sector
a significant contributor to electricity generation in the OECS, efforts must
include geothermal energy development.
The benefits of geothermal energy in the Caribbean and beyond
The International Renewable Energy Agency reports that geothermal
deployment worldwide reached a total installed capacity of 12.7
gigawatts in 2016, a level well below its potential. There is, however,
increasing recognition of its many advantages over other technologies,
which may explain why global geothermal output has risen by 26 percent
in just over five years.
First, it has high availability and can be delivered 24 hours a day, 365 days
a year. Geothermal energy plants can also operate continuously at up to
98 percent capacity because they have a constant source of “fuel” and
require little downtime for maintenance. With climate change gradually
increasing the severity of extreme weather events, a further advantage of
geothermal installations is their greater resilience in the face of hurricane
damage, as compared to solar, wind, and wave technologies.
Though there is currently just one operational geothermal plant in the
Caribbean, on the French island of Guadeloupe, geothermal studies have
been carried out since the 1950s, generating a wealth of knowledge that
can inform new projects. With recognition of the unique benefits of
geothermal spreading, seven of the OECS’ ten members are now
pursuing geothermal energy projects.
The growing presence of geothermal in the Eastern Caribbean
Montserrat, with the smallest population in the OECS, is already well
advanced, with two rounds of exploratory drilling having confirmed a
productive geothermal resource, and a third exploratory well on the way.
Discussions regarding the design, procurement, and construction of a 2.5-
3.5 megawatt (MW) plant are in progress.
Due to rising fuel prices and the cost of shipping to the island, Montserrat
has some of the highest electricity costs in the world. A successful
geothermal energy project would reduce the cost of electricity
generation, in turn lowering costs for investors and ultimately transforming
Montserrat’s wider economy.
In Dominica, meanwhile, geothermal work has been underway for some
time, but the devastating effects of Hurricane Maria have only reinforced
the need for the country to invest in indigenous renewable energy
sources.
Surface studies on St Kitts, carried out by a geothermal company from
nearby Guadeloupe, are still ongoing, but preliminary results indicate the
potential for a geothermal plant of 18-36 MW. On sister island Nevis
additional testing is required, but a plant of 9 MW is being considered.
Saint Lucia has completed both a feasibility study and also an
environmental and social impact assessment in preparation for
exploratory drilling.
St Vincent and the Grenadines has completed a power purchase
agreement with a private generating company for the sale of future
geothermal energy, and a drilling contractor has already been procured.
Grenada is setting up a project management unit to oversee their
geothermal work with drilling expected to commence soon.
Understanding and overcoming the barriers to geothermal development
The OECS Commission’s recent stakeholder analysis sought to identify the
main challenges to geothermal energy development in the region.
Feedback from governments, utility companies, and private-sector
experts showed a clear consensus amongst all participants that finance
and government policy are the main challenges to geothermal energy
development in the region, whereas technological issues and competition
from other energy sources play a lesser role.
Although geothermal projects are relatively capital intensive, a
geothermal power plant has low and predictable operating costs.
However, financing for geothermal energy remains a challenge for the
region given the high cost of the exploratory studies required to confirm
the resource.
Few OECS countries are currently in a financial position to pursue
geothermal on their own, and neither are they necessarily prepared to
take loans from multilateral development banks for that purpose. This
means that private sector developers are likely to play a significant role in
geothermal energy development in the region.
Aside from this important role of the private sector in capitalising
geothermal projects, Eastern Caribbean states are seeking innovative
financing options that will not negatively impact the electricity tariffs
expected from geothermal generation.
A critical issue in future will be successful negotiation of supply
agreements with regard to concessions, timeframes, prices, and other
regulations. These must ensure fair terms and conditions for all
stakeholders. In this regard, national governments have a leading role to
play in safeguarding the interests of the countries.
Since geothermal energy development constitutes a novel undertaking
for most of the Eastern Caribbean, capacity building will also be key.
Geothermal energy development will require input from several
professional fields, but will also require specialised knowledge and skills.
Once geothermal plants are built, close management will be needed as
they require careful optimisation over time. As such, a holistic approach is
key to achieving best practices in terms of field appraisal, project
development, drilling, and operation, thereby ensuring that geothermal
projects achieve their anticipated economic performance.
Though geothermal energy is a much more involved and expensive
undertaking than solar or wind, the benefits may well be worth the effort.
It is geothermal energy that holds real promise for the Eastern Caribbean
as we seek to gain greater energy independence, reduce energy costs,
and drive towards sustainable development in the region.
<< Back to news headlines >>
27 expressions of interest in GPL’s natural gas power plant Thursday 01st February, 2018 – Kaieteur News
At least five Chinese companies are among 27 firms which have
expressed interest in operating the Guyana Power and Light (GPL)’s
natural gas-fired power plant, under a 25-year agreement, in Demerara.
GPL, the state-owned electric utility invited technically and financially
sound business parties to submit an expression of interest (EoI) for
Independent Power Production (IPP) on a build, own and operate 50-
megawatt (MWs) Capacity Natural Gas Power Plant.
The EoI period ended yesterday, with senior GPL officials unveiling the
names of the companies which responded to the company’s request.
Inside GPL’s boardroom at Duke Street, Kingston, the official documents
revealed a large interest from South American states, especially Colombia
and Venezuela. Companies in Qatar, Dubai, Trinidad and Tobago, United
States and the United Kingdom, also made EoI submissions.
Scope of work for the project comprises all activities necessary to
develop, finance, insure, install new plant and equipment, test,
commission, own, operate and maintain the power generation facility.
The project also entails the construction of associated substations, fuel
storage facility and other related facilities for complete operation,
generation and transmission of electricity to the national grid.
Among the requirements for the EoI, was access to competent
construction, commissioning, operation and maintenance contractors of
at least two similar-sized facilities, a strong balance sheet with a minimum
capital of US$25 million, audited financial statements for the last three
years and a bank credit reference.
Companies were also required to demonstrate the ability to raise funds to
undertake a project with a notional capital cost of US$100 million, at
competitive terms with a debt/equity ratio within the range of 80%:20%
and 70%:30%.
The next phase is for the EoI submissions to be evaluated.
Initially, GPL last September had invited EoI for a 50 MW dual-fuel power
plant with a mix of heavy fuel oil and natural gas. The plant was to be built
within the specific areas of Georgetown, East Coast of Demerara and the
East Bank of Demerara.
The decision by GPL to move in the direction of natural gas only is
interesting, given that the coalition government said as recent as last
week that it has not decided whether to utilize the excess natural gas
from ExxonMobil operations.
Minister David Patterson has disclosed that it is estimated that the natural
gas to be produced daily is between 30-50M cubic feet. A portion of that
amount is to be re-injected into ExxonMobil’s operations with the
remaining amount to be disposed of or likely utilized by Guyana.
Patterson stated that at this time the Government remains focused on
continuing developmental work based on a specific location for the
landing of the natural gas pipeline.
The Minister, who is part of the Government team of Cabinet members
overseeing the developing of the oil and gas industry in Guyana,
disclosed that indeed the administration is exploring the commercial use
and development of natural gas. The current assessments being done are
both for downstream power generation through the development of a
new power generation facility – and as a medium to long-term investment
opportunity.
<< Back to news headlines >>
$1m Factoring Scheme In Sme Funding 'Firsts' Wednesday 31st January, 2018 – Tribune 242
A "first ever" $1 million accounts 'factoring' scheme aims to aid "well over
100" Bahamian small businesses immediately following its summer 2018
launch. Omni Financial Group, the Bahamian payments solutions provider,
yesterday hailed its partnership with the Inter-American Development
Bank (IDB) as potentially boosting cash flow, growth and customer base
for local micro, small and medium-sized enterprises (MSMEs). With the IDB's
Multilateral Investment Fund (MIF) providing the financing, Omni will
effectively act as its 'executing agency' by making small loans secured
against the accounts receivables (debts) owed to qualifying Bahamian
MSMEs by their clients.
This is known as 'factoring', which is commonplace in most economies, but
has never been done in a structured way in the Bahamas. The Bahamas
Agricultural and Industrial Corporation (BAIC) will work with Omni to
identify potential lending clients, and develop the benchmarks and rules
that MSMEs must meet to qualify for the micro loan facility.
Harvey Morris, Omni's chief executive, told Tribune Business that while the
scheme would boost access to capital for an 'underserved' element of
the private sector, it will also impose "long-term discipline" on MSMES when
it comes to financial management.
He explained that the ultimate goal was to enable MSMEs to grow to the
point where they could access more traditional forms of capital, such as
debt financing provided by commercial banks, thereby stimulating
economic growth, entrepreneurship and job creation.
Mr Morris suggested Omni's IDB partnership was "the first time that
factoring has been done" in such a structured way in the Bahamas, with
the parties "leaning towards" a model where the payments solutions
provider paid the full invoice value - minus a small discount - to the MSE
upfront.
While some factoring schemes only pay a proportion of the invoice value,
Mr Morris added that the preferred model would better "increase the
supplier's [MSME] cash flow".
"We are going to work with known purchasers and suppliers, and once the
supplier has delivered the products his invoice is brought to us," the Omni
chief explained. "We will discount the invoice at an amount to be
determined, because we got an exceptional rate on this facility from the
IDB, and those funds will be paid to the supplier immediately."
Using a 5 per cent discount rate as an example, Mr Morris said Omni
would pay the supplier $9,500 on a $10,000 invoice. The payments
provider would then treat the invoice as its own receivable, collecting
repayment from the borrower's client after one-three months depending
on the payment terms.
Mr Morris said the scheme aimed to enhance MSME cash flow and
liquidity by giving them instant funds to restock inventory, enabling them
to start the product and supply cycle much quicker than if they were
waiting for client payments.
"The benefit for them is to replenish their inventory," he explained to
Tribune Business, "and it also gives them the opportunity to negotiate sales
with suppliers [clients] who they will not normally deal with now because
those suppliers have a longer payments cycle.
"The SME may have put all of his money in because financing may be
difficult for him, so all funds go into products. He has a good receivable,
but how does he replenish inventory to produce another set of products?"
Mr Morris said this was the problem that Omni's partnership with the IDB is
seeking to solve, and he suggested that "well over 100" MSMEs will be
assisted "in the very early stages".
"The intent is to try and provide the funding to persons who don't have any
access to financial services; credit services," he told Tribune Business.
"We're looking at farmers, we're looking at cottage industries, we're
looking at persons providing services to the Government.
"This year our [Omni's] focus is on providing financial inclusion to MSMEs. It's
badly needed, but a lot of people, because they're not aware of the
service, they have a receivable and wait it out while their business suffers.
"In speaking to members of BAIC, once we started the education process,
everyone gave us a scenario where the product could have helped them
if available before."
Mr Morris said Omni had been working on the factoring product's
development for 18 months prior to yesterday's formal unveiling, with its
actual launch scheduled for summer 2018.
He added that the IDB will now arrange for Omni's team to visit other
countries that employ MSME factoring schemes, so it can obtain
"complete knowledge" before completing its own version;
"The next step is the completion of the conditions precedent," Mr Morris
said. "A key one is entering into an agreement with BAIC to assist in the
screening of SMEs, and further review and development of the final
product for approval by the IDN and our Board. As far as the process is
concerned, we have probably another three to six months to complete
the next phase."
Seeking to manage expectations, he added that yesterday's signing with
the IDB did not mean the factoring scheme will launch today. "This does
not mean the IDB will disburse the funds to us and we'll be lending
tomorrow," Mr Morris said. "It requires a lot more due diligence."
He explained that one of the conditions required to qualify for factoring is
the presentation of an invoice to "a reputable company that can settle
that invoice on the due date", thereby minimising risk for Omni and the
wider programme.
"The short-term benefit to the sector is the capital," Mr Morris told Tribune
Business, "but the long-term benefit is financial discipline and chance to
demonstrate their ability to serve a facility from a commercial bank.
"It's our hope many of these clients will be graduated. This product was
tailor-made for us by the MIF in the Bahamas. And the IDB continues to
encourage us to provide financial inclusion for all."
The $1 million represents the first time the MIF, the IDB's private sector arm,
has made a non-grant disbursement in the Bahamas.
<< Back to news headlines >>
Rbc's Middle Class Mortgage Appetite 'Severely Diminished' Wednesday 31st January, 2018 – Tribune 242
A ROYAL Bank of Canada (RBC) executive yesterday said its appetite to
lend mortgages to middle and lower class Bahamians was "substantially
diminished" due to inadequate market infrastructure. Tim Rider, RBC
Caribbean's senior vice-president of sales, told the Royal Fidelity Economic
Outlook that as a result the Canadian-owned bank was now focused on
"affluent" borrowers when it came to home lending. With many potential
borrowers too heavily indebted to take on a mortgage, Mr Rider also
pointed to the continuing absence of a Bahamian Credit Bureau as an
example of 'inadequate market infrastructure'.
Legislation to create such a facility has been tabled in the House of
Assembly, and is expected to be debated early in 2018, but the RBC
executive said its non-existence meant that lending decisions were
currently based on "imperfect information" with banks unable to properly
assess the creditworthiness of individual borrowers.
And, defending RBC's continued Bahamian branch closures and drive to
digital banking, Mr Rider said the bank needed to be "speeding up" -
rather than slowing down - when it came to driving such change.
Amid all the complaints, he questioned whether a bank such as RBC
should be committed to the Bahamas if this nation was "not committed to
its own success', arguing that reforms such as digital banking where
necessary to drag the country to world-class norms.
Mr Rider also warned that Bahamian companies and wealthy individuals
were setting up "escape routes" for their assets and families in case the
Bahamian economy and government finances continued to nosedive -
confirming what multiple sources have recently informed Tribune Business
about.
"The current mortgage lending infrastructure has substantially diminished
RBC's appetite for mortgages to the average Bahamian, and forced our
focus up-market to those borrowers who are more affluent and have
proven ability to repay their debt," Mr Rider said.
"The mortgage lending infrastructure, and lending infrastructure in general
in this country, needs to improve so that we can actually open the
lending books."
Mr Rider added that the mortgage market has largely been deserted by
the local banks, with Commonwealth Bank, Bank of the Bahamas and
Fidelity Bank (Bahamas) now all largely focused on consumer loans that
are perceived as less risky because they can be secured via salary
deductions.
The senior RBC executive said many potential borrowers are over-
leveraged, further depressing the pool of borrowers who can potentially
qualify for a mortgage. "From an aggregate perspective we see the
country having over-leveraged consumers and over-leveraged
businesses," he said.
"Leverage at the sovereign level is a concern, but the VAT tax has
indicated that the size of the economy is larger than originally thought, so
the debt-to-GDP can be turned, but it will have to primarily be through
expense control back towards an investment grade rating."
While many Bahamians will likely be further riled by Mr Rider's comments,
having been antagonised by RBC's recent branch consolidations and
Family Island withdrawals, they have major social and economic
implications for this nation.
For they suggest that the dream of 'owning a piece of the rock' is
increasingly being placed beyond the reach of middle class and average
Bahamians, the majority of society, as a result of commercial bank risk
aversion to mortgage lending.
This is a consequence of the fall-out from the 2008-2009 recession, which
resulted in $600 million worth of non-performing mortgage loans clogging
bank balance sheets and depressing profit performance, and the
prolonged workout that followed.
The Bahamian economy, together with unemployment and salary levels,
has yet to fully recover and this, combined with more stringent banking
lending standards, has sharply reduced the origination of new mortgage
loans.
This, in turn, has depressed the Bahamian housing market, resulting in
sharply reduced work volumes for multiple professions that rely upon it -
the likes of contractors, realtors, attorneys and other service providers.
The negative ripple effects have been felt throughout the Bahamian
economy for a decade, and Mr Rider yesterday identified structural
impediments to increased commercial bank lending.
He said the Bahamas does not have a Credit Bureau, making it nearly
impossible for lenders to truly understand the level of indebtedness of a
potential client. "This means decisions are based on significantly imperfect
and much more narrow information than we are used to having in
Canada, the US and Europe," Mr Rider said.
"While I know it is on the legislative docket, an expedited focus would be
highly recommended."
While he did not identify other 'inadequate mortgage infrastructure', Mr
Rider may also have had in mind the Homeowners Protection Act passed
by the former Christie administration. While the goal was to make
struggling borrowers more secure in their home, the Act is viewed as
having had unintended consequences.
Sir Franklyn Wilson, the Arawak Homes chairman, previously called on the
Government to "urgently review" the Act, branding it "a real disaster" for
the Bahamas' struggling mortgage market.
A well-known Progressive Liberal Party (PLP) supporter, he criticised the
Christie administration for "unnecessarily rushing" the Act into law so it
could meet a 2012 manifesto promise prior to the May 10 general
election.
He argued that it imposed overly-burdensome restrictions on what banks
and other mortgage lenders "can and cannot do" in relation to their
distressed properties, and introduced concepts and definitions that were
unworkable in practice. K P Turnquest, the Deputy Prime Minister,
subsequently said the Government would conduct just such a review.
Mr Rider, meanwhile, said RBC has made significant investments in its
digital app and point of sales (POS) technology. He added that it had to
make "hard choices" to ensure the bank can survive.
"I have been asked many times to slow down and give folks time to
adjust," said Mr Rider, who argued: "We cannot be slowing down. In fact,
we need to be speeding up." He posed the question: "Should a global
lender like RBC be committed to the Bahamas if the Bahamas is not
committed to its own success?"
Mr Rider said that without change to bring the Bahamas towards world-
class norms, it will continue to fall behind.
"Wealthy Bahamians and companies are limiting their investments in the
Bahamas at this time, given their current exposure levels, as well as setting
up financial escape routes for their families should the Bahamas continue
to deteriorate financially," he added.
"While we understand the prudence of this as a risk manager and banker,
it is a detriment to the Bahamian economy."
<< Back to news headlines >>
Gb Chamber Chief Fears More Closures Wednesday 31st January, 2018 – Tribune 242
THE Grand Bahama Chamber of Commerce's president yesterday
expressed concern that further Freeport businesses may close following
the Prime Minister's more downbeat appraisal on the Grand Lucayan sale.
Mick Holding told Tribune Business he was surprised to hear Dr Hubert
Minnis tell the nation that the sale of Freeport's 'anchor resort' property
was "far from completed", given that the Prime Minister had indicated that
the Wynn Group purchase would close by end-February 2018 barely a
month earlier.
Dr Minnis, in his televised address, only said the Grand Lucayan's sale
would close "this year", and Mr Holding was fearful that the absence of a
better-defined timetable could cause some businesses - especially those
in the Port Lucaya Marketplace and the surrounding area - to lose hope.
Pointing out that there were still 11 months to go in the year, the GB
Chamber chief said the sale and re-opening of the Grand Lucayan held
more importance for Grand Bahama's economy than the $2.56 billion
revival of the former Ginn project at West End that was much touted by
the Prime Minister. Mr Holding, though, quickly acknowledged that west
Grand Bahama "badly needed" renewed investment activity, and said
residents there would argue that developing the ex-Ginn sur mer site was
more important than the Grand Lucayan.
Arguing that the Bahamas, and Grand Bahama, should "aim for both"
projects to get going, Mr Holding said each was critical to reviving the
island's economy and reducing the unemployment rate.
"I think that probably, but I doubt it will come first, the Grand Lucayan will
have a greater impact on the general economy of Grand Bahama," he
told Tribune Business.
"There are a lot of businesses hanging in there, just waiting for the hotel to
re-open, and if something doesn't happen quite soon some of those
businesses will go under."
Mr Holding added: "It's not just the jobs in the hotel; there's a whole
infrastructure around there; restaurants, bars and retail, that depended on
the hotel for their trade. Many have closed, others are hanging on, but
may also close down."
Admitting that he was taken aback by the Prime Minister's more
downbeat assessment, he told Tribune Business: "Before Christmas I think
the statement was January/February 2018.
"This year has got 11 months to run, and that's quite a difference between
January and February. I was a little bit surprised, I must admit. I think some
of them [Port Lucaya area businesses] will hang on if there's something
positive; they'll think: 'At least there's a lifeline there'.
"I think what's going to happen, as things get tight or tighter and there's still
no deadline, some of them may go under I'm afraid. That's my concern."
Dr Minnis, in his national address, switched quickly from the Grand
Lucayan to the potential acquisition of the former Ginn project by
Toronto-based investor/developer, Skyline Investments, and its Grand
Palm Beach Acquisitions vehicle.
Mr Holding described the purchase, if it closes, as only "positive" for West
End and the wider Grand Bahama economy in terms of job creation and
increased economic activity.
"It's going to create permanent jobs out there, not only in West End, which
badly needs employment and regeneration, but also the rest of Grand
Bahama," he told Tribune Business.
"That community [West End] has suffered enormously for many years, and
was badly beaten up in Hurricane Matthew. This will certainly help the
economy out there."
Mr Holding also expressed hope that Skyline would invest as heavily in the
West End community as Ginn has done.
Skyline Investments, which is listed on the Tel Aviv Stock Exchange,
describes itself on its website as having $500 million in assets. It specialises
in real estate investment and development related to the hotel/resort
industry.
It describes itself as "sourcing new acquisition opportunities to grow and
diversify its cash flow in North America", with an emphasis on
geographical diversification.
Current properties include the Hyatt Regency at The Arcade in Cleveland;
the Renaissance Cleveland Hotel; Bear Valley Ski Resort in California, plus
a variety of mixed-use resort developments throughout Canada.
Dr Minnis, unveiling the group's plans, said: "Grand Beach Acquisitions will
construct, repair, revitalise, develop and operate 246 rooms in three
hotels; a banquet facility; 116 branded hotel residences; 1,000 other
residences; a hotel/casino site; approximately 150,000 square feet of
shops and restaurants; a spa and wellness retreat; two marinas; an 18-hole
golf course including driving range; an IFR-rated airport; a resort hospitality
training academy; and an organic farm.
"Grand Palm Beach Acquisitions intends to repair, revitalise and develop
the property, to be known as 'Bahama Bay', in nine phases over a 10-year
period with a projected expenditure of $2.56 billion."
<< Back to news headlines >>
Government provides update on investment projects for the South Wednesday 31st January, 2018 – St. Lucia News
The south of the island is earmarked for several major projects which have
already commenced or will commence in 2018.
Prime Minister and Minister for Finance, Economic Growth, Job Creation,
External Affairs and the Public Service Honourable Allen Chastanet
updated the nation on the developments during a press briefing on
Tuesday at the Finance Administrative Centre.
Among the anticipated investment projects discussed were the Fairmont
for Sabwisha, Choiseul, the Ritz Carlton for Black Bay, Vieux Fort, the
Canelles Project and the Desert Star Holdings “Pearl of the Caribbean”
project also for Vieux Fort.
The Prime Minister recently returned from a trip to Miami, Florida, where he
and a team of ministers – Minister for Infrastructure, Ports, Energy and
Labour Honourable Stephenson King, Minister for Equity, Social Justice and
Empowerment Honourable Lenard Montoute and Minister with
responsibility for Investment Honourable Bradly Felix – held meetings with
cruise lines on the southern cruise ship terminal.
“While we were in Miami we had several meetings and the first of which
was with two major cruise industry partners, Royal Caribbean and
Carnival,” explained the Prime Minister. “This was specifically in relation to
the Il Pirata site where we want to proceed with reclaiming land in that
area to build a cruise ship terminal, a hotel park, as well as a major
marina. We have been working with the cruise lines in order to make sure
we are meeting their standards and so we have now entered discussions
to formally bring them into the project.”
The Prime Minister was also pleased to speak of the recommencement of
the Horse Racing track in Vieux Fort which forms part of the DSH project.
He explained that during the Miami visit meetings were also held with Gulf
Stream Park, a racetrack and casino in Hallandale Beach, Florida, which is
one of the most important venues for horse racing the United States. He
explained that Saint Lucia’s racetrack will have some of the same design
elements.
“It is not just about horse racing, it is about developing a village around
that facility. So those meetings went extremely well. Thankfully, work has
recommenced on our horse racing track,” he noted, while adding that a
land dispute which had caused the hiatus had been settled.
DSH Chairman Teo Ah Khing was also on hand at the press briefing to
show and explain the design for the race track as well as the design for
the cruise terminal. With the target date for the track being October this
means Saint Lucia could see our first major world class horse racing event
in 2018.
“This track is a world class standard track,” stated the DSH Chairman. “It is
going to hold not just races for local horses and horsemen, there will be a
place for international persons to bring their horses here for racing at the
same time, to have good horses, award-winning horses come and race
here. This will improve tourism and sports.”
Mr. Ah Khing spoke about the far reaching benefits of the race track in
terms of international media coverage and linkage industries.
The press also got the opportunity to see designs for the port facility in the
south which the Prime Minister explained is long overdue.
“The port in the south allows constituencies that have not been able to
participate in cruise tourism to develop their attractions because we have
so many attractions in our southern communities,” stated the Prime
Minister, who also specifically spoke about the benefits of the terminal to
taxi drivers in the south who depend heavily on getting business only from
the airport.
The Prime Minister explained that there are currently Environment Impact
Assessments and sensitivity studies being done on the area.
In terms of more upcoming projects for the south, the Prime Minister stated
that equipment has been arriving for the Sabwisha project and it is
carded to start early March. The Government is also finalizing
arrangements for the Ritz Carlton and an announcement on Canelles will
be made soon by the developers. The Prime Minister also explained that
he will make an announcement shortly regarding the redevelopment of
the Hewanorra International Airport.
<< Back to news headlines >>
Minister Grant lauds Development Bank for spreading the national
economic pie Wednesday 31st January, 2018 – SKN Vibes
When the Verchilds High School held its 25th anniversary dinner on
Saturday evening December 16 last year, the organising committee did
not have to look far for a venue. From a business standpoint their locality
had come of age, as the event that catered for nearly 200 persons was
held in Old Road.
If the anniversary dinner were to have been held in November last year,
just a few days earlier, its most likely venue would have been in Basseterre.
One person who knows why that would have been so, is the Area
Parliamentary Representative, the Hon Lindsay Grant who is also the
Federal Minister of Tourism, International Trade, Industry, and Commerce.
“It is good to see that the Development Bank (of St. Kitts and Nevis) is
reaching out into the rural communities empowering young
entrepreneurs,” said the Hon Grant who had attended the dinner as the
Area Parliamentary Representative. The dinner was held at the Railway
Bar and Grill in Old Road.
He went on to explain why he had mentioned the Development Bank of
St. Kitts and Nevis (DBSKN): “A case in point is the Railway Bar and Grill
right here in Old Road. It is a magnificent edifice and where persons from
within the community - we have Old Road, Half Way Tree, Challengers
etc. - could host functions in a building, and in an area that can match
anywhere in Basseterre.”
The Verchilds High School’s anniversary dinner was the first event
attracting over 100 persons at the Railway Bar and Grill, a new business
venture that is owned and operated by a young entrepreneur, Ms Arlene
Fyfield, who was empowered by the Development Bank of St. Kitts and
Nevis (DBSKN) through its business loans programme.
“I think it (Development Bank) gives the persons in the rural communities
an opportunity to have functions in an area where they are from, rather
than having to journey to Basseterre, and still knowing that the pleasantly
is still here,” observed the Hon Grant. “The ambience of their surrounding
and the service is fantastic.”
He concluded by saying: “It augurs well for St. Kitts and Nevis, and it is
good because it is the same thing we teach in tourism that tourism is not
just for Basseterre but it is for rural communities, and we have to engage
rural communities to make sure that the national pie is spread around.”
The Railway Bar and Grill is located in the Wingfield Estate, Old Road,
which is best known for its tourism related businesses. It is next to the
discarded sugar train railway line and shed, and hence the name Railway
Bar and Grill. The owner, Ms Arlene Fyfield, has been in the hospitality and
catering business since 2008.
She had started with a small wooden structure in the same area in 2008,
where she sold chicken and chips, water, sodas and other snacks
catering to the locals and even tourists who she says loved her chicken.
But with the encouragement of her daughter Ms Arnisha Agard she was
able to think of expanding her business.
After they would have started construction of the new buildings to house
the expanded business, Ms Fyfield’s boyfriend, Mr Keithroy Dyer who is a
contractor, encouraged her to approach the Development Bank of St.
Kitts and Nevis for funding to allow for a smooth expansion. This was done
and the bank responded positively and the business opened its doors on
Sunday December 3 last year.
According to Mrs Kimmoy O’Loughlin-Burroughs, Assistant Manager,
Business Support Unit at the Development Bank of St. Kitts and Nevis
(DBSKN), the bank is open to financing to anyone whether they are in
urban or rural areas as long as the business idea fits the area/location and
that it is a viable business idea.
“At the Development Bank everyone has an equal opportunity in terms of
location or geography,” said Mrs O’Loughlin-Burroughs. “Ms Fyfield had
been in the business for quite some time and would have gained enough
experience to run a bigger operation. While she is keen to continue doing
business with the local people, part of her target market is the tourists who
come to the area.”
The bank official concluded: “Location-wise, the Railway Bar and Grill is in
a good position for Ms Fyfield to reach her target market.”
<< Back to news headlines >>
Brothers Investment Group International» wants to invest in the country Wednesday 31st January, 2018 – Haiti Libre
Saturday at the Sinai Temple in Hollywood, Florida, the "Brothers
Investment Group International, LLC" a private community development
company, dedicated to improving Haitian-American communities,
composed of 200 members of the Haitian Millionaires Club, had gathered
for its first Haitian Millennium Gala more than 1,000 participants.
In the presence of Stéphanie Auguste, the Minister of Haitians Living
Abroad, Carmel André Béliard, Minister of Agriculture, several business
owners, leaders of the Haitian Community in Florida, the Group of Haitian
investors from the diaspora has proposed a set of commitments and
actions initiated by the Group to rebuild Haiti.
Brothers Investment Group International, LLC would have already
obtained the licenses for the launch of its own commercial bank "Brothers
Capital Bank and Trust" to the exclusive service of the Haitian interests.
According to Anson Jean-Pierre, the President of Brothers Investment
Group International, the value of the Group would be approximately $3.5
billion and the Group wishes to mobilize a capital of $ 10 billion over the
long term to invest, among other things, in the banking, energy, real
estate and education.
Several investments in Haiti are envisaged including :
A project of solar energy production;
An ecological real estate development project on the Côte des Arcadins
An organic and organic agricultural production project for domestic
consumption and export to the United States in particular.
<< Back to news headlines >>
US overtakes Cayman Islands in financial secrecy index Wednesday 31st January, 2018 – Caribbean News Now
The United States has pushed the Cayman Islands into third place in the
global financial secrecy charts from the Tax Justice Network. The US is now
listed as the second largest tax haven in the world, behind Switzerland.
The TJN’s 2018 Financial Secrecy Index (FSI), produced in partnership with
Transparency International and the Financial Accountability and
Corporate Transparency (FACT) Coalition, launched the report in
Washington on Tuesday, when Gary Kalman, the executive director of
FACT, said the US ranking and lack of leadership was enabling the global
tax haven industry.
The authors of the report continue to campaign against secrecy in global
finance because they say it facilitates financial crime, money laundering,
corruption and tax evasion.
“Jurisdictions who fail to contain it deny citizens elsewhere their human
rights and exacerbate global inequality,” the TJN said in a release.
Analyzing each of the countries on its list in the 2018 report, the TJN
acknowledged in its assessment of the Cayman Islands that there had
been some changes and said that the jurisdiction had responded in a
mixed fashion to the global initiatives that have emerged to tackle the
problem of international financial secrecy.
The Cayman Islands remains in the top three, the TJN said, because of the
scale of onshore operations and the persistent levels of secrecy. But the
report acknowledged that Cayman was one of “relatively few classic tax
havens to opt for the ‘automatic information exchange’ in Europe”,
though the TJN criticised that deal as “very narrowly focused and full of
loopholes” that had hardly impacted offshore business here.
The country report also gave credit to Cayman for being one of the first
countries to sign on for the common reporting standard, which will begin
to take effect here this year, acknowledged the repeal and replacement
of the Confidential Relationships (Preservation) Law.
However, it still criticised the jurisdiction and even noted the drama
surrounding local newspaper editor David Legge fleeing from Cayman in
June 2015 after Premier Alden McLaughlin accused him of treason over
an editorial about petty local corruption.
The TJN remains a staunch critic of Cayman and other financial offshore
centres, but this particular report and its surrounding messages are firmly
aimed at the US. For many years the Cayman Islands has pointed to
America as a jurisdiction with far less regulation and controls that this
jurisdiction, and now it seems the TJN and Cayman at least agree on one
thing.
<< Back to news headlines >>
Eastern Caribbean-Southeast Asia Economic and Cultural Chamber
appoints business envoy to Middle East and Pakistan Wednesday 31st January, 2018 – Caribbean News Now
Dr Hussain Farooq, president of HF Corporation, a citizenship and
investment advisory firm, has been appointed as the official business
envoy to Middle East and Pakistan by the Eastern Caribbean-Southeast
Asia Economic and Cultural Chamber.
The Eastern Caribbean-Southeast Asia Economic and Cultural Chamber is
a member of the SIDS Global Business Network administered by the United
Nations Office of the High Representative for the Least Developed
Countries, Landlocked Developing Countries and Small Island Developing
States (UNOHRLLS) and an official participant to the United Nations Global
Compact.
Matthew Pajares Yngson, the hon. executive director and envoy for
diplomatic affairs of the Chamber said: “As a non-governmental
organization part of the SIDS Global Business Network, a program
administered by the UNOHRLLS, the Chamber realizes the importance of
networking with other regions outside our main areas of proficiency.
Dr Farooq is respected and well-connected in both Pakistan and the
Middle East and, as a forward-thinking organization, it is our belief that
connecting the Eastern Caribbean to these important growth regions is
vital in reaching our long-term mandate.
“There are numerous synergies that can be realized when connecting the
Eastern Caribbean to the rest of the world. Though we aim to be the main
conduit between the Eastern Caribbean and Southeast Asia, we must
also understand the potential of other regions in the world that may also
be of great benefit to our stakeholders in the Eastern Caribbean.
“The business and regional experience that Dr Farooq brings to the
Chamber will contribute greatly not only to the success of the
organization, but more importantly to the Eastern Caribbean states that
are still recovering from the devastation brought about by the recent
hurricanes.
“We thank Dr Farooq for his acceptance in this important role and know
very well that he will be a strong asset in our inter-regional organization.”
In expressing his gratitude to the Chamber, Farooq said: “I feel honoured
to be given this opportunity by the Eastern Caribbean-Southeast Asia
Economic and Cultural Chamber — to act as a business envoy for the
Chamber in the Middle East and Pakistan — and feel very optimistic and
enthusiastic about the potential that exists for collaboration between
these regions.
“The Eastern Caribbean is a region full of opportunities, resources and has
a lot of horizons waiting to be explored; and we intend to bridge the gap
between the Eastern Caribbean nations, and the Middle East and
Pakistan.
“Pakistan and West Indies go a long way with cricket being a major
joining force. We, now, need to work on the advancement of this
relationship for the benefit of these nations.
“The Middle East region is also getting more informed about the potential
of the Eastern Caribbean region. The number of passengers travelling from
the Middle East to the Caribbean is increasing, and through tourism
comes awareness.
“The Eastern Caribbean states have a lot to offer — be it agribusiness or
cruise tourism, business processing outsourcing or sustainable resort
development; and through proper representation of these opportunities in
the Middle Eastern countries and Pakistan, we can help in bringing more
tourists, and hence investors, to the Eastern Caribbean region.
“Nutmeg, for example, is a widely used product in Pakistan and the
Middle East — with Pakistan and the United Arab Emirates importing a
major portion, according to one estimate, from Guatemala. This could be
just one potential area, among many, for Grenada to explore.
“A pro-business environment, English-speaking workforce and presence of
bilateral treaties with different countries make the Caribbean region
conducive to investment. Investors in the Southeast Asia are also realizing
the potential of the Caribbean markets.
“We also aim to strengthen the relationship between the governments of
these countries in areas such as global warming and climate change —
considering the important role this is playing in our everyday lives — and
we intend to provide a platform for public-private dialogue in such
important areas.
“Intelligent partnerships, and tapping into the untapped potential, are the
way forward in this era of globalization and through this alliance; the
potential opportunities that exist for multilateral collaboration in trade and
investment between these regions can be capitalized on.”
<< Back to news headlines >>
South Korea complains to U.S. about tariffs on washing machines, solar
panels Thursday 1st February, 2018 – Reuters
South Korean trade representatives have made a strong complaint to the
United States about the “unfairness” of its safeguard measures against
imported washing machines and solar panels, the Asian nation’s trade
minister said on Thursday.
Last week, U.S. President Donald Trump imposed a steep tariff on imported
washing machines and solar panels in a move to protect American
manufacturers, sparking criticism from China and South Korea.
South Korea and the United States began talks in January to revise a two-
way trade pact that took effect in 2012, as Trump has been vocal about
scrapping the deal to tackle trade imbalances, particularly with U.S.
automakers.
South Korean Trade Minister Kim Hyun-chong said the talks were far from
complete, but both sides were hopeful of wrapping up the negotiations.
“We had heated negotiations... We have still long way to go,” Kim told
reporters in Seoul after an hours-long second round of talks on the pact.
“The U.S. is keen on automobiles in light of reducing its trade deficit with
South Korea.”
The United States is South Korea’s second-biggest trading partner after
China.
Negotiators from both countries divided into groups to discuss specific
subjects such as anti-dumping and safeguard issues, the auto sector’s
market access and tariffs and investor-state dispute settlement, Kim
added.
In response to the U.S. tariffs, South Korea’s trade ministry has vowed to
“actively respond to U.S. trade protectionism,” including making a
complaint to the World Trade Organization (WTO).
<< Back to news headlines >>
Oil rises as OPEC compliance eclipses boom in US output Thursday 1st February, 2018 – Reuters
Oil prices rose on Thursday after a survey showed OPEC’s commitment to
its supply cuts remains in place, even as U.S. production topped 10 million
barrels per day for the first time since 1970.
Brent April crude futures were up 53 cents on the day at $69.42 a barrel by
1150 GMT, while NYMEX crude for March delivery rose 42 cents to $65.15 a
barrel.
Brent crude rose by 3.3 percent in January, its strongest start to the year
for five years, in line with a broad rise in other risk-linked assets such as U.S.
equities, which hit record highs last month and marked their biggest
January increase since 1997.
With investors now pondering which of oil’s current key driving forces will
prove to be the dominant one - rising U.S. crude output, or OPEC’s
adherence to its supply cuts, the relationship with equities and even the
dollar is likely to erode.
“I don’t think it’s durable, that suddenly we see oil and the S&P attached
at the hip. They have coincidentally done well and it’s profit-taking. But I
think their fortunes are going to diverge and this correlation won’t survive
the test of time,” London Capital Group head of research Jasper Lawler
said.
“The other factor is that big $70 level in Brent. That is pretty much the top
of the range for most forecasts out there. So again, that’s a price level
that gives some pause for thought. I don’t think we should go back to 60
but I think probably 65 seems like a logical area to ... start refocusing on
the fundamentals of the market versus general sentiment.”
Goldman Sachs raised its three-month forecast for Brent to $75 from $62
and its six-month forecast to $82.50 from $75.
Oil prices are unlikely to advance much above $70 a barrel in 2018, given
the tug of war between OPEC and the U.S. shale industry, a Reuters poll
showed on Wednesday.
U.S. crude oil production in November surpassed 10 million bpd for the first
time since 1970, and neared the all-time output record, the Energy
Information Administration said on Wednesday.
The EIA also reported the biggest increase in crude oil stocks since March
last year, a rise of 6.8 million barrels.
“As oil prices rise, higher shale output is definitely on the market’s mind,”
said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and
Consulting in Tokyo.
Output by the Organization of the Petroleum Exporting Countries (OPEC)
also rose in January from an eight-month low as higher output from
Nigeria and Saudi Arabia offset a further decline in Venezuela, a Reuters
survey found.
However, adherence by producers included in the deal to curb supply
rose to 138 percent from 137 percent in December, suggesting
commitment is not wavering even as oil prices hit their highest since 2014.
<< Back to news headlines >>
Factories start 2018 on solid footing Thursday 1st February, 2018 – Reuters
Factories across the globe got off to a strong start this year, with
manufacturing activity in most countries gaining momentum and hitting
multi-year highs.
Business surveys from Europe and Asia showed solid activity and output,
reinforcing expectations for another year of synchronized global
expansion that has propelled many world stock markets to or close to
record highs.
Last year, the euro zone economy was a surprise global star and any signs
that zip, alongside rising price pressures, has carried into this year will be
welcomed by the European Central Bank as it moves to unwind its super-
loose monetary policy.
The 19-country bloc’s booming manufacturing industry raced into 2018,
churning out goods at one of the fastest monthly paces in over 20 years in
January.
“The euro zone economy clearly has a tailwind behind it. There is nothing
on the immediate horizon which would make you think the economy is
about to run out of steam,” said Peter Dixon, global financial economist at
Commerzbank.
IHS Markit’s January final manufacturing Purchasing Managers’ Index for
the euro zone was 59.6, matching an earlier preliminary reading but
below December’s 60.6 - which was the highest since the survey began in
June 1997.
Indicating February would also be a busy month, new orders growth was
at a near record pace as was employment. Firms also built up a solid
backlog of work and were their most optimistic in at least 5-1/2 years.
Among the four biggest economies, PMIs were close to record highs in
Germany and Italy and among the best for 17 years and a decade in
France and Spain respectively.
But the biggest outlier in Europe was Britain, where manufacturing lost
more momentum than expected last month. Uncertainties over its path to
leave the European Union next year curtailed business investment,
following one of the steepest jumps in the cost of raw materials in
decades.
“The UK economy looks set to grow at half the rate of the U.S. in 2018 and
a full percentage point slower than the euro zone,” said James Knightley,
chief international economist at ING. “It should be doing much better
given the global upturn in demand and the competitive sterling
exchange rate.”
The UK factory PMI dropped to its lowest since June and the prospects for
2018 do not look bright.
Markets were little moved by the data. Focus will later turn to the United
States, where a sister survey is expected to show solid manufacturing
activity.
TECH TRADE
The strongest manufacturing readings in Asia came from tech exporters,
which continue to ride a robust semiconductor cycle driven by upgrades
in smartphones, industrial robots, cars, and more recently demand for
computing machines used to mine cryptocurrencies like bitcoin.
In Japan, the Markit/Nikkei PMI rose to a four-year high.
Taiwan’s reading rose to its highest since April 2011, while South Korean
factory activity bounced back into expansion territory as domestic and
export orders picked up.
Even in China -- where authorities are cracking down on air pollution and
excessive financial risks -- factory growth last month appeared generally
resilient, though economists agree the crackdowns will start to weigh on
activity eventually.
The private Caixin/Markit PMI was steady at 51.5, matching December’s
reading and better than economists at expected, though official data on
Wednesday suggested a slight softening as export orders faltered.
A clearer picture of China’s manufacturing activity and its actual
demand may not emerge until spring when winter smog restrictions are
lifted and construction revives.
“Overall, we expect Asian manufacturing conditions to remain healthy,
supported by robust external demand and accommodative domestic
monetary policy,” said Krystal Tan, Asia economist at Capital Economics.
RISK OF PROTECTIONISM
The outlook for Asia’s export-reliant economies, however, remains
clouded by worries about U.S. trade protectionism as the Trump
administration starts translating last year’s tough talk into action.
Washington slapped steep import tariffs on washing machines and solar
panels last week, drawing protests from Beijing and Seoul, and U.S. officials
suggest other measures are on the way.
While such steps could hurt growth, HSBC Private Banking’s head of
investment strategy for Asia Cheuk Wan Fan said there was no reason to
panic as Asian countries trade more with each other than in the past and
are less reliant on the United States.
Individual companies were therefore more at risk than the wider
economic picture.
“When we look at the risk arising from U.S. protectionism and trade in-
fighting, we adopt a bottom-up approach in identifying potential victims,”
she said. “We will avoid these companies which heavily rely on U.S. export
markets.”
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All Brexit economic forecasts were wrong, British minister says Thursday 1st February, 2018 – Reuters
Brexit minister David Davis rekindled a debate about the credibility of the
government’s own forecasts by saying on Thursday that every economic
prediction on the British economy since the EU referendum has been
wrong.
Davis made the comments in parliament after being asked about leaked
analysis, drawn up by government officials, which suggests Britain would
be worse off after Brexit under a wide range of potential scenarios.
He questioned the value of such research, saying the work is “incredibly
difficult” and that every institution that had tried it had failed.
“Every forecasting model on the performance on the British economy post
the referendum by every major organization, the banks, the government
organizations and, indeed, international organizations has proven wrong,”
Davis said.
“One of the ways it has been proven wrong is because employment in
this country has grown despite the forecasts to record levels today. We will
be seeking to do the best we can to ensure that growth record is
maintained.”
Bodies such as the International Monetary Fund and the Bank of England
have raised their forecasts from gloomy predictions made around the
time of 2016 referendum. However, Britain’s economy has
underperformed many of its peers and is likely to lag global growth this
year.
In the same debate, junior Brexit minister Steve Baker suggested
government officials may be undermining government policy by
calibrating their work to show only the downside of Brexit.
When asked by another Member of Parliament whether he had heard
claims that Treasury officials had “deliberately developed a model” to
show that leaving the EU customs union was damaging to influence
policy, Baker said he agreed.
“I‘m sorry to say that my honorable friend’s account is essentially correct,”
Baker said, adding that this was “quite extraordinary”.
British officials are legally obliged to remain impartial on policy.
The minister then quickly clarified that he had not suggested the
accusation itself was correct.
“To be absolutely clear, I’ve said it was correct that the allegation was put
to me,” Baker said. “I did not in any way seek to confirm the truth of it.”
Some of the most vocal advocates of a total separation from the EU,
known as a hard Brexit, have repeatedly suggested that the machinery of
government was biased against Brexit and working behind the scenes to
sabotage it.
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German industrial workers stage second 24-hour strike Thursday 1st February, 2018 – Reuters
Industrial workers in Germany began a second day of 24-hour strikes over
pay and working hours on Thursday, affecting companies including
carmakers Volkswagen (VOWG_p.DE) and Ford (F.N).
The IG Metall union has called for full-day walkouts through Friday, firing a
last warning shot before it ballots for extended industrial action that could
be crippling to companies reliant on a supply chain of car parts and other
components.
Both the union and employers said on Thursday they were open to talks
resuming on Monday. But each is demanding more willingness from the
other to make concessions.
“There can only be an agreement if the employers improve their stance
on all three topics: pay, the right to shorter hours and aid for workers
burdened by their situation at home or at work,” IG Metall chief Joerg
Hofmann said.
Emboldened by Germany’s fastest economic growth in six years and
record low unemployment, IG Metall is demanding an 8 percent pay rise
over 27 months for 3.9 million metal and engineering workers across
Europe’s largest economy.
The union has also asked for workers to be given the right to reduce their
weekly hours to 28 from 35 to care for children, elderly or sick relatives,
and to be able to return to full time after two years.
This is IG Metall’s first major push for a change in hours since workers
staged seven weeks of strikes in 1984 to help secure a cut of the working
week to 35 from 40 hours.
Employers have offered a 6.8 percent wage increase, but rejected the
demand for shorter hours unless they can also increase workers’ hours
when necessary.
They have also dismissed the idea that they should make up some of the
pay shortfall for workers who cut their hours, saying that would mean some
being paid a higher hourly wage than others.
Around 68,000 workers at 80 companies including truckmaker MAN and
automotive supplier ZF Friedrichshafen downed their tools on Wednesday,
IG Metall said.
By Friday, that number is expected to rise to around 260 companies,
including Mercedes-Benz maker Daimler (DAIGn.DE) and Porsche
(VOWG_p.DE).
The DIW economic institute has estimated the strikes could cost
companies a total of 62 million euros ($77 million) a day in lost revenue,
assuming around 50,000 workers, or on average 200 per company, stop
working for one day each.
The employers are challenging the strikes in court and seeking damages.
Workers at Volkswagen’s headquarters in Wolfsburg and at other sites in
western Germany were staging separate strikes on Thursday after IG
Metall rejected an improved pay offer for about 120,000 staff at the
carmaker.
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European shares slip at end of strong month Wednesday 31st January, 2018 – Reuters
European shares fell on Wednesday as investors locked in profits at the
end of a strong month while results from some of the region’s biggest
names also weighed.
The STOXX 600 index fell 0.2 percent on the day, ending at its lowest in
more than three weeks and suffering its third consecutive day of losses.
The pan-European benchmark, however, ended January with a 2.1
percent monthly gain as optimism over earnings and economic growth
outweighed recent bond market jitters and concerns over a rising euro.
”We’ve the impression that investors are looking for a pretext to take a
breather and lock in some of their gains.” said Andrea Tueni, head of sales
at Saxo Banque Paris.
Results were center stage on Wednesday, with investors particularly
impatient with earnings misses in this high-valuation environment.
Ericsson (ERICb.ST) sank 9.2 percent after the telecoms equipment maker
reported a deeper than expected loss and said the Chinese market
would continue to decline.
Debt collector Intrum Justitia (INTRUM.ST) tumbled by 8.9 percent after its
fourth-quarter revenue and earnings missed expectations.
Shares in fashion retailer H&M (HMb.ST) fell 10.6 percent after fourth-
quarter profit and profit margins fell and the company said it would open
far fewer stores in 2018.
It was another dark day for struggling UK outsourcer Capita (CPI.L), and a
pay day for short-sellers, with the shares down 47 percent after the
company warned on profit, announced a rights issue and suspended its
dividend.
Yet investors remained optimistic on European equities in general.
“It has been a very strong start to the year, and with that, markets can
always take a pause, but there is nothing from the earnings season so far
that would not support a continued constructive view on the market,”
said Britta Weidenbach, head of European equities at Deutsche Asset
Management.
Year to date in 2018, European equity funds have registered the strongest
inflows across all major regions, drawing in more than $22 billion, HSBC
found. Last year Europe accounted for more than a third of global equity
fund flows.
There were some bright spots among companies reporting on
Wednesday.
Electrolux (ELUXb.ST) rose 6.9 percent after the home appliance maker
reported a bigger than expected rise in fourth-quarter profit, while
Finland’s Elisa (ELISA.HE) gained 5.8 percent after its results beat
expectations.
An order boom helped truckmaker Volvo (VOLVb.ST) to raise its outlook,
driving the shares up 0.4 percent.
In an early sign of the negative impact forex could have on some
European businesses, Infineon (IFXGn.DE) shares fell 1 percent after the
chipmaker cut its revenue guidance because of the weak dollar.
“I think there will be selected companies with a potential negative impact
from the dollar, but the question is, is it a net negative and what is the
underlying story,” said Deutsche Bank’s Weidenbach.
Overall fourth-quarter earnings for the STOXX 600 are expected to
increase by 11.9 percent year on year, the latest Thomson Reuters data
showed.
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Nikkei rises for first time in 7 days, helped by softer yen, upbeat earnings Thursday 1st February, 2018 – Reuters
Japan’s Nikkei share average rose on Thursday, rebounding from a six-day
losing streak and pushing most sectors into positive territory, as a weaker
yen and upbeat corporate earnings drove the benchmark index higher.
The Nikkei rose 1.7 percent to 23,486.11 after declining for six straight
sessions.
Fujifilm Holdings jumped 12 percent after the company said it will take
over Xerox Corp in a $6.1 billion deal, combining the U.S. company into an
existing joint venture to gain scale and cut costs in the face of declining
demand for office printing.
Sumitomo Mitsui Financial Group, Japan’s second-largest bank by market
valuation, and Mizuho Financial Group, the third-largest lender, jumped
4.4 percent and 2.2 percent respectively after they both reported hefty
gains in their stock portfolios.
Hino Motors soared 8.0 percent after the truckmaker raised its full-year net
profit outlook.
On the other hand, Fujitsu Ltd dived 13 percent after its operating profit
dropped 29.3 percent for the April-December period.
The broader Topix gained 1.8 percent to 1,870.44, with 32 of its 33
subsectors rising.
<< Back to news headlines >>
Equities battle rising global bond yields to snap end-Jan losing streak Thursday 1st February, 2018- Reuters
European stocks rose on Thursday after three days of losses, although U.S.
and German bond yields near multi-year highs checked gains in world
stock markets and kept them from testing recent record highs.
Stock markets in Europe rose 0.25 percent , supported by a flurry of mostly
positive earnings results, while Japan's blue-chip stock index bounced 1.7
percent off four-week lows .N225 and MSCI's all-country equity index
.MIWD00000PUS was marginally higher.
U.S. equity futures ESc1 1YMc1 however pointed to a flat open for Wall
Street ahead of earnings announcements from tech giants Apple
(AAPL.O), Alphabet (GOOG.O) and Amazon.com (AMZN.O).
January's last trading session on Wall Street ended in the red, but U.S.
indexes still ended with monthly gains of over 5 percent .SPX. World stocks
enjoyed a record 15-month winning streak.
This week’s meeting of the U.S. Federal Reserve was more hawkish than
expected, but confirmed what markets had already expected - an
interest rate rise is likely in March, said Markus Huber, a trader at
brokerage City of London Markets.
“In light of today’s flood of earnings in Europe and the United States, the
Fed meeting will most likely have only a limited and temporary impact on
markets,” Huber predicted.
Global equity markets are torn between buoyant economic growth and
double-digit company earnings, on the one hand, and the possibility that
U.S. and euro zone central banks will tighten policy faster than expected.
The growth momentum was confirmed by manufacturing activity surveys
on Thursday that showed Asian factories getting off to a strong 2018 start
and Europe posting solid growth.
Boeing and Facebook were the latest to reinforce the solid U.S. earnings
growth picture. European markets cheered improved performance at
Unilever and Royal Dutch Shell (ULVR.L) (RDSa.L)
Huber said results from the likes of Amazon and Apple would be crucial.
“It will be essential that those companies not only deliver in regard to
earnings expectations but also show that the momentum going forward
remains strong,” he added.
Equity bullishness is being tempered, however, by rising global bond yields.
The Fed held interest rates unchanged on Wednesday but raised its
inflation outlook, no longer saying it expected price growth to stay below
2 percent. It also flagged “further gradual” rate increases.
That wording convinced many that rates could rise four times this year,
rather than three.
U.S. 10-year Treasury yields surged to near four-year highs above 2.75
percent US10YT=RR after the Fed statement, while German Bund yields on
Thursday rose to fresh two-year highs at around 0.74 percent DE10YT=RR.
Two-year U.S. yields are near decade-highs and could rise further should
jobs data due on Friday confirm sustained labor market strength.
“Long-ended U.S. yields are still rising and that’s spilling over on the
European market and (German) Bunds especially,” said Commerzbank
rates strategist Rainer Guntermann.
Pressure is building on euro zone authorities, too, to curb stimulus, with
employment at record highs and Thursday’s manufacturing surveys
confirming the bloc’s growth boom.
On currency markets, the dollar’s post-Fed bounce fizzled, pushing it
down 0.1 percent against a basket of currencies .DXY. The euro gained
0.2 percent to $1.2440, just off recent three-year highs of $1.2538.
The British pound GBP=D4 rose 0.25 percent, after a 5 percent gain in
January, its biggest monthly rise since May 2009, owing to broad dollar
weakness and expectations of a Brexit deal more favourable to the UK.
The weak dollar trend will not be changed by Fed rate rises, ING Bank
analysts predicted. Not only was policy tightening already priced in,
economic recovery elsewhere and U.S. political uncertainty suggested
“the overnight dollar strength is unlikely to transform into a trend,” they
told clients.
Oil prices LCOc1 CLc1 were higher after a survey showed OPEC’s
commitment to its supply cuts remains in place, even as U.S. production
topped 10 million barrels per day for the first time since 1970.
<< Back to news headlines >>
Sterling climbs as investors' political jitters ease Thursday 1st February, 2018 – Reuters
Sterling strengthened on Thursday, recovering from losses earlier in the
week, as concerns over Prime Minister Theresa May’s leadership eased
and expectations grew that the Bank of England to take a more hawkish
tone in its meeting next week.
Reports that May was facing a leadership challenge from members of her
own party, as well as criticism from the House of Lords, which said in a
report that her Brexit legislation plans contained “fundamental flaws”,
weighed on the currency earlier in the week.
But the pound has been recovering since Tuesday, when Bank of England
Governor Mark Carney struck an upbeat tone on the economy and said
focus was turning to inflation, which investors thought might mean interest
rate would rise faster. The central bank meets next Thursday.
“There were a couple of things in there that suggested things were more
optimistic,” said ING currency strategist Viraj Patel, in London. “He (talked
about) focus shifting back to curbing inflation, which suggested that
maybe they’re looking at a hike in 2018.”
Patel said sterling had also been able to recover because of the absence
of bad news this week.
“Domestic political noise will act as a limiter for sterling, but it won’t
actively weigh on it. Once that noise doesn’t escalate, or there’s no new
catalyst, the natural tendency is for the pound to just revert some of those
losses,” he said.
A report that showed British manufacturing lost more momentum than
expected last month, with activity falling to a seven-month low, took some
shine off sterling but was not enough to knock it into negative territory.
By 1000 GMT the pound was trading up 0.4 percent up at $1.4244, having
earlier reached $1.4275. Against the euro, it was up 0.1 percent at 87.36
pence.
The pound reached its highest levels on a trade-weighted basis since late
June 2016 in the aftermath of the Brexit vote last week. It was just a half a
percent off that high on Thursday.
Since the EU referendum, sterling is still down around 9 percent on a trade-
weighted basis, but it is up about 8 percent from a trough reached in
October 2016.
“With the currency having returned to more ‘normal’ levels recently, we
foresee a slower pace of gains for the rest of 2018, mainly against the
dollar, before the pound trade-weighted index trend appreciation re-
accelerates in 2019,” Credit Agricole strategists wrote in a note to clients.
<< Back to news headlines >>
Dollar bounce only brief despite more hawkish Fed Thursday 1st February, 2018 – Reuters
The dollar briefly clawed back some of its recent falls on Thursday after the
Federal Reserve said inflation was likely to rise this year, but with expected
monetary tightening priced in, traders are waiting to see if upcoming
data will give the greenback more than a brief respite.
The dollar, which is stuck near three year lows after its worst monthly
performance since mid-2016, rose in Asian trading before giving up those
gains.
Traders said that non-farm payroll numbers due later this week, as well as
a host of other economic indicators, will need to be strong to help push
the dollar higher.
The U.S. currency has struggled this year as expected monetary tightening
in other parts of the world, alongside stronger global economic growth,
encourage investors to put more of their money elsewhere, and
particularly back into the euro zone.
The Fed kept interest rates unchanged on Wednesday but said inflation is
likely to quicken this year, bolstering expectations borrowing costs will
continue to climb under incoming central bank chief Jerome Powell.
Against a basket of currencies, the dollar was flat on the day at 89.082. It
touched a fresh three-year low of 88.438 earlier this week.
Against the euro, the dollar also gave up its gains and was down 0.1
percent as the single currency once again pushed past $1.24 to trade at
$1.24275.
“While the kneejerk reaction has been a higher dollar, we expect the
positive effect on the dollar to fade rather soon,” ING analysts said.
“Not only is there already a fair degree of tightening priced in, but
synchronised economic recovery elsewhere and still very much present
U.S. political uncertainty...suggest that the overnight dollar strength is
unlikely to transform into a trend.”
The euro rose around 3.5 percent in January, during which it scaled a
three-year peak above $1.25, amid prospects for the European Central
Bank to begin normalising monetary policy this year.
That prospect got a boost earlier on Wednesday after last month’s
underlying euro zone inflation picked up pace.
Traders are awaiting European manufacturing survey data, as well as
comments by the European Central Bank chief economist, due later on
Thursday.
The dollar did hold on to its gains against the yen. It edged up 0.3 percent
to 109.56 yen, moving away from a four-month low of 108.28 plumbed on
Friday.
The U.S. currency lost 3.1 percent against the yen in January, weighed by
a bevy of factors including concerns about U.S. trade protectionism and
lingering speculation the Bank of Japan was gearing up to begin an exit
from its easy monetary policy.
“Dollar/yen is still in a consolidation phase,” said Tareck Horchani, head of
Asia-Pacific sales trading for Saxo Markets in Singapore, adding that the
dollar’s bounce was still looking tepid.
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Japan steelmakers' profits surge; Kobe Steel reinstates forecast Thursday 1st February, 2018 – Reuters
Japanese steelmakers, led by Nippon Steel & Sumitomo Metal Corp, on
Thursday reported a surge in nine-month earnings, shrugging off an
industrial quality scandal as Kobe Steel reinstated its annual net profit
forecast.
The earnings suggest the steelmakers escaped any sustained negative
impact from the scandal kicked off when Kobe Steel in October admitted
to discovering widespread product data tampering at some of its plants,
undermining Japan’s reputation for manufacturing excellence.
Kobe Steel, Japan’s No.3 steelmaker, said it was reinstating a forecast for
its first annual profit in three years, after establishing that the tampering
had not impacted the safety of its products, which are used widely in
planes, trains and automobiles.
Kobe forecast 45 billion yen ($411 million) of profit for the year through
March and also raised its sales prediction, suggesting customers had not
abandoned the company after the scandal. Before withdrawing its
forecast in October it had expected an annual profit of 35 billion yen.
“Stronger-than-expected profits in steel and construction machineries
were behind an increase in annual forecast,” Kazuaki Kawahara, Kobe
Steel’s managing executive officer, told a news conference.
Before the scandal - which is expected to cost the company 10 billion yen
this year - clouded its outlook, Kobe Steel had posted annual net losses in
the two previous years.
In the April-December, Kobe Steel returned to a net profit of 55.8 billion
yen from a loss of 36.5 billion yen a year earlier, as higher prices in steel
products and higher sales of construction machineries more than offset an
impact from the scandal.
Kawahara said its external committee is expected to complete
investigation over its data misconduct by the end of this month.
Nippon Steel said it had a 108 percent rise in April-December recurring
profit, led by solid demand and higher prices for steel products, and
raised its full-year net profit forecast, citing higher-than-expected gains
from asset sales.
Japanese steelmakers are enjoying the best market conditions in at least
three years. Steel prices have risen on increased production by
automakers, while construction is in full swing for Tokyo’s 2020 Olympics.
Nippon Steel’s recurring profit for the nine months through Dec. 31 came
to 225.48 billion yen. Its profit forecast for the year to March 31 remained
at 300 billion yen, below a mean estimate of 328 billion yen among 13
analysts surveyed by Thomson Reuters I/B/E/S.
“Steel prices at home and abroad are on the rise to reflect solid
demand,” said Toshiharu Sakae, Nippon Steel’s executive vice president.
“But we are concerned about (the) raw materials market, especially for
higher coking coal prices, and other materials such as zinc and
manganese which are becoming an extra cost burden of over 50 billion
yen,” he said.
JFE Holdings Inc, Japan’s second-biggest steelmaker, said its recurring
profit for the nine months through December nearly quadrupled to 170.44
billion yen.
It raised its full-year profit estimate by 10 percent to 220 billion yen thanks
to an appraisal of gains on its raw materials inventory amid higher prices
for coking coal and iron ore.
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