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▪ Colonial Fire and General Insurance Company Limited’s initial rating assigned at CariA
▪ Home Mortgage Bank’s rating reaffirmed at CariA
▪ NCB Financial Group Limited’s initial corporate credit rating assigned at CariA
▪ National Commercial Bank Jamaica Limited’s rating upgraded to CariBBB+
▪ NCB (Cayman) Limited’s initial corporate credit rating assigned at CariA
▪ The Government of the Commonwealth of Dominica placed on Rating Watch – Developing
▪ Dominica AID Bank’s rating downgraded by 1-notch and placed on Rating Watch – Negative
▪ The Government of the British Virgin Islands placed on Rating Watch – Developing
▪ The Government of Anguilla placed on Rating Watch – Developing
▪ NCB Capital Markets Limited’s rating upgraded to CariBBB
▪ Trinidad and Tobago Mortgage Finance Limited’s rating reaffirmed at CariAA-
▪ The National Gas Company of Trinidad and Tobago Limited’s rating reaffirmed at CariAA+
▪ The Government of the Republic of Trinidad and Tobago’s rating reaffirmed at CariAA+
▪ The Government of Saint Lucia’s ratings for its proposed bond issues assigned at CariBBB
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REGIONAL
Trinidad and Tobago
WASA weighs property seiz
As the Water and Sewerage Authority (WASA) moves to collect some $500
million currently owed by errant customers, chairman Romney Thomas has
promised that before year’s end properties will be seized and placed for
sale in a bid to collect outstanding debts.
Businesses push export agenda to curb dependence on banks for US$
Exporters yesterday declared that the time had come to reduce
dependance on commercial banks for US currency, stating that
increasing export volumes was now a priority.
IMF: Low energy prices, forex remain issues for T&T
The International Monetary Fund (IMF) yesterday issued as part of its
Article IV consultations its staff report for 2017, highlighting three pertinent
issues/recommendations which it believes T&T must address.
Jamaica
KIW Shifts Focus To Investments - Reassessing Market Entry Strategy
John Jackson, chairman of KIW International, indicated this week that the
company's plan to re-enter the stock market via introduction of its shares
on the Jamaica Stock Exchange has been nixed by the authorities.
Fosrich Prices Junior IPO At $2
Electrical and lighting company FosRich plans to raise $200 million from a
share float on the junior arm of the Jamaica Stock Exchange in
December.
ARC Expands Mesh Wire Operation - Plans Fivefold Increase In US Exports
ARC Manufacturing has sunk $200 million into an automated fabric mesh
wire plant, and is now looking to quintuple exports to the United States.
Barbados
Barbados to benefit greatly from Sandals Canadian Marketing Incentive
BARBADOS was one of the destinations taking centre stage at Sandals
Resorts International Overdrive Unveiling Tour which travelled to over 21
cities in North America, the most recent of which were Toronto and
Montreal, reaching a combined audience of nearly 750 Canadian travel
agents.
The Bahamas
BPL Studying 19 Bids From Power Generators
NINETEEN firms have submitted bids to provide 80 megawatts of power to
Bahamas Power & Light (BPL).
St. Kitts and Nevis
PM Harris impressed that ninety-four percent of employees at recently-
opened Park Hyatt St. Kitts are locals
More jobs were created in St. Kitts and Nevis with 94 percent of the 320
permanent employees hired at the newly opened Park Hyatt St. Kitts
Christophe Harbour being locals, a figure the country’s Prime Minister, Dr.
the Honourable Timothy Harris, has lauded as remarkable, while
underscoring that locals are already benefiting from the operations of the
five star luxury resort situated at Banana Bay on the South-east Peninsula in
St. Kitts.
American Airlines increases daily non-stop flights to St. Kitts
The Honourable Lindsay Grant, Minister of Tourism, has echoed his delight
and that of his Ministry on the recent addition of American Airlines non-
stop service to the Robert Llewellyn Bradshaw International Airport.
St. Lucia
New branding for Saint Lucia: “Let her inspire you”
Saint Lucia has a new look for its logo and branding, moving the island’s
image away from sun, sea and sand and focused instead on the
destination’s beauty, romantic appeal, culture, lush landscapes, friendly
people and their love for their island.
Unemployment in Saint Lucia continues to fall
Unemployment has dropped to 16.8 percent in the third quarter of 2017,
according to the Central Statistics Department latest job figures.
The Dominican Republic
Haiti, DomRep sign MoU on air service relations
The Dominican Republic and Haiti have signed a memorandum of
understanding (MoU) on air services between the two countries,
establishing the legal framework that will govern their future bilateral air
services relations
Other Regional
US $1B-plus in pledges for hurricane-hit islands
More than U.S. $1 billion has been pledged to help the Caribbean
countries hit by September’s hurricanes rebuild and to do so better than
before.
INTERNATIONAL
United States
'Very uncertain' Yellen still predicts U.S. inflation rebound
Federal Reserve Chair Janet Yellen stuck by her prediction that U.S.
inflation will soon rebound but offered on Tuesday an unusually strong
caveat: she is “very uncertain” about this and is open to the possibility
that prices could remain low for years to come.
United Kingdom
Sterling treads water ahead of UK budget
Britain’s pound trod water on Wednesday, with traders wary of taking on
any large new positions on the currency ahead of a budget statement
from the country’s Finance Minister Philip Hammond.
Boxed in by slow growth, UK's Hammond readies budget
British Finance Minister Philip Hammond will say on Wednesday how much
he can afford to help unhappy voters as he faces a potentially sharp
deterioration in the economy’s growth prospects.
Europe
Buoyant risk appetite pushes euro up for a second day
The euro edged higher for a second consecutive day on Wednesday,
recouping more than half of its losses sustained after the German coalition
collapse as investors bought the single currency on expectations of strong
economic growth.
ECB's Coeure expects bond-buying pledge to be dropped by Sept
The man in charge of the European Central Bank’s money-printing
program expects the ECB to drop by next September its pledge to
continue buying bonds until inflation heads towards its target, he told a
German newspaper.
Paris watchdog win bolsters its fight for Brexit banks
The surprise decision to move the European Banking Authority to Paris will
boost its chances of attracting London banks after Brexit, French officials
said on Tuesday.
China
China clamps down on online micro lending; U.S.-listed shares plunge
China took steps to rein in the rapidly growing and lightly regulated
market for online micro-lenders in the government’s latest crackdown on
internet finance, sending shares of U.S.-listed Chinese financial firms into a
tailspin.
China regulator to consider letting insurers invest more broadly – Securities
Times
China’s insurance regulator is considering allowing insurers to allocate
their funds to commodities and long-term property rentals, the Securities
Times quoted an official as saying on Wednesday.
Japan
BOJ gives early sign of lift-off with warnings on the costs of easing
The Bank of Japan is dropping subtle, yet intentional, hints that it could
edge away from crisis-mode stimulus earlier than expected, through a
future hike in its yield target, according to people familiar with the central
bank’s thinking.
Global
Oil jumps, U.S. light crude at two-and-a-half-year high on Canada
pipeline woe
Oil prices spiked on Wednesday with U.S. light crude hitting highs not seen
since July 2015 after faults on a major pipeline dented Canadian
deliveries to the United States, where crude inventories were also reported
to be falling.
Natgas exporting countries convene as global buyers' market rises
Top officials of major gas producing countries are meeting this week in
Bolivia to weigh how to shore up prices that have been hammered by
expanding supplies of the fuel that are giving global buyers greater sway
over purchase and contract terms.
Barbados to benefit greatly from Sandals Canadian Marketing Incentive Tuesday 21st November, 2017 – Nation News
BARBADOS was one of the destinations taking centre stage at Sandals
Resorts International Overdrive Unveiling Tour which travelled to over 21
cities in North America, the most recent of which were Toronto and
Montreal, reaching a combined audience of nearly 750 Canadian travel
agents.
Joining the Unveiling Tours in Canada was Sandals Barbados hotel
manager Patrick Drake, along with representatives from various
Caribbean tourism boards including Antigua, Grenada, Turks and Caicos
and Saint Lucia.
“The brand is solid and Barbados is definitely on the lips of all those who
we interacted with. This bodes well for us as a country and a resort which
will open another 222 rooms on December 20 to our guests. So I am
extremely encouraged by the popularity of the destination and the
reputation it has,” said Drake.
The tour has seen nearly 50 executive team members from Sandals and
Beaches properties across the Caribbean, along with representatives from
all of its destinations, travel throughout Canada and the United States to
present travel agents with an exciting showcase of the company’s latest
products and developments, including the opening of Sandals Royal
Barbados, set to debut on December 20.
Also on display was the planned reopening of Sandals Grande Antigua
(December 17) and Beaches Turks and Caicos (December 14), as well as
the upcoming debut of Over the Water Suites at Sandals South Coast and
the new wedding options available at Sandals and Beaches.
The Canadian showcases were particularly special as the company
continued its award-winning ways by claiming the 2017 Agents’ Choice
Awards for favourite Responsible Travel Company and favourite All-
Inclusive Hotel Brand; an award it has consistently received since its
inception 18 years ago. The awards were presented by David McClung,
president of Baxter Travel Media.
Expressing gratitude for both the award and the tireless work of the travel
agents who support the company, the company’s chairman Gordon
‘Butch’ Stewart, said, “This is a beautiful award … we love Canada, we
love the travel agents, they’re our backbone. Thank you!”
Adding to the chairman’s sentiments, Gary Sadler, senior vice-president of
sales for Unique Vacations Inc., told the Toronto gathering, “The goal is
really to thank the travel agents in Canada for all the work they do to
make Sandals and Beaches Resorts such a strong company. With the help
of travel agents, we will always be successful. We are telling you about
the new updates that we have for our products, all the brand new things
that are coming on stream, but a key to it is that our chairman is present,
our CEO is present, and they’re here to send a very simple, strong, plain
message, that the travel agents in Canada are extremely important to us
and the Caribbean is ready to welcome our mutual clients.”
“We’ve had this desire to out-perform our best work. Sandals is not in
competition with some of the other all-inclusives out there, Sandals is
actually in competition with itself, with its last project, with what it did
before, prior, how do you keep elevating the bar?” said Adam Stewart,
deputy chairman and chief executive officer of the Sandals chain. “And
then as you elevate the bar in the new hotel, you’ve got to go back in the
existing hotels and make them better.”
The Overdrive tour comes to an end on December 6 with Milwaukee and
Chicago being the last scheduled stops.
<< Back to news headlines >>
Haiti, DomRep sign MoU on air service relations Wednesday 22nd November, 2017 – Jamaica Observer
The Dominican Republic and Haiti have signed a memorandum of
understanding (MoU) on air services between the two countries,
establishing the legal framework that will govern their future bilateral air
services relations
Director General of the National Office of Civil Aviation (OFNAC) Olivier
Jean, and Luis Ernesto Camilo the President of the “Junta de Aviación
Civil” of the Dominican Republic (JAC) signed the MoU here after two
working meetings.
Camilo described the agreement as “historic” saying it strengthens the
bilateral relations necessary to regulate air transport and providing
opportunities for investments in tourism and trade.
Jean, who was accompanied by his legal advisor, Aysha Flambert, and
Phillipe Bayard, the director of the Haitian company “Sunrise Airways” said
that cordiality and openness prevailed throughout the negotiation
process.
Prior to the signing, the Haitian delegation met with Foreign Affairs Minister
Miguel Vargas Maldonado, who described the MOU as “an important
step forward in bilateral relations between the two countries”.
<< Back to news headlines >>
US $1B-plus in pledges for hurricane-hit islands Wednesday 22nd November, 2017 – Antigua Observer
More than U.S. $1 billion has been pledged to help the Caribbean
countries hit by September’s hurricanes rebuild and to do so better than
before.
The pledges came at Tuesday’s donor conference in New York with the
Inter-American Development Bank (IDB) announcing U.S. $1 billion in
resources to help build resiliency in the Caribbean islands devastated by
Hurricanes Irma and Maria.
Earlier in the day, the European Union (E.U.) committed some 300 million
euros to the rebuilding efforts, from which Antigua and Barbuda is
expected to benefit.
“Out of the total amount, about a third will be new grant resources for the
countries of the region,” a European Commission release noted.
“The European Union stands by the region, and our assistance package of
300 million euros will provide much needed support to accelerate
recovery, strengthen resilience, and step up progress towards a
sustainable economic path,” the statement reported Neven Mimica, the
international cooperation and development commissioner, as saying.
While some of the funds will be used to cover humanitarian needs in
Dominica, Cuba, and St. Kitts and Nevis, the release stated that the
majority will provide support for medium-term reconstruction and
rehabilitation efforts at the national level in Antigua and Barbuda,
Dominica, St. Kitts and Nevis, Cuba and the overseas countries and
territories.
Meanwhile, Canada has committed to providing some CDN $100 million
over five years.
And the Kuwait Fund has indicated that it is prepared to extend
concessional loans and technical assistance grants to the countries
affected by the hurricanes.
The Fund extends loans on concessionary terms to finance development
projects in developing countries.
OBSERVER media understands that the pledges made by the IDB, the
European Union, and Canada were among the larger pledges made at
Tuesday’s donor conference, which included participation of India,
among other developing countries, as well as donor agencies such as the
William Jefferson Clinton Foundation.
<< Back to news headlines >>
BPL Studying 19 Bids From Power Generators Tuesday 21st November, 2017 – Tribune242
NINETEEN firms have submitted bids to provide 80 megawatts of power to
Bahamas Power & Light (BPL).
The company’s management conducted a public opening of the bids
yesterday. Whitney Heastie, BPL chief executive officer said yesterday that
BPL has engaged an outside firm to conduct the evaluation of the bids.
The company is still in negotiations with that firm.
Mr Heastie said BPL is looking for the ‘best option for its consumers. The 80
megawatts of power generation the electricity provider is seeking,
matches the 80 megawatts of rented generation BPL currently employs.
“The RFP was initially structured as being for 80 megawatts of rental
generation for five years and then realising that we possibly can get some
offers that would be attractive we modified that process,” said Mr Heastie,
noting a longer term arrangement could be reached.
As to when BPL expects to conclude the process Mr Heastie said it is
difficult to give timelines at this time. “We would like to have something
sured up by the summer peak 2018 but that is not something that is going
to cause us to rush the process,” he said. The prospective bidders include:
So Energy International; Tiger Offshore Rentals; Providence Energy Partners
Holdings Energy Solution; Rolls Royce Power Systems; Green Fuel WMS
International Energy Management and Leasing Services; Bahamas
Independent Power Partners Alternative I; Bahamas Independent Power
Partners Alternative II; Martin Energy Group; Modec; Green Energy Service
dba Power Plus; Cain Industries Bahamas Limited; Tyoga LNG; Supernova
Sominicana srl (two bids); Sol Petroleum Bahamas Limited; Quantum Utility
Generation; New Fortress Energy; Karpowership Latam Limited; Shell Gas;
Aggreko International; Furnace and Lube Service Inc. (2 bids).
<< Back to news headlines >>
PM Harris impressed that ninety-four percent of employees at recently-
opened Park Hyatt St. Kitts are locals Tuesday 21st November, 2017 – SKN Vibes
More jobs were created in St. Kitts and Nevis with 94 percent of the 320
permanent employees hired at the newly opened Park Hyatt St. Kitts
Christophe Harbour being locals, a figure the country’s Prime Minister, Dr.
the Honourable Timothy Harris, has lauded as remarkable, while
underscoring that locals are already benefiting from the operations of the
five star luxury resort situated at Banana Bay on the South-east Peninsula in
St. Kitts.
“This is a clear indication of the deserving confidence that has been
placed in the ability of our people to excel and to reach their God-given
potential,” said Dr. Harris, while adding that through discussions with top
Park Hyatt officials they showed interest in ensuring that the core people
coming out of the colleges in the federation were equipped with the skills
and the attitudinal disposition to render exceptional service.
“I am sure that they will render to you excellent service as they need to.
This excellence in service we want to engender in all of our people in the
government sector, in the private sector, in the media even, and of
course, that becomes the ethos, the enduring values by which the people
of St. Kitts and Nevis become best known—excellence of service,
excellence of imagination, that is critical in the task of national
development,” Prime Minister Harris added.
He said that the government remains committed to ensuring that locals
are empowered, but added that they themselves must make that extra
effort to market their products and grab at the opportunities available.
“We will hope that our farmers, fishers and those involved in arts and in the
production of things will find at the Park Hyatt a good place with which to
do business,” he said.
Mohammed Asaria, Vice Chairman of Range Developments, the
developers of the 126-room luxury resort, shared similar sentiments and
said it was always a plan to ensure that locals benefit in whatever way
possible.
“I think that is an incredible result and it hasn’t happened by accident…
and it’s not just the employees, the staff which make the hotel, it’s the rest
of the opportunities which this hotel provides to the Federation of St. Kitts
and Nevis. There are a number of opportunities, be that from the sale of
produce, be that from the sale of other materials,” said Vice Chairman
Asaria, while highlighting that the management of the hotel is committed
to “work hand in hand with the Government and the people of St. Kitts
and Nevis to ensure that that opportunity is maximized.”
<< Back to news headlines >>
American Airlines increases daily non-stop flights to St. Kitts Tuesday 21st November, 2017 – SKN Vibes
The Honourable Lindsay Grant, Minister of Tourism, has echoed his delight
and that of his Ministry on the recent addition of American Airlines non-
stop service to the Robert Llewellyn Bradshaw International Airport.
“American Airlines will now provide twice daily non-stop service to St. Kitts
from Miami for the first time in our history, for five days a week up from
four. Additionally, the flight will operate inbound Wednesday to Sunday
and outbound Thursday to Monday starting December 01, with the first
Wednesday operation taking place on December 06,” said the Minister of
Tourism, during a press conference in recognition of the opening of the
Park Hyatt St. Kitts Christophe Harbour on November 17.
Minister Grant said that the addition of the American Airlines flight
“compliments the new Delta Airlines non-stop weekly service from JFK
(John F. Kennedy) and an additional service from Atlanta, as well as of
our recently-added United (Airlines) stop out of Newark New Jersey.”
He explained that these new flights will prove beneficial not only to the
government, but also to the Park Hyatt St. Kitts Christophe Harbour, which
opened its doors on November 01. He added that it rests partly on him to
ensure the hotel receives the best there is to offer.
“For my part as the Minister of Tourism, it will be incumbent upon me that I
deliver for you the type and the quality of airlines coming into St. Kitts, and
the frequency that will compliment what you have here to offer,” said
Minister Grant. “I have seen and I believe that this hotel is going to raise
the level and the bar of our workforce because you are going to bring the
type of delivery of service to the customers that we have been pushing for
years. If we are speaking about high-end hotel then we have to deliver
first class experience to our visitors and our customers. And so, this must
not only be at the hotel, but it must transcend throughout every facet of
the society,” he said.
<< Back to news headlines >>
New branding for Saint Lucia: “Let her inspire you” Tuesday 21st November, 2017 – St. Lucia News Online
Saint Lucia has a new look for its logo and branding, moving the island’s
image away from sun, sea and sand and focused instead on the
destination’s beauty, romantic appeal, culture, lush landscapes, friendly
people and their love for their island.
The move follows the formation of the newly instituted Saint Lucia Tourism
Authority (SLTA), which saw the passage of new legislation and the
restructuring of the Saint Lucia Tourist Board to a more business oriented,
agile and results driven entity.
The SLTA says it engaged the services of Translation LLC, a New York
based creative agency, to develop a platform that would distinguish the
island from all other Caribbean destinations and highlight its unique
appeal.
The new call to action is the tag line: ‘Saint Lucia, LET HER INSPIRE YOU’.
The new brand platform seeks to present the island’s distinctiveness,
increase demand and promote more compelling reasons to travel to
Saint Lucia, inspiring more visitors, says Saint Lucia’s Minister for Tourism,
Hon. Dominic Fedee.
“We are elated about our new branding. We believe this branding speaks
not only to the current visitor experience, but also to our desires and
current efforts in creating a sustainable and incomparable tourism
product,” he said.
The roll out of new marketing campaigns accompanies the rebranding
reveal along with the launch of the second annual SOLEIL Saint Lucia
Sumer Festival and a Food & Rum Festival this January.
<< Back to news headlines >>
Unemployment in Saint Lucia continues to fall Tuesday 21st November, 2017 – St. Lucia News Online
Unemployment has dropped to 16.8 percent in the third quarter of 2017,
according to the Central Statistics Department latest job figures.
For the same period last year, (July – September 2016) unemployment
had stood at 20 percent. This indicates a 3.2 percent drop in comparison.
The current 16.8 percent decline shows an improvement from the second
quarter of this year – April to June 2017- which was 20.8 percent. For that
same period last year, unemployment was 21.4 percent.
Approximately 5,000 new jobs were created in the third quarter of this
year.
This increase came from the following sectors: Accommodation and Food
Services which makes up 17.8 percent of employment figures, Wholesale
and Retail Trade and Auto Repairs – 15.9 percent. The Forestry and
Agriculture Industries saw an improvement of 10.8 percent while
construction saw a 10.1 percent increase.
Youth unemployment has been reduced from 39.8 percent in the second
quarter to 34.3 percent this quarter. Last year’s third quarter figure was
35.9 percent.
The results of the St. Lucia Chamber of Commerce’s annual business
performance survey, as presented by Executive Director Brian Louisy,
showed that businesses generated better sales in the first part of the year.
The October results showed that 65.2 percent of the businesses surveyed
reported higher income compared to 60.9 in 2016. 39 percent recorded
more staff additions from January to June 2017.
And about 45 percent of surveyed firms said they expect to add to their
staff teams for the second half of 2017.
According to the Chamber of Commerce, the projected increase in hiring
is believed to be due to measured confidence in the economy by local
businesses. About 70 percent of the surveyed participants are fairly
optimistic about further economic progress.
<< Back to news headlines >>
Sterling treads water ahead of UK budget Wednesday 22nd November, 2017 – Reuters
Britain’s pound trod water on Wednesday, with traders wary of taking on
any large new positions on the currency ahead of a budget statement
from the country’s Finance Minister Philip Hammond.
Most analysts said the statement would be unlikely to have any great
impact on sterling, as investors were already largely prepared for lower
growth forecasts, and because the finance minister had little room for any
kind of bold budget moves.
Hammond, who is fighting for his political future as well as the fortunes of
Britain’s economy as it prepares to leave the European Union, is under fire
from many Brexit supporters who say he is taking an overly cautious
approach to the talks with Brussels.
But he is still expected to tread carefully, with measures to speed up
house-building and improve Britain’s weak productivity.
“The UK government has little room for manoeuvre when setting fiscal
policy and so the details of the budget are unlikely to have a material
impact on the pound,” said MUFG currency strategist Lee Hardman.
“(But) if the budget is badly received, there will be intensified pressure on
Theresa May - particularly from hard Brexit supporters - to appoint a new
Chancellor. The pound would likely prove sensitive to any further signs of
political instability,” he added.
The pound edged up 0.1 percent to $1.3251 ahead of the 1230 GMT
statement, staying within the narrow $1.3190-$1.3280 range in which it has
traded all week.
Against the stronger euro, the pound eased back 0.2 percent to 88.78
pence.
“Sterling’s still very cheap and still reacts more to good than to bad news
as a result. Today may just bring confirmation that the Chancellor has very
little room for fiscal handouts,” said Societe Generale macro strategist Kit
Juckes.
Away from the budget, traders were still closely watching developments
around Brexit negotiations.
Britain’s parliament is debating legislation which will enact Britain’s exit
from the EU in March 2019 and copy EU law into British law - described by
officials as “one of the largest legislative projects ever undertaken in the
UK”.
May’s government averted a rebellion in parliament on Tuesday over
plans to ditch the EU’s Charter of Fundamental Rights, promising to review
its approach and make changes if needed.
(Editing by Ralph Boulton)
<< Back to news headlines >>
Oil jumps, U.S. light crude at two-and-a-half-year high on Canada
pipeline woe Wednesday 22nd November, 2017 – Reuters
Oil prices spiked on Wednesday with U.S. light crude hitting highs not seen
since July 2015 after faults on a major pipeline dented Canadian
deliveries to the United States, where crude inventories were also reported
to be falling.
U.S. light crude hit a 2-1/2-year high of $57.98 a barrel before easing to
$57.74 by 0950 GMT, up 91 cents on the day.
Brent crude was up 48 cents at $63.05 per barrel.
Traders attributed the jump to an 85 percent cut in the amount of oil
TransCanada Corp will deliver to the United States on its Keystone pipeline
through the end of November, announced by the company on Tuesday.
Keystone, which carries 590,000 barrels per day of crude from Alberta’s oil
sands to markets in the United States, was shut last week after a 5,000-
barrel spill in South Dakota.
“There is a shortage of crude oil into the United States. Hence the rally in
the prices,” PVM Oil Associates strategist Tamas Varga said.
This adds to a picture of falling crude inventories painted by the American
Petroleum Institute (API) in its weekly report on Tuesday, with stocks
dropping by 6.4 million barrels in the week to Nov. 17, far above analysts’
expectations.
The latest official U.S. production and inventory data is due on
Wednesday.
“If we see the U.S. Energy Information Administration ... confirming the big
draw in crude oil stocks reported by the API last night, I think we will see
the market going higher,” Varga said.
Outside North America, markets have been supported by an effort led by
the Organization of the Petroleum Exporting Countries to end a global
supply overhang by restraining output.
The deal to curb production is due to expire in March, but is widely
expected to be extended at the group’s next meeting on Nov. 30.
“There is growing consensus that OPEC will extend their production cut
deal at the end of the month. This confidence along with the current
geopolitical environment has kept ICE Brent trading firmly above $60 per
barrel,” Dutch bank ING said.
“However, an outcome at the OPEC meeting which falls short of market
expectations, will likely lead to a selloff, and given the large speculative
long in Brent, this could be fairly severe,” it added.
(Additional reporting by Henning Gloystein in Singapore; Editing by Dale
Hudson)
<< Back to news headlines >>
Boxed in by slow growth, UK's Hammond readies budget Wednesday 22nd November, 2017 – Reuters
British Finance Minister Philip Hammond will say on Wednesday how much
he can afford to help unhappy voters as he faces a potentially sharp
deterioration in the economy’s growth prospects.
Hammond, fighting for his political future as well as the fortunes of Britain’s
economy ahead of Brexit, is due to deliver his budget plan to parliament
just after 1230 GMT.
He is under fire from many Brexit supporters who resent his cautious
approach to the talks with Brussels, and his relationship with Prime Minister
Theresa May is under strain.
The Daily Telegraph newspaper said May’s office was alarmed by the low-
key build-up to the budget - which is seen as a chance to turnaround her
struggling government’s fortunes - and stepped in late on Tuesday to
announce extra education spending.
Despite the pressure to help the prime minister, Hammond has little room
for the kind of bold budget moves that many in his Conservative Party are
demanding to help households after years of cuts in public spending.
Instead, he is expected to stick to his budget rules and tread carefully with
measures to speed up house-building and improve Britain’s weak
productivity.
The world’s fifth-biggest economy has been growing more slowly than any
other big developed nation, due in large part to the referendum vote in
2016 to leave the European Union, as sterling fell sharply, pushing up
inflation and aggravating the weak wage growth of many workers.
Meanwhile, Britain’s debt load has continued to rise to stand at about 80
percent of gross domestic product, double the level before the global
financial crisis, even if its once-towering budget deficit has been slashed
in recent years.
Hammond’s challenge looks set to get harder. The forecasters whose
projections underpin his budget plans are expected to say they have cut
their outlook for growth in the years ahead due to Britain’s deep-rooted
productivity problem.
CAUTION
That would hit the money that Hammond wants to keep in reserve to help
the economy as it leaves the EU in 2019. Britain is also likely to have to
commit to sending tens of billions of pounds to Brussels to pay for its
divorce from the EU.
Hammond has made clear he will not turn on the spending taps now. He
has rejected a fellow minister’s call for a big public housing investment
push and told a newspaper at the weekend: “We are heavily constrained
fiscally. We don’t have huge amounts of room for maneuver. But we do
have some room.”
Hammond has said he will seek to boost house-building through new
powers and changes to planning rules, and he has reportedly considered
a cut in a property purchase tax for first-time home-buyers, which might
show younger voters he is sensitive to their fear of being poorer than their
parents.
He is also facing calls to relax further his grip on public-sector pay and
spend more on health, something he might be able to do modestly after
an accounting change to shift the debt and borrowing of housing
associations off the government’s books.
Another focus of the budget plan is likely to be on ways to speed up
Britain’s slow productivity growth, which threatens to become even more
of a problem as the country faces the prospect of reduced access to its
main export markets in the EU.
After he was forced into a U-turn on a planned tax hike for self-employed
workers in March, Hammond has been under pressure.
Some Conservative lawmakers say his cautious approach to the Brexit
talks plays into the hands of the EU. Others simply dislike his style and have
pounced on gaffes, including one on Sunday when he said “there are no
unemployed” people in Britain.
“He is hard to love. He has an odd manner,” a Conservative lawmaker
said, speaking on condition of anonymity.
Rupert Harrison, a former aide to Hammond’s predecessor George
Osborne, advised against big policy gambles, given the Conservatives’
weak grip on parliament.
At the same time, voters are in no mood for a tough new push to bring
down the deficit. “Instead, Mr Hammond should focus on keeping fiscal
slippage to a minimum while avoiding political risks,” Harrison wrote in a
column in the Financial Times.
(Additional reporting by Elizabeth Piper; Writing by William Schomberg;
Editing by Janet Lawrence)
<< Back to news headlines >>
'Very uncertain' Yellen still predicts U.S. inflation rebound Tuesday 21st November, 2017 – Reuters
Federal Reserve Chair Janet Yellen stuck by her prediction that U.S.
inflation will soon rebound but offered on Tuesday an unusually strong
caveat: she is “very uncertain” about this and is open to the possibility
that prices could remain low for years to come.
A day after announcing her retirement from the U.S. central bank,
planned for early February, Yellen said the Fed is nonetheless reasonably
close to its goals and should continue to gradually raise interest rates to
keep both inflation and unemployment from drifting too low.
Yellen, one of the most powerful figures in world finance who also
weighed in on the challenges women face in economics, said she does
not believe that inflation expectations have drifted down too much
despite five years of below-target U.S. price readings.
Inflation should rebound over the next year or two, she said, adding: “I will
say I am very uncertain about this. My colleagues and I are not certain
that it is transitory, and we are monitoring inflation very closely.”
A key lesson of her four-year tenure atop the Fed was to keep an open
mind and not assume “you have a monopoly on truth,” Yellen told
students and professors at NYU Stern School of Business. “It may be that
there is something more endemic going on or long-lasting here that we
need to pay attention to.”
The Fed’s top policymakers have repeated their belief that inflation would
rebound even while their preferred price measure has slipped to 1.3
percent, below a 2-percent target. Unemployment has fallen to 4.1
percent while overall economic growth is running strong at 3 percent,
prompting high expectations for a rate hike next month despite the price
weakness.
Yellen noted that while undershooting the inflation target for too long
“can be quite dangerous,” the Fed must also avoid driving
unemployment “way below” sustainable levels. “We don’t want a boom-
bust policy,” she said.
The first woman to lead the Fed, Yellen is credited with putting the
economy on a firmer footing and steering monetary policy away from the
fire-fighting mode that followed the 2007-2009 recession and financial
crisis.
Yet she was overlooked when U.S. President Donald Trump earlier this
month nominated Jerome Powell, a Fed governor, to become Fed chair
in February - a decision that broke with tradition of chairs serving at least
two terms. On Monday Yellen said she would resign her seat on the Fed’s
Board of Governors once Powell is confirmed and sworn in.
Yellen has pushed to improve recruiting and promotion of women and
minorities at the Fed. Of the roughly 135 regional presidents in the Fed’s
history, all but six have been men and all but three have been white.
Asked about gender disparity in economics, Yellen stressed the
importance for young people to have mentors who are “watching out for
them... Especially for women in a field that has very few women.”
The proportion of women among new economics PhDs has flatlined over
the last decade, and has dropped among associate professors, while only
13 percent of professors are women in PhD-granting departments,
according to the American Economic Association.
Women tend to be less well-integrated in more casual, male social
networks, making opportunities such as co-authoring research less
accessible, Yellen said. “The way in which women are somewhat
disadvantaged is that it’s often during social interactions that those
conversations take place.”
(Reporting by Jonathan Spicer and Stephanie Kelly; Editing by Chris Reese
and Lisa Shumaker)
<< Back to news headlines >>
Buoyant risk appetite pushes euro up for a second day Wednesday 22nd November, 2017 – Reuters
The euro edged higher for a second consecutive day on Wednesday,
recouping more than half of its losses sustained after the German coalition
collapse as investors bought the single currency on expectations of strong
economic growth.
With risk appetite firmly on the front foot, with world stocks perched at a
record high and market gauges of volatility heading back towards record
lows, even commodity-linked currencies, such as the New Zealand dollar,
which have suffered a recent beating found some support.
“Regardless of what the German political outcome will be, the
implementation of the economic policies will continue and investors are
using this opportunity in the euro weakness to adjust some positions,” said
Manuel Oliveri, an FX Strategist at Credit Agricole in London.
The euro rose 0.25 percent on Wednesday to $1.1769 against the dollar
and not far away from a one-month high of $1.1862 hit last Wednesday.
The euro’s gains were also bolstered by the general trend of dollar
weakness across the board due to softening U.S. yields.
Spreads between ten and two-year U.S. Treasury bonds narrowed to 57.4
basis points in the previous session, its flattest level since late 2007 and was
trading roughly half a basis point higher at around 58 basis points.
The dollar index against a basket of six major currencies was down 0.2
percent at 93.77.
The index fell back from a one-week high of 94.165 overnight after a rally
triggered earlier this week by a sagging euro stalled as long-term U.S.
Treasury yields continued inching lower.
With outgoing U.S. Federal Reserve Chair Janet Yellen not offering any firm
clues on where monetary policy in the world’s biggest economy is
headed, the dollar’s near-term outlook remained uncertain.
Yellen stuck by her prediction that U.S. inflation will soon rebound but
offered on Tuesday an unusually strong caveat: she is “very uncertain”
about this and is open to the possibility that prices could remain low for
years to come.
“The monetary policy side of things is unlikely to provide any momentum
for the dollar exchange rates until year-end,” Commerzbank strategists
said in a note.
(Reporting by Saikat Chatterjee, editing by Louise Heavens)
<< Back to news headlines >>
BOJ gives early sign of lift-off with warnings on the costs of easing Tuesday 21st November, 2017 – Reuters
The Bank of Japan is dropping subtle, yet intentional, hints that it could
edge away from crisis-mode stimulus earlier than expected, through a
future hike in its yield target, according to people familiar with the central
bank’s thinking.
With inflation still way below its 2 percent target, the BOJ sees no
immediate need to withdraw stimulus, and regards weak price growth as
its most pressing policy challenge.
But bank officials are now more vocal on the rising cost of prolonged
easing, such as the hit to bank margins - a sign that their next move would
be to roll back stimulus rather than expand it, the people said.
The most likely first step - albeit some time away - would be to allow long-
term rates to rise more, reflecting improvements in the economy, they
said.
“The change in tone doesn’t have immediate policy implications, but it’s
probably intentional,” one of the people said.
“The BOJ wants to make its policy framework more sustainable,” said
another. “Allowing longer-term rates to rise more would give banks some
breathing space.”
The first sign of change came in Nagoya on Nov. 6, when BOJ Governor
Haruhiko Kuroda - whose current term ends in April - said he was “mindful”
of the risk prolonged easing could hurt banks’ appetite to lend.
Days later, board member Yukitoshi Funo said the BOJ must be vigilant to
the cost of easing.
The most striking warning came from Kuroda last week, when he referred
to a “reversal rate” - the level where rate cuts by a central bank hurt, not
help, the economy by damaging banks and discouraging lending.
“Because the impact of the low interest rate environment on financial
institutions’ soundness is cumulative, the BOJ will continue to pay attention
to this risk,” Kuroda said in a Nov. 13 speech in Zurich.
European Central Bank (ECB) executive board member Benoit Coeure
referred to the reversal rate in July last year in discussing when further rate
cuts could become counter-productive. Five months later, the ECB
decided to cut monthly asset purchases from 2017.
The BOJ also has a history of dropping early hints of a future policy shift.
Roughly a year before adopting its yield curve control (YCC) policy, the
BOJ published a research paper analyzing the feasibility of the idea.
“Reversal rate is a pretty shocking word to come out of the mouth of a
BOJ governor. It’s unthinkable the BOJ would insert it in Kuroda’s speech
without any policy intention,” said Takahide Kiuchi, who was a BOJ board
member until July.
The BOJ may allow long-term rates to rise more by shifting its long-term
rate target to five-year yields from 10-year yields around the first quarter of
next year, Kiuchi said.
“The BOJ could put a positive spin on the move by saying it can more
effectively reflate growth by keeping short-term borrowing costs low while
allowing longer yields to rise.”
NO SURPRISES
After three years of heavy asset buying failed to fire up inflation, the BOJ
last year shifted to a policy targeting interest rates to free itself from a
commitment to buy bonds at a set pace and make its policy framework
more sustainable.
Under that YCC policy it guides short-term rates at minus 0.1 percent and
10-year bond yields around zero percent.
The shift in communication comes as the U.S. Federal Reserve and ECB
head for an exit from ultra-loose policy, and suggests the BOJ could follow
suit sooner than expected.
A majority of economists polled by Reuters before Kuroda’s latest
comments expect the BOJ’s next move to be a withdrawal of stimulus -
but not until later next year or beyond.
If the economy keeps improving, the central bank may consider hiking
the yield target as early as April, said veteran BOJ watcher Izuru Kato,
chief economist at Totan Research.
“The BOJ probably wants to fine-tune YCC with a modest hike in the yield
target, and justify the move as aimed at easing the strain on Japan’s
banking system,” he said.
Indeed, BOJ officials have signaled they do not necessarily need to wait
until inflation hits 2 percent to raise the yield target, as long as it keeps
printing money aggressively.
But stubbornly low inflation and a potential change in governor could
discourage the BOJ from any early policy change.
“The BOJ would struggle to justify raising the yield target unless inflation
exceeds 1 percent,” said Mari Iwashita, chief market economist at SMBC
Friend Securities.
Core consumer inflation stood at 0.7 percent in September from a year
earlier.
While the timing of a rate hike remains uncertain, one thing is sure: the
BOJ won’t spring a surprise like the time Kuroda deployed his ‘bazooka’
monetary stimulus in 2013.
“It’s important the BOJ prepares markets in advance with careful
communication,” said a third person familiar with the bank’s thinking.
(Reporting by Leika Kihara; Editing by Ian Geoghegan)
<< Back to news headlines >>
ECB's Coeure expects bond-buying pledge to be dropped by Sept Tuesday 21st November, 2017 – Reuters
The man in charge of the European Central Bank’s money-printing
program expects the ECB to drop by next September its pledge to
continue buying bonds until inflation heads towards its target, he told a
German newspaper.
The ECB decided to cut the pace of its bond purchases to 30 billion euros
($35 billion) per month at its October meeting but pledged to continue
the stimulus program until it is confident that inflation was “consistent with
its inflation aim” of just under 2 percent.
But Benoit Coeure, the ECB director in charge of its market operations,
expected this part of the policy message to change by September, the
earliest possible end-date for the purchases set by the ECB last month.
“We were not ready to make that change in October, but I expect it will
come at some point between now and September 2018,” Coeure said in
an interview with Handelsblatt published on Tuesday.
Inflation in the euro zone was 1.4 percent last month. It has missed the
ECB’s target for 3-1/2 years and is expected to continue doing so at least
until 2019, according to the ECB’s own forecasts.
($1 = 0.8516 euros)
(Reporting By Francesco Canepa; Editing by John Stonestreet and Hugh
Lawson)
<< Back to news headlines >>
Paris watchdog win bolsters its fight for Brexit banks Tuesday 21st November, 2017 – Reuters
The surprise decision to move the European Banking Authority to Paris will
boost its chances of attracting London banks after Brexit, French officials
said on Tuesday.
Paris won over Dublin in a lucky dip after a voting run-off produced a tied
result on Monday evening. Frankfurt, seen by many as favourite, did not
even make it to the final two in the battle to replace London as home to
the organisation that sets banking rules across the bloc and employs 185
people.
Frankfurt and Paris are at the forefront of the race among European cities
to attract London businesses that need an EU hub to continue serving
customers in the bloc after Britain leaves in March 2019. Goldman Sachs
(GS.N) has said it will make Paris and Frankfurt its European hubs after
Brexit.
French Finance Minister Bruno Le Maire said the decision to put the EBA in
Paris sent exactly the sort of signal that big banks such as Goldman and
Morgan Stanley (MS.N) were waiting for.
“It’s a very strong signal, firstly that financial stability will be decided in
Paris,” Le Maire said on the sidelines of an innovation conference at the
Finance Ministry.
“The second signal, which I think is excellent news for Paris, is that Paris will
become one of the big European financial centres, if not the biggest. It’s
also a signal to big international institutions.”
Le Maire said the government still had to take several important decisions,
notably on labour costs, but that he expected many big banks to come
to Paris.
Bagging the EBA marks an unexpected win for the French capital, given
that its bid was among the least generous financially.
It is also unusual because it puts two such regulators in one location,
joining the European Securities and Markets Authority (ESMA) and
prompting some officials to speculate that they could cooperate more
closely to exert greater influence.
“Personally, I‘m very happy with this decision. Paris was top of my list,” said
EBA spokeswoman Franca Rosa Congiu.
Though the EBA employs only 185 staff, it plays a core role in turning EU
banking law into rules for supervisors to enforce. It also runs the biannual
stress test of leading EU lenders.
GERMAN SETBACK
While Paris revels in its victory, Germany was left licking its wounds after a
setback to both the country and its Chancellor, Angela Merkel. The
German Premier had called for the watchdog to be based in Frankfurt,
which is already home to the European Central Bank (ECB).
“We would have preferred a different decision because we believe that
Frankfurt, all things considered, best meets the criteria stipulated,” said
Lutz Raettig, President of the lobby group Frankfurt Main Finance.
Gerhard Hofmann, a member of the board of the National Association of
German Cooperative Banks, said the EU was missing out on an
opportunity to move the EBA close to the ECB.
“In light of the fact that there is great overlap in the mandates of both
institutions, as well as the significance of Frankfurt as a banking and
financial capital in Europe, Frankfurt was well positioned,” Hofmann said.
But Volker Bouffier, Prime Minister of Frankfurt’s home state of Hesse, said
the city would remain “the most significant financial capital on the
European continent” regardless.
“A host of banks have already announced their intentions to base
themselves in Frankfurt or expand there,” he said. “We are sure that we
will continue to be successful on that front.”
Nonetheless, the win is a considerable boost for France.
“We thought that we had lost the battle against Frankfurt, but this big win
establishes an equilibrium between the two,” one French banker said.
Former Bank of France Governor Christian Noyer said in France’s bid that
the banking agency and market watchdog ESMA would be able to work
together more closely.
“There is a good reason for satisfaction that it will allow synergies with
ESMA. There are clearly some points of convergence,” another French
banking source said.
ESMA, which employs 270 permanent and temporary staff, must review its
offices by 2019 when its lease runs out.
Setting up alongside the EBA could allow both to save on back-office
services and foster a closer relationship.
(Additional reporting by Leigh Thomas in Paris and Tom Sims in Frankfurt;
Editing by John O'Donnell and David Goodman)
<< Back to news headlines >>
China clamps down on online micro lending; U.S.-listed shares plunge Tuesday 21st November, 2017 – Reuters
China took steps to rein in the rapidly growing and lightly regulated
market for online micro-lenders in the government’s latest crackdown on
internet finance, sending shares of U.S.-listed Chinese financial firms into a
tailspin.
A top-level Chinese government body issued an urgent notice on Tuesday
to provincial governments urging them to suspend regulatory approval for
the setting up of new internet micro-lenders, sources who had seen the
notice told Reuters.
The multi-department body, tasked by the central government to rein in
risks in the internet finance sector, also told local regulators to restrict
granting of new approvals for micro-loan firms to conduct lending across
regions, according to the sources.
The information office of the State Council, or Cabinet, referred Reuters to
the People’s Bank of China (PBOC) and other regulators when asked to
comment. The PBOC has yet to respond to a faxed request for comment.
Beijing started a relentless crack down on the internet finance sector last
year, issuing guidelines and rules to regulate online financial activity
following a spate of scandals, frauds and high-profile peer-to-peer (P2P)
failures.
The clean-up has led to the creation of a top-level body comprising
government entities that include the central bank and the banking
regulator.
The crackdown on micro-lenders comes as authorities warn about rising
household debt, which includes mortgages and consumer loans.
Unsecured consumer lending via Chinese online platforms more than
tripled last year to almost $140 billion, according to a recent report by the
Cambridge Centre for Alternative Finance.
PLUNGING NASDAQ SHARES
On Tuesday, shares in Chinese online lender Qudian (QD.N) sank nearly 20
percent on NASDAQ, before recovering some ground to end 3.8 percent
lower at $19.31.
Qudian, backed by Alibaba (BABA.N) affiliate Ant Financial and became
profitable last year, operates a website that allows college students and
young white-collar workers to buy laptops, smartphones and other
consumer electronics in monthly installments.
The company went public at $24 per share, raising about $900 million in
an initial public offering that priced above expectations, driven by robust
U.S. investor demand for fast-growing Chinese companies.
On Tuesday, shares of China Commercial Credit Inc. (CCCR.O) ended
down 8.8 percent and PPDAI Group (PPDF.N) slumped 14 percent. Jianpu
Technology (JT.N), which also debuted just this month, finished 10.8
percent lower. Shares of China Rapid Finance (XRF.N), a P2P platform and
a loan provider, fell before closing 3.3 percent higher.
There was no apparent reaction in Chinese mainland stocks CSI300, which
were broadly up on Wednesday's morning trade led by the finance
sector. Companies providing small loans, especially on the internet, have
expanded rapidly in the past year, partly due to loose government rules.
Such firms meet demand for credit from individuals who have been
shunned by Chinese banks, which typically prefer big corporate clients.
Loan amounts span from a few hundred yuan to tens of thousands, with
borrowers typically without steady incomes or any credit history. Interest
rates on these small loans can be more than 35 percent per annum, some
even higher, and are not often appreciated by individuals who are drawn
to the easy terms and conditions.
Some borrowers also take loans from one lender to refinance loans from
other credit providers, causing a spike in their debts. Local media have
also reported cases of oppressive and sometimes violent loan-collection
methods in a sector that has thrived under little supervision.
Tuesday’s move came just days after LexinFintech (LX.O) filed a $500
million IPO with the Securities and Exchange Commission, the latest in a
series of offerings from the sector.
(Reporting by Shu Zhang and Ryan Woo in Beijing, Saqib Iqbal Ahmed in
New York and Aparajita Saxena in Bengaluru; Editing by Alison Williams, G
Crosse & Shri Navaratnam)
<< Back to news headlines >>
China regulator to consider letting insurers invest more broadly – Securities
Times Wednesday 22nd November, 2017 – Reuters
China’s insurance regulator is considering allowing insurers to allocate
their funds to commodities and long-term property rentals, the Securities
Times quoted an official as saying on Wednesday.
Ren Chunsheng, Head of the department supervising fund allocation at
the China Insurance Regulatory Commission, said letting insurers invest
their funds elsewhere would help deepened reforms, the report said. The
comments come after a months-long crackdown on corruption in the
insurance industry which has netted high-ranking officials and seen
greater scrutiny on where funds are invested. Ren, who spoke at a
conference, said the insurance industry should improve risk management
and explore the use of its funds for financial derivatives, hedging and
managing risks.
He also said authorities have made headway in containing aggressive
investment behaviour. During the year, China has tightened rules on
acquisitions abroad as part of a broader campaign against what Beijing
calls “irrational” investments that has targeted sectors including property,
entertainment and sport.
(Reporting by Engen Tham; Editing by Shri Navaratnam)
<< Back to news headlines >>
Natgas exporting countries convene as global buyers' market rises Tuesday 21st November, 2017 – Reuters
Top officials of major gas producing countries are meeting this week in
Bolivia to weigh how to shore up prices that have been hammered by
expanding supplies of the fuel that are giving global buyers greater sway
over purchase and contract terms.
The Gas Exporting Countries Forum (GECF), which aspires to be the OPEC
for natural gas suppliers, kicked off the event on Tuesday with calls for
cooperation. The four-day meeting is expected to draw energy ministers
from Qatar, Iran, Russia and Venezuela to Santa Cruz, Bolivia.
They gather as gas prices have stabilized over the last year, after plunging
more than 80 percent in the prior decade. However, prices remain under
pressure due to growing supplies of shale gas and more competition from
liquefied natural gas (LNG).
The group is modeled after the Organization of the Petroleum Exporting
Countries (OPEC), whose 12 member nations manage oil supply to control
prices. “We have to defend our resource, which is gas, and we need to
work together so that in the future, gas will be as valuable as oil,”
Equatorial Guinea’s Mines and Energy Minister Gabriel Obiang Lima told
reporters as he arrived on Tuesday in Santa Cruz, Bolivia’s hub for gas
development.
GECF countries increasingly are competing with exports from and prices
set in the United States, which is on track to become the world’s third
largest exporter of LNG after Qatar and Australia. But GECF Secretary
General Seyed Mohammad Hossein Adeli said he saw no global glut of
natural gas, pointing to both growing demand and supply.
Global consumption of natural gas grew about 1.5 percent in 2016 to
some 3.54 trillion cubic meters (TCM) driven by unconventional gas
production, according to BP Plc’s statistical review. Adeli said he
expected gas consumption to grow another 2 percent this year, primarily
driven by strong demand in Europe and Asia.
At least 25 countries are now capable of receiving LNG supplies and new
regasification plants are expected to start operating in the coming
months, giving buyers greater flexibility and increasing competition
among suppliers.
Even though LNG represents only about 10 percent of the world’s gas
trade, new suppliers are willing to offer sweeter terms to customers, roiling
traditional markets and turning up the heat on some producers trying to
hold onto more rigid terms.
That has “buyers in a better position to make contracts with shorter terms
and more customized to their demand profile, without risking money in
high take-or-pay clauses,” said Mauro Chavez, a senior research analyst
at consultants Wood Mackenzie. The United States has been the most
aggressive in shaking up the market, through flexible contract terms.
Its rise as a force in global LNG markets and its growing gas sales to
Mexico via pipeline have contributed to greater price certainty,
according to analysts. This is reflected in a long and flat North American
dry gas cost curve that should limit abrupt price increases, they added.
PRICE PREDICTABILITY
Price indexes are becoming a factor not only in LNG contracts but also in
sales via pipeline.
In markets such as the Caribbean, some sellers also are customizing their
gas supplies by linking contracts to fuel oil prices, which is also used for
power generation. The gas oversupply has fueled some mergers among
producers, just as the terms of some of the world’s most important gas
trade deals are being renegotiated ahead of their expiration dates,
including some contracts between Qatar and Japan, South Korea and
Taiwan. Other traditional gas suppliers such as Russia, Norway and Algeria
seem determined to maintain market share in key markets such as
Europe.
In Latin America and the Caribbean, where U.S. LNG supplies have
lowered prices for importers such as Chile and Argentina, traditional
suppliers Trinidad and Bolivia need to attract upstream investments, cut
costs and offer consumers more pricing flexibility to remain competitive.
(Reporting by Marianna Parraga and Alexandra Alper; Editing by Gary
McWilliams and Richard Chang)
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WASA weighs property seiz Wednesday 22nd November, 2017 – Trinidad and Tobago Guardian
As the Water and Sewerage Authority (WASA) moves to collect some $500
million currently owed by errant customers, chairman Romney Thomas has
promised that before year’s end properties will be seized and placed for
sale in a bid to collect outstanding debts.
Thomas was speaking at WASA’s commissioning ceremony for the McKai
Booster Station at the Lady Young Road, Morvant, yesterday.
Asked what percentage of customers were in arrears, Thomas said it was
difficult to pinpoint but noted it was a mixture of residential and
commercial customers. On a time-line for the actual start of seizure of
property, Thomas said WASA was “working” with property owners so as to
come to a resolution.
“We want to give people the opportunity to come in and talk to us and
try to enter into a payment plan. We are not going to be draconian about
it. And for those who don’t want to do it we will take that next step,”
Thomas said.
“Right now it is a warning, but we have to collect the outstanding debt. It
is way too much debt we have outside there and we are struggling to
pay contractors. In terms of the sale of property... by the end of the year
we would be advertising properties for sale.”
This is not the first time the company has threatened such action to clear
of its customer debt, but such plan is yet to meterialise. Yesterday, Thomas
pointed out that WASA was probably the only public utility authorised to
sell a property for outstanding arrears, as outlined in the Rate and
Recoveries Act. He said, however, that they will most likely target seizure
of properties for customers who have the biggest debts first.
Public Utilities Minister Robert Le Hunte said the bigger picture was that all
citizens must appreciate that the price of water was one of the lowest in
the Western Hemisphere, as each household had to pay a mere $3 a day
for water. But he said the consumption pattern of citizens was four times
that of other countries.
“If there are individuals who are not paying their bills at this time, that’s
part of the reason why the country has subsidised WASA to the tune of
almost $3 billion,” Le Hunte said, adding the country should be “crying
shame” on customers who are not paying their bills with the rates currently
as low as they are.
The minister said only 38 per cent of the population currently had access
to pipe-borne water on a 24 hours/seven days a week basis.
The booster station was initially estimated at $3.1 million but reportedly
cost the Public Utilities Ministry $2.2 million.
Thomas said it would provide water to the McKai community, which has
been without water since its inception some 50 years ago. The community
comprises some 400 people or 100 households. The project was done not
by contractors but solely by WASA employees and Thomas paid kudos to
them.
WASA’s director of programme and change management Denise Lee
Sing-Pereira said the booster station was the brainchild of deceased
WASA senior manager of North-West operations Derek Hookers, who was
shot dead in 2015. To date his murder has remained unsolved.
“Derek’s commitment to the Mc Kai Lands community has been
demonstrated through his successful completion of Phase One of the
project, which entailed the laying of 1.5 kilometre PVC pipeline. Derek,
however, died before his goal of providing a first time water supply to the
community was realised,” Lee Sing-Pereira said.
She said the station has a design capacity of 135,360 gallons of water per
day and is fed from the Picton Reservoir via the El Socorro Booster Station.
<< Back to news headlines >>
Businesses push export agenda to curb dependence on banks for US$ Wednesday 22nd November, 2017 – Trinidad and Tobago Guardian
Exporters yesterday declared that the time had come to reduce
dependance on commercial banks for US currency, stating that
increasing export volumes was now a priority.
Managing director, Fresh Start Ltd, Marcus Sun Kow said within a three-
year period he wanted to increase his exports to 35 per cent of business
sales.
Sun Kow was part of a panel discussion titled, "An Export toolkit: Market
Selection to Profit Optimisation," which was held yesterday at the T&T
Chamber of Industry and Commerce, Westmoorings.
Outlining one of the mistakes his company made, Sun Kow said his
company sent goods into a country without doing an integrated
marketing strategy in order for the target market to recognise his brand
and product.
In the end, the product expired on the shelves.
Dale Parson, chief executive, Kaleidoscope Paints Ltd (KPL) said he went
through a reality check in 2016, when his business did not have the US
currency to settle bills.
He said his business was at "the mercy" of commercial banks as the
company looked for US currency.
"When I checked our revenue from exports it was 26 per cent and we are
always at the mercy of commercial banks to find US dollars. There is no
other way but to export," he said.
"What we realise is that we have 26 per cent of our total revenue which
comes from US dollars. We need to be independent of commercial banks,
we need to be closer to 60 per cent, so I need to more than double my
exports in as short as possible period of time."
He added that in order to penetrate a market that is not English-speaking,
there is need to have bilingual sales managers on call.
Parson said if the dollar slides downward in the next three months, a
business owner should have a plan in place to deal with this.
"In a short space of time, by March if the dollar slides and it becomes
harder and harder to get US dollars, you should try to shift some of your
existing resources to export, I urge everybody to that."
"It is a wake up call. We have hired bilingual export commercial
managers, bilingual administrators. We are still building on market
penetration in those existing Caribbean markets, we need to go outside
and we have to put resources in place to get the market data and fix the
front end."
Some countries which KPL exports to include: Antigua, Belize, Suriname,
Dominica, Guyana, St. Vincent, St. Lucia, Grenada and Haiti.
Sheldon Wood, Carib Brewery Ltd said the infrastructure must be in place
to support the business' ambition to export outside of its domestic market.
"On a team you need to have people who are focused on generating
demand, you can't have one person doing everything all at once. There
must be a team that generates demand for the brand, as well as the
operational side of the business must be soundly taken care of."
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IMF: Low energy prices, forex remain issues for T&T Wednesday 22nd November, 2017 – Trinidad and Tobago Guardian
The International Monetary Fund (IMF) yesterday issued as part of its
Article IV consultations its staff report for 2017, highlighting three pertinent
issues/recommendations which it believes T&T must address.
The three issues pointed out by IMF were: restoring macroeconomic
stability, managing external imbalances and supporting broad-based and
inclusive growth.
The recommendations come in the context of continued low energy
prices and three years of recession which have significantly widened fiscal
deficits in T&T.
The Fund said: "absent consolidation, fiscal balances and public debt are
projected to be on an unsustainable medium-term trajectory."
On the issue of restoring macroeconomic stability, the IMF noted: "Despite
some policy actions already undertaken, sustainable fiscal adjustment
requires additional measures. Given the urgency of consolidation, staff
advocated high impact measures to achieve the required adjustment,
with an eye towards increasing revenues and reducing current
expenditures. Increasing public investment remains critical for a return to
sustainable growth."
Referring to managing external imbalances, the IMF suggested that a
significant exchange rate adjustment would "help restore
competitiveness, external and foreign exchange market balance, help
counteract the adverse impact of fiscal consolidation on growth, and
allow for higher consumption and national welfare in the long run."
Regarding supporting broad-based and inclusive growth, the IMF
suggested that adopting structural reforms is "critical for enhancing
growth and diversification."
"These include improving the business climate, the efficiency and
effectiveness of government employment programs, public sector
administration, and data timeliness and quality."
In highlighting other factors which formed the context for its
recommendations, the IMF said the exchange rate also played a
significant role.
"The external balance assessment indicates the currency remains
overvalued. Together with low prices and weak output in the energy
sector, this has considerably widened the current account deficit.
"These large current account deficits have been financed by official
borrowing, private capital inflows, and some reserve losses, thus starting to
rapidly erode a large positive foreign asset position.
"That said, reserve losses have been limited by the rationing of foreign
exchange, which, however, has led to persistent and highly distortionary
shortages in the foreign exchange (f/x) market. Monetary policy has been
on hold on concerns that lower interest rates would exacerbate pressures
in the foreign exchange market, where shortages are already
widespread."
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KIW Shifts Focus To Investments - Reassessing Market Entry Strategy Wednesday 22nd November, 2017 – Jamaica Gleaner
John Jackson, chairman of KIW International, indicated this week that the
company's plan to re-enter the stock market via introduction of its shares
on the Jamaica Stock Exchange has been nixed by the authorities.
KIW had planned to list its shares on the junior market by 2018. Instead, the
company was told it will have to offer its shares on the exchange via a
public offer - forcing KIW to reassess its strategy to go public.
"The latest information we received is that to list on the Jamaican market
will require a public issue, so we plan discuss same as that information just
came to us last week," Jackson told Gleaner Business.
" ... We will have to determine the amount if we proceed with the JM
listing, which is our preference," he said.
KIW was once listed on the main market of the exchange, but delisted at
the end of November 1999. It is now targeting the junior market, where it
qualify for 10 years of tax breaks. Jackson surmised that it was their choice
of the junior market, having been previously listed on the main market,
that prompted the decision by the regulators.
Options on the table for market re-entry include an initial public offering,
as well as a renounceable rights issue first offered to shareholders and
then to the public, if not fully taken up, Jackson said on Monday.
KIW was acquired by tea making company Jamaican Teas Limited from
the Jamaican government in a deal worth $57 million, earlier this year.
Jamaican Teas acquired 43 per cent of the ordinary shares under the
deal, as well as preference shares, but has grown its holdings through
purchases from minority owners, said Jackson, who also acts as chairman
of Jamaican Teas.
Its ownership of KIW's ordinary shares still falls below 50 per cent. "But, from
an effective standpoint, a practical standpoint, Jamaica Teas controls this
company," Jackson asserted.
The teamaker, which also operates a real estate arm under subsidiary H.
Mahood & Sons Limited, said previously it was weighing a possible a
merger of that subsidiary with KIW. It also briefly considered developing
the KIW complex as public warehousing space.
NO RESTRUCTURING
But the chairman now says there is no restructuring on the cards for KIW,
and that the company is primarily focused for now on investing its own
funds.
"The plan for 2018 is management of our investment portfolio," he said. "If
we go to the IPO, it would be an expansion of this role initially until
sometime down the road when we think it would be opportune to add
some other things," he said.
The company holds cash and equity investments valued at just over $81
million, noted the chairman.
At midyear, Jamaican Teas sold land acquired in the deal for just over
$200 million to Abe Dabdoub's Tools and Hardware Limited. The land was
handed over at the end of October.
The KIW preference shares were also redeemed shortly after the
acquisition of the company.
"We decided to repay them - the conversion was posing a little bit of
challenge for us in terms of valuing the company. We felt it was a cleaner
and less costly exercise to redeem them," Jackson said.
Underpinning the plans to go public is the objective of restoring faith in
KIW, according to the chairman, who also noted that the company's
growth strategy would focus primarily on the equities market.
"Other things may come forth. But we believe that the stock market in
Jamaica is likely to offer the best rate of return over the next two to three
years. If the returns are attractive enough we will be trying to take
advantage of them," said Jackson.
"We are trying to restore faith in the company to where it was. There are
not many companies that have been delisted, which have come back."
KIW's total investments and cash holdings were estimated at a combined
$205 million in its financial year ending September 2017, said the
chairman, who noted that equity investments contributed $66 million to
the portfolio. The company will make a capital distribution of $10 million to
shareholders in December.
KIW International Limited, formerly Kingston Industrial Works, was formed in
1908 to provide industrial repair services to sugar estates. KIW's main
income was generated from the rental of factory and warehouse space
at its location at 138 Spanish Town Road in Kingston, the property that was
sold off in October.
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Fosrich Prices Junior IPO At $2 Wednesday 22nd November, 2017 – Jamaica Gleaner
Electrical and lighting company FosRich plans to raise $200 million from a
share float on the junior arm of the Jamaica Stock Exchange in
December.
The offer is priced at $2 a share for general public. It's being brokered by
Stocks & Securities Limited.
FosRich Company Limited will issue a maximum of 100 million new shares
with the offer bringing its total shares to 502 million units. The founders,
Cecil and Marion Foster, will hold 80 per cent or 402 million units after the
invitation while the general public will get to buy roughly 10 million shares
or 2.0 per cent of the company in the IPO.
FosRich plans to develop and launch a new line of industrial products as
well as to increase working capital, from the proceeds of the IPO,
according to the company's prospectus.
The financial information disclosed in the prospectus indicates that
FosRich continues grow revenue from large projects and in-store
purchases. However, profit over the period January to September 2017
was estimated at $22.5 million, down from $37.9 million earned in the prior
reporting period.
HISTORIC TREND
The figures were in line with the historic trend detailed in the prospectus,
where FosRich's revenues more than doubled over five years - ranging
from $660 million in 2012 to $1.56 billion last year - while profit vacillated in
the period.
Within the five-year period, its low-point was $2.9 million of profit in 2015,
while its high point was $50 million in 2013.
The company opened its doors in 1993 and built a brand that operates
from three locations in Kingston, Montego Bay, and Mandeville. Recent
projects undertaken by FosRich include retrofitting the stadium lights at
Sabina Park in conjunction with the Urban Development Corporation and
Philips. It also supplied LED street lights to the Jamaica Public Service
Company in conjunction with Philips.
FosRich is made up of three principal business segments FosRich Electrical,
which provides breakers, copper wires, energy-saving bulbs, ceiling fans,
and other products; FosRich Lighting, a supplier of interior and affordable,
decorative lighting products since 2010; and FosRich Energy, which deals
in energy-saving lighting options, and supplies and installs solar water
heaters, solar photovoltaic systems, lighting, LED lighting and induction
lighting products.
The IPO will be open for subscription from December 4-11.
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ARC Expands Mesh Wire Operation - Plans Fivefold Increase In US Exports Wednesday 22nd November, 2017 – Jamaica Gleaner
ARC Manufacturing has sunk $200 million into an automated fabric mesh
wire plant, and is now looking to quintuple exports to the United States.
Chairman Norman Horne says the new plant at Bell Road in Kingston
should grow overall sales at the private company by three per cent.
ARC already produces wire mesh products with two older machines, but
said the fully automated fabric mesh production line would allow it to ship
10 container loads to the United States monthly, instead of the current
two.
Speaking at the plant commissioning on Tuesday, the CEO said ARC is
targeting the US at a time when that country is pressuring main building
materials supplier China, which faces a 40 per cent increase in costs due
to countervailing measures and duties.
ARC will export duty free to the US market under the Caribbean Basin
Initiative, Horne said, while also indicating that his outfit is being helped by
Chinese expertise.
"Although we will be competing against them with the finished product,
the Chinese are assisting is with the engineering," he said.
For the new unit, the monthly production is estimated at approximately
350 metric tonnes.
ARC, which is already supplying markets in Grand Cayman, St Lucia, Haiti,
Turks & Caicos Islands, Guyana, Dominica and the US, aims to sell 150
tonnes of the material, monthly, to overseas clients.
Fabric mesh, described as is a staple in the construction industry, is used
for the reinforcement and strengthening of concrete structures - including
commercial buildings and residential homes.
Horne said Monday that the value of the local market for wire mesh was
around $40 million. He did not elaborate on whether he was quoting
domestic or hard currency.
The new mesh wire plant comprises 6,000 square feet of new operational
space. The line is capable of producing fabric mesh sheet and rolls at
high speed of 65 welds per minute.
It will reduce energy demand by 60 per cent and also reduce labour
costs, Horne said, even while noting he plans to hire at least eight new
employees for the plant.
With features such as compact mesh sheeting, the new installation
reduces the size of the product coming off the assembly line, allowing for
greater quantities to be delivered, the company said.
Additionally, the production line is connected to the internet which allows
for remote monitoring and online generation of daily reports.
The ARC group founded by Horne is engaged in manufacturing and
distribution. The Kingston complex houses seven factories on 18 acres.
Horne said that although the company had balanced its inventories
between manufactured products and trade items to reduce risk,
manufacturing continued to deliver far higher margins.
ARC's strategy, he said, has involved "manipulation of imported raw
materials" to devise products for the building industry.
"We import zinc rods and use these for seven products. We use wire rods
for nine products. This fungibility is important for us to achieve profitability
in Jamaica," he said.
The ARC chairman told Gleaner Business that turnover for the company
amounted to $10.2 billion last year, with a "trending minor increase in 2017
over 2016."
ARC's other manufacturing lines include steel products, lumber products -
inclusive of boards, lumber, plywood and wooden doors - cement and
aggregates, roofing materials, binding wire, nails, tract and studs.
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