Benefits of a CariCRIS Rating for a Bond...
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Transcript of Benefits of a CariCRIS Rating for a Bond...
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▪ Transjamaican Highway Limited’s rating assigned at CariA-
▪ HMB’s collateralised mortgage obligation’s (CMO 2020-01) rating assigned at ttAA- (SO)
▪ Island Car Rentals Limited’s J $2.2 billion debt issue rating reaffirmed at jmBBB+
▪ HMB’s collateralised mortgage obligation’s (CMO 2019-01) rating reaffirmed at CariAA- (SO)
▪ Government of Barbados’ rating reaffirmed at CariBB-
▪ NCB Capital Markets (Barbados) Limited’s rating reaffirmed at CariBBB-
▪ PanJam Investment Limited’s rating upgraded to CariA-
▪ The Pegasus Hotels of Guyana Limited reaffirmed at CariBBB-
▪ National Flour Mills Limited’s rating reaffirmed at CariA- ▪ The Belize Bank Limited’s rating assigned at CariBBB-
▪ Jamaica Public Service Company Limited’s rating upgraded to CariA-
▪ Saint Lucia Electricity Services Limited’s rating reaffirmed at CariBBB
▪ Endeavour Holdings Limited’s TTD 400 million bond issue rating reaffirmed at CariA+
▪ Government of Barbados’ rating upgraded to CariBB-
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Cash Flow Based Lending for Banks & Credit Unions 26th & 27th March 2020 Antigua
Benefits of a CariCRIS Rating for a Bond Issue:
Latest Rating Actions by CariCRIS
• Widen the range of possible investors to ensure success of the issue
• Help investors to determine if the bond issue is a wise investment
• Provide a clear understanding of the creditworthiness of the issuing
firm and the factors that will impact its performance
DATE
WORKSHOP
COUNTRY
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REGIONAL
Trinidad and Tobago
Republic Financial jumps to $144.01
OVERALL market activity resulted from trading in 11 securities of which four
advanced, two declined and five traded firm.
TWCU rebrands, opens common bond
WHAT was formerly known as the Telephone Workers Credit Union Co-
operative Society will now be officially known as TWCU Cooperative
Society Ltd, as the society marks its 70-year anniversary with an almost
entirely new image.
Barbados
Barbados off European Union grey list
Barbados’ reputation as a clean international business centre has been
restored with the island’s removal from the European Union (EU) grey list of
non-cooperative tax jurisdictions on Tuesday.
Garbage tax pushing costs up
One of Barbados’ largest beverage companies says the Garbage and
Sewage Contribution (GSC) levy coupled with the change in water rate
has resulted in its operation costs shooting up by about 40 per cent.
Estimates debate start on Monday
Government’s Budget, setting out the Estimates of Expenditure and
Revenue for the financial year 2020-2021, was Wednesday laid in
Parliament, together with a projected forecast for the current financial
year 2019-2020.
Jamaica
Eppley earns record profit of $157 million, declares largest dividend in its
history
Eppley Limited's 2019 results have shown record earnings of $157.7 million
for the year, a 20 per cent return on the company's opening equity. The
company has declared the largest dividend in its history at $0.57 per
share.
Jamaica continued
Seprod credits acquisition of Facey Consumer Division, exports growth for
bumper 2019 figures
The Seprod Group is now reaping the benefits of its acquisition of the
Facey Consumer Division and an uptick in export for its bumper revenue
out-turns for 2019.
Mailpac reports net profit of $74.5 million
Mailpac Group Limited (MGL) posted on Friday last an after-tax profit of
$74.5 million for the quarter ended December 31, 2019, in its first set of
financial statements as a publicly listed company.
iCreate Limited raises $24m from bond issue
Start-up company iCreate Limited has raised $24 million through the issue
of a bond arranged by Sagicor Investments Limited.
Jamaica Money Market Brokers expects best-ever year
Jamaica Money Market Brokers (JMMB) is projecting that its 2019
financials, when completed, will represent the strongest in its history with
significant performance attributed to organic and inorganic growth.
'Brick pon brick' 2019 for Pulse Investments
Pulse investments has reported that the company has seen increased
growth in all business segments which has resulted in the modelling and
real estate company doubling its profits last year.
Sygnus Credit doubles investment portfolio
In six months, Sygnus Credit Investments Limited has doubled its portfolio of
investments, nearly half of which is deployed in Jamaica.
Portland JSX enters new phase, waiting for the returns to roll in
Private equity outfit Portland JSX Limited has wrapped up its investing
phase, having taken positions in ten companies.
138 Student Living, Eppley among winners
The Jamaica Stock Exchange (JSE) combined index declined on
Wednesday with an advance/decline ratio of 38/28.
Guyana
Economy grew by 4.7 % in 2019
FUELLED by the investments in the new oil and gas sector and the
performance of traditional industries, the local economy continues to
grow and has recorded positive economic growth of 4.7 per cent for
2019, the highest domestic growth since 2014.
Exxon says spent over $45B on local business to date
ExxonMobil has reported that from 2015 to present, it has spent GY $45.7
billion on hundreds of local vendors with more GY$24 billion being spent
directly on over 700 Guyanese vendors in 2019 alone.
The Bahamas
EU Sorted: Now for France And Holland
The deputy prime minister is "very confident" The Bahamas will resolve its
blacklisting by individual European Union (EU) members after it yesterday
completed its escape from the bloc's tax watch-list.
Insurer Suffers $220m In Hurricane Dorian Claims
JS Johnson's underwriting affiliate suffered just a $105,787 net loss for 2020
despite incurring more than $220m in insurance claims, it was revealed
yesterday.
Panama
Panama economy heading towards 5.5% growth-IMF
Panama’s economy is advanced "in its recovery process". and “we
expect economic growth for 2020 to reach 4.8% and climbing said The
International Monetary Fund (IMF) following an on-site evaluation.
British Virgin Islands
VI now a fully compliant jurisdiction under EU tax laws- Premier Fahie says
gov't welcomes move & will remain focused on VI's role in global
economy
The [British] Virgin Islands has now been recognised as a fully compliant
jurisdiction for tax purposes under the European Union (EU) having
previously been placed on "Annexe ll" of the EU's list while they monitored
the Territory’s compliance in matters related to economic substance.
Venezuela
Latest Rosneft sanctions ratchet up U.S. threats for foreign firms dealing
with Venezuela
Washington’s move this week to sanction a trading unit of Russian oil giant
Rosneft for its ties with Venezuela’s state-run PDVSA escalated threats
facing non-U.S. firms and will likely spur “overcompliance” by companies,
analysts and industry sources said.
Venezuela's Maduro taps sanctioned VP to 'restructure' oil industry
Venezuelan President Nicolas Maduro said on Wednesday he would
create a presidential commission to restructure the country’s beleaguered
oil industry, which will be led by Vice President for the Economy Tareck El
Aissami.
INTERNATIONAL
United States
Fed policymakers cautiously optimistic on U.S. economy despite new
risks, minutes show
Federal Reserve policymakers were cautiously optimistic about their ability
to hold interest rates steady this year, minutes of the central bank’s last
policy meeting showed, even as they acknowledged new risks caused by
the coronavirus outbreak.
Morgan Stanley to buy E*Trade Financial in $13 billion deal
Morgan Stanley (MS.N) said on Thursday it would buy discount brokerage
E*Trade Financial Corp (ETFC.O) in an all-stock deal worth about $13
billion.
United Kingdom
UK retail sales see post-election bounce in January
British shoppers started spending again early this year after a sluggish end
to 2019, another sign that improved sentiment since December’s election
is translating into stronger economic activity.
United Kingdom continued
Google plans to move UK users' accounts outside EU jurisdiction
Google is planning to move its British users’ accounts out of the control of
European Union privacy regulators, placing them under U.S. jurisdiction
instead, the company confirmed late on Wednesday.
Europe
Perfume retailer Douglas targets lifting online sales in southern Europe -
CEO
E-commerce accounts for 32% of revenue in Germany, is significantly
lower in southern European markets
BMW expects to cut average emissions in Europe by 20% this year
BMW (BMWG.DE) will continue to grow sales globally while at the same
time lowering its European average emissions of carbon dioxide by
around 20% this year, Chief Financial Officer Nicolas Peter said on
Thursday.
China
China's virus-hit industrial cities start to ease curbs, restore production
Big manufacturing hubs on the Chinese coast are starting to loosen curbs
on the movement of people and traffic while local governments prod
factories to restart production, following weeks of stoppages due to the
coronavirus outbreak.
China's Lenovo confident of managing virus impact, reports strong third
quarter
Lenovo Group (0992.HK), the world’s biggest PC maker, posted a better
than expected profit on Thursday and said its global operations would
help it tackle short-term headwinds from China’s coronavirus outbreak,
sending its shares up 7%.
Shares of HNA affiliates rally after report of China bailout plan
Shares in affiliates of HNA Group surged on Thursday following a news
report that China plans to take over the debt-laden conglomerate as the
coronavirus outbreak has further hit its ability to meet financial obligations.
China continued
China Jan new bank loans hit record, more policy support seen
New bank loans in China rose more than expected to a record high in
January, as authorities step up support for an economy hit by trade
tensions and facing a new threat from a fast-spreading coronavirus
outbreak.
China to cut $71.3 billion insurance fees to help firms amid coronavirus
outbreak
China is expected to cut pension contributions and insurance fees by
more than 500 billion yuan ($71.27 billion) this year, government officials
said on Thursday, as it seeks to help companies weather the coronavirus
outbreak.
Japan
Japan keeps view economy recovering, flags virus as big risk
Japan’s government kept its view that the economy is recovering
moderately in a monthly report in February as the labor market remained
solid, but it warned about risks to the outlook from the coronavirus
epidemic.
Global
Oil near one-month high on supply threats, easing demand woes
Brent oil prices held near one-month highs on Thursday supported by
China’s efforts to boost its economy, a drop in new coronavirus cases at
the epicentre of the outbreak and supply concerns in Venezuela and
Libya.
IMF calls Argentine debt 'unsustainable,' says bondholders must help
resolve crisis
The International Monetary Fund warned Argentina’s bondholders on
Wednesday that they would likely need to take a hit to help resolve the
country’s “unsustainable” debt burden.
Economy grew by 4.7 % in 2019 Thursday 20th February, 2020 – Guyana Chronicle
FUELLED by the investments in the new oil and gas sector and the
performance of traditional industries, the local economy continues to
grow and has recorded positive economic growth of 4.7 per cent for
2019, the highest domestic growth since 2014.
While there has been positive growth from 2015, economic growth has
been cumulative since 2017, moving from 2.1 per cent in that year to 3.8
per cent in 2018 and to 4.7 per cent last year. The growth recorded last
year was more than the projected 4.6 per cent.
“The 4.7 per cent growth that we had last year was in spite of poor
performances of sugar and bauxite…sometimes the negative reports
overshadow what is positive,” said Minister of Finance, Winston Jordan, as
he shared the ‘positive’ performance with investors and officials during
the sod-turning exercise for the Hilton Hotel, aback Ogle, on Wednesday.
Guyana has been dependent on the performance of a few commodities
over the years, but Jordan said there seems to be a shift in this
dependence, since the positive growth was due to successes in the rice,
construction and tourism industries.
The ability of those sectors, to fuel economic growth, shows that the
economy has been moving away from traditional products and into a
new direction.
“We need to recognise the performance of those sectors…it comes on
the heel of positive performances in spite of yearly challenges…Guyana
continues to grow and with the exception of the year we had one per
cent growth, every year we had growth in excess of three per cent,” said
Minister Jordan, noting that this performance was as a result of the A
Partnership for National Unity and Alliance For Change (APNU+AFC)
Coalition government’s strategic plans and investments.
The minister said government had established a regime that will be
attractive enough to both local and foreign investors. Investments have
been continuous over the past year despite the current political
conditions.
Jordan said investors have flooded the local market despite the political
conditions and this, he said, is surprising because investors like political
stability and they would often wait for the “dust to settle.”
“I am, however, happy that we are attracting investors…as you look
around you can see development and continued investments…those
features are all around, 10 days before elections,” said the minister,
adding that it shows that the coalition government has laid the
foundation for investments to flow.
In pointing out some of the recent investments, the minister said the sod
was recently turned for the construction of Hilton and AC Marriott hotels
at Ogle; and First Bauxite will be opened today at Bonasika.
Chief Executive Officer (CEO) of the National Industrial and Commercial
Investments Limited (NICIL), Colvin Heath-London, also highlighted some
of the impending investments during his remarks at the sod-turning
exercise.
Heath-London said prominent Guyanese businessman, Danny Shaw, who
was responsible for the Windsor Estate Providence development, will soon
turn the sod for the Windsor Estate East Coast Development.
Additionally, local Cardiologist, Dr. Mahendra Carpen, is leading a group
of Guyanese doctors who will be investing in a state-of-the-art specialty
hospital complex, which is geared at offering several specialised services.
Some of the services which will be offered are cardiac, cancer and
urology, all geared at ensuring that Guyanese are no longer forced to
seek certain specialised treatment abroad.
“This certainly is a testimony that NICIL continues to deliver…it reinforces
the point that Guyanese investors are continuing to have a part of the
pie,” said Heath-London.
Heath-London’s point about benefits for locals was reinforced by Minister
Jordan, who said none of those projects will utilise taxpayers’ money.
“We are not taking taxpayers’ money and building hotels and borrowing
loans that attract commercial interest, to build hotels…this was the case
with the Marriott Hotel under the previous administration, when they sold
off the profitable shares in GTT, borrowed US$30M from Republic Bank and
used taxpayers’ money,” said the minister, adding that the coalition
government inherited the bill and it is taxpayers’ money that is repaying
the loan.
Jordan said such a model is not one which the coalition government will
replicate, and they will instead create conditions to ensure that businesses
make profits, but at the same time establish regulations that will protect
the environment, protect workers and grow the economy.
New York-based stock market, NASDAQ, had listed Guyana as the fastest
growing economy in the world. According to NASDAQ, Guyana’s
projected growth rate from 2018-2021 is 16.3 per cent.
The stock market said that with a Gross Domestic Product (GDP) size of
$3.63B (2018 Rank: 160), a growth rate of 4.1 per cent in 2018 and 4.6 per
cent in 2019, Guyana’s economy is expected to grow by 33.5 per cent
and 22.9 per cent in 2020 and 2021 respectively.
Those projections are contained in a report from the International
Monetary Fund (IMF), which stated that Guyana’s real Gross Domestic
Product (GDP) is expected to grow by approximately 86 per cent in 2020,
almost 20 times more than the projected 4.4 per cent growth for this year.
The Economic Commission for Latin America and the Caribbean (ECLAC)
has also forecasted a staggeringly-high growth rate for Guyana next year.
ECLAC noted that Guyana’s growth rate is pegged at 4.5 per cent for this
year, while next year it will be 85.5 per cent.
A report from Bloomberg stated that with such figures, Guyana’s GDP will
grow 14 times as fast as China’s next year.
Further projections by the IMF showed that real GDP will grow by 4.8 per
cent in 2021, 20.6 per cent in 2022 and 26.2 per cent in 2023. Guyana’s
$4B annual GDP is also expected to expand to about $15B by 2024, said
the IMF. The financial institution said the commencement of oil production
will substantially improve Guyana’s medium and long-term outlook.
Guyana is projected to be among the world’s largest per-capita oil
producers by 2025.
The oil sector is projected to grow rapidly, accounting for around 40 per
cent of GDP by 2024 and supporting additional fiscal spending annually of
6.5 per cent of non-oil GDP on average over the medium term, which will
help meet critical social and infrastructure needs.
ECLAC said the Guyana Government will receive approximately 14.5 per
cent of all oil revenue in 2020.
In addition to potential oil revenues, there has already been a notable
increase in the Foreign Direct Investments here. According to ECLAC,
Guyana took in US$495M in FDIs in 2018, which was more than double
what it had received in 2017.
<< Back to news headlines >>
Exxon says spent over $45B on local business to date Thursday 20th February, 2020 – Guyana Chronicle
ExxonMobil has reported that from 2015 to present, it has spent GY $45.7
billion on hundreds of local vendors with more GY$24 billion being spent
directly on over 700 Guyanese vendors in 2019 alone.
In a release on Wednesday, the oil company noted that the 700 vendors
benefitting in 2019 provided goods and services ranging from food to
engineering and the figure spent represents a 74 per cent increase in
expenditure compared to GY$14 billion in 2018.
The company also disclosed that the number of Guyanese supporting
ExxonMobil Guyana’s exploration, development and production activities
has grown by 77 per cent in 2019, representing more than half of the total
workforce.
“There are now nearly 1,900 Guyanese supporting the company’s
activities,” the release stated.
Much of this was made possible through the Centre for Local Business
Development (Centre) established by Esso Exploration and Production
Guyana Ltd, an affiliate of Exxon Mobil Corporation in collaboration with
DAI Global, LLC.
Recently, the Center released a list of planned 2020 tenders to provide
goods or services related to ExxonMobil Guyana and its prime contractors.
The list was uploaded to the Centre’s Supplier Registration Portal and
supplements ongoing efforts to provide Guyanese businesses information
regarding upcoming opportunities available in the oil and gas industry.
The act is comparable to the request in Guyana’s recently completed
Local Content Policy that Operators provide an annual procurement plan
ahead of schedule so that Guyanese contractors can position
themselves, in advance, to benefit.
Planning is underway for another Supplier Forum later this year which will
allow for direct engagement with ExxonMobil Guyana and its prime
Contractors.
“Local suppliers are important to the success of our operations, and
through the Centre, we continue to strengthen the capabilities of
Guyanese businesses; improving their competitiveness and the country’s
overall industrial base,” President of ExxonMobil Guyana, Rod Henson said
in the release.
ExxonMobil stated that the Centre continues to be a reliable resource for
information on safety, technical standards, procurement opportunities,
tendering processes and project-specific information. It also provides
mentoring, access to financial support services and business-to-business
networking opportunities. It was established in 2017, to assist small and
medium-sized Guyanese businesses build capacity and improve their
competitiveness and more than 2,100 Guyanese business are registered
through the Center to date.
In keeping with its mandate, the it has provided coaching and mentorship
to more than 450 businesses. Currently, 15 Guyanese companies are
receiving mentorship for ISO 9001 compliance, while four companies were
certified and one company has reached compliancy. “Using a multi-
tiered approach, ExxonMobil focuses on building workforce and supplier
capabilities as well as strategic community investment. Continued growth
of local content is exactly what we want to see as we continue to partner
with Guyana,” Henson indicated. He expects that a steady phased
approach to future development projects such as Liza Phase 2 and
potentially Payara will help further progress local content in Guyana.
<< Back to news headlines >>
EU Sorted: Now for France And Holland Wednesday 19th February, 2020 – Tribune 242
The deputy prime minister is "very confident" The Bahamas will resolve its
blacklisting by individual European Union (EU) members after it yesterday
completed its escape from the bloc's tax watch-list.
K Peter Turnquest told Tribune Business that this nation was "making
progress in addressing the issues" - including "distrust" - that led both
France and the Netherlands to place it on their own individual "blacklists"
of countries deemed non co-operative on tax matters.
Disclosing that their concerns have now been identified, Mr Turnquest said
they related to "similar issues that we've had in the past with respect to the
exchange of [tax] information". This likely means that The Bahamas was
failing to respond within the timeframe sought by both France and the
Netherlands, and/or the content of the information supplied was less than
desired.
The deputy prime minister added, though, that both EU members had
failed to be totally transparent about the standards they wanted The
Bahamas to meet before invoking their national "blacklists". He also
suggested communication with this nation had not been up to the mark.
Speaking after the 27-nation EU confirmed The Bahamas' removal from its
so-called "grey list", deeming this nation to be in full compliance with its
tax-related demands, Mr Turnquest said this nation has no qualms about
meeting global regulatory standards once "treated with mutual respect".
"I think the message is that The Bahamas has demonstrated, and
attempted to demonstrate for any number of years, that it is co-operative
and meets the standards when they are made known to us and they are
transparent," he told this newspaper.
"In the case of those individual countries that may have reservations and
specific issues, we are addressing those. Once we have communication
and are treated with mutual respect, we don't have reservations about
dealing with the issue of international standards. We don't equivocate
over that."
Mr Turnquest declined to provide detail on the rationale for the French
and Dutch actions, but said: "It's communication and some distrust in the
relationship that caused them to take the action they did.
"We are making progress. We know what the issues are, and are dealing
with them. It's similar issues that we've had before with respect to the
exchange of information. I'm very confident we will address their issues.
What their timeline is for removing us from their list, I can't speak to that.
But I'm very confident we will be able to address their issues."
The Bahamas' removal from the EU's so-called 'grey list', effectively a
category of nations that were being monitored for full compliance with its
demands, means this nation is now deemed to have properly
implemented economic substance requirements, the removal of
preferential incentives for foreign investors, and be demonstrating full co-
operation on all tax matters.
However, many in the Bahamian financial services industry are
questioning the value of meeting all the EU's demands when its individual
members - France and the Netherlands - adopt what appear to be even
more rigorous criteria to "blacklist" this nation on similar tax-related
grounds.
While less worrisome than a blacklisting by the full EU, a fate that befell
rival international financial centres (IFCs), the Cayman Islands and
Panama, yesterday, such individual country actions still negatively impact
the reputation of The Bahamas' financial services industry, deter French
and Dutch citizens/companies from doing business here, and delay
transactions with those states.
Emmanuel Komolafe, a Bahamas-based risk management specialist,
yesterday told Tribune Business that "it makes no sense" for the EU to brand
The Bahamas fully compliant while some of its major members keep it on
their own blacklists.
Arguing that this had dampened any joy at escaping full EU scrutiny, he
said: "The EU initially put us on their blacklist, then took us off it and put us
on their 'grey list'. Now we are off the 'grey list' but, in the middle of that,
the Netherlands put us on their blacklist for tax matters and then France
did.
"My first flashpoint is: Today, the EU have taken us off their grey list, yet
here we have the Netherlands and France doing the same thing with their
own blacklists. They are part of the EU, and the EU has confirmed we've
fulfilled their requirements, so I submit they ought to do the same. It only
makes sense for the Netherlands and France to follow suit."
While acknowledging that being one of 16 countries removed from the
EU's 'grey list' was positive for a Bahamian financial services industry badly
in need of a boost, Mr Komolafe said the country "must go beyond that"
given that national blacklists undermine the rationale for complying with
both the EU and likes of the Organisation for Economic Co-Operation and
Development (OECD).
"Having their own lists undermines the process that the EU follows," Mr
Komolafe added. "We must follow up with France and the Netherlands so
that they take us off their blacklists, especially as they're based on the
same issues of tax co-operation and the exchange of information.
"The removal from the 'grey list' is positive news but is not cause for
jubilation." Besides The Bahamas' continued presence on national tax
blacklists, Mr Komolafe added that it still needs to focus on also escaping
the Financial Action Task Force's (FATF) monitoring list of countries that
have deficiencies in their anti-money laundering and terror financing
regimes.
Mr Turnquest, meanwhile, said The Bahamas' 'grey list' escape gives the
Bahamas Financial Services Board (BFSB) and the private sector "another
tool through which to promote The Bahamas" as a compliant, well-
regulated jurisdiction to international investors.
He conceded, though, that The Bahamas cannot afford to "rest on our
laurels" and needs to "keep our eye on the ball" given the constantly-
changing global regulatory environment and standards to ensure it avoids
such pressure in the future.
The deputy prime minister also confirmed that this nation was "actively
engaged", and monitoring, the OECD's proposals for countries to levy a
minimum tax rate on multinationals as well as for taxing the digital
economy.
"It is a significant achievement given all the challenges put before us," Mr
Turnquest said of the 'grey list' escape, "and our team demonstrated
tremendous capacity and proficiency in dealing with it.
"We are happy with the result, and have demonstrated to the
international community that we are reliable partners, and that The
Bahamas is committed to good governance and transparency for the
industry.
"In terms of the industry itself, it's a boost for us again and brings
confidence to the jurisdiction that it is compliant with international
standards and regulatory quality."
Mr Turnquest added that upgrading the Investment Funds Act to meet the
EU's Alternative Investment Fund Management Directive (AIFMD) would
also provide "a particular advantage to us as we seek to regain our
position with regards to fund management".
He said it was critical for the partnership between the Government,
financial services industry and its regulators to continue to ensure that The
Bahamas "makes sensible regulations and legislation that can give us a
tremendous advantage."
<< Back to news headlines >>
Insurer Suffers $220m In Hurricane Dorian Claims Wednesday 19th February, 2020 – Tribune 242
JS Johnson's underwriting affiliate suffered just a $105,787 net loss for 2020
despite incurring more than $220m in insurance claims, it was revealed
yesterday.
The BISX-listed broker and agent, unveiling its results for the full-year and
fourth quarter, said its reinsurance programme had minimised the losses
sustained by Insurance Company of The Bahamas (ICB) due to the
Category Five storm.
ICB is the carrier through which JS Johnson places much of its property
and casualty business. Alister McKellar, its managing director, told
shareholders: "Given the scale of Dorian, we are fortunate to have only
suffered a net loss of $105,787 in our underwriting division.
"This accomplishment speaks volumes of the quality and financial strength
of our reinsurance programme, which stood behind the more than $220m
of gross claims recorded by ICB. [It is] still a meaningful change to the
$1.457m in profit earned the year prior."the
Bahamian property and casualty insurers buy huge quantities of
reinsurance on an annual basis as their capital bases are simply not
sufficient to cover the billions of dollars' worth of assets domiciled in this
nation. They typically take only a small portion of the risk on to their books,
with reinsurers covering the bulk of this exposure.
JS Johnson's total net income dropped by 8.9 percent year-over-year to
$6.44m, compared to $7.067m the prior year, due to Dorian's impact on
ICB's figures. However, the agency and brokerage business produced
positive gains despite the devastation inflicted upon Grand Bahama and
Abaco.
"In contrast, our agency division enjoyed another successful year," Mr
McKellar said. "Total income grew a healthy 13 percent from $19.646 to
$22.111m, the highest growth in several years, spurred on by the
continued economic recovery throughout the majority of our islands.
"This trend is expected to continue into 2020 with the inflow of foreign
exchange and investment. Despite expenses increasing 11 percent,
overall profitability rose 17 percent from $5.611m to $6.546m."
ICB's gross claims are in line with those for the overall Bahamian property
and casualty industry, with the total expected to be towards the upper
end of the $1.5bn to $2bn range.
Anton Saunders, RoyalStar Assurance's managing director, previously
revealed that the carrier and its reinsurance partners have set aside a
$325m "gross reserve" to deal with some 1,800 Dorian-related claims.
"The $2bn [collective industry claims payout] for Dorian is holding firm. You
can forget the $1.5bn," he said.
<< Back to news headlines >>
Panama economy heading towards 5.5% growth-IMF Tuesday 18th February, 2020 – Panama Newsroom
Panama’s economy is advanced "in its recovery process". and “we
expect economic growth for 2020 to reach 4.8% and climbing said The
International Monetary Fund (IMF) following an on-site evaluation.
"We see that there is a clear recovery in the economy. We expect that
economic growth for this year will be of the order 4.8%," said the head of
the IMF mission, Alejandro Santos.
It is estimated that "good management of finances" will allow the
Panamanian economy to grow at a rate of 5.5% in the medium term,
Santos added.
The Panamanian economy has been decelerating which was
accentuated in 2019 when it was expected to grow 3.5%, the lowest rate
in a decade and as a result of the depletion of the economic model
based on large public investments in infrastructure, economists told the
Efe News Agency.
The multilateral agency believes that this year the deficit and inflation "will
remain under control and that the economy will continue to grow," after
learning about the initiatives, policies, strategies and how the country will
face global challenges.
During the year 2019, the fiscal deficit was controlled, which closed at
3.1% in accordance with official data, and it is expected that the
budgeted amount will be achieved, thus aligning with the Fiscal Social
Responsibility law, Santos added. .
The Vice Minister of Finance, Jorge Luis Almengor, stressed that the
Panamanian Government is committed "to the prudent management of
public finances, in order to resume the fiscal discipline required to comply
with the Fiscal Social Responsibility Law, the Law of Budget and other laws
applied in Panama. "
As part of the economic recovery plan, the Government of Laurentino
Cortizopaid debts of $1.584 billion to suppliers, contractors, teachers,
agricultural producers, banks and the Social Security Fund (CSS),
according to the official information.
<< Back to news headlines >>
Fed policymakers cautiously optimistic on U.S. economy despite new
risks, minutes show Monday 20th February, 2020 – Reuters
Federal Reserve policymakers were cautiously optimistic about their ability
to hold interest rates steady this year, minutes of the central bank’s last
policy meeting showed, even as they acknowledged new risks caused by
the coronavirus outbreak.
The readout on Wednesday of the policy discussion, at which
policymakers unanimously voted to keep interest rates unchanged in a
target range of between 1.50% and 1.75%, also showed Fed officials were
skeptical about any big rethink of the central bank’s inflation target.
“Participants generally saw the distribution of risks to the outlook for
economic activity as somewhat more favorable than at the previous
meeting,” the Fed said in the minutes of the Jan. 28-29 meeting. It went on
to say the current stance of monetary policy was likely to remain
appropriate “for a time.”
Coming into this year the Fed had made clear that, after three interest
rate cuts in 2019, it plans to hold interest rates steady, barring a significant
change in the U.S. economic outlook.
Policymakers have pointed to U.S. consumer spending levels, dissipating
U.S-China trade tensions and loose financial conditions as supporting their
view, but how long such an upbeat assessment can last has already been
tested by escalating concern about the global economic impact of the
coronavirus outbreak that started in China.
On Monday Apple Inc (AAPL.O) issued a revenue warning due to the
disruption the epidemic is causing to its supply chain. China, the world’s
second-largest economy, is still struggling to get its manufacturing sector
back up and running after imposing severe travel restrictions to contain
the flu-like virus.
Fed Chair Jerome Powell said last week it was too early to tell if the knock-
on economic impact on the United States would be severe or sustained
enough to cause the Fed to change its current path.
Since the outbreak began investors have brought forward their bets of
when the Fed will cut interest rates again, to around June of this year. In
the minutes, policymakers said the threat “warranted close watching.”
Despite that, Fed officials offered a fairly upbeat assessment of the
economy, expecting consumer spending to “likely remain on a firm
footing,” job gains to expand at a healthy pace, continued moderate
economic expansion and inflation returning to its 2% goal. The Fed is
forecasting the economy growing 2.0% this year.
That is at odds with some economic data released since the meeting. The
Commerce Department reported last week a slowdown in consumer
spending in January. Business investment has also experienced a
deepening downturn and the U.S. manufacturing sector remains weak.
As part of a discussion on rethinking the Fed’s inflation goal during the
central bank’s review of its main policy tools, there were vocal doubts
about adopting an inflation range.
“Most participants expressed concern that introducing a symmetric
inflation range ... could be misperceived as a signal that the Committee
was comfortable with continued misses below its symmetric inflation
objective,” the Fed said.
BALANCE SHEET
Elsewhere in the minutes, Fed policymakers discussed how to handle its
growing balance sheet. The Fed has been buying $60 billion monthly of
U.S. Treasury bills since October to increase the level of reserves in the
banking system in response to a liquidity crunch.
Powell has said the Fed would aim to begin scaling back that amount
sometime in the April-June period, when the level of reserves in the
banking system would likely be deemed adequate.
After that, “regular open market operations would be required over time
in order to accommodate trend growth in the Federal Reserve’s liabilities
and maintain an ample supply of reserves,” Fed policymakers noted in the
minutes.
The Fed also expects to continue offering support in the market for
repurchase agreements, or repo, at least through April but in the minutes
staff floated a plan that included phasing out the term repo operations
after April. Those policymakers who commented on the plan were
comfortable with the idea, according to the minutes.
Several policymakers asked for more discussion “before long” on the
possibility of creating a standing repo facility, which would allow banks to
borrow cash as needed at a fixed rate.
<< Back to news headlines >>
Morgan Stanley to buy E*Trade Financial in $13 billion deal Thursday 20th February, 2020 – Reuters
Morgan Stanley (MS.N) said on Thursday it would buy discount brokerage
E*Trade Financial Corp (ETFC.O) in an all-stock deal worth about $13
billion.
E*Trade shareholders will receive 1.0432 Morgan Stanley shares for each
share as part of the deal.
<< Back to news headlines >>
Japan keeps view economy recovering, flags virus as big risk Thursday 20th February, 2020 – Reuters
Japan’s government kept its view that the economy is recovering
moderately in a monthly report in February as the labor market remained
solid, but it warned about risks to the outlook from the coronavirus
epidemic.
The new assessment came even after Japan’s economy shrank at the
fastest pace in almost six years in October-December last year as a sales
tax hike hit consumer and business spending.
While the government maintained its view, it slightly changed the wording
to say the economy was “recovering at a moderate pace, while an
increased weakness centered on manufacturers remains intact amid
continued softness in exports.”
A Cabinet Office official said: “The virus outbreak is the biggest risk to the
economy. We need to pay a close attention to its adverse impacts to the
economy.”
The government also kept its view that factory output remained weak
and said it was expected to stay sluggish for a while as the virus drags on
China’s economy and disrupts global supply chains.
Among other key elements, the report said consumer spending was
“picking up” and capital spending was “increasing moderately but
showed some weakness”. Both assessments were unchanged from last
month.
And the government said exports were weakening.
Data this week showed Japan’s machinery orders tumbled at their fastest
pace since 2018 while exports fell for the 14th straight month.
The number of foreign visitors to Japan fell for the fourth straight month in
January as the impact of a South Korean boycott continued to weigh.
Sharper falls are expected ahead as the virus keeps away Chinese tourists
and dampens global air travel.
Japan’s financial watchdog has begun conducting an emergency survey
on domestic financial institutions with business operations in China to
gauge how the coronavirus outbreak could affect credit costs.
With growing global fallout from the epidemic, many private analysts
believe that Japan’s economy is on brink of recession.
<< Back to news headlines >>
Oil near one-month high on supply threats, easing demand woes Thursday 20th February, 2020 – Reuters
Brent oil prices held near one-month highs on Thursday supported by
China’s efforts to boost its economy, a drop in new coronavirus cases at
the epicentre of the outbreak and supply concerns in Venezuela and
Libya.
Brent crude futures LCOc1 were up 7 cents at $59.19 a barrel by 0939
GMT, after climbing to as high as $59.71 earlier in the day.
West Texas Intermediate (WTI) crude futures CLc1 climbed 17 cents to
$53.46 per barrel.
China’s move to cut its benchmark lending rate on Thursday also helped
ease worries about slowing demand in the world’s second-biggest oil
consumer and largest crude oil importer.
China reported 349 new confirmed cases in Hubei province on
Wednesday, the lowest in more than three weeks, while the death toll rose
by 108, down from 132 the previous day.
“The market found support in still growing optimism over a soon-to-be-felt
increase in Chinese economic activity and the prospect of Venezuelan
export constraints increasing,” JBC Energy said.
The United States this week sanctioned a trading unit of Russian oil giant
Rosneft for its ties with Venezuela’s state-run PDVSA, a move which could
choke the OPEC member’s crude exports even further.
At the same time, conflict in Libya that has led to a blockade of its ports
and oilfields shows no signs of a resolution.
The head of Libya’s internationally recognised government Fayez al-Serraj
dashed hopes of reviving peace negotiations on Wednesday after the
Libyan National Army of Khalifa Haftar shelled the port in the capital
Tripoli, held by al-Serraj’s government.
The shutdowns in Libya, ongoing for over a month, have slashed the OPEC
member’s crude production by over 1 million barrels per day.
Brent crude may extend its gains to $60.22 per barrel, as suggested by its
wave pattern and a projection analysis, according to Reuters technical
analyst Wang Tao.
Meanwhile, American Petroleum Institute data showed a bigger-than-
expected build up in crude oil inventories helped cap price gains.
U.S. crude stocks rose by 4.16 million barrels in the week to Feb. 14,
compared with analyst expectations for a build of 2.5 million barrels,
according to data from the industry group on Wednesday. [API/S]
“Although crude oil inventories rose by more than expected, the draws of
2.7 million bbls in gasoline stocks and 2.6 million bbls in distillate inventories
keep the futures markets steady this morning,” brokerage PVM said.
Official Energy Information Administration stock data is expected to come
later today.
<< Back to news headlines >>
IMF calls Argentine debt 'unsustainable,' says bondholders must help
resolve crisis Thursday 20th February, 2020 – Reuters
The International Monetary Fund warned Argentina’s bondholders on
Wednesday that they would likely need to take a hit to help resolve the
country’s “unsustainable” debt burden.
The fund, wrapping up a week-long visit to Argentina, said rising public
debts meant the country needs a definitive plan to restore debt
sustainability, which would require a “meaningful contribution from private
creditors.”
Argentina is battling to restructure its debts to avoid defaulting on around
$100 billion in loans and bonds - including to the IMF - after a biting
recession, high inflation and a market crash pummeled the country last
year.
The IMF stance lends support to Argentina’s new Peronist government,
which has maintained it cannot pay its debts unless given time to revive
growth. Argentina is looking to wrap up debt negotiations with creditors
by the end of March.
“They are basically calling for a large haircut,” said Gabriel Zelpo, director
of Buenos Aires economic consultancy Seido, adding the move gave
Argentina’s economy minister, Martin Guzman, more leverage to ask
creditors to take losses.
He said that while the stance was not totally unexpected it was generally
a negative for bondholders and implied potentially tougher negotiations.
“It implies a longer period of restructuring and a longer period for
returning to the market.”
The IMF said Argentina’s ability to service its debts had deteriorated
sharply compared with mid-2019 when it categorized the country’s
situation as “sustainable, but not with high probability.”
“IMF staff now assesses Argentina’s debt to be unsustainable,” it said,
adding that the fiscal surplus Argentina would need to reduce its debts
was “not economically nor politically feasible.”
The IMF said meetings with Argentine officials had been “very productive”
and that the fund’s managing director, Kristalina Georgieva, would meet
Guzman at the Group of 20 Finance Ministers summit to discuss “next
steps.”
Argentina’s center-left president, Alberto Fernandez, said on Twitter that
he welcomed the IMF’s stance. “If all parties demonstrate a willingness to
agree, we can grow again, honor our commitments and put Argentina
back on its feet,” he wrote.
Argentine bond prices, which were hammered last year, have wobbled
recently as investors waited on signs from the IMF about its stance, likely to
be influential in how Argentina goes about its debt restructuring plans.
“The worst-case scenario for bondholders would be for the IMF to issue a
statement supporting a deep cut, or a cut in capital owed to
bondholders,” Fernando Marrul, director of consultancy FM & Associates,
said ahead of the fund’s statement.
Guzman recently said austerity policies backed by the IMF were to blame
for Argentina’s debt crisis and warned that upcoming debt talks would
likely be frustrating for bondholders.
Argentine bond prices have dropped 3.5% this year as uncertainty rose
about the country’s ability to pay $44 billion to the IMF, its biggest single
creditor.
<< Back to news headlines >>
Republic Financial jumps to $144.01 Thursday 20th February, 2020 – Trinidad Express Newspaper
OVERALL market activity resulted from trading in 11 securities of which four
advanced, two declined and five traded firm.
Trading activity on the first tier market registered a volume of 138,979
shares crossing the floor of the Exchange valued at $4,291,995.23.
The Composite Index advanced by 2.48 points (0.16 per cent) to close
1,511.15.
The All T& T Index advanced by 2.42 points (0.13 per cent) to close at
1,927.81.
The Cross Listed Index advanced by 0.35 points (0.24 per cent) to close at
148.27.The SME Index remained at 68.45.
JMMB Group Ltd was the volume leader with 44,649 shares changing
hands for a value of $119,710.42, followed by First Citizens Bank with a
volume of 43,777 shares being traded for $2,188,570. First Caribbean
International Bank contributed 14,245 shares with a value of $112,393.05,
while Scotiabank added 12,217 shares valued at $763,562.50.
Republic Financial Holdings Ltd registered the day's largest gain,
increasing $0.75 to end the day at $144.01. Conversely, TTNGL registered
the day's largest decline, falling $0.02 to close at $20.88.
CLICO Investment Fund was the only active security on the Mutual Fund
Market, posting a volume of 313,709 shares valued at $8,940,903.70.
CLICO Investment Fund advanced by $0.01 to end at $28.50.
Calypso Macro Index Fund remained at $16. The second tier market did
not witness any activity.
The SME market did not witness any activity. CinemaOne remained at
$6.50. Endeavour Holdings Ltd remained at $12.65.
The USD equity market did not witness any activity. MPC Caribbean Clean
Energy Ltd remained at US$1.08.
<< Back to news headlines >>
TWCU rebrands, opens common bond Thursday 20th February, 2020 – Trinidad and Tobago Newsday
WHAT was formerly known as the Telephone Workers Credit Union Co-
operative Society will now be officially known as TWCU Cooperative
Society Ltd, as the society marks its 70-year anniversary with an almost
entirely new image.
TWCU recently hosted a ceremony, marking the start of its anniversary
celebrations ahead of the May 25 date. The ceremony saw the launch of
a new logo, as well as the expansion of its vision, products and services.
The previous name was derived from a common bond, which the
members shared as workers of the TT Consolidated Telephone Company
(now TSTT). The credit union was formed with just 38 members and $51 in
share capital, and has since grown to over 5,000 members with an asset
base of more than $438 million (as at December 2018).
Acting Commissioner for C-operative Development Andrea McKenna
gave the feature address at the ceremony and lauded the company for
its tenacity and care for its membership.
"Your company can be considered a beacon of strength and security to
its members," McKenna said.
"Your achievement here today has demonstrated that amidst the rigorous
economic conditions, your organisation truly stands as an illustration of the
resilience of (a) value-based credit union model.
"Your credit union has always built its strength on volunteering as you have
donated your time since inception to make sure that your members'
needs are satisfied, recognising that your voluntary service is so valuable
to your members that it is literally priceless and for this I commend you.
She said the credit union was established when wages among telephone
workers and the wider society were generally low but provided a platform
for its members to grow.
"You can boast that your credit union has enhanced the lives of the
members by the provision of loans for education and (to) finance
household expenses," McKenna said.
"As you continue to embrace change, I would encourage you to shift your
focus to develop your small business loan portfolio and to foster
entrepreneurship among members.
TWCU director Trevor Alleyne, addressing the audience, said the
company has remained resilient because of its propensity to embrace
change and welcome new ways of conducting business.
"Throughout our 70 years of existence, change has been the catalyst for
our growth and development. Change, through membership and
environmental factors, has shaped society's character and defined our
progress," he said.
"From the vision and zeal of our early pioneers, through the dedication of
our stalwarts to whom the baton was passed from time to time and the
commitment to the legacy inherited by our present members."
He highlighted changes that came with each passing decade since its
establishment, starting in the 1950s when he said, "early pioneers were
dedicated to the nurturing and strengthening of the co-operative idea
within the common bond (TT Consolidated Telephone Company)."
Its second decade of operations, Alleyne said, saw changes within the
working environment.
"In the aftermath of the prolonged industrial strike of 123 days, the
workplace environment was restructured to become TT Telephone
Company Ltd.
"Members earned better incomes that made savings easier, which
boosted support for the credit union."
The 1970s, he highlighted, also saw changes in tandem with the rise of
social movements.
"As a result of the black power social unrest, the government of the day
embarked on assistance to co-operative development as a socio-
economic strategy," Alleyne said, adding that credit union members
earned tax exemptions on credit union share savings, which boosted
membership and contributed to the credit union's growth.
During the 1980s, the credit union introduced computerisation of
operations and acquired offices on Henry Street, Port of Spain.
"The fifth decade...Our society endured and survived the collateral effects
of the attempted coup and assault on the democracy of the nation. We
suffered financial loss and property damage and was not indemnified by
insurance," Alleyne said.
"Unfazed, we continued operations and went on to launch in
collaboration with the Ministry of Education (for the) national schools
choral speaking (programme) that was sponsored for 15 consecutive
years in which over 3,000 students participated (annually).
He said with there was greater change with the turn of the millennium.
"Our society, along with the local and global community, was prepared to
mitigate the technological concerns at the advent of the 21st century.
We, like the local and global community breathed a sigh of relief."
The following decade, the 2010s saw the introduction of new
management operating systems. It moved from volunteer management
to paid management, as well as the introduction of a youth arm, which
was intended for succession planning.
"(With the 2020s), as we celebrate our 70th anniversary this year, moving
towards our eighth decade, once again, we respond to the change in
the evolving dynamics of the era," Alleyne said.
TWCU says while the name change may seem minor, it is significant as it
removes all perceived limitations and opens its bond to all.
<< Back to news headlines >>
VI now a fully compliant jurisdiction under EU tax laws- Premier Fahie says
gov't welcomes move & will remain focused on VI's role in global
economy Wednesday 19th February, 2020 – Virgin Island News Online
The [British] Virgin Islands has now been recognised as a fully compliant
jurisdiction for tax purposes under the European Union (EU) having
previously been placed on "Annexe ll" of the EU's list while they monitored
the Territory’s compliance in matters related to economic substance.
The announcement was made in a press release entitled 'Taxation:
Council revises its EU list of non-cooperative jurisdictions,' published by the
Council of the European Union on Tuesday, February 18, 2020.
“I welcome the European Union’s recognition that the BVI fully complies
with its tax good governance principles. This is as a result of close
cooperation and positive dialogue with the EU and demonstrates the
BVI’s commitment to meeting and surpassing international standards,"
Hon Fahie said in statements released late Tuesday afternoon.
VI had to meet EU Requirements
While the Territory was never added to the EU’s list of non-cooperative
jurisdictions, getting placed on Annexe ll, meant it had to meet EU
economic substance requirements first by passing the Economic
Substance (Companies and Limited Partnerships) Act in December of
2018.
"The BVI was also required to undertake further work to define appropriate
substance requirements for collective investment vehicles. Following a
thorough process of assessment, monitoring and dialogue, the EU now
deems the BVI to be fully compliant with its EU tax good governance
principles and the jurisdiction has been removed from Annexe ll," a
statement from Government said.
While the VI is now a compliant jurisdiction; however, the EU announced
that four other jurisdictions, including fellow Overseas Territory (OT),
Cayman Islands, along with Palau, Panama and Seychelles, is now on its
list of non-cooperative tax jurisdictions.
According to the EU, those jurisdictions did not implement the tax reforms
to which they had committed, by an agreed deadline.
Gov't will remain focused - Premier Fahie
According to Premier Fahie, in order to keep the VI in good standing, “I,
along with my Government, remain completely focused on ensuring the
continued success of our international business and finance centre and its
role in the global economy."
He said the belief is that there will be significant opportunities for the VI
and its people to enhance economic substance even further.
<< Back to news headlines >>
UK retail sales see post-election bounce in January Thursday 20th February, 2020 – Reuters
British shoppers started spending again early this year after a sluggish end
to 2019, another sign that improved sentiment since December’s election
is translating into stronger economic activity.
Retail sales volumes rose by a greater-than-expected 0.9% on the month
in January after a 0.5% fall in December, Britain’s Office for National
Statistics said on Thursday.
The recovery was even more marked if fuel sales are excluded: sales up
1.6% on the month, the biggest increase since May 2018 and above all
forecasts in the Reuters poll.
Sales at petrol stations fell by 5.7% in January, the most since April 2012,
which the ONS linked to higher fuel prices. Clothing sales grew by the
most since May 2018 after several months of weakness.
Consumer demand faltered in the latter part of 2019 amid a political
deadlock in parliament over Brexit. Combined with weak business
investment, that kept Britain’s economy from growing at all in the last
quarter of 2019.
Following a snap election in December, Prime Minister Boris Johnson
returned to office with a comfortable majority. Business and consumer
sentiment has improved since then, as Britain left the European Union on
Jan. 31 with an 11-month transition deal.
The data supports the Bank of England’s decision to leave interest rates
unchanged last month, on expectations the economy will recover early
this year. Sterling erased some earlier losses after the figures came out.
“The British consumer is a hardy beast and having weathered the pre-
election uncertainty, we have charged back into the shops,” Jeremy
Thomson-Cook, chief economist at payments company Equals Group,
said.
However, he added, the rebound might not last.
Separate data earlier on Thursday showed employers had made the
weakest annual pay offers in more than a year to staff during the three
months to the end of January, and many economists predict Brexit
uncertainties will re-emerge soon.
Annual sales growth remained lackluster in January, up just 0.8% on the
year after 0.9% annual growth in December, broadly in line with
economists’ forecasts.
Looking at the three months to January as a whole, annual sales growth
was the weakest since May 2013. Excluding fuel, sales did not grow at all
between August and December, the weakest such run since comparable
records began in 1996.
Earlier in 2019, consumer demand had helped support growth, while
businesses had put investment on hold until the course of Brexit became
clearer.
Britain has now left the EU, and after the 11-month transition expires at the
end of the year, customs checks and new tariffs on trade with the EU are
likely.
British retailers had mostly reported subdued results for the Christmas
period.
Asda, the British supermarket arm of the world’s biggest retailer, Walmart
(WMT.N), said on Tuesday that increasingly budget-conscious consumers
were behind a fall in its underlying sales in the Christmas quarter.
<< Back to news headlines >>
Google plans to move UK users' accounts outside EU jurisdiction Thursday 20th February, 2020 – Reuters
Google is planning to move its British users’ accounts out of the control of
European Union privacy regulators, placing them under U.S. jurisdiction
instead, the company confirmed late on Wednesday.
Reuters had reported the plans earlier on Wednesday, citing people
familiar with them.
The shift, prompted by Britain’s exit from the EU, will leave the sensitive
personal information of tens of millions with less protection and within
easier reach of British law enforcement.
Alphabet Inc’s Google intends to require its British users to acknowledge
new terms of service including the new jurisdiction, according to people
familiar with the plans.
“Nothing about our services or our approach to privacy will change,
including how we collect or process data, and how we respond to law
enforcement demands for users’ information,” Google said in an emailed
statement. “The protections of the UK GDPR will still apply to these users.”
A spokesman declined to answer questions.
Ireland, where Google and other U.S. tech companies have their
European headquarters, is staying in the EU, which has one of the world’s
most aggressive data protection rules, the General Data Protection
Regulation.
Google has decided to move its British users out of Irish jurisdiction
because it is unclear whether Britain will follow GDPR or adopt other rules
that could affect the handling of user data, the people said.
If British Google users have their data kept in Ireland, it would be more
difficult for British authorities to recover it in criminal investigations.
The recent Cloud Act in the United States, however, is expected to make
it easier for British authorities to obtain data from U.S. companies. Britain
and the United States are also on track to negotiate a broader trade
agreement.
Beyond that, the United States has among the weakest privacy
protections of any major economy, with no broad law despite years of
advocacy by consumer protection groups.
Google has amassed one of the largest stores of information about
people on the planet, using the data to tailor services and sell advertising.
Google could also have had British accounts answer to a British subsidiary,
but has opted not to, the people said.
Lea Kissner, Google’s former lead for global privacy technology, said she
would have been surprised if the company had kept British accounts
controlled in an EU country with the United Kingdom no longer a member.
“There’s a bunch of noise about the U.K. government possibly trading
away enough data protection to lose adequacy under GDPR, at which
point having them in Google Ireland’s scope sounds super-messy,” Kissner
said.
“Never discount the desire of tech companies not be caught in between
two different governments.”
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In coming months, other U.S. tech companies will have to make similar
choices, according to people involved in internal discussions elsewhere.
Facebook, which has a similar set-up to Google, did not immediately
respond to requests for comment.
<< Back to news headlines >>
Perfume retailer Douglas targets lifting online sales in southern Europe -
CEO Thursday 20th February, 2020 – Reuters
E-commerce accounts for 32% of revenue in Germany, is significantly
lower in southern European markets
Douglas intends to get southern markets online share towards level seen in
Germany
Company exploring the market for possible acquisition opportunities and
keeping an eye on technology companies
Advertisement
Data and technology derived from 44 million customer cards helps drive
sales through individual marketing
In fiscal Q1 (Sept-Dec), Douglas saw EBITDA increase by 9.2% to 191 million
euros on 6% sales growth to 1.3 billion euros
Q1 e-commerce sales rose by 23.2% to 249 million euros
Q1 accounts for more than a third of annual sales, and more than half of
the EBITDA of the fiscal year (Reporting by Arno Schuetze in Frankfurt;
Editing by Edmund Blair)
<< Back to news headlines >>
BMW expects to cut average emissions in Europe by 20% this year Thursday 20th February, 2020 – Reuters
BMW (BMWG.DE) will continue to grow sales globally while at the same
time lowering its European average emissions of carbon dioxide by
around 20% this year, Chief Financial Officer Nicolas Peter said on
Thursday.
Carmakers need to lower their output of carbon dioxide, a greenhouse
gas blamed for global warming, but carmakers have struggled to meet
stricter emissions goals as clients increasingly choose to buy heavier sports
utility vehicles.
“The fleet average emissions will go down significantly in 2020, by around
20%,” Peter told journalists at a roundtable discussion in Munich. BMW’s
fleet average emissions were 128 grams per kilometer in 2018, and just
below that in 2019, he said.
In 2020, BMW’s fleet average emissions will be just over 100 grams per
kilometer and the carmaker will meet the emissions standards for 2021,
thanks to higher sales of electrified vehicles and more efficient
combustion engines, he said.
Peter reiterated that BMW expected to grow sales in 2020.
“We have started well into January and grew sales in China,” Peter said,
adding that the carmaker had sold around 175,000 cars in January.
<< Back to news headlines >>
Eppley earns record profit of $157 million, declares largest dividend in its
history Wednesday 19th February, 2020 – Jamaica Observer
Eppley Limited's 2019 results have shown record earnings of $157.7 million
for the year, a 20 per cent return on the company's opening equity. The
company has declared the largest dividend in its history at $0.57 per
share.
At the end of the quarter, Eppley owned a $3.8-billion investment portfolio
consisting of loans, leases, receivables, and investments in real estate and
asset management joint ventures and subsidiaries, according to the
quarterly report. The average income yield of its portfolio was 13 per cent,
and its capital-at-risk was less than one per cent of capital.
The $157.7 million after-tax profit was significantly above the $120.5 million
the company earned in 2018. The net interest income on its proprietary
investments and the management fees from its funds both increased
significantly, highlighting the continued improvement in the quality of the
company's underlying business.
Additionally, Eppley earned $13.8 million of other comprehensive income
last year, not included in the $157.7 million figure, mostly reflecting
increases in the fair value of its investments.
“Key wins for Eppley this year include fully deploying the Caribbean
Mezzanine Fund two years ahead of schedule and more than doubling
the size of the Eppley Caribbean Property Fund with our JSE listing,”
Nicholas Scott, managing director of Eppley told the Business Observer.
Eppley was listed in 2013 with an investment strategy of producing
attractive risk-adjusted returns by identifying inefficiencies in Caribbean
financial markets.
“Initially, we did so by investing in private credit in Jamaica using funds on
our account. In 2016 we launched the Caribbean's first mezzanine credit
fund in partnership with NCB Capital Markets,” Scott said.
“In 2018 we became the first junior market listed company to graduate to
the main market of the JSE. More recently, we purchased the Eppley
Caribbean Property Fund and cross-listed it on the JSE this summer —
creating the largest listed real estate fund in the Caribbean,” Scott said.
“Since our listing in 2013, we've produced a compounded average
annual return for our shareholders in excess of 30 per cent, consistently, for
over six years. We've also distributed the vast majority of our earnings to
shareholders in the form of cash dividends. Today, we manage an
investment platform that controls more than US$100 million of capital and
vehicles that together generate annual net profits in excess of $850 million
a year,” he told the Business Observer.
EPPLEY CARIBBEAN
Coming on the back of those results, the company has launched the
Eppley Caribbean Property Fund (ECPF).
ECPF is a real estate fund that was cross listed on the JSE in the summer.
“Since that time, we've deployed most of the listing proceeds and closed
on all the immediate acquisitions disclosed in our prospectus. We plan on
investing the remaining proceeds in the coming months,” Scott said.
“ECPF now owns one of the largest and highest-quality commercial real
estate portfolios in the region, totalling over 500,000 square feet,” Scott
said.
The fund owns properties in Barbados and Jamaica, including the Cave
Sheperd Building, 24 Broad Street, Emerald City Mall, Alamac Warehouse,
Sunset Mall, Chattel Village, Carlisle House and Hastings Office Centre in
Barbados; along with Empire Shopping Centre, Angels Industrial Estate
and 227 Marcus Garvey Drive in Jamaica. A total of 64 per cent of the
fund's portfolio is in Barbados and 36 per cent in Jamaica. Categorised by
type of business, 30 per cent of the properties are industrial, nine per cent
office and 61 per cent retail.
“In September, a few months after the JSE listing, we marked the first full
year of Eppley's management of the fund, which was previously run by
Fortress Fund Managers for over 20 years. We also reported the highest net
profit in the fund's history,” Scott said.
“In December, we declared an annual dividend more than double the
previous year. In today's results, which cover the quarter ended
December 31, 2019, we produced over 80 per cent increases in net rental
income, funds from operations, and earnings.”
<< Back to news headlines >>
Seprod credits acquisition of Facey Consumer Division, exports growth for
bumper 2019 figures Wednesday 19th February, 2020 – Jamaica Observer
The Seprod Group is now reaping the benefits of its acquisition of the
Facey Consumer Division and an uptick in export for its bumper revenue
out-turns for 2019.
These positive outcomes have resulted in an $11.8-billion increase in
revenues for Seprod, a leading manufacturer and distributor in Jamaica.
In its interim 2019 financials posted on the Jamaica Stock Exchange
website, Seprod reports that it ended the year with strong earnings of
$34.35 billion, or 53%, over 2018.
Net profit from continuing operations for the year was $1.99 billion, an
increase of $510 million or 34% over 2018.
The increase in profits from continuing operations was due in large part to
efficiencies gained from internal reorganisations of the ingredients and
distribution businesses, and the consolidation of the dairy business.
During 2019 the management of Seprod executed on its previously
communicated decision to close the Golden Grove sugar factory. In so
doing, management curtailed the 10 years of operational losses from
sugar manufacturing.
This move will positively impact the group's return on equity and its cash
flows in the future. The losses from this discontinued operation (inclusive of
redundancy payments and estimated impairment losses) amounted to
$814 million.
The resulting net profit for the year was $1.18 billion, an increase of $119
million or 11% over 2018.
The 2019 financial result was impacted by several one-off costs related to
the Golden Grove closure as well as the dairy consolidation.
In its 2019 interim figures, Seprod reports that 2019 was a year of
consolidation for the group.
Company Chairman Paul B Scott and Chief Executive Officer Richard
Pandohie say, “the difficult decisions taken have placed the group in an
excellent position to generate sustainable value creation for 2020 and
beyond”.
<< Back to news headlines >>
Mailpac reports net profit of $74.5 million Wednesday 19th February, 2020 – Jamaica Observer
Mailpac Group Limited (MGL) posted on Friday last an after-tax profit of
$74.5 million for the quarter ended December 31, 2019, in its first set of
financial statements as a publicly listed company.
In the unaudited financial statement, executive chairman Khary Robinson
stated that revenues for the quarter under review amounted to $361.7
million, which was 5.9 per cent higher than the projections made in the
company's initial public offering (IPO) prospectus in November last year.
Gross profit for the quarter of $181.7 million also surpassed the $176.8
million projected in the prospectus.
Operating expenses for the quarter were $86.9 million, which comprised
mostly of staff costs, advertising expenses, and store operating expenses.
MGL's total assets at the end of the quarter stood at $447.9 million,
meanwhile shareholder's equity stood at $341.9 million.
The company had no long-term debt at the end of the period other than
the $12.7 million owed to Norbrook Equity Partners.
“We are pleased with the performance of Mailpac Group Limited in its first
quarter of operation. The company continues to lead the ecommerce
market and surpassed our IPO projections for the quarter under review on
all meaningful metrics. We expect the company to continue benefiting
from the rapid growth of online shopping in Jamaica, as well as its unique
shopping tools. These include free returns, its tax-free address and its
landed price tool,” Robinson stated.
MGL became publicly listed on the Junior Market of the Jamaica Stock
Exchange on December 4, 2019, and through its IPO of shares on the
Junior Market, has managed to raise $495 million – a record-breaking
total, creating a first in the history of the Junior Market.
The Mailpac Group, with 11 locations islandwide, facilitates online
shopping and shipment to Jamaica by offering clients a US
shipping/mailing address.
<< Back to news headlines >>
iCreate Limited raises $24m from bond issue Wednesday 19th February, 2020 – Jamaica Observer
Start-up company iCreate Limited has raised $24 million through the issue
of a bond arranged by Sagicor Investments Limited.
The bond, which was issued on February 7, 2020, has semi-annual coupon
payments and matures in five years. This has provided the company with
additional capital to grow the business and pay down liabilities, which
stand at $37 million.
iCreate, with registered office at 72B Hope Road, Kingston 6, is a subsidiary
of eMedia Interactive Group Limited. The company, through partnership,
is a creative institute of the University of the Commonwealth Caribbean,
with its principal activity being to develop and deliver degree and
certificate courses to students in creative fields such as advertising, film,
animation, graphic design, mobile games, fashion design and more.
STRONG ANNUAL REVENUE GROWTH FOR 2019
In its just-released unaudited 2019 financial report, iCreate recorded
strong revenue growth of $48.3 million, an increase of 51.6% when
compared to the corresponding period of 2018. This strong revenue
growth was attributable to increased physical capacity at the Kingston
location and the opening of its Montego Bay branch during the year.
For the quarter ended December 31, 2019, the company recorded
revenue growth of 185% or $4.5 million over the corresponding quarter of
2018. Gross profit for the 12 months ended December 31, 2019 increased
from $20 million to $33.5 million or 67% over the prior period. Gross profit
margin improved from 63% to 69% when compared to the similar period
last year.
NET LOSS ON
Total comprehensive income for the period under review recorded a net
loss of $34 million compared to a $14.8-million loss recorded in 2018. This
was due primarily to lower-than-expected revenue in the fourth quarter,
as a result of the timing of some contracts slated to be finalised in the first
three months of 2019 which will not materialise until the first quarter of
2020.
Additionally, the company performed an assessment of its receivables
and increased its credit loss provisions by $8.3 million, which was recorded
in the fourth quarter. Overall, increased legal, professional and regulatory
fees associated with listing on the Jamaica Stock Exchange, increased
expected credit losses relating to receivables, and increased
depreciation charges arising from investment in training equipment and
leasehold improvement at the Kingston and Montego Bay locations
adversely impacted the bottom line.
Notwithstanding the overall performance in 2019, the company's
significant capital investment in training equipment and physical capacity
in 2019 has positioned it for growth in revenue and profitability in the
coming years.
POSITIVE OUTLOOK
The outlook for iCreate is positive, given some bold decisions in 2019 —
including the move to increase provision for credit losses.
With the iCreate infrastructure now at 100% completion, the company
expects a positive return on investment as it strategically increases market
penetration, diversifies product offerings, and creates key partnerships.
iCreate reports that it continues to enjoy a student satisfaction rating
above 80% with the Montego Bay office showing good signs of growth
and its successful expansion into Trinidad and Tobago. That location
started recording revenues within just one month of launch.
NEW SENIOR APPOINTMENT
iCreate has advised that Antoinette Hamilton has been appointed to the
position of chief financial officer. She will be responsible for the financial
operations of iCreate Limited.
Hamilton is a chartered accountant with over 12 years of audit and
financial expertise in the private sector. She holds a Bachelor of Science in
Management Studies (Accounting) from The University of the West Indies,
completed the Certified Public Accountant qualifications with the
Georgia State Board of Accountancy, USA, and is currently pursuing an
MBA in Banking and Finance at the Mona School of Business and
Management. She also serves as a member of the advisory board of
Jamaica Business Development Corporation.
<< Back to news headlines >>
Jamaica Money Market Brokers expects best-ever year Wednesday 19th February, 2020 – Jamaica Observer
Jamaica Money Market Brokers (JMMB) is projecting that its 2019
financials, when completed, will represent the strongest in its history with
significant performance attributed to organic and inorganic growth.
So far, JMMB Group earned record profits for the nine-month reporting
period ended December 31, 2019, with operating profits of J$5.79 billion,
representing a 43 per cent increase over the prior year.
In addition to this performance, the company recorded significant
achievements during the third quarter, resulting from the execution of its
regionally integrated financial services strategy.
These include the successful execution of the acquisition of 22.5 per cent
of Sagicor Financial Company Limited (SFC), the opening of JMMB Express
Finance (T&T) Limited, the group's consumer finance business line, fifth
location (Tobago), on December 4, 2019.
During that period, JMMB successfully introduced its Visa debit card as
well as Visa-enabled ATMs in Jamaica and the migration of clients who
held Save Smart accounts at JMMB Investments to JMMB Bank's
(Jamaica) EzAccess chequing and savings accounts.
In its just-released unaudited financial results for the nine-month reporting
period JMMB pointed out that the SCF acquisition gave the group
diversification and the opportunity to participate in the future growth of a
market leader in the Caribbean's insurance, pension, and asset
management sectors. The acquisition, which cost approximately J$34.4
billion, was not completed at the reporting date with the financial results
of SFC as of December 31, 2019, not yet available.
JMMB's share of net assets and share of profits or gains arising on this
acquisition will be reflected when the purchase price allocation is
finalised, which is expected before March 31, 2020. Another significant
milestone during the period under review was JMMB's first additional
public share offering, the largest of its kind in Jamaica, which raised J$12.4
billion.
This funding strengthens the group's capital base and will be used to
further facilitate the group's expansion and diversification strategy through
acquisitions and adding new business lines.
UPCOMING FOURTH QUARTER
The directors report that the upcoming fourth quarter January-March 2020
“will see a sharp focus on embedding our financial partnership model to
better serve our clients and reap synergy benefits from operating from a
“One Group, One Client, One Experience framework.”
In his report Chief Executive Officer Keith Duncan pointed to another
imperative for the fourth quarter, which is completing crucial operational
efficiency projects to allow the banking business lines to operate on one
core banking system while utilising standardised products, procedures,
and policies across the group.
“Deepening our inorganic growth strategy as we explore accretive
business development opportunities to grow our return on equity and
expand our footprint,” Duncan reported.
FINANCIAL PERFORMANCE
Net operating revenue for the period under review totalled J$17.38 billion,
which represented a 26% growth or J$3.61 billion when compared to the
comparable period last year. This mainly resulted from increases in net
gains on securities trading, FX trading gains, fees and previous income
and net interest income.
Net gains on securities trading grew by 69% to J$5.64 billion and were
partly due to improved appetite for emerging-market assets. Foreign
exchange trading gains increased by 19 per cent or J$359.28 million to
J$2.26 billion because of increased trading volume and growth in regional
markets. Fees and commission income was 32 per cent higher at J$2.43
billion and was due to significant growth in managed funds and collective
investment schemes across the group.
Net interest income grew by 5 per cent to J$7.02 billion as there was
strong growth in the loan and investment portfolios.
<< Back to news headlines >>
'Brick pon brick' 2019 for Pulse Investments Wednesday 19th February, 2020 – Jamaica Observer
Pulse investments has reported that the company has seen increased
growth in all business segments which has resulted in the modelling and
real estate company doubling its profits last year.
The company, yesterday at its annual general meeting held at Villa Ronai
located on Old Stony Hill Road in St Andrew said that it recorded net
profits of $653.2 million, which is a significant increase over the $301.8
million gained in the previous year.
Co-Managing Director Safia Cooper in attesting to the welcome
performance said that it was a “brick pon brick” year for the company—
referring to a popular dancehall song which connotes heightened
financial gains.
In its annual report to shareholders, the company also indicated that not
only did their profits surge by 116 per cent, but “revenues also increased –
moving to just over $1 billion, a first for the real estate, lifestyle, and media
company. Incomes also went up by 76 per cent, stridently moving from
$621.5 million to $1.09 billion year-on-year”.
Pulse recorded gains across all lines of business including media content
production and distribution, property rentals [including leisure and
hospitality], model agency representation, live events as well as branding
and sponsorship.
The greatest gain the company has said was recorded in media content
production and distribution [largely TV shows] and property rentals which
saw revenues growing by 71 per cent to $253.3 million for TV and by 48 per
cent or $88 million for property rentals.
“Property rentals increase largely reflects the new hospitality business line
Pulse Rooms [a 22-room accommodations development located at 38a
Trafalgar Road],” the report also outlined to shareholders.
The co-managing director who has responsibility for these areas of the
business said that the Pulse Rooms which were commissioned into use at
the end of 2018, have reaped some real rewards in 2019.
“We've seen good growth at Pulse Rooms at Trafalgar wherein
occupancy levels have been growing, fluctuating anywhere between 30-
100 per cent occupancy at the location. We have enjoyed at least four-
five periods of full occupancy,” she noted.
She said that going into the summer period of this year, they are
anticipating a consistent 70 per cent occupancy rate at the location, this
as the company strategically positions itself to benefit from peak periods
including: carnival, holidays, champs, and any other major seasonal
events.
In further speaking about their gains in the real estate business, it was
mentioned that plans are now advance to commence operations at the
company's Pulse Suites at Villa Ronai, which is a complement of 68 guest
suites, of which the first phase of the development consisting of 40 suites—
is expected to be open to the public in the first quarter of this year.
“On completion these suites are expected to generate approximately
$350 million in annual revenues, assuming there is a 66 per cent
occupancy level,” the report detailed. Other business lines such as the
Pulse centre and the Peter Tosh Museum also brought positive inflows and
contributed to the company's performance.
<< Back to news headlines >>
Sygnus Credit doubles investment portfolio Wednesday 19th February, 2020 – Jamaica Gleaner
In six months, Sygnus Credit Investments Limited has doubled its portfolio of
investments, nearly half of which is deployed in Jamaica.
The company has made 23 private credit investments valued at US$54.35
million to the period ending December 2019.
That’s up from US$28 million deployed among 16 companies up to June
2019.
“What we’ve done in six months is that the net amount invested in that
period, including those we’ve exited, was more than all of 2018; in fact
what we did for Q2 exceeded all of the previous financial year,” Morris
told the Financial Gleaner.
Sygnus Credit has investments in various regional markets: largely
Jamaica, 44 per cent; and Cayman Islands, 27 per cent; but also the
Dutch Caribbean islands of St Maarten, Saba and St Eustatius and the
ABC islands of Aruba, Bonaire and Curacao; and St Lucia.
To help finance the growth in its private credit investment portfolio, Sygnus
Credit raised US$15 million on the private debt market in December.
Another member of the Sygnus Capital group, the newly formed Sygnus
Deneb Investments Limited, is also raising US$25 million on the debt market
for its operations as a private equity investor.
The new business, which was launched last Wednesday as s a joint
venture with Sagicor Investments Jamaica Limited, does not overlap with
Sygnus Credit, Morris said.
“Sygnus Deneb is the third leg of our alternative investment platform doing
its own capital raise in a similar way to the other leg, Sygnus Real Estate
Finance,” he noted.
Sygnus Credit is the only member of the Sygnus Capital group that trades
on the stock market.
The company reported half-year net profit of US$1.63 million, up 71 per
cent from US$955,584 in the 2018 period.
Sygnus Credit said it improved the yield on its private credit investments
from 11.8 per cent to 12.5 per cent, and that its average investment in
targeted companies has moved up from US$1.75 million to US$2.36 million.
At the same time the company is reporting that the weighted average
term of investment has moved from 2.3 years at December 2018 to 2.9
years at December 2019.
“This is simply because the number of opportunities we had over the
corresponding period was for longer maturity investments,” said Morris.
“Typically we invest for up to five years, and that can go up to seven
years for infrastructural investments. In this reporting we ended up with
investment maturities that were both longer and in some instances shorter
which we have exited,” he said.
For the rest of the financial year Morris expects the company to finalise
new deals, over which the company will be approaching the market
again for more funds to execute the investments. The company’s financial
year ends in June.
“We told shareholders that we’d be approaching the market for US$35
million debt or equity. We’ve raised US$15 million and at the appropriate
time we’ll make an announcement about the other US$20 million,” Morris
said.
<< Back to news headlines >>
Portland JSX enters new phase, waiting for the returns to roll in Wednesday 19th February, 2020 – Jamaica Gleaner
Private equity outfit Portland JSX Limited has wrapped up its investing
phase, having taken positions in ten companies.
The fund is now in its operational cycle, where it will focus on driving value
from its investments, says Managing Partner of Portland Private Equity, Rob
Almeida.
“The underlying companies are now improving their results, and so the
focus is on accelerating that improvement and realising returns in the form
of dividends and other ways of monetising the investments,” Almeida told
the Financial Gleaner.
Portland JSX takes positions in investments made by Portland Caribbean
Fund II. Both funds are managed by Portland Private Equity, an investment
outfit controlled by Michael Lee-Chin.
Since its inception, Portland Caribbean Fund ll has pumped between US$5
million and US$30 million into individual companies. The average
investment was around US$15-20 million, according to Almeida.
Portland JSX fund holds about 15 per cent of the total investment, he said.
Caribbean Fund II has taken positions in:
• Liberty Latin America, a regional telecommunications provider and the
owner of Flow;
• InterEnergy Holdings, a regional electricity company, which also holds
assets in Jamaica;
• Merqueo, an e-grocer in Colombia;
• Grupo IGA, a restaurant business in Colombia which owns the Andres
Carne de Res restaurant;
• Diverze Assets Inc, the Melville family-controlled company that holds
Tropical Battery and Chukka Caribbean Adventures
• Productive Business Solutions, a regional business productivity solutions
provider owned by Musson Jamaica;
• IEH Penonome, a wind farm in Panama;
• Clarien Group Limited, a banking group in Bermuda that is majority
owned by NCB Financial Group;
• Facey Telecom, a regional logistics company focused on digital
products and owned by Musson Jamaica; and
• Outsourcing Management Limited, which trades as itelBPO and is
principally owned by Montego Bay-based businessman Yoni Epstein.
The list is in declining order of size of investments. Those individual
investments ranged up to US$30 million, and amounted to US$160 million
overall.
Portland JSX’s contribution to the overall pool, assuming the 15 per cent
noted by Almeida, would have been about US$24 million.
“Our general expectation is that we will get about two-three times our
money back from our investments, and right now we’ve made 10
investments. And while some will outperform or come in a little lower, we
see them all as being on track to achieve our objective,” Almeida said.
“We’ve gone through the heavy-lifting phase, and we’re now at that
phase where performance and returns can accelerate,” he added.
The funds that Portland Caribbean have deployed are meant to finance
improvements and maximise revenue potential.
Pinpointing the Diverze investment, Almeida said that since that
transaction, tour company Chukka has been focused on expansion,
including the installation of a zip line at Dunn’s River Falls, and the
expansions of its Good Hope tour in Trelawny, and Ocean Outpost in
Sandy Bay.
“We’ve added Starfish Island and Jaguar Pond in Belize and we’re
working on deals in Cayman and Barbados,” Almeida said.
Asked about the potential impact from the coronavirus on tourism, and
the investments in that sector, Almeida says there are consultations with
the authorities to ensure a measured approach.
“We’re being proactive in working with the tourism authorities to ensure
that no one that is infected lands, but at the same time you don’t want to
turn away anyone for no good reason. We are therefore working with the
ministries of health and tourism to ensure that a very prudent and
thoughtful approach is taken to the matter,” he said.
For the nine months ending November 2019, Portland JSX made a profit of
US$1.186 million, up from US$1.016 million in the previous period.
<< Back to news headlines >>
Barbados off European Union grey list Wednesday 19th February, 2020 – Barbados Today
Barbados’ reputation as a clean international business centre has been
restored with the island’s removal from the European Union (EU) grey list of
non-cooperative tax jurisdictions on Tuesday.
Local authorities have responded to the development saying it sends a
positive message worldwide.
Director of International Business in the Ministry of International Business
Kevin Hunte said being “completely cleared “is good for Barbados’
reputation”.
“It sends the international signal that Barbados is serious about
compliance, regulation and good tax governance principles that are fair
to all. Barbados remains open for credible investors of substance and
Barbados will continue to make strides in all areas in order to facilitate
business,” he added.
A release published by the EU Council, on its website, said Barbados and
15 other countries – Antigua and Barbuda, Armenia, The Bahamas, Belize,
Bermuda, British Virgin Islands, Cabo Verde, Cook Islands, Curaçao,
Marshall Islands, Montenegro, Nauru, Niue, St Kitts and Nevis and Vietnam
– managed to implement all the necessary reforms to comply with EU tax
good governance principles ahead of the agreed deadline and are
therefore removed from Annex II.
Annex II refers to jurisdictions with pending commitments. It now includes
The Cayman Islands, Palau, Panama and Seychelles that have been
added to the list with eight other countries already identified as non-
cooperative tax jurisdictions. The EU claimed these territories did not
implement tax reforms, to which they had committed, by the agreed
deadline.
“The work on the list of non-cooperative tax jurisdictions is based on a
thorough process of assessment, monitoring and dialogue with about 70
third country jurisdictions. Since we started this exercise, 49 countries have
implemented the necessary tax reforms to comply with the EU’s criteria.
This is an undeniable success. But it is also work in progress and a dynamic
process where our methodology and criteria are constantly reviewed,”
Croatia’s deputy prime minister and minister of finance Zdravko Marić
explained.
The EU Council’s press release also stated that “the list of non-cooperative
tax jurisdictions, which is part of the EU’s external strategy for taxation as
defined by the Council, is intended to contribute to ongoing efforts to
promote tax good governance worldwide”. The list of non-cooperative
tax jurisdictions was first established in December 2017.
After an assessment by the EU Code of Conduct Group, a list of non-
cooperative jurisdictions for tax purposes was published in January 2019. A
number of countries with no or nominal tax was grey-listed based on their
efforts of satisfying Criterion 2.2 – not facilitating offshore structures or
arrangements aimed at attracting profits that do not reflect real
economic activity in the jurisdiction – by December 31, 2019.
In November 2018, the Organization for Economic Cooperation and
Development (OECD) implemented a new global standard on Base
Erosion and Profit Shifting (BEPS) – Action 5 on Countering Harmful Tax
Practices More Effectively. It aimed to prevent business activities from
being relocated to countries with no, or nominal tax.
Many countries sought to address these concerns through improved
legislation. Barbados enacted the Barbados Companies (Economic
Substance) Act 2018-41, which introduced enhanced economic
substance requirements for tax purposes from January 1, 2019.
However, Hunte explained that the Act was repealed and replaced in the
last quarter of 2019 and the guidelines were also published.
He said this was done to ensure that both the Economic Substance Act
and the guidelines were in line with international standards, “while still
ensuring they were not too onerous or cumbersome for businesses in
Barbados”.
Having complied with the requirements, Barbados is no longer on the grey
list.
<< Back to news headlines >>
Garbage tax pushing costs up Thursday 20th February, 2020 – Barbados Today
One of Barbados’ largest beverage companies says the Garbage and
Sewage Contribution (GSC) levy coupled with the change in water rate
has resulted in its operation costs shooting up by about 40 per cent.
However, officials are giving the assurance that there would be no
increase in the prices of its aerated soft drinks and other products as a
result.
Additionally, with up to 20 per cent of every gallon of water used at the
facility being considered waste water, the company is seeking to enter
into a unique partnership with the Barbados Water Authority (BWA) to
ensure further improvement in conserving and reusing water from that
facility.
General Manager of the Barbados Bottling Company Limited (BBC) Andre
Thomas made the disclosure on Wednesday, following a tour of the
Newton, Christ Church facility by members of the BWA, the Ministry of
Energy and Water Resources and members of the media.
Thomas said the BBC got all its water from the BWA, and while he opted
not to say what the company’s monthly bill was, he said “we pay heavily
for it”.
“Any impact on the financial performance of the business will have a
significant impact on bottom line and the ability to operate. So yes, the
increase in the water rates and GSC tax impacted our business heavily.
Our cost went up probably by 30 or 40 per cent,” he said.
In addition to the GSC, which took effect in August 2018 and is set at 50
per cent of the water bill, the BWA also adjusted its water rates for
commercial customers in May last year, moving it from a fixed 4.66 per
cubic metre to a sliding scale.
Thomas said while the impact was significant “at the end of the day we
are a part of the environment”, and therefore anything that is useful for
the country and the environment “we support”.
He said the company would be ramping up its water recycling efforts and
forming closer ties with the BWA and the Sanitation Services Authority in
that regard.
“We are willing to invest and put our money where our mouth is to support
Barbados and everybody benefits,” said Thomas.
Wednesday’s tour was designed primarily to give the BWA and the
ministry officials a first-hand view of the measures in place at the
beverage manufacturing plant to capture its waste water and recycle it,
and to discuss ways to put the recycled water to greater use.
Barbados TODAY understands that while the company has been
capturing the wastewater and purifying it and using back some of it to do
cleaning, a significant amount of it is being returned to the aquifers.
The BBC, which was once part of the Banks Holdings Limited (BHL) Group
for decades but was sold to Coca-Cola bottling partner KOSCAB
Distribution Barbados Limited in 2018, is one of the top five heaviest users
of water from the BWA.
“One of the things we want to ensure we do is to either replenish or
conserve all resources that we use. Water is a big part of what we use in
our production process. So is plastic,” said Thomas.
He noted that while approximately 80 per cent of every plastic bottle
produced by the company was recycled and exported as raw material,
he wanted to be able to “say the same for water”.
“In our production process out of every gallon of water that is used about
10, 15 or 20 per cent is used as wastewater. Right now we produce about
8,000 gallons of waste water that can be used within the Barbados market
for either irrigation of the million trees that the Prime Minister has talked
about or for irrigation of football fields for the National Sports Council,” he
said.
Thomas also pointed out that the company, which currently directly
employs 120 people, had recently finished installing solar photovoltaic on
its roof.
“We expect to save about 11 or 12 per cent in energy consumption. Our
limitation really is government regulation. We want to go even higher but
we need to make sure we are within the government regulation,” said
Thomas.
Minister of Energy and Water Resources Wilfred Abrahams said he was
impressed by the technology being used at the plant and the innovation
used to capture the waste water and recycle it, adding that he was
looking forward “to synergies” between the BWA and the BBC.
Officials of the two entities are to carry out further discussions in order to
cement what form the collaboration will take and if there would be any
form of compensation or reduction in water bill for the company.
General Manager of the BWA Keithroy Halliday agreed there was
definitely room for collaboration.
“One of the things we have been pushing for . . . is the fact that instead of
using potable water you can use water such as what you are treating, to
wash down driveways and buildings. I believe that is an avenue we will
pursue,” said Halliday, who said the BWA was also keen to learn from the
BBC in relation to the capturing and treatment of wastewater.
<< Back to news headlines >>
Estimates debate start on Monday Thursday 20th February, 2020 – Nation News
Government’s Budget, setting out the Estimates of Expenditure and
Revenue for the financial year 2020-2021, was Wednesday laid in
Parliament, together with a projected forecast for the current financial
year 2019-2020.
These will form the basis of the Parliamentary Debate to ensue from
February 24, 2020 on the Appropriation Bill.
On the cash basis current revenue of $2 952.8 million is expected, of which
$2 756.1 million is tax revenue and $196.7 million is non-tax revenue and
grant income. Total expenditure is projected to be $2 887.5 million, of
which $2 403.9 million is current expenditure, exclusive of amortisation,
and $151.8 million is capital expenditure.
The revised surplus of $390.8 million, on the IFI basis, represents 3.7 per cent
of GDP at market prices. The primary balance for the financial year 2019-
2020 is estimated to be a surplus of $644.0 million or 6.1 per cent of GDP on
the cash basis.
It is estimated that Government’s total expenditure for the financial year
2020-2021, on the accrual basis, will be $3 372.6 million. When converted
to the cash basis, total expenditure is $3 309.0 million, an increase of
$421.5 million or 14.6 per cent from the revised figure for 2019-2020. Of the
amount approved for the 2020-2021, $2 589.6 million represents current
expenditure and $719.4 million represents capital expenditure and
amortisation.
Expenditure on goods and services is expected to increase by $60.8
million to $433.5 million. Current transfers are projected to increase by
$15.7 million or 1.6 per cent to $981.1 million.
The repayment of principal and interest on Government’s debt is
expected to account for $910.8 million compared to the revised
projection of $578.7 million.
On the accrual basis, current revenue for the next fiscal year is projected
at $3 142.6 million. On the cash basis current revenue is projected at $3
043.9 million, an increase of 3.1 per cent over the revised revenue of $2
952.8 million for the financial year ending March 2021.
When amortisation of $544.8 million is taken into account, a surplus of
$279.7 million on the cash basis is expected, representing 2.6 per cent of
GDP.
On the accrual basis the surplus is expected to be $489.3 million or 4.5 per
cent of GDP. The primary balance is projected to be a surplus of $645.6
million or 6.0 per cent on the cash basis and $652.1 million on the accrual
basis.
The Estimates for the 2020-2021 fiscal year include provision for the
following activities:
• A current subvention of $116.0 million is being provided to the
Queen Elizabeth Hospital;
• $3.5 million for the IDB Road Rehabilitation Programme;
• Grant funding of $11.5 million is expected to be received as
budgetary support and also to assist in carrying out the Renewable
Energy Programme;
• An amount of $18.5 million has been provided for the Public Sector
Smart Energy Programme;
• A current subvention of $114.7 million has been provided to the
University of the West Indies;
• A current subvention of $21.8 million has been provided to the
Welfare Department.
<< Back to news headlines >>
138 Student Living, Eppley among winners Wednesday 19th February, 2020 – Jamaica Gleaner
The Jamaica Stock Exchange (JSE) combined index declined on
Wednesday with an advance/decline ratio of 38/28.
The JSE Combined Index declined by 737.87 points or 0.15 per cent to
close at 481,453.65
The JSE Main Market Index declined by 1,256.86 points or 0.26 per cent to
close at 488,451.55 while the Junior Market Index advanced by 38.12
points or 1.30 per cent to close at 2,977.15.
The JSE USD Equities Index advanced by 0.29 points or 0.22 per cent to
close at 230.56.
Overall market activity
78 stocks traded
38 advanced
28 declined
12 traded firm
Winners
138 Student Living, up 16.89 per cent to close at $6.23
Eppley Ltd, up 14.66 per cent to close at $16.03
Paramount Trading, up 11.76 per cent to close at $1.90
SSL Venture Capital, up 8.18 per cent to close at $1.19
Lasco Manufacturing, up 6.99 per cent to close at $4.44
Losers
Salada Foods, down 13.97 per cent to close at $27.53
CAC (9.50%), down 8.60 per cent to close at $0.85
RJR, down 6.98 per cent to close at $1.60
Consolidated Bakeries, down 6.78 per cent to close at $1.65
Express Catering, down 5.78 per cent to close at $5.38
Market volume
23.979 million units valued at over $244.136 million.
Volume leaders were Indies Pharma Jamaica Limited followed by Sagicor
Select Funds Limited – Financial and Lasco Distributors Limited.
<< Back to news headlines >>
Latest Rosneft sanctions ratchet up U.S. threats for foreign firms dealing
with Venezuela Wednesday 19th February, 2020 – Reuters
Washington’s move this week to sanction a trading unit of Russian oil giant
Rosneft for its ties with Venezuela’s state-run PDVSA escalated threats
facing non-U.S. firms and will likely spur “overcompliance” by companies,
analysts and industry sources said.
The U.S. government on Tuesday blacklisted Rosneft Trading, SA, the
Geneva-based trading arm of Rosneft (ROSN.MM) that has emerged as
one of PDVSA’s main intermediaries since previous rounds of sanctions
targeted the Venezuelan company last year, in an effort to oust President
Nicolas Maduro.
The measure explicitly prohibited U.S. companies from dealing with
Rosneft Trading after a three-month wind-down period. But in a Q&A
published alongside the new measure, the Treasury Department’s Office
of Foreign Assets Control (OFAC) said “non-U.S. persons” unable to wind
down dealings with the company by May 20 “may seek guidance from
OFAC.”
“It’s the first clear, written indication that non-U.S. third parties should be
on guard, because after May 20 they could be targeted,” said one
Venezuelan oil industry source, who spoke on the condition of anonymity.
A separate OFAC move last August, which threatened sanctions against
anyone doing business with Venezuela, halted a long-standing trade
relationship between PDVSA and Chinese companies CNPC and
PetroChina Co (601857.SS), limiting their business relationship to joint
production in Venezuelan oilfields.
The Kremlin on Tuesday said the new U.S. sanctions were illegal and would
not affect Moscow’s ties with Caracas. Rosneft said Washington had
“repeatedly” said its activities in Venezuela did not violate the restrictions,
and that the company would “consider its options for legal protection.”
But OFAC’s measures could dissuade Rosneft Trading’s other customers
from dealing with the unit while complicating access to financing, as
companies seek to avoid U.S. scrutiny, said Peter Harrell, a fellow at the
Centre for a New American Security and a former State Department
official focusing on sanctions.
“Whether it’s for Rosneft Trading in this regard, now, or for companies that
deal with Rosneft Trading throughout the world, they are on notice that
they are all susceptible to sanctions,” a senior U.S. administration official
told reporters on Tuesday.
Already, global commodity trader Trafigura Group has said it would
comply with U.S. sanctions on Rosneft Trading.
India’s Reliance Industries (RELI.NS), the second largest buyer of
Venezuelan crude, said it would continue talks with Washington to ensure
its purchases were compliant with sanctions. Another Indian customer,
Nayara Energy, said it complies with applicable sanctions.
‘ALTERNATIVE PATHS’
To be sure, Rosneft could try to use other, non-sanctioned entities to
continue its dealings with Venezuela. TNK Trading International, another
Rosneft subsidiary, also regularly lifts crude directly from Venezuelan ports,
according to internal PDVSA documents seen by Reuters.
“Should Moscow aim to continue channelling Venezuelan crude exports,
it will find alternative paths to circumvent today’s U.S. sanctions,” Andrew
Bishop of Signum Global Advisors wrote in a note to clients on Monday.
The sanction on Rosneft Trading also comes less than a month after OFAC
renewed a license allowing U.S. oil major Chevron Corp (CVX.N) to
continue operating in Venezuela, where it has joint ventures with PDVSA
and recently resumed direct crude exports. Moscow has branded that
unfair competition.
U.S. special representative for Venezuela Elliott Abrams said on Tuesday
that Spanish oil company Repsol, another PDVSA customer, would have
to change its activities “as we move forward.” Repsol declined to
comment.
“The U.S. will likely continue to try to scare non-Western companies from
backing the Maduro regime. But it is highly unlikely the U.S. will force
Western companies, certainly not U.S. companies, out of Venezuela’s oil
patch,” said Raul Gallegos, Andean director for consultancy Control Risks.
“Russia and [President Vladimir] Putin will continue to support the
Venezuelan regime, aside from what measures Rosneft may take to
protect its commercial interests elsewhere,” he said.
<< Back to news headlines >>
Venezuela's Maduro taps sanctioned VP to 'restructure' oil industry Wednesday 19th February, 2020 – Reuters
Venezuelan President Nicolas Maduro said on Wednesday he would
create a presidential commission to restructure the country’s beleaguered
oil industry, which will be led by Vice President for the Economy Tareck El
Aissami.
The announcement came a day after the United States sanctioned
Rosneft Trading, a unit of Russian state oil company Rosneft, that has
emerged as a major intermediary for Venezuelan crude since Washington
blacklisted Petróleos de Venezuela, S.A., or PDVSA [PDVSA.UL], last year to
try to oust Maduro.
Declaring an “energy emergency,” Maduro set a goal for Venezuela to
raise crude output to 2 million barrels per day this year, more than double
current levels.
“The sanctions, the blockade - I will not accept any more excuses,”
Maduro said. “I am signing a decree to declare an energy emergency in
the hydrocarbons industry in order to adapt necessary and urgent
measures to guarantee national energy security and protect the industry
from imperialist aggression.”
Oil Minister and PDVSA President Manuel Quevedo will serve on the
commission, Maduro said. Defence Minister Vladimir Padrino, as well other
cabinet officials and union leaders, will also serve on the commission.
The grouping will also include Asdrubal Chavez, a cousin of late leftist
President Hugo Chavez who was the chief executive of PDVSA’s Houston-
based refining subsidiary, Citgo Petroleum Corp, until Venezuela’s
opposition wrested control of that company following sanctions last year.
Maduro has frequently blamed U.S. sanctions for a collapse in oil
production that accelerated ever since he named Quevedo, a former
National Guard major general with no prior oil industry experience, to lead
PDVSA.
In a speech to PDVSA workers at the company’s Caracas headquarters,
Maduro did not outline specific changes to policies affecting the oil
industry. He said the commission would have “complete power for the
changes, transformations, and integral defence of the entire oil industry
from A to Z.”
The naming of El Aissami to lead the commission was likely to derail any
efforts to ease the company’s international isolation in the face of
sanctions.
El Aissami himself was sanctioned by the United States three years ago for
alleged drug trafficking. Last year, the U.S. government announced
criminal charges against El Aissami for alleged sanctions circumvention
and alleged violations of the Foreign Narcotics Kingpin Deisgnation Act.
In response, El Aissami said, “They can accuse us of whatever they want.”
<< Back to news headlines >>
China's virus-hit industrial cities start to ease curbs, restore production Wednesday 19th February, 2020 – Reuters
Big manufacturing hubs on the Chinese coast are starting to loosen curbs
on the movement of people and traffic while local governments prod
factories to restart production, following weeks of stoppages due to the
coronavirus outbreak.
In their early efforts to contain the virus, authorities extended a week-long
Lunar New Year holiday in late January by about 10 days, instituted
quarantines, and imposed restrictions on traffic in large parts of the
country.
The measures slowed the sprawling industrial sector to a crawl, with
companies unable to resume production or restore output to normal
levels due to a lack of workers. Many have also been unable to take
delivery of raw materials or send products to clients due to logistical
hurdles, with the disruptions knocking on along supply chains worldwide.
China is conscious of striking a balance between stamping out an
epidemic that has infected more than 70,000 people - killing more than
2,000 of them - and shielding the already weakened economy from more
damage.
The city of Foshan, a large manufacturer of electronics and household
appliances in the southern province of Guangdong, said late on Tuesday
that businesses no longer needed to seek approval before resuming
operations and they need not require returning workers to show proof of
their health.
On Monday, the nearby city of Zhongshan similarly lowered such
administrative barriers.
In the eastern province of Zhejiang, known for its bustling private sector,
the cities of Hangzhou and Ningbo over the weekend also pared back
the approval process for companies looking to restart.
“Macro and micro data suggest production activities are resuming at a
slow pace in China, reaching 60-80% of normal levels by end-Feb and
normalizing only by mid-to-late March,” Morgan Stanley wrote in a
research noted.
“If the spread of the virus is not contained within the next two weeks, the
disruption to production could extend into the second quarter.”
Analysts polled by Reuters expect China’s growth could slow to 4.5% in the
first quarter from 6% the previous quarter [ECILT/CN]. But some recently
downgraded forecasts are in the 3-4% range, citing delays in resuming
production.
TRAINS, PLANES AND CARS
More than 50% of the bigger industrial enterprises in Guangdong, Jiangsu
and other large provinces, as well as Shanghai, have resumed
production, an official at the National Development and Reform
Commission told a briefing in Beijing.
Some cities in Guangdong and Zhejiang this week organized buses and
trains to ferry workers back from their hometowns.
The city of Taizhou, in Zhejiang, even arranged for several planes to pick
up workers from Chongqing, Guiyang, Chengdu, Kunming and Xian, with
the local government of Taizhou footing a third of the bill.
Labour shortages are relatively acute in Zhejiang, Ge Pingan, an official at
the Zhejiang government’s human resources department, said.
As of Tuesday, 21,800 workers had been ferried back to the eastern
province on chartered flights or buses, Ge told a briefing.
Most listed companies in Zhejiang are expected to resume production by
the end of February, an official at the Zhejiang securities regulator told the
briefing.
The outbreak has also chilled consumer demand and hammered the
services sector, with restaurants, hotels, cinemas and travel agents among
the hardest hit.
China’s auto market, the world’s largest, is likely to see sales slide more
than 10% in the first half of 2020 because of the epidemic.
In a bid to revive consumption, Foshan announced stimulus measures for
its auto market, the first city in China to do so in the virus outbreak.
The city government will offer subsidies of 2,000 yuan ($285) for purchases
of new cars and 3,000 yuan for replacement of existing cars, according to
a document published on Feb. 3 on its website.
Foshan, where Volkswagen (VOWG_p.DE) has a car plant with FAW
Group [SASACJ.UL], will also offer subsidies to help offset the marketing
expenses of auto companies.
<< Back to news headlines >>
China's Lenovo confident of managing virus impact, reports strong third
quarter Thursday 20th February, 2020 – Reuters
Lenovo Group (0992.HK), the world’s biggest PC maker, posted a better
than expected profit on Thursday and said its global operations would
help it tackle short-term headwinds from China’s coronavirus outbreak,
sending its shares up 7%.
The Chinese company reported an 11% rise in net profit for its third quarter
ended December to $258 million thanks to strong demand for its PCs and
smart devices, beating an average $223 million estimate of seven
analysts, according to Refinitiv data. Revenue rose to a record $14.1
billion.
“The numbers are very good,” said Christopher Yim, analyst at BOCOM
International, adding that the PC business’ profitability was impressive.
Lenovo is among companies facing disruptions to their supply chain after
local governments in China extended a Lunar New Year holiday and
imposed strict travel curbs to limit the spread of the coronavirus.
IPhone maker Apple (AAPL.O) warned earlier this week it will not be able
to meet sales forecasts for the current quarter as the virus outbreak was
pressuring its supply chain.
One of Lenovo’s biggest factories is in the central Chinese city of Wuhan,
the epicenter of the outbreak, where businesses remain shut.
A shortage of workers and difficulties faced by Lenovo’s component
suppliers are among the biggest bottlenecks, but the company was
increasing production at overseas facilities it has in Brazil, United States,
India and Japan to mitigate some of the impact, Lenovo’s Chairman
Yang Yuanqing told Reuters.
He said he was confident that the majority, if not all, of production at the
firm’s Shenzhen and Hefei facilities, which produce most of its PCs, would
resume by the end of the month.
Given current infection trends, he is also optimistic that the company
could see production fully recover by end-March. China reported on
Thursday a sharp drop in new cases but the data was partly attributable
to a change in how it diagnoses the virus, which has killed about 2,100
people and infected some 75,000.
Demand from China in the current quarter would be hit but the company
would be buffered as the country only accounts for 25% of the company’s
overall business, he said.
“Another good thing is that this quarter is not Lenovo’s peak quarter, the
peak quarter was Q3, last quarter, so that means that the impact on our
shipments would be less than last quarter even though we cannot 100%
recover our capacity,” Yang said.
The global PC market grew 2.3% in the quarter to December, as
customers replaced machines to migrate to Windows 10, market research
firm Gartner said last month. Lenovo took a 24.8% market share during the
quarter, ahead of rivals HP Inc (HPQ.N) and Dell, it said.
The year began on a positive note for Lenovo after an early January
interim agreement between Washington and Beijing eased 18 months of
U.S.-China trade tensions.
Laptop computers were among $156 billion worth of Chinese goods that
Washington had threatened to hit with tariffs in December, along with
cellphones and toys, which U.S. President Donald Trump later decided not
to implement.
<< Back to news headlines >>
Shares of HNA affiliates rally after report of China bailout plan Thursday 20th February, 2020 – Reuters
Shares in affiliates of HNA Group surged on Thursday following a news
report that China plans to take over the debt-laden conglomerate as the
coronavirus outbreak has further hit its ability to meet financial obligations.
The government of the southern province of Hainan, where HNA
[HNAIRC.UL] is based, is in talks to take control of the group and sell off its
airline assets, Bloomberg said on Wednesday, citing people familiar with
the matter.
HNA, which controls or holds stakes in a number of domestic carriers
including its flagship Hainan Airlines (600221.SS), did not immediately
respond to requests for comment on the report.
China’s aviation regulator said last week it would support restructuring or
mergers to help airlines cope with the fallout of the epidemic, which has
prompted carriers to cancel thousands of flights.
The Bloomberg report said that under the plan most of HNA’s airline assets
would be sold to China’s three top carriers - Air China Ltd (601111.SS)
(0753.HK), China Southern Airlines Co (600029.SS) (1055.HK) and China
Eastern Airlines Corp (600115.SS) (0670.HK).
Air China and China Eastern are prepared to hold talks, but a deal could
take time as the industry also battles the fallout from the virus outbreak, a
source with direct knowledge of the matter told Reuters.
Air China and China Eastern did not immediately respond to requests for
comment. China Southern declined to comment.
Shares in Hainan Airlines, HNA Innovation (600555.SS) and HNA Investment
Group (000616.SZ) closed up by their 10% daily limit after the news report
of the planned takeover.
HNA Technology (600751.SS), Bohai Leasing (000415.SZ) and HNA
Infrastructure Investment Group (600515.SS) posted gains in a range of
3.9% to 8.8%. Hong Kong-listed stocks linked to HNA also rose.
Heavily indebted HNA Group has restructured jet orders with Europe’s
Airbus (AIR.PA) in a deal that includes an order for dozens of A330neo jets,
two people familiar with the matter told Reuters.
TOUGH OUTLOOK
HNA Group was once one of China’s most aggressive dealmaking firms,
spending $50 billion on acquisitions that included stakes in Deutsche Bank
(DBKGn.DE) and Hilton Worldwide (HLT.N), and prime property in New
York, Sydney and San Francisco.
Its total borrowings were 706.7 billion yuan ($100.6 billion) as of the end of
June, data filed to the government shows.
“HNA does have money to pay back but the money is actually within its
subsidiaries, which they cannot draw on to pay back the bondholders,”
said Warut Promboon, head of credit research at Bondcritic.
“There are still bonds coming due and if the government is taking it over,
we believe they have to honour the debt.”
HNA began unwinding many acquisitions to focus on its core airlines and
tourism businesses after racking up high levels of debt and drawing
regulatory scrutiny.
But the prices HNA has sought and the complex structures, loans and
other business bonds among its holdings have made it tough to unwind
them, bankers said.
In December, Chairman Chen Feng said the firm had delayed some
salary payments in 2019 because of cash flow shortages, but vowed to
resolve liquidity risks in 2020.
However, the virus outbreak has pressured its core airline business this year,
with Hong Kong Airlines, part-owned by HNA, announcing a plan to cut
400 jobs this month.
<< Back to news headlines >>
China Jan new bank loans hit record, more policy support seen Thursday 20th February, 2020 – Reuters
New bank loans in China rose more than expected to a record high in
January, as authorities step up support for an economy hit by trade
tensions and facing a new threat from a fast-spreading coronavirus
outbreak.
Chinese banks tend to front-load loans at the beginning of the year to get
higher-quality customers and win market share.
Banks extended a record 3.34 trillion yuan ($476.42 billion) in new yuan
loans in January, up from 1.14 trillion yuan in December and exceeding
analyst expectations, according to data released by the People’s Bank of
China (PBOC) on Thursday.
Analysts polled by Reuters had predicted new yuan loans would rise to
3.00 trillion yuan in January, compared with the prior record 3.23 trillion
yuan a year earlier.
Household loans, mostly mortgages, fell to 634.1 billion yuan in January
from 645.9 billion yuan in December, while corporate loans rocketed to
2.86 trillion yuan from 424.4 billion yuan, according to Reuters calculation
based on central bank data.
Chinese regulators have been trying to boost bank lending and lower
financing costs for over a year, especially for smaller and private
companies which generate a sizeable share of the country’s economic
growth and jobs.
Growth in the world’s second-biggest economy slowed to 6.1% in 2019,
the weakest pace since 1990, as demand at home and abroad slowed in
part due to the Sino-U.S. trade war.
On Thursday, the PBOC cut the benchmark lending rate - the loan prime
rate (LPR), as the authorities move to lower financing costs for businesses
to help support the economy jolted by the virus outbreak.
“We expect further monetary easing in the coming weeks, both targeted
and broad based, in an effort to shore up credit growth and economic
activity,” Julian Evans-Pritchard at Capital Economics said.
The Lunar New Year, which fell at the end of January, and China’s
extended holiday break and lockdown of several cities to control the
spreading epidemic, is likely to put a brake on lending for some time.
But the central bank and regulators are gearing up to boost lending and
lower funding costs. Chinese banks have doled out more than 537 billion
yuan in credit to help fight the virus outbreak, officials have said.
Broad M2 money supply in January grew 8.4% from a year earlier, central
bank data showed on Thursday, below estimates of 8.6% forecast in the
Reuters poll. It rose 8.7% in December.
Outstanding yuan loans grew 12.1% from a year earlier compared with
12.3% growth in December. Analysts had expected 12.1% growth.
MORE POLICY STEPS EXPECTED
Annual growth of outstanding total social financing (TSF), a broad
measure of credit and liquidity in the economy, stood at 10.7% in January,
unchanged from in December.
TSF includes off-balance sheet forms of financing that exist outside the
conventional bank lending system, such as initial public offerings, loans
from trust companies and bond sales.
In January, TSF jumped to 5.07 trillion yuan from 2.103 trillion yuan in
December. Analysts polled by Reuters had expected January TSF of 4.3
trillion yuan.
Policy sources have told Reuters the government plans to roll out more
support measures as the coronavirus epidemic, which has killed more
than 2,100 people and infected over 74,000, is expected to have a
devastating impact on first-quarter growth.
Over the past two years, Beijing has been relying on a mix of monetary
and fiscal measures to weather the downturn, cutting taxes and issuing
local government bonds to fund infrastructure projects while trying to spur
lending, especially for small firms.
The PBOC has cut reserve requirement ratios (RRR) eight times since early
2018, with the latest reduction taking effect on Jan. 6.
A sharp drop in corporate sales and cash flow caused by the outbreak is
likely to put more stress on China’s financial system, particularly small, rural
banks. A stress test by the PBOC last year said more than 13% of lenders
were considered “high risk”.
Some relief could come from the trade front after Beijing and Washington
signed a Phase 1 deal last month to defuse a protracted tariff war.
<< Back to news headlines >>
China to cut $71.3 billion insurance fees to help firms amid coronavirus
outbreak Thursday 20th February, 2020 – Reuters
China is expected to cut pension contributions and insurance fees by
more than 500 billion yuan ($71.27 billion) this year, government officials
said on Thursday, as it seeks to help companies weather the coronavirus
outbreak.
The forecast follows a government pledge this week to reduce or exempt
companies across the country from pension contributions, jobless and
work-injury insurance for a period of time.
“Based on preliminary estimates, we expect the cuts in three kinds of
social insurance fees to exceed 500 billion yuan,” You Jun, vice minister at
the Ministry of Human Resources and Social Security, told a news briefing,
adding that the impact of the measures would surpass changes made
last year.
Under the exemptions announced this week, firms in Hubei province, the
epicenter of the outbreak, will not have to pay pensions, jobless and work-
injury insurance until June.
Small firms in other provinces will be exempt from paying pensions, jobless
insurance and work injury insurance until June, while payments by large
firms will be reduced by half until April.
You said the government could ensure pension funds and other social
insurance would be paid in full and on time despite the exemptions and
reductions.
Separately, Yu Weiping, vice finance minister, told the briefing that the
impact of the fee cuts on government revenue would be manageable.
“In the short-term, those measures will lead to a reduction in revenue of
government funds, but in the long-run, it will reduce the burden on
companies,” Yu said.
“With the improvement of corporate performance, China’s tax base can
be expanded and the fiscal revenue situation will gradually improve.”
China would continue with a proactive fiscal policy and step up its quality
and efficiency, Yu added.
To fight the virus, authorities have imposed a host of strict containment
measures but they have slowed businesses across the country, with
companies unable to resume production or restore output to normal
levels after the Lunar New Year holiday because of a lack of workers.
“The current epidemic will inevitably have an impact on employment ...
and there are also some firms facing relatively huge operation pressure,
and there is also supply and demand mismatch in the labor market,” You
said.
But he said the impact would be short-term.
<< Back to news headlines >>
