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REGIONAL
Trinidad and Tobago
GHL adds $0.98
OVERALL market activity resulted from trading in 12 securities of which
three advanced, four declined and five traded firm.
TTARP scores two victories
The TT Association of Retired Persons (TTARP) recently scored two major
victories for seniors.
CAL aims to lead regional carriers
Over the past decade Caribbean Airlines Ltd (CAL), the national carrier of
TT, has served the region with flights to both international and regional
destinations. And though it has had its ups and downs, the airline
declared an operating profit in 2018.
Barbados
Closing the loophole
The Revenue Authority is losing $50 million in Value Added Tax (VAT)
returns because it is unable to collect taxes outside of Barbados, senators
learned today.
Jamaica
Jamaica's cruise tourism earns $22.6 billion
Preliminary data from the Statistical Institute of Jamaica shows that cruise
tourism has seen an almost 300 per cent increase in earnings over the last
10 years.
Guyana
Exxon increases estimate to 5.5 billion barrels
United States oil giant ExxonMobil has updated its gross recoverable
resource estimate to 5.5 billion barrels of oil equivalent in the Stabroek
Block in Guyana.
Guyana continued
IDB Report reveals…Electricity, high tax rates, corruption most serious
obstacles to local businesses
The private sector is touted as the engine of growth in Guyana. Yet, it
continues to face significant constraints which hinder its potential.
The Bahamas
Banks’ Bad Loans Strike Ten-Year Low
Bad loans commercial banking industry borrowers dropped to under
$800m at end-January 2019, falling to their “lowest levels for ten years”.
BPL To Seek Shell Equity for Its $95m
Bahamas Power & Light (BPL) will likely take an equity ownership interest in
Shell’s new power plant in return for its $95m emergency generation
investment, it was revealed yesterday.
Antigua and Barbuda
Burma Quarry workers refuse to work overtime
Workers at the Burma Quarry have decided that enough is enough when
it comes to a matter affecting their pay packets.
Bank staff back on job – for now
Staff at Global Bank of Commerce have suspended industrial action
against the company following discussions by the bank’s management
with the Antigua and Barbuda Workers Union (ABWU).
British Virgin Islands
Look for new DDM building job, contractors told
The bidding process for construction of the new building for the
Department of Disaster Management (DDM) and the National Emergency
Operations Centre (NEOC) are projected to begin soon.
All gov’t ministers getting 3 months as Deputy Premier, Wheatley the first
appointee
In what can be described as an unconventional move, Premier Andrew
Fahie is giving each of the ministers in his government an opportunity to
serve as Deputy Premier.
Costa Rica
SuGEF relaxes bank reserves to boost credit
The Superintendencia General de Entidades Financieras (SuGEF) –
General Superintendency of Financial Institutions – relaxed the rule that
requires financial institutions to create reserves to protect themselves in
case of deterioration of their loans.
The Dominican Republic
Energy Efficiency Plan could cut consumption 13.2%
If the Energy and Mines Ministry’s National Energy Efficiency Plan is
applied, the country could save 3,276 gigawatts per year, or a 13.2% cut
in consumption until 2030.
Venezuela
Venezuela's Guaido urges more sanctions after German expulsion
Venezuela’s opposition leader Juan Guaido urged Europe to tighten
financial sanctions against the government of Nicolas Maduro after it
expelled Germany’s ambassador, a magazine quoted him as saying on
Thursday.
INTERNATIONAL
United States
Persistent low U.S. jobless rate should help minority employment catch up
Maintaining the U.S. unemployment rate at its current low level is likely to
bring black and Hispanic jobless rates closer to that of whites, a team of
researchers including San Francisco Federal Reserve president Mary Daly
concluded in a paper released on Thursday.
United Kingdom
Britain matches EU offer to maintain flights in no-deal Brexit scenario
Britain said on Thursday it would match an offer by the European Union to
protect airlines’ flying rights in the event of a no-deal Brexit, tackling one
of the main concerns that planes could be grounded and lead to travel
chaos.
United Kingdom continued
UK parliament will vote on May's Brexit deal on March 12
British lawmakers will vote on whether to approve Prime Minister Theresa
May’s revised Brexit deal on March 12, the leader of the House of
Commons Andrea Leadsom said on Thursday.
Europe
Exports, investment, consumption drive euro zone fourth quarter GDP
slowing growth
Net exports, investment and consumption drove euro zone economic
growth in the last quarter of 2018, data showed on Thursday, offsetting a
sharp drop in inventories.
48 financial firms apply to move to Germany in Brexit planning
German regulators have received 48 applications in recent months from
financial firms seeking to relocate to Germany in the wake of Britain’s
decision to leave the European Union, an official said on Thursday.
Greek economic expansion slows in fourth quarter, recovery on track
Greece’s economy shrank in the last three months of 2018 after
expanding for nine consecutive quarters, government data showed on
Thursday, with the annual pace of growth also slowing.
China
China says higher 2019 budget deficit will spur growth, won't open
floodgates
China’s decision to increase its budget deficit ratio to 2.8 percent this year
from 2.6 percent in 2018 is appropriate for the economy, and leaves room
for policymakers to manoeuvre, Finance Minister Liu Kun said on Thursday.
China February forex reserves rise to six-month high, eases outflow worry
China’s foreign exchange reserves in February rose to their highest in six
months as growing optimism over U.S.-China trade talks buoyed the yuan
currency, easing worries about capital outflows from the slowing
economy.
China approves 10 new airline routes from Beijing's new airport
China has approved plans by China Eastern Airlines, Xiamen Air and
Capital Airlines to fly out of Beijing’s new mega-airport from September to
cities such as Moscow, Cairo and Busan.
Japan
Japan's Renesas to partially halt chip production for two months on China
slowdown
Automotive chipmaker Renesas Electronics Corp plans to halt production
at six plants in Japan for up to two months this year as it braces for a
further slowdown in Chinese demand, the company said on Thursday.
Softbank launches $5 billion fund to invest in LatAm tech firms
Japan’s Softbank Group Corp said on Thursday it had launched a new $5
billion innovation fund to invest in technology companies in Latin America.
Global
Euro clings to $1.13 as ECB stimulus signal awaited
The euro held near three-week lows on Thursday, before a European
Central Bank meeting that many hope will signal fresh stimulus and inject
some life into currencies stuck in trading ranges.
Global stocks stuck in worst run of the year ahead of ECB
World stocks were stuck in their worst run of the year and bonds were on
the rise on Thursday, as investors waited for confirmation that the
European Central Bank will start shoveling cheap cash at the euro zone
again.
FX trading volumes shrink in February as volatility slides
Trading volumes of currencies shrank 7.6 percent in February from a year
earlier, Refinitiv data showed, as a slump in foreign exchange price
volatility discouraged traders from buying and selling.
Britain matches EU offer to maintain flights in no-deal Brexit scenario Thursday 7th March, 2019 – Reuters
Britain said on Thursday it would match an offer by the European Union to
protect airlines’ flying rights in the event of a no-deal Brexit, tackling one
of the main concerns that planes could be grounded and lead to travel
chaos.
The Department for Transport said the government was still working to
secure a withdrawal and transition deal with Brussels, but that as part of its
preparations for all eventualities it had agreed to reciprocate EU plans.
The EU executive has proposed allowing British airlines to fly to and from EU
airports for 12 months after March 29, assuming Britain offered equivalent
rights to EU airlines.
Britain said on Thursday for the 12-month period it intended to grant EU air
carriers a level of access to the UK at least equivalent to the rights that
would be granted to UK airlines under the EU’s regulation.
“This includes traffic rights, ownership and control, leasing of aircraft,
cooperative marketing arrangements and fair competition,” it said.
It said it would also go further and allow member state airlines to operate
wholly within the UK for the IATA summer season 2019, which ends on 27
October 2019, to maintain connections between regional bases.
Ryanair boss Michael O’Leary had been vocal in warning that planes
could be grounded if Britain leaves the EU without a deal. Rival easyJet
has established a new airline in Austria to protect its rights.
<< Back to news headlines >>
UK parliament will vote on May's Brexit deal on March 12 Thursday 7th March, 2019 – Reuters
British lawmakers will vote on whether to approve Prime Minister Theresa
May’s revised Brexit deal on March 12, the leader of the House of
Commons Andrea Leadsom said on Thursday.
May has been seeking changes to her deal, after it was rejected by a
record majority in parliament in January.
If the deal is rejected again, Leadsom said she would make a statement
at that point setting out the timetable for fulfilling May’s commitment to
give parliament votes next week on whether to leave the EU without a
deal on March 29 or delay Brexit.
<< Back to news headlines >>
Japan's Renesas to partially halt chip production for two months on China
slowdown Thursday 7th March, 2019 – Reuters
Automotive chipmaker Renesas Electronics Corp plans to halt production
at six plants in Japan for up to two months this year as it braces for a
further slowdown in Chinese demand, the company said on Thursday.
The company is considering halting front-end production at the plants for
a month around May and again for a month around August to avoid
excessive chip inventories amid uncertainties stemming from Sino-U.S.
trade frictions.
Back-end production at three other plants in Japan, as well as four plants
in China and Malaysia, may be also temporarily suspended on a weekly
basis several times, the company said.
Renesas expects chip demand for autos, machine tools and air
conditioners to slip further this year, a company spokesman said.
The suspension plans, first reported by media late Wednesday, spooked
investors and drove down Renesas shares by their daily allowable limit of
100 yen, or 14.6 percent, to 584 yen on the Tokyo stock exchange on
Thursday.
On Wednesday, Hyundai Motor Co said it was considering plans to
suspend production at its oldest plant in China, as the South Korean
carmaker reels from tumbling sales and massive overcapacity in its
biggest market.
China’s car sales contracted for the first time since the 1990s last year, hit
by a weakening economy and the fallout of trade frictions with the United
States.
<< Back to news headlines >>
Softbank launches $5 billion fund to invest in LatAm tech firms Thursday 7th March, 2019 – Reuters
Japan’s Softbank Group Corp said on Thursday it had launched a new $5
billion innovation fund to invest in technology companies in Latin America.
Softbank, which already has a $100 billion investment vehicle known as
Softbank Vision Fund, has made sizeable investments in ride-hailing firm
Uber Technologies Inc, shared office provider WeWork, food delivery start-
up DoorDash and dog walking app Wag.
"Latin America presents significant opportunities for SoftBank Group, and
the Vision Fund will have the ability to co-invest alongside the SoftBank
Innovation Fund," executive officer of SoftBank Investment Advisers Rajeev
Misra said.
<< Back to news headlines >>
China says higher 2019 budget deficit will spur growth, won't open
floodgates Thursday 7th March, 2019 – Reuters
China’s decision to increase its budget deficit ratio to 2.8 percent this year
from 2.6 percent in 2018 is appropriate for the economy, and leaves room
for policymakers to manoeuvre, Finance Minister Liu Kun said on Thursday.
But a proactive fiscal policy does not mean China will open the
floodgates for stimulus, Liu said at a news conference on the sidelines of
the annual parliamentary meeting in Beijing, reiterating past government
pledges of restraint.
Global investors are closely watching how forcefully Beijing will support the
economy after growth in 2018 slowed to a near 30-year low. A key market
focus is how policymakers will balance the need for growth against the
threat of a further flare-up in financial risks and debt.
“We will not spend a penny that is not supposed to be spent, and we’ll
strive to guarantee the money that is supposed to be spent,” Liu said.
Premier Li Keqiang told the opening of parliament on Tuesday that China
is planning billions of dollars in additional tax cuts and infrastructure
spending, amid pressure from softer domestic demand and a trade war
with the United States.
The premier also announced the slightly higher target for the budget
deficit to GDP ratio and a lower annual economic growth target of 6-6.5
percent, both of which had been widely expected.
For 2019, Beijing is planning cuts of nearly 2 trillion yuan ($298 billion) in
taxes and fees for companies, featuring long-awaited reductions in value-
added tax for manufacturing, transport and construction sectors. It has
not yet announced when the VAT cuts will take effect.
Liu acknowledged that the planned tax cuts will exert some pressure on
local government finances, but he pledged more funds will be transferred
from the central government to localities.
“Considering the downward pressure on the economy and the upcoming
policy of larger tax and fee cuts, some regions will still face relatively big
budgetary pressure this year,” said Liu.
PROVINCES IN TRANSITION
Many provinces across China are in the midst of a long-term economic
transformation as President Xi Jinping urges industries to move away from
low-value, polluting manufacturing.
Shanxi, a northern province traditionally known for its coal resources, is
building solar plants in old mining districts in its renewable energy push,
and like other provinces, has not been spared from the broader
economic slowdown.
To shore up its corporate sector, Shanxi reduced taxes by 57.3 billion yuan
($8.5 billion) in 2018 and cut fees of 6 billion yuan, with 90 percent of the
companies benefiting from the tax cuts being private firms, Wu Tao, head
of the Shanxi provincial government’s finance department, said on the
sidelines of parliament on Wednesday.
“Since last year, we have overcome difficulties and spared no effort in
pushing forward the implementation of tax and fee cuts, even though
fiscal revenues, which once dropped for two consecutive years, are still in
a stage of recovery,” Wu said.
Shanxi is expected to cut taxes and fees by another 31.2 billion yuan this
year, he said.
Shanxi has reported falling government revenues in 2015 and 2016.
The finance minister said the central government is highly concerned
about the cases of some provinces having difficulties in paying salaries,
maintaining operations and social security.
Local governments will be allowed to issue 2.15 trillion yuan worth of
special purpose bonds in 2019, up 59 percent from last year. Such bonds
are not included in the government budget and for funding key
investment projects.
“The arrangement on the budget deficit ratio has fully considered factors
including fiscal revenue and local government special bonds and leaves
more policy room for future macro adjustments,” Liu said.
The government will also look to offset some of the reduction in fiscal
revenue from the tax cuts by collecting more profits from certain state-
owned financial institutions and centrally-owed enterprises, Liu said,
without giving more details.
Local governments will also have to secure funding via other channels, he
added.
“In this regard, some funds will be raised, which allows us not to raise the
deficit ratio too high.”
But Liu said some local governments are still raising debt illegally and
Beijing will not allow new hidden debt.
<< Back to news headlines >>
China February forex reserves rise to six-month high, eases outflow worry Thursday 7th March, 2019 – Reuters
China’s foreign exchange reserves in February rose to their highest in six
months as growing optimism over U.S.-China trade talks buoyed the yuan
currency, easing worries about capital outflows from the slowing
economy.
While China’s economy continues to cool, analysts believe the risk of
strong capital outflows has greatly diminished in recent months as the
yuan regained its footing and foreign investors piled back into the
country’s battered stock markets.
Chinese foreign exchange reserves, the world’s largest rose by $2.26 billion
in February to $3.090 trillion, central bank data showed on Thursday,
marking the highest level since August 2018.
Economists polled by Reuters had expected reserves would fall $920
million to $3.087 trillion.
The yuan gained 0.09 percent against dollar in February, and is up more
than 2 percent so far this year. The dollar index against other major
currencies rose 0.6 percent in February.
Financial markets’ bearish outlook on the yuan has seen a remarkable
reversal in the last few months due to a host of factors: growing optimism
for a U.S.-Sino trade agreement, a soft U.S. dollar and a sharp rise in
foreign investors’ inflows into Chinese stocks and bonds.
A Reuters poll on Wednesday showed the yuan is expected to trade
around current levels of 6.70 to the dollar in a year’s time, in sharp contrast
to January when most analysts forecast it would drop through the 7-mark
to decade lows.
As part of a possible trade deal, Washington is reportedly pressing China
for a promise that it will not devalue its currency, which has further
underpinned the yuan.
A source briefed on the trade negotiations said on Sunday that the
world’s largest economies appear close to an agreement that would roll
back U.S. tariffs on Chinese goods, as Washington urges China to make
structural economic changes and eliminate retaliatory tariffs on U.S.
goods.
China’s state planner pledged on Tuesday to increase the flexibility of the
yuan’s exchange rate, setting off speculation that a tweak to official
wording could mean changes to its tightly managed currency regime.
China’s economic growth cooled to 6.6 percent in 2018, the slowest pace
in 28 years, and is widely expected to lose more momentum this year.
GO WITH THE FLOWS?
So far, tighter Chinese capital controls have discouraged heavy outflows
like those seen in the last downturn in 2015, but the yuan still fell 5.3
percent versus the dollar last year.
Though not a major factor, increasing inflows of foreign capital have
helped offset some of the pressure this year.
Net flows into the Shanghai and Shenzhen stock markets via the Stock
Connect scheme as of end February topped 120 billion yuan ($17.9
billion), nearly four times that in the first two months of 2018.
Overseas investors are also showing a strong, sustained appetite for
Chinese government bonds as the country’s debt is added into main
global benchmarks this year.
For now, analysts are closely watching both trade talks and Chinese
economic data for clues on where the yuan goes next.
Even if Washington and Beijing reach a deal to end their trade war, China
is expected to implement more measures in coming months to avert the
risk of a sharper economic slowdown. More forceful policy easing
measures such as interest rate cuts could put the yuan back under the
gun.
The value of China’s gold reserves rose slightly to $79.498 billion in February
from $79.319 billion at the end of January, as the central bank increased
the total amount of gold reserves to 60.260 million fine troy ounces from
59.940 million troy ounces.
The central bank did not explain why it bought more gold.
<< Back to news headlines >>
China approves 10 new airline routes from Beijing's new airport Thursday 7th March, 2019 – Reuters
China has approved plans by China Eastern Airlines, Xiamen Air and
Capital Airlines to fly out of Beijing’s new mega-airport from September to
cities such as Moscow, Cairo and Busan.
The Civil Aviation Administration of China said in a statement on its
website on Thursday that it had approved 32 new airline routes, 10 of
which will be from Beijing Daxing International Airport in September and
October.
Of the 10, five were proposed by Hainan Airlines unit Beijing-based Capital
Airlines, one by China Southern Airlines subsidiary Xiamen Air and four by
China Eastern Airlines.
The airport, due to open in September, can handle 72 million passengers
a year by 2025 and is expected to become one of the world’s busiest
airports upon completion.
This will be the city’s second such facility and help relieve pressure on
Beijing Capital International Airport, whose annual capacity has reached
100 million passengers.
Airlines including China Southern, China Eastern, Capital Airlines and
China United Airlines will be relocated to the new airport, while carriers
such as Air China Hainan Airlines and Grand China Air will stay at the old
facility.
<< Back to news headlines >>
Persistent low U.S. jobless rate should help minority employment catch up Thursday 7th March, 2019 – Reuters
Maintaining the U.S. unemployment rate at its current low level is likely to
bring black and Hispanic jobless rates closer to that of whites, a team of
researchers including San Francisco Federal Reserve president Mary Daly
concluded in a paper released on Thursday.
The current national unemployment rate of 4 percent is below most
estimates of full employment, and running that sort of “hot” economy for
as long as possible could also narrow the gap in jobless rates between the
less educated and those with college degrees, the team found in an
exploration of whether periods of particularly low unemployment narrow
some of the persistent gaps in unemployment between different groups.
The study looked at the differences in unemployment rates among
people with different education levels, and between whites on one hand,
and blacks and Hispanics on the other.
“We read the overall evidence ... as indicating that the employment
experience of ... African Americans and Hispanics, as well as that of those
with less than a college degree, has improved relatively more compared
to whites of the same gender as the labour market has strengthened,” the
group concluded in the paper released as part of a Brookings Institution
economic research conference this week.
The research reaffirms a long list of studies over the years concluding that
minority groups and the less educated lose their jobs faster in downturns,
but benefit as conditions improve and markets tighten.
In the years after the 2007-2009 financial crisis, for example, the
unemployment rate for whites fell to just below 8 percent by August 2011
but persisted at 16.4 percent for blacks, near its recession-era high. As of
November it was around 6 percent for blacks and 3.5 percent for whites.
This most recent research comes as the Fed is considering just how long it
can keep rates at their current level without risking inflation or other costs.
The current unemployment rate is below most estimates of what can be
sustained without inflation. However, there is little evidence inflation is
accelerating, and many at the Fed feel the unemployment rate could fall
even further and stay there.
The paper also looked at whether a longer period of low unemployment
might help lagging rural areas to catch up, but concluded the causes of
poor rural performance “seem to be structural and are not ameliorated
by a strong national labour market.”
<< Back to news headlines >>
Exports, investment, consumption drive euro zone fourth quarter GDP
slowing growth Thursday 7th March, 2019 – Reuters
Net exports, investment and consumption drove euro zone economic
growth in the last quarter of 2018, data showed on Thursday, offsetting a
sharp drop in inventories.
The European Union’s statistics office Eurostat confirmed its earlier
estimate that gross domestic product in the 19 countries sharing the euro
rose 0.2 percent quarter on quarter in the October-December period.
It revised down to 1.1 percent the year-on-year number for the fourth
quarter from 1.2 percent estimated in February.
The numbers confirm a slowdown in the euro zone economy from the
more robust growth rates in the first and second quarters of 2018 — a
factor which markets expect the European Central Bank to take into
account by phasing out more slowly its monetary stimulus to the
economy.
Eurostat said household and government consumption added 0.1
percentage point each to the final quarterly growth result and investment
also added 0.1 point. Net trade gave an additional 0.2 points helping
offset a 0.4 point drop in inventories.
Employment in the euro zone rose 0.3 percent on the quarter and 1.3
percent year-on-year, with the highest number of jobs added in
construction and information and communication services and the
biggest number of jobs disappearing in agriculture, forestry and fishing,
arts, entertainment and financial and insurance activities.
<< Back to news headlines >>
48 financial firms apply to move to Germany in Brexit planning Thursday 7th March, 2019 – Reuters
German regulators have received 48 applications in recent months from
financial firms seeking to relocate to Germany in the wake of Britain’s
decision to leave the European Union, an official said on Thursday.
Elisabeth Roegele, an executive director with Germany’s Bafin financial
markets watchdog, said that more applications could still come.
“There are still companies that are only now dealing with the issue,” she
added.
<< Back to news headlines >>
Greek economic expansion slows in fourth quarter, recovery on track Thursday 7th March, 2019 – Reuters
Greece’s economy shrank in the last three months of 2018 after
expanding for nine consecutive quarters, government data showed on
Thursday, with the annual pace of growth also slowing.
Seasonally adjusted data released by the country’s statistics service
showed gross domestic product contracted by 0.1 percent in the fourth
quarter from the third, when it expanded by 1.0 percent.
Despite the slight contraction, the data showed Greece’s recovery
remains largely on track after a lengthy recession that shrank its economy
by a quarter.
“The growth of the Greek economy, for a second year in a row, is a first
positive step on the way to normality,” said Eurobank chief economist
Tassos Anastasatos.
“Deceleration of economic activity in Q4 2018, mainly due to a decline in
fixed investments, reflects remaining uncertainties.”
On an annual basis, economic expansion decelerated to 1.6 percent in
the fourth quarter from a downwardly revised 2.1 percent clip in the
previous quarter.
“Private consumption along with net exports were the main drivers, but
continuing weakness in investment spending - gross capital formation -
was a drag,” said National Bank economist Nikos Magginas.
Looking at 2018 as a whole, the data pointed to a 1.9 percent growth
rate, slightly below initial estimates.
Other data released on Thursday showed unemployment in December
fell to 18.0 percent from 18.3 percent in November, the lowest reading
since July 2011 but still the highest in the euro zone.
In its latest enhanced surveillance report, issued last month, the European
Union Commission projected real GDP growth of 2.0 percent in 2018,
picking up to 2.2 percent this year and to 2.3 percent in 2019.
It sees domestic growth drivers - private consumption and investment -
strengthening, but the contribution from the external sector moderating as
imports rise and the EU’s economic growth slow.
“Looking at this year, we expect private consumption to remain a pillar,
helped by a rise in disposable incomes,” Magginas said. “Net exports will
likely contribute positively but at a softer pace due to a slowdown in the
euro area.”
<< Back to news headlines >>
Euro clings to $1.13 as ECB stimulus signal awaited Thursday 7th March, 2019 – Reuters
The euro held near three-week lows on Thursday, before a European
Central Bank meeting that many hope will signal fresh stimulus and inject
some life into currencies stuck in trading ranges.
The euro/dollar exchange rate has had a quiet start to 2019 as central
banks have put off tightening monetary policy as economic momentum
slows. That has left investors struggling to decide on direction.
Analysts said expectations the ECB will signal new cheap bank loans had
largely been priced in, so the focus would be on the bank’s economic
forecasts and indications of whether it will further delay a rate increase
the market expects in mid-2020.
The ECB is expected to cut growth forecasts and provide its strongest
signal yet that more cheap long-term bank loans are coming.
“We don’t expect the ECB to make any changes but signal that changes
are imminent,” said Thu Lan Nguyen, a currencies analyst at
Commerzbank. “The risks are that the euro gives up a bit more. The risks
are to the downside.”
The euro was little changed at $1.1313, but euro overnight implied
volatility climbed overnight to its highest since Dec. 20.
The dollar, measured against a basket of currencies, stood at 96.875.
“Waiting for the overvalued dollar to reverse course requires patience,
and is itself one driver of the lack of FX volatility,” Societe Generale
strategist Kit Juckes said.
The dollar should slip over the coming year because U.S. economic
growth is slowing and any boost from a resolution in the U.S.-China trade
conflict is already priced in, according to a Reuters poll of strategists.
EASING STANCE
The Canadian and Australian dollars remained near two-month lows after
investors bet their central banks would ease monetary policy as their
economies slow.
The Aussie fell to a two-month low of $0.70205 after weaker-than-
expected retail sales data, then recovered by 0.2 percent to $0.7049.
The Canadian dollar slid to its lowest since Jan. 4 after the Bank of
Canada on Wednesday said there was “increased uncertainty” about
future rate increases. It recovered to C$ 1.3426 on Thursday.
Sterling stabilized near $1.3150 as investors look toward next week’s British
parliamentary votes on a proposed Brexit withdrawal.
The Japanese yen and Swiss franc gained marginally as financial investors
turned cautious about the outlook for growth.
<< Back to news headlines >>
Global stocks stuck in worst run of the year ahead of ECB Thursday 7th March, 2019 – Reuters
World stocks were stuck in their worst run of the year and bonds were on
the rise on Thursday, as investors waited for confirmation that the
European Central Bank will start shovelling cheap cash at the euro zone
again.
The ECB was holding its second meeting of the year, and with the euro
almost motionless and stocks suffering from the same growth nerves that
will see the central bank chop its in-house forecasts later, markets were
poised.
European shares retreated further from five-month highs as MSCI’s 47-
country world share index also dropped for a fourth straight session to set
its longest losing streak since December’s rout.
Italy’s government bonds rallied to a 7-month high while its banks, which
used the biggest share of the previous round of cheap central bank loans,
rose 0.1 percent but remained below the highs hit in the previous session.
A return to what was once its flagship crisis-fighting tool would be a
wrenching change of direction for the ECB just months after it wound
down its 2.6 trillion-euro QE program,
But Head of investments at UK fund manager Hermes, Eoin Murray, said he
wondered how much impact such measures, or even more U.S. Fed
stimulus, would have, considering the potency has tended to wane with
every new round in recent years.
“I just don’t think it will have the power to get the economy to the point of
take-off,” Murray said.
Europe’s subdued mood came after Asia and Wall Street had also both
stumbled overnight.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.3
percent lower on Thursday, yet hovering not far from its five-month high
marked last week, and was up 10 percent year-to-date.
Japan’s Nikkei average fell 0.7 percent, while Hong Kong’s Hang Seng
shed 0.7 percent and Chinese blue-chips snapped a four-day winning
streak as the boost from new stimulus plans there ran into the sand.
Wall Street’s main indexes had fallen for a third straight session, with the
S&P 500 posting its biggest one-day decline in a month, as investors
sought reasons to buy after a near 20 percent rally since the start the year.
“For some time, markets had been pricing in good news, namely that the
talks between the U.S. and China will likely go well,” said Tatsushi Maeno,
senior strategist at Okasan Asset Management. “Now markets are having
a pause.”
Adding to concerns about the talks was data that showed the U.S. goods
trade deficit surged to a record high in 2018 as strong domestic demand
pulled in imports, despite the Trump administration’s “America First”
policies aimed at shrinking the gap.
Other U.S. data out on Wednesday suggested some slowing in the labour
market, though the pace of job gains remains more than enough to drive
the unemployment rate down.
The ADP National Employment Report showed private payrolls increased
by 183,000 in February after surging 300,000 in January. Economists polled
by Reuters had forecast private payrolls advancing 189,000 in February.
The government’s more comprehensive “non-farm” payrolls employment
report for February is scheduled for release on Friday.
TIME TO TLRTO?
In the currency market, the euro traded at $1.1304, hovering near a two-
week low ahead of the ECB and its expected news on its cheap long-
term loans for banks, known more formally as Targeted Long-Term
Refinancing Operations (TLTROs).
The dollar was little changed at 111.74 yen, moving away from Tuesday’s
2-1/2-month peak of 112.135, while the dollar index, which measures the
greenback against a basket of six of its peers, barely moved at 96.887.
The Canadian and Australian dollar sank to two-month lows on
Wednesday as traders scaled back holdings on expectations policy-
makers would leave interest rates alone in the foreseeable future or even
lower them to counter their softening economies.
Adding to the Aussie’s woes on Thursday was data showing local retailers
suffered another bleak month in January, in a sign overall economic
momentum was slowing. The Aussie dollar last changed hands at $0.7042,
up 0.1 percent on the day.
Brexit uncertainty kept the pound below an eight-month high hit last week
as investors waited for some clarity to emerge out of negotiations
between Britain and the European Union.
Diplomats said talks in Brussels on Tuesday led by British Prime Minister
Theresa May’s chief lawyer, Geoffrey Cox, failed to find common ground,
with three weeks to go before Britain’s scheduled departure on March 29.
“Markets are getting conflicting signals from lawmakers in Britain and the
negative news flow from Brussels on the negotiation process, and that is
keeping the pound in a tight range,” said Nikolay Markov, a senior
economist at Pictet Asset Management.
Among commodities, oil edged up amid ongoing OPEC-led supply cuts
and U.S. sanctions against exporters Venezuela and Iran, although prices
were prevented from rising further by record U.S. crude output and rising
commercial fuel inventories.
U.S. crude futures rose 0.1 percent to $56.29 per barrel, moving closer to its
3-1/2-month high of $57.88 touched Friday, while international benchmark
Brent futures gained 0.3 percent to $66.20 per barrel.
<< Back to news headlines >>
FX trading volumes shrink in February as volatility slides Thursday 7th March, 2019 – Reuters
Trading volumes of currencies shrank 7.6 percent in February from a year
earlier, Refinitiv data showed, as a slump in foreign exchange price
volatility discouraged traders from buying and selling.
Average daily trading volumes touched $428 billion in February, down
from $463 billion a year earlier and $446 billion in January, Refinitiv said in a
statement published late on Wednesday.
Declining activity in the spot market was behind the fall, with spot volumes
- at $87 billion - having their worst month since August 2017. Other
volumes, which include swaps and options, held up much better.
Foreign exchange volatility, which is often correlated with trading volume
growth, has slumped in 2019 as central banks move together in pressing
pause on plans to tighten monetary policy.
<< Back to news headlines >>
Exxon increases estimate to 5.5 billion barrels Thursday 7th March 2019 – Guyana Chronicle
United States oil giant ExxonMobil has updated its gross recoverable
resource estimate to 5.5 billion barrels of oil equivalent in the Stabroek
Block in Guyana.
The announcement came on Wednesday at the company’s 2019 Investor
Day by way of webcast and was also included in its 2019 Investor Day
report. “The success story that I highlighted last year has continued. We
ended up with five new discoveries in the Stabroek Block in 2018. We’ve
already had two new discoveries in 2019. We’re still to quantify those last
two discoveries but last year I’d said we’d increase our resource to 3.2
billion oil equivalent barrels [and], as you can see from the numbers that
are on the chart, we’ve closed to double that in just 12 months,” Senior
Vice President at Exxon Mobil Corporation Neil Chapman said.
The report noted that there were 5 new discoveries in 2019 and two in
2019 with the total number of discoveries to date in the south eastern part
of the Stabroek Block at 12.
Speaking on the current border controversy between Guyana and
Venezuela, Chapman highlighted that none of the discoveries of
ExxonMobil thus far are in the area under debate.
“Looking at that block you can see where our discoveries are. They are all
in the South-East corner of this block. It has been well noted in the public
around the border dispute with Venezuela [but] it’s a long, long way from
where our discoveries are and where our activity is and there’s no dispute
between the countries,” he said.
The report listed Guyana and Brazil as amongst the most valuable plays in
the industry stating, too, that there is a robust inventory of additional
prospects in Guyana with significant upside potential. For the 2019-2020
periods, Chapman said ExxonMobil plans to drill approximately 10
additional exploration wells even as it has increased the number of its
FPSOs from 3 to 5.
Other updates provided show that at Liza Phase 1, topside modules were
installed; integration is ongoing; offshore installation will commence in the
second quarter of 2019; Liza Destiny is expected in Guyana in the second
quarter of 2019 and start up is expected in the early first quarter of 2020.
Meanwhile, regarding Liza Phase 2, Final Investment Decision (FID) is
planned for the first quarter of 2019 and it is on schedule for start-up in
2022.
At Payara, early engineering is progressing; environmental permitting was
initiated; FID is expected in the fourth quarter of 2019 while start-up is
expected in 2023. Guyana’s outlook production for 2025 was increased
from 500 to 750 while the report stated that among the five outstanding
developments influencing ExxonMobil’s growing value of portfolio is
Deepwater Guyana.
Chapman commended the Government of Guyana for its partnership
stating that there have been excellent relations thus far. “We’ve had
really strong support and a great partnership with the Guyanese
government,” he said. “President Granger implemented a new Ministry of
Energy last year; Dr. Bynoe is heading that up. It’s a great partnership
between the operators, ourselves and the government.”
The company believes that considerable potential remains for Guyana
and stated that the more it discovers, the more it is understanding
Guyana’s about the geology and believes that the prospects are even
greater in the basin.
<< Back to news headlines >>
IDB Report reveals…Electricity, high tax rates, corruption most serious
obstacles to local businesses Thursday 7th March 2019 – Kaieteur News
The private sector is touted as the engine of growth in Guyana. Yet, it
continues to face significant constraints which hinder its potential.
According to a report by the Inter-American Development Bank (IDB),
‘Constraints Affecting Guyana’s Private Sector: Survey Results,’ electricity,
high taxes and corruption are ranked the most serious obstacles to local
businesses.
With respect to electricity, the IDB said that this was deemed the most
serious obstacle to businesses in Guyana. The institution said that this is not
surprising, since it takes approximately 104 days to obtain an electrical
connection. The Bank highlighted that this is significantly above the
average of 62 days for obtaining a connection in the Caribbean.
The Bank said that the firms surveyed also indicated that they experience
an average of eight power outages per month with an average duration
of three hours. This, the Bank pointed out, is also the highest when
compared to the rest of the Caribbean.
Further to this, the IDB said that the estimated loss from power outages for
firms in Guyana exceeds the levels incurred by their counterparts in the
Caribbean. In fact, the Bank’s data indicates that the estimated loss
approximates 1.6 percent of annual sales, compared with a regional
average of 0.7 percent of annual sales.
CORRUPTION
Corruption, the Bank noted, was the second highest-ranked constraint
identified by businesses. The Bank said that 34.45 percent of the firms
surveyed view corruption as a major obstacle while 43.7 percent consider
it a very severe obstacle.
Notwithstanding the claim that corruption is a major or severe obstacle,
the IDB said that a relatively small percentage of firms surveyed indicated
that they were expected to pay a bribe to obtain an operating licence,
electrical connection, telephone connection, import licence, water
connection, and construction permits.
Based on the survey, the Bank said that approximately 6.7 percent of the
firms indicated they were expected to pay a bribe to obtain the contract,
while 3.3 percent of the firms claimed they were expected to pay a bribe
to tax officers.
Further to this, the financial institution noted that the cost incurred by
businesses in Guyana related to making informal payments (or bribes) to
‘get things done’ is higher than the amount paid by their counterparts in
the Caribbean. In this regard, the Bank noted that the bribe paid for
various government services is approximately four percent, significantly
higher than the regional average of 1.8 percent. It also stands out as the
highest in the Caribbean. The Bank also noted that the cost of the bribe is
relatively higher for businesses in the following sectors: machinery and
equipment, fabricated metal products, and wholesale.
HIGH TAX RATES
With regard to high tax rates, the IDB noted that local firms ranked this as
a significant obstacle to their operations.
It said, “Indeed, tax rates were ranked third as the most serious
obstacle…This may be attributed to the fact that Guyana has one of the
highest corporate tax rates in Latin America and the Caribbean. Some
studies have found that the high tax rates motivate businesses to operate
in the informal sector…”
Notwithstanding the relationship between high tax rates and the size of
the informal economy, the IDB said that most of the firms surveyed paid
their required taxes. In fact, the IDB data revealed that approximately 13.3
percent of the firms paid less tax than required by law, while the
remaining 86.7 percent of firms paid their fair share of taxes.
COMPETITION
Apart from the aforementioned, the IDB said that competition in the
informal sector was noted as an issue of concern.
The IDB said, “The practices of competitors in the informal sector were
ranked as the fourth most serious obstacle for businesses operating locally.
The survey revealed that approximately 94.4 percent and 88.9 percent of
the firms consider this factor as a serious constraint because their
counterparts in the informal sector can circumvent rules and regulations
and are not subject to rules of entry, respectively.”
ACCESS TO FINANCE
Another issue of concern for local businesses was access to finance.
In this regard, the IDB’s survey revealed that 6.7 percent of the firms
regard this factor as the most serious obstacle for doing business. It said
that most firms that view access to finance as a major or very severe
obstacle are small and medium-scale enterprises. It also stands true for
medium-scale firms.
Expounding further, the Bank said, “Most firms that consider access to
finance as a major or severe obstacle are privately owned. These include
sole proprietorship (24.4 percent major obstacle, 28.9 percent very severe
obstacle), partnership including limited liability partnerships (18.8 percent
major obstacle, 12.5 percent very severe), limited partnership (9.1 percent
major obstacle; 18.2 percent very severe obstacle), and shareholding
company with no traded shares (22.5 percent major obstacle).”
The Bank also noted that locally owned firms are most affected by access
to finance.
<< Back to news headlines >>
Banks’ Bad Loans Strike Ten-Year Low Wednesday 6th March 2019 – Tribune 242
Bad loans commercial banking industry borrowers dropped to under
$800m at end-January 2019, falling to their “lowest levels for ten years”.
The Central Bank of The Bahamas’ report on January’s economic
developments revealed that borrower arrears has fallen to its lowest level
since the 2008-2009 financial crisis, providing a further glimmer of optimism
that the economy may finally be moving towards recovery.
“Banks’ credit quality indicators continued to improve over the review
period,” the Central Bank said. “Specifically, total private sector arrears
decreased by $10.7m (1.3 percent), to $799.1m, and the ratio to total
private sector loans contracted by 18 basis points to 14.1 percent - the
lowest rate in ten years.
“On a year-on-year basis, the total arrears ratios moved lower by 1.3
percentage points, as both the short-term and non-performing loan rates
softened by 70 and 59 basis points, respectively. Broad-based reductions
were recorded across all loan categories, with the mortgage, consumer
and commercial arrears rates narrowing by 1.7, 1.2 and 0.3 percentage
points, respectively.”
However, the good news was partially offset by the fact January’s decline
was driven entirely by a fall in short-term arrears. Non-performing credit,
meaning loans that are 90 days or more past due, increased during the
month to indicate that there are still too many Bahamians struggling to
meet their repayment obligations.
“The reduction was due mainly to an $18.6m (6.4 percent) decline in
short-term arrears (31 to 90 days) to $274.3m, while the corresponding
ratio fell by 32 basis points to 4.8 percent,” the Central Bank confirmed. “In
a partial offset, non-performing loans (NPLs), firmed by $7.9m (1.5 percent)
to $524.9m, and by 14 basis points to 9.2 percent of total private sector
loans.
“Disaggregated by loan type, the overall decrease in arrears was mainly
attributed to a $15.7m (3.2 percent) contraction in mortgage
delinquencies to $483.7m, as both the short and long-term components
fell by $9.4m (5.7 percent) and $6.4m (1.9 percent), respectively.
“In addition, consumer loan arrears softened by $0.7m (0.3 percent) to
$228.6m, as the 31-90-day segment decreased by $8.4m (8.8 percent), in
contrast to the $7.7m (5.8 percent) rise in NPLs.
“In contrast, the commercial component rose by $5.7m (7 percent) due
to a $6.6m (13.7 percent) rise in long-term delinquencies, which
overshadowed the $0.8m (2.5 percent) fall-off in short-term arrears.”
Bahamian commercial banks increased their loan loss provisions by $8.5m
or 1.9 percent to $447m in line with the rise in non-performing loans. “As a
consequence, the ratio of total provisions to arrears firmed by 1.8
percentage points to 55.9 percent,” the Central Bank said.
“In addition, the total provisions to NPL ratio edged-up by 35 basis points
to 85.2 percent. At the end of January, banks’ write-offs and recoveries
amounted to $6.2m and $1.2m, respectively.”
Bahamian businesses and households are still deleveraging, as local
currency credit outstanding fell by $31.4m in January - a smaller decline
than the $52.1m contraction experienced in the same month in 2018.
“The decline in private sector credit was extended by $6.8m to $17.7m,”
the Central Bank said of January 2019, “as growth in commercial credit
tapered to $6.9m from $17.8m last year, while consumer loans and
mortgages fell further by $16.8m and $7.7m, relative to $19.9m and $8.8m
in 2018.”
<< Back to news headlines >>
BPL To Seek Shell Equity for Its $95m Wednesday 6th March 2019 – Tribune 242
Bahamas Power & Light (BPL) will likely take an equity ownership interest in
Shell’s new power plant in return for its $95m emergency generation
investment, it was revealed yesterday.
Whitney Heastie, BPL’s chief executive, told Tribune Business that the
severity of New Providence’s energy crisis meant the utility had “no
option” but to act ahead of sealing the agreement with Shell to address
the capital’s power needs long-term.
Arguing that Bahamian households and businesses cannot wait until 2022,
when the Shell power plant is scheduled to become operational, to enjoy
much-reduced energy costs and more reliable supply, Mr Heastie
described BPL’s 132-megawatt (MW) deal with Wartsila as a “precursor to
what will be done” by the energy giant.
He added that Wartsila’s seven engines will effectively be “rolled into the
Shell project”, with BPL using the 132 MW to bridge the three-year gap
until the latter’s arrival and eliminate load shedding, blackouts and eight
years of relying on temporary rental generation units to make up the
shortfall.
“BPL is just making the initial investment,” Mr Heastie explained of the
$95m Wartsila deal. “It has no option but to try and stabilise the shortfall in
generation. What we’re doing today all falls under Shell tomorrow, when
the LNG facility is available for it to run on LNG. This is a precursor to what
will be done by Shell.”
While BPL and Shell North America last year signed a Memorandum of
Understanding (MoU) to formalise the latter’s selection as the preferred
bidder to build, own and operate a new 220 MW power plant at Clifton
Pier, the two sides have yet to tie down a power purchase agreement
(PPA) and other commercial terms.
BPL’s newly-announced deal with Wartsila effectively gives it a headstart
in addressing New Providence’s energy woes in advance of agreeing all
terms with Shell, including the price at which the state-owned utility will
buy electricity from the new plant.
The Shell plant will be designed to run on multiple fuels, including heavy
fuel oil (HFO), diesel and liquefied natural gas (LNG), and the seven
engines to be supplied by Wartsila match these requirements so that they
can be seamlessly incorporated into the former’s new plant when it is
constructed
Mr Heastie yesterday said Shell will still be responsible for adding the final
90 MW of generation to bring its plant up to the agreed 220 MW capacity,
along with construction of the onshore and offshore infrastructure needed
to facilitate use of LNG.
He added that this will include LNG storage and regasification facilities at
Clifton Pier, together with a jetty and cryogenic line, to enable Shell’s
plant to use LNG as one of its fuel source options from 2022 onwards.
With BPL’s Wartsila deal bringing in 60 percent of the new power plant’s
capacity, Mr Heastie said the state-owned utility now has to discuss with
Shell how it will be compensated for making a $95m investment that the
energy giant will ultimately benefit from.
“We’re in the initial stages of having definitive discussions with Shell now
that we’ve signed the MoU,” he told Tribune Business. “So, one of the
things we will talk to Shell about is how the 132 MW rolls into their project.
“We still have to define with them how the value of these assets [the 132
MW] will roll into the overall project. It may be that BPL takes an equity
stake in the project. We could not wait, in all fairness to Shell, until there’s
a definitive agreement. There’s no mechanism for them to invest as
there’s no contract between us now.
“The mindset here was because of what we have been experiencing on
the fuel charge, we’ve got to be able to provide some relief to the
Bahamian public, or public in general. This 132 MW is obviously about 50
percent of peak demand, and we anticipate that once this is complete
there will be a significant shift downwards in what consumers pay based
on the fuel charge.”
Mr Heastie explanation answers Paul Maynard, the Bahamas Electrical
Workers Union’s (BEWU) president, who yesterday questioned whether BPL
would recover - or receive compensation for - a $95m investment that will
ultimately accrue to Shell’s benefit.
“Shell owes this country $95m,” Mr Maynard charged. “In 2021-2022,
when they take over, they will get a new power plant. I want to know
when they will give back $95m to this country. It means that they owe us
money. That has to happen, that has to be a part of it. I can’t see it not
being a part of it.
“It means they [Shell] only have to provide 90 MW. Their budget was
$300m, from what I understand. We’ve spent $95m for them, and they
need to give us this money back.”
Mr Maynard, who represents BPL’s unionised line workers, said his difficulty
with the Wartsila agreement lay “in what is not being said” by senior
executives. “The devil is in the details, as they say,” he told Tribune
Business.
“There are a lot of missing components that normally accompany a
contract of this nature. For example, training (operations and
maintenance), critical spares, warranty engineering support. Is the $95m a
turnkey price or is it just the price of the engines.
“Shipping and transport from Italy to Clifton, HFO and LNG requires
additional auxiliaries for fuel treatment and regasification, respectively.”
Mr Heastie, though, confirmed to Tribune Business that $95m is the ‘all-in’
price that includes the cost of the seven engines together with their
shipping and installation.
Mr Maynard, though, made clear his unhappiness that the union had
been left out of the Wartsila discussions. He suggested that this broke with
previous protocols where the BEWU had been “involved”, and consulted
on, the past installation of new engines at both Clifton Pier and Blue Hills
power stations.
The union chief also hit out at BPL’s decision to “outsource” operation and
maintenance of the new 132 MW to Wartsila, even though the same will
happen under Shell. The latter’s deal with BPL will split generation from
transmission and distribution, with the state-owned utility focusing solely on
the latter on New Providence, and Shell acting as an independent power
producer (IPP).
“My concern is that our people have to run the plant because we’re
paying $95m. We have to run it. They didn’t come to the union, and we
need to talk about this training component,” Mr Maynard told Tribune
Business.
“My thing is that BPL was originally supposed to get 60 MW from them
[Wartsila]. I don’t understand why we’re going down this road. Shell was
supposed to do this. I don’t understand why we’re paying.
“It’s not going to help them this summer, that’s for sure, and that’s a
problem. My thing is I would have preferred turbines to these engines.
That’s how I feel. The chief executive likes reciprocating engines, but we
need to get into modern technology such as aeroderivative turbines.”
Mr Heastie, though, said Shell had been fully involved in the selection of
Wartsila and its generation technology to ensure it fitted with the long-
term power plant plans.
BPL had started moving antiquated generation assets, which it no longer
uses, out of Clifton Pier’s building ‘A’ from November last year to make
way for the new 132 MW. The “pedestals” upon which the old two-stroke
turbines rested are now being raised to the main floor’s level, with
“significant improvements” to both engine houses and substations now on
the way.
“What we’re doing is outsourcing the operation and maintenance of that
plant to Wartsila, or a Wartsila-qualified service provider will be operating
that facility,” Mr Heastie told Tribune Business. “They’re going to be
responsible for providing the training for persons to operate that facility.
“We have stipulated that the majority of personnel are Bahamian. We
would prefer them to hire individuals with diesel plant generation
experience and train them on the four-speed engines. There’s no one in
New Providence today with that experience on four-speed engines.”
Mr Heastie said the new power plant operator will be held accountable
by having to meet key performance indicators, such as reliability,
availability and cost, which will be based on global energy industry
standards.
He added that, once the 132 MW becomes operational in October-
November 2019, BPL will be able to reduce its reliance on the Blue Hills
power station that burns the more expensive diesel fuel.
The utility is currently generating 80 percent of New Providence’s energy
needs from Blue Hills, which is why customer fuel charges have soared, a
situation not helped by last September’s Clifton Pier fires that took out 63
MW of BPL’s most efficient engines.
Mr Heastie confirmed that BPL was behind on maintenance of its
generation assets as a result of capacity shortfalls, which meant it could
not turbines off-line when it wanted to service them. The utility typically
seeks to complete all scheduled maintenance by March/April every year,
in time to meet peak summer demand, but this will continue into those
months in 2019.
BPL’s immediate problem now is to get through summer 2019 without
incurring frequent blackouts and load shedding, while it waits for the new
142 MW to be installed. Mr Heastie conceded this will be challenging
given the utility’s aged, strained infrastructure, and he confirmed it was
seeking an extra 30 MW in rental generation to help get it through.
“We want our consumers to be energy conscious and conserve as much
as they can in the summer months,” he told Tribune Business. “We’re
optimistic, and certainly thinking that if we make it through this summer it
will be smoother sailing thereafter. We’re going to be tested on this one,
but if we make it through, we will be in good shape.”
<< Back to news headlines >>
Closing the loophole Thursday 7th March, 2019 – Barbados Today
The Revenue Authority is losing $50 million in Value Added Tax (VAT)
returns because it is unable to collect taxes outside of Barbados, senators
learned today.
Speaking in the Senate today during debate on the Value Added Tax
Amendment Bill 2019 Senator Dr Crystal Haynes pointed out that
Government was losing a substantial amount of revenue due to BRA’s
limitations.
The amendment will allow Government to collect VAT on goods and
services purchased online from a vendor outside of the island for use here.
The legislation also empowers the Government to collect VAT on goods
and services purchased online from local vendors for local – even if the
transaction is processed outside of Barbados.
Senator Haynes told the Upper Chamber: “It has been estimated that we
have been losing about $50 million in VAT revenues because the BRA
does not have the jurisdiction to operate in terms of tax collection outside
of Barbados. So one of the things which this legislation has spoken to is
that it makes reference to a tax collecting agent.”
She revealed that a proposal had gone out and following applications
from several tenders, a company had been selected to act as the
Government’s tax collection for these online transactions.
Dr Haynes said the technology had been “tried and tested” and was
currently being used by 46 US states.
But several items purchased online would be exempt from VAT, she told
lawmakers.
For example, a Barbadian who bought a plane ticket to travel from
Barbados would not have to pay the tax, as the service was not being
consumed in Barbados, she said.
As education had always been a VAT exempt service, it would remain
unaffected, and other categories, including pharmaceuticals and
hospital supplies, would also be VAT-exempt, she added.
Assuring citizens that these new tax collection tentacles would not reach
into the pockets of citizens travelling abroad, Senator Haynes said: “This is
a tax on online transactions, so I would just like the public to remember
that they won’t have to worry that when they travel to New York or travel
to see family in England and you use your card that you are going to
have this tax applied. It is not a tax on credit cards. It is specifically
attached to close the loophole on online transactions.”
<< Back to news headlines >>
Jamaica's cruise tourism earns $22.6 billion Thursday 7th March, 2019 – Jamaica Observer
Preliminary data from the Statistical Institute of Jamaica shows that cruise
tourism has seen an almost 300 per cent increase in earnings over the last
10 years.
In 2008, the sector earned $7.5 billion and in 2017 cruise saw earnings of
$22.6 billion.
“Cruise tourism for Jamaica has been a long journey of growth and
development over many years and it began much like all other industries
with a small beginning then mushroomed into proportions that today we
can regard as an integral part of the fabric of our economy,” said Bartlett,
who made the announcement at a Jamaica Vacations' (JAMVAC's)
Cruise Council cocktail party last Wednesday.
“What we recognise as well is that cruise provides the best and most
immediate form of conversion of wealth into the pockets and economies
of the local destination. The impact of this sizeable earning therefore has
been instantaneous in the communities across the country,” he added.
JAMVAC Ltd, an agency of the Ministry of Tourism, has direct responsibility
for cruise. JAMVAC has since been an important player in Jamaica's
growing cruise industry which last year received a significant boost with
vessels including Marella Cruise, Carnival Horizon and Ms Sirena arriving in
Jamaican waters for the very first time.
Last year more than 4.3 million visitors arrived in Jamaica; 2.4 million via
airports and a further 1.8 million by cruise. These visitors generated
approximately US$3.3 billion in earnings, an 8.6 per cent increase over
2017.
“The indications are that cruise earnings for 2018, are apace if not ahead
of 2017 and that means it has made a bigger contribution to the overall
US$3.3 billion we earned last year for tourism overall.
“We want to grow cruise by looking at new ports and new possibilities and
the prime minister has spearheaded the whole transformation
approaches for a new port in Port Royal which will have a sea walk facility
to enable a collapsible jetty that will be able to dock huge ships in the
Port Royal Harbour by the end of this year and we have secure done
vessel that will come in 2020,” Bartlett said.
JAMVAC's Executive Director Joy Roberts noted that 2018 was an
incredible year for Jamaican tourism and the agency, as they were able
to see their strategies and work bear fruit.
“Jamaica has so much to offer as a destination and that is why it was
important for us to promote brand Jamaica not only to the traditional
markets but to also seek new markets with diverse interests. I have no
doubt that 2019 will prove to be an even better year for Jamaican
tourism,” Roberts said.
Increased cruise arrivals is a key component in the ministry's strategy to
not only increase overall economic growth but to practise inclusive
tourism.
Benefits from cruise tourism positively affect a wide range of small and
medium sized tourism enterprises (SMTEs) as well as local service providers
including contract carriage operators, craft vendors, artisans, food and
beverage producers, local community groups, DJs and entertainers.
JAMVAC has been employing new strategies to enhance the cruise
experience by providing entertainment at each port and getting real time
feedback from cruise passengers through their digital happy or not
monitors.
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Energy Efficiency Plan could cut consumption 13.2% Wednesday 6th March, 2019 – Dominican Today
If the Energy and Mines Ministry’s National Energy Efficiency Plan is
applied, the country could save 3,276 gigawatts per year, or a 13.2% cut
in consumption until 2030.
Energy and Mines minister Antonio Isa Conde said if such plans were
applied throughout the country, in industries, in commerce, in tourism
businesses and homes, the savings would be comparable to a 250-
megawatt plant.
Isa said despite the progress in terms of savings, he’s not satisfied “even
with the people around me.”
He stressed that the need to save must become part of the people’s
awareness.
To mark World Energy Efficiency Day, Isa urged for the end of the waste
culture in the use of energy. “The issue is part of the Electric Pact,
demonized by political sectors suffering from myopia, since it
contemplates as mandate the implementation of the Energy Efficiency
Law.”
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Venezuela's Guaido urges more sanctions after German expulsion Thursday 7th March, 2019 – Reuters
Venezuela’s opposition leader Juan Guaido urged Europe to tighten
financial sanctions against the government of Nicolas Maduro after it
expelled Germany’s ambassador, a magazine quoted him as saying on
Thursday.
It was the latest flashpoint in a global showdown over Venezuela, with
Western nations largely recognizing Guaido as legitimate head of state,
but Russia and China still supporting the socialist Maduro and urging non-
interference.
“This action represents a threat against Germany,” Guaido told Der
Spiegel after Caracas declared ambassador Daniel Kriener persona non
grata. He and other diplomats had welcomed home Guaido at Caracas
airport earlier this week.
“I hope that Europe reacts sharply to this serious threat against an
ambassador,” Guaido added. “Above all, they should tighten financial
sanctions against the regime.”
Germany is among the many nations backing Guaido’s plan to install a
transition government ahead of free elections.
He denounces Maduro as a usurper whose re-election last year resulted
from a sham vote. Maduro says he is victim of a U.S.-led coup attempt
and “economic war”.
German Foreign Minister Heiko Maas on Wednesday called Venezuela’s
action “incomprehensible” and said Germany and its European partners
would continue to back Guaido.
He said the ambassador would be returning home for consultations.
Guaido, however, said he had asked Kriener to stay, since Maduro was
not empowered to expel a diplomat as he was “occupying the post of
president illegally.”
The international community should act to prevent Maduro using
Venezuelan taxpayer funds to “kill critics of the regime and indigenous
peoples, as is already happening at the border to Brazil,” he said in
reference to recent violence there.
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GHL adds $0.98 Thursday 7th March, 2019 – Trinidad Express Newspapers
OVERALL market activity resulted from trading in 12 securities of which
three advanced, four declined and five traded firm.
The Composite Index declined by 2.78 points (0.21 per cent) to close at
1,331.05. The All T& T Index advanced by 0.72 points (0.04 per cent) to
close at 1,763.32.
The Cross Listed Index declined by 0.87 points (0.71 per cent) to close at
121.30. The SME Index remained at 99.50.
Trading activity on the first-tier market registered a volume of 191,500
shares crossing the floor of the Exchange valued at $1,177,669.54.
GraceKennedy was the volume leader with 156,176 shares changing
hands for a value of $484,145.60, followed by Guardian Holdings Ltd with
a volume of 25,000 shares being traded for $474,500. TTNGL contributed
3,853 shares with a value of $115,804.89, while JMMB Group added 2,857
shares valued at $4,999.75.
Guardian Holdings Ltd registered the day's largest gain, increasing $0.98
to end the day at $18.98. Conversely, Republic Financial Holdings Ltd
registered the day's largest decline, falling $1.24 to close at $118.76.
CLICO Investment was the only active security on the mutual fund market,
posting a volume of 13,092 shares valued at $264,398. CLICO Investment
Fund remained at $20.20. Calypso Macro Index Fund remained at $13.60.
The second-tier market did not witness any
activity. The SME market did not witness any activity. CinemaOne
remained at $9.95. The USD equity market did not witness any activity.
MPC Caribbean Clean Energy remained at US$1.00.
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TTARP scores two victories Thursday 7th March, 2019 – Trinidad and Tobago Newsday
The TT Association of Retired Persons (TTARP) recently scored two major
victories for seniors.
The first was to get Government to give the country’s retired public
servants an interim payment of $3,000 a month because of the lengthy
period it takes the public service to process pension payments. The
department is required to track work history in the service, a process that
could take as long as two years.
Retired public servants will now receive the interim payment while their
work records are processed, after which they will receive their arrears and
their correct pension payments.
The second victory scored by TTARP is a senior citizens' grant, which
becomes payable when a retiree reaches 65, and is only payable to
people who earn a combined monthly income of less than $5,000.
According to Government, this combined income includes NIS pension
and any other occupational pensions.
Over the years TTARP has lobbied persistently for enhanced benefits for its
membership. Other achievements include increases in national insurance
pensions; increases in the tax allowance and free transport with the
introduction of the bus pass.
At last September’s AGM at the Centre of Excellence in Macoya, the
board referred to its mission statement, which focuses on enhancing the
quality of life for senior citizens. It said, “Our future is defined in the phrase
‘forever young.’ It does not mean forever young in age. It means forever
young in attitude, it means forever young in mind, it means forever young
in purpose.”
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CAL aims to lead regional carriers Thursday 7th March, 2019 – Trinidad and Tobago Newsday
Over the past decade Caribbean Airlines Ltd (CAL), the national carrier of
TT, has served the region with flights to both international and regional
destinations. And though it has had its ups and downs, the airline
declared an operating profit in 2018.
Now, the airline’s CEO Garvin Medera has said he is making an all-out
effort to put the airline at the forefront of regional carriers.
“Our objective is clear and focused: to be the most efficiently run and
sustainable airline in the region, to be the best in terms of on-time
performance and to constantly delight all our valued customers.”
Medera said being Caribbean means different things to different people.
“Many people say luck! Others say that to be Caribbean is to be easy
going, fun or warm; generous or wise, vibrant or respectful. Some would
say we are as different as we are alike.”
But he thinks being Caribbean is like a good cocktail, a perfect blend of
all these things, with a few magic ingredients added for good measure.
Medera pointed out that Caribbean people do not always appreciate
how special it is to be Caribbean, and sometimes take the energy of the
musical, the vibrancy of the culture, the beauty of the places and people
for granted.
“At Caribbean Airlines, we believe this is the right time to embrace and
celebrate our Caribbean identity. We are diving deep into the culture
and the spirit of our many diverse nations – bonded by a shared sea and
similar heritage – to bring out the best of the region."
Roughly a month ago CAL launched its latest corporation initiative, the
Caribbean Identity, through which it will showcase the authenticity of the
Caribbean region and all the elements that make it unique. This initiative
will be taken to Guyana and Jamaica and all of CAL's 20 destinations.
“This will be reflected across our whole airline identity, from our brand to
our community activities and our presence at festivals and major events in
the destinations we serve. We will build even further on our role as the
airline that brings the Caribbean together by enhancing connectivity
across the region and increasing the choices available to our customers.”
Medera said he plans to use new technology in running the airline. CAL
will implement a new Caribbean Airlines app, which puts booking,
managing and monitoring the journey on mobile devices.
The CEO said the airline also plans to acquire a brand-new fleet of Boeing
737 MAX 8 aircraft to replace its aging fleet. The first aircraft is expected at
Piarco before the end of the year.
“But through all the changes and new opportunities, what will remain the
same is who we are at the heart of Caribbean Airlines – a blend of all that
is best about our people and our region, the essence of the authentic
Caribbean, to share with you, our customers.”
CAL’s statistics show that the airline, while providing 1,053, 918 seats in
2018, carried only 937,368 passengers, with an on-time performance of 76
per cent. Its best month was August, when 92,124 passengers used its
services. Second-best performance was in July, with the figures being
86,452 passengers carried, with an on-time performance of 78 per cent.
For the first quarter of 2019 CAL will provide 243,668 seats, with the most
being in March when 84,460 seats will be available on the domestic
services.
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Burma Quarry workers refuse to work overtime Thursday 7th March, 2019 – The Antigua Observer
Workers at the Burma Quarry have decided that enough is enough when
it comes to a matter affecting their pay packets.
As of yesterday – Wednesday 6th March 2019 – the quarry workers said
they will no longer work any overtime because of long outstanding pay
owed to them for the same.
“The issue is the lack or low overtime payment for the workers here,” shop
steward Michael Peters, told OBSERVER.
The quarrymen are reportedly owed overtime pay for over a year but
continued working in the expectation that the obligation would
eventually be honoured within a timely period by their employer – the
Government of Antigua and Barbuda.
“We used to work 17 hours a day, seven days a week,” said Peters.
Thus, as a form of protest, Peters declared that until they are paid they will
not be working past 3:00 p.m. – the end of their usual work day.
Peters questioned the current whereabouts of one million dollars that was
allegedly placed in the treasury to pay them.
According to him, the lack of overtime pay has had a domino effect on
the workers and their commitments. Their children have reportedly
suffered as a consequence because some are unable to pay school fees,
according to the shop steward.
In light of this action taken by the quarry workers, work has piled up. Peters
says evidence of this can be observed by the large heap of material left
at the quarry.
He said apart from the non-payment, workers are struggling with threats
by government to privatise the quarry.
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Bank staff back on job – for now Thursday 7th March, 2019 – The Antigua Observer
Staff at Global Bank of Commerce have suspended industrial action
against the company following discussions by the bank’s management
with the Antigua and Barbuda Workers Union (ABWU).
At a press conference yesterday, the ABWU issued a letter indicating strike
action against the bank, stating it felt disrespected by the bank’s
representatives during negotiations.
Industrial Relations Officer for ABWU Fernando Samuels told reporters the
bank’s representatives were cruel, disingenuous, and negotiating in bad
faith.
“The union finds the bank’s action to be extremely disrespectful to not
only the employees and their representatives, who were ready to discuss
the longstanding matters, but also [disrespectful to] the office of the
Labour Commissioner. The union also views the behaviour of the bank to
be disingenuous and goes against the principle of good industrial relations
to the loyal staff who continue to work diligently,” he said.
According to the union, the bank failed to provide an update on issues
that were put on hold following initial talks which ended on April 30, 2018.
Prior to yesterday’s discussions, the bank’s representatives were expected
to meet with ABWU officials and the Labour Commissioner at the Labour
Department on Tuesday.
However, Global allegedly informed the Labour Department and the
union of its [the bank’s] unavailability 20 minutes AFTER the meeting was
scheduled to begin.
The union was supposed to meet with bank staff concerning their next
move after the press conference, but the bank’s call to the ABWU put that
meeting on hold.
On the discussion table for the two parties were, among other things,
issues relating to staff training, hours of work, overtime, maternity leave,
study leave and salaries.
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Look for new DDM building job, contractors told Wednesday 6th March, 2019 – BVI News Online
The bidding process for construction of the new building for the
Department of Disaster Management (DDM) and the National Emergency
Operations Centre (NEOC) are projected to begin soon.
This is according to the Projects Unit of the Ministry of Finance in its monthly
progress report on how the $65 million rehabilitation and reconstruction
loan from the Caribbean Development Bank (CDB) is being spent.
“The tender document for the rehabilitation of the DDM building will be
launched shortly. Contractors, look out for the opportunity for the DDM
building works,” the Projects Unit said.
Another relatively major project to be funded through the loan is the
rehabilitative works that are to be done on the L-shaped building at the
hurricane-ravaged Elmore Stoutt High School campus in Road Town.
The project is farther along and is closer to entering the construction
phase when compared to the DDM/NEOC building project.
“The bid opening for the L-shaped building of the school took place on
January 30 and the tender process is in the final stage. The objective is to
start the works as soon as possible so that the building can be ready for
the upcoming school year,” the Unit said.
The Projects Unit is currently the agency in control of the loan funds for
these projects.
At the end of February, the sum that has been earmarked from the loan
so far amounted to a little more than $12.5 million.
Some $8,102,000 are set aside for some 18 consultancies and $4.5 million
was budgeted for the purchase of goods.
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All gov’t ministers getting 3 months as Deputy Premier, Wheatley the first
appointee Wednesday 6th March, 2019 – BVI News Online
In what can be described as an unconventional move, Premier Andrew
Fahie is giving each of the ministers in his government an opportunity to
serve as Deputy Premier.
Minister of Education & Culture Dr Natalio Wheatley has been given the
first crack at the post.
Governor Augustus Jaspert appointed and swore in Dr Wheatley to the
post on Wednesday morning, March 6.
Each minister will sit in the post for three months.
“After the first year then someone will be named permanently to the post
of Deputy Premier,” Premier Fahie said while explaining the move. “It
allows for each minister to get the experience and also makes sure that
each minister also develops in areas that normally in most governments
might never have seen or had the opportunity to do.”
He continued: “Our government is one that’s inclusive and we intend to
build our people whether elected or not in the same manner so that we
can all be ready and equipped to take on the challenges of tomorrow.”
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SuGEF relaxes bank reserves to boost credit Wednesday 6th March, 2019 – Qcostarica
The Superintendencia General de Entidades Financieras (SuGEF) –
General Superintendency of Financial Institutions – relaxed the rule that
requires financial institutions to create reserves to protect themselves in
case of deterioration of their loans.
The decision was made to “free” resources to financial institutions for the
placement of loans at a time when the economy is slowing, confirmed
Bernardo Alfaro, head of the SuGEF.
As of this year, the Superintendency reduced from 5% to 2.5% the
percentage of the projected annual profit that the banks must allocate to
the formation of the so-called “countercyclical” estimates, as detailed in
the official bulleting SGF-0077-2019 of January 19.
Each financial institution, based on its earnings projections, must save the
portion dictated by the SuGEF regulations.
This special reserve began to accumulate in 2016. At the end of 2018, it
amounted to ¢71.7 billion colones, according to the data of SuGEF.
The objective of this cyclical estimate is to accumulate resources, in times
of economic growth, and to protect financial institutions when credit
portfolios deteriorate.
Deceleration
Alfaro explained that the decision to reduce the percentage of
mandatory estimation was agreed after analysing the trend of the Índice
de Auges Económicos (Economic Booms Index).
This is an internal indicator of the SuGEF that measures the growth of credit
granted by financial entities with operations in the country.
“There is no acceleration in credit (…) the tool (the provision) is
countercyclical, and not pro-cyclical. If it continues, it would increase the
problem of low credit expansion,” stressed the Superintendent.
Data from the Banco Central (Central Bank) shows that the growth of
credit in the private sector stagnated as of November of last year.
The year-on-year change rate remained at 6% from November 2018 to
February 2019.
Alfaro said the SuGEF will conduct a review of the regulatory change in
June. At that time, it will be determined if the percentage of the
countercyclical reserve is further reduced, maintained or raised.
For María Isabel Cortés, executive director of the Costa Rican Banking
Association (ABC), the Costa Rican economy needs to be reactivated,
which is why the decision of the SuGEF was necessary.
Annabelle Ortega, executive director of the Cámara de Bancos
(Chamber of Banks), considered the SuGEF decision a positive one given
the current economic cycle.
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