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▪ NCB Capital Markets (Barbados) Limited’s initial rating assigned at CariBBB-

▪ Government of Barbados’s local currency rating upgraded to CariBB

▪ PanJam Investment Limited’s initial rating assigned at CariBBB+

▪ Saint Lucia Electricity Services Limited’s rating reaffirmed at CariBBB ▪ TSTT’s existing rating reaffirmed and new proposed bond issue rating assigned at CariA ▪ Jamaica Public Service Company Limited’s initial rating assigned at CariBBB+

▪ Endeavour Holdings Limited’s rating reaffirmed at CariA+

▪ Island Car Rentals Limited’s initial rating assigned at jmBBB+

▪ The Pegasus Hotels of Guyana Limited’s rating upgraded to CariBBB

▪ The National Gas Company of Trinidad and Tobago’s rating reaffirmed at CariAA+

▪ Home Mortgage Bank’s rating reaffirmed at CariA

▪ NCB Cayman Limited’s rating reaffirmed at CariA

▪ NiQuan Energy Trinidad Limited’s initial rating assigned at CariA+

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REGIONAL

Trinidad and Tobago

Alarm over rent hike for Cocoa Company

THE revelation that the Cocoa Development Company (CDC), a non-

profit State company with less than 13 employees, moved from a monthly

rental payment for office space of $17,000 to $72,000 caused alarm and

concern from members of the Public Accounts Enterprises Committee

(PAEC).

NCB trades $4m

OVERALL market activity resulted from trading in 14 securities of which five

advanced, eight declined and one traded firm.

Sagicor hires Alignvest executive as new CFO

SAGICOR Financial Corporation said yesterday that it had appointed

Alignvest executive Andre Mousseau as its chief financial officer (CFO),

effective from last Friday.

Barbados

Still no pay

Former employees of telecommunications company, Ozone Wireless who

were laid off last year feel betrayed by their former employer and left in

the dark about thousands of dollars owed them and which have been

outstanding since last May when they were dismissed.

Jamaica

FTC, CAC To Merge

A new agency is to be created to undertake the functions of the Fair

Trading Commission, FTC, and the Consumer Affairs Commission, CAC, a

process that is expected to get under way this year.

JPS Full Switchover From HFO To LNG To Go Beyond 2020

Power utility Jamaica Public Service Company Limited, JPS, will

decommission all its plants that run on heavy fuel oil, HFO, a programme

that will extend beyond 2020 amid the continued switchover to liquefied

natural gas, LNG, as its main fuel source.

Jamaica Continued

Torpedo Microlender Acquired By Foreign Firm

Silva Investment Limited, a foreign firm engaged in multiple businesses, has

acquired Torpedo Micro Loan Financing in what it said is a strategic move

to get a foothold in Jamaica’s growing financial market.

Guyana

ExxonMobil strikes again in 11th and 12th well – Stabroek Block has

potential for five platforms – Energy Director

There is continued success in the wells that ExxonMobil has been drilling in

its offshore concessions in the Stabroek Block. Two more wells have struck

oil.

Govt. raises tender threshold for ministries, state agencies

The National Procurement and Tender Administration Board (NPTAB) has

announced adjustments to thresholds that will allow ministries and state

agencies to spend more without going to that body.

The Bahamas

Fidelity Eyes ‘$7.5m-Plus’ Profit Boost in Affiliate Exit

Fidelity Bank (Bahamas) will enjoy a $7.5m-plus profit “boost” for 2019 as a

result of selling a 50 percent equity stake in its investment banking affiliate,

it was revealed yesterday.

Game Changer: Cabinet Studying ‘Mega Deal’ For Port and Lucayan

Freeport's economy "won't look back" if Royal Caribbean's partnership

with a Mexican group to develop mega cruise berths and buy the Grand

Lucayan succeeds, Tribune Business can reveal.

Antigua and Barbuda

Scotiabank’s decision to sell Caribbean banking assets precipitous,

presumptuous and reckless, says Antigua-Barbuda PM

In a letter on Tuesday to David Parks, managing director, Caribbean East,

of the Bank of Nova Scotia in Barbados, Antigua and Barbuda Prime

Minister Gaston Browne described Scotiabank’s agreement to sell its local

banking operations to Trinidad-based Republic Financial Holdings Limited

(RFHL) without consultation with his government as “precipitous,

presumptuous and reckless of the interests of BNS’s shareholders to whom

you owe a fiduciary responsibility.”

British Virgin Islands

It Was An Audit—Premier Insists

Outgoing Premier and Finance Minister, Hon. Dr. D. Orlando Smith has

denounced that the review conducted into the $85M cruise pier and land

side development was not an audit.

The Dominican Republic

Dominican agricultural sector wants to declare emergency, due to the

drought

The agricultural producers of the Dominican Republic will formally request

the Government to declare the emergency in the areas most affected by

the drought, where the crops are drying up, and the livestock has begun

to die, after months without rain to alleviate the agostamiento of the field.

Venezuela

Venezuela opposition plans to get oil money from U.S. fund

Venezuela’s opposition on Wednesday said it would use a U.S.-based

fund to receive some of the country’s oil income in a key step to bankroll

its efforts to dislodge President Nicolas Maduro.

Cuba

Russia approves 38 million euro loan to Cuba's military

Russia has approved a 38 million euro ($43.27 million) loan for Cuba’s

defense sector, a senior Russian defense official was quoted as saying on

Wednesday.

INTERNATIONAL

United States

Oil steadies as investors weigh up odds of global supply squeeze

Oil steadied on Thursday as growing expectations that global supply

could fall significantly short of demand this year lent support, offsetting the

negative impact of a rise in U.S. inventories.

BB&T to buy SunTrust in biggest bank deal since 2009

BB&T Corp will buy SunTrust Banks Inc for about $28 billion in an all-stock

deal, the companies said on Thursday, creating the sixth largest U.S.

lender in the biggest bank deal since the 2007-2009 financial crisis.

United Kingdom

Bank of England sees weakest outlook for UK since 2009 on Brexit, world

slowdown

The Bank of England said Britain faced its weakest economic growth in 10

years in 2019, blaming mounting Brexit uncertainty and the global

slowdown, but it stuck to its message that interest rates will rise, if a Brexit

deal is done.

Bank of England to reinvest proceeds from maturing QE gilt

The Bank of England said on Thursday it will reinvest 20.6 billion pounds of

proceeds from a maturing government bond held as part of its

quantitative easing program.

British PM May takes demand for Brexit renegotiation to Brussels

Prime Minister Theresa May was in Brussels on Thursday to plead with EU

leaders to change the Brexit divorce deal she negotiated last year, in

order to get it through parliament, after they offered little hope they were

willing to do so.

Europe

EU slashes euro zone growth outlook, expects inflation to slow

The European Commission sharply cut on Thursday its forecasts for euro

zone economic growth this year and next because it expects the bloc’s

largest countries to be held back by global trade tensions and an array of

domestic challenges.

Europe Continued

EU cuts Italian growth outlook, says government caused recession

The European Commission slashed its forecasts for Italy’s economic growth

in 2019 and 2020 on Thursday, saying uncertainty over government

policies and higher borrowing costs have pushed the country into a

recession.

Daimler says its emissions will rise in 2018-2019

Daimler’s average emissions levels in Europe will rise in 2018 and 2019

because stricter anti-pollution testing rules have revealed higher results,

Chief Executive Dieter Zetsche said on Thursday.

Euro slips to two-week low after EU cuts growth forecast

The euro fell to a two-week low on Thursday after the European

Commission sharply cut its forecasts for economic growth in the euro

zone.

India

Ambani to invest $1.4 billion in Indian state, will help e-commerce

expansion

India’s Reliance Industries will invest 100 billion rupees ($1.4 billion) in the

eastern state of West Bengal, a part of which would fund the company’s

new e-commerce venture, its chairman Mukesh Ambani said on Thursday.

Global

World shares go weak as dollar extends power surge

World shares ground to a halt on Thursday as the dollar scored its longest

winning streak since a hot run in early October that helped set off a wave

of global ‘bear’ markets.

Saudi Arabia pumps 10.24 million bpd in Jan, below its OPEC's target

Saudi Arabia, the world’s top oil exporter, told OPEC it pumped 10.24

million barrels per day (bpd) in January, two OPEC sources said, as the

kingdom follows through on its pledge to reduce output to help balance

the oil market and support prices.

Alarm over rent hike for Cocoa Company Thursday 7th February, 2019 – Trinidad and Tobago Express

THE revelation that the Cocoa Development Company (CDC), a non-

profit State company with less than 13 employees, moved from a monthly

rental payment for office space of $17,000 to $72,000 caused alarm and

concern from members of the Public Accounts Enterprises Committee

(PAEC).

The company's audited accounts were being examined by the Public

Account (Enterprises) Committee when member Fitzgerald Hinds stated: 'I

am getting the impression that this company exists for itself.'

The company, which was established in 2014, is the successor to the

Cocoa and Coffee Board which was collapsed into the present

organisation. It operates on the basis of a subvention from the State,

which in 2018 amounted to $2.8 million. However, it inherited from the

precursor company a bank account with $13 million in 2014, which is now

down to $6.9 million.

The company has been cautious in hiring staff because of its financial

situation, chairman Winston Rudder indicated.

Hinds asked about the rent payment. Rudder said the CDC used to pay

$17,250 at Yard Street but the company had moved to Mulchan Seuchan

Road, Chaguanas.

'And how much are you currently paying there?' asked PAEC chairman

Wade Mark.

'Seventy-two thousand dollars a month,' Rudder replied.

'What! What!' Hinds exclaimed.

'You see why we are concerned. Because as an entity with the largest

chunk of your subvention for which you are seeking an increase, spending

a substantial amount, including drawing down from its savings. What is this

company doing? Is this company only for itself? Is it achieving its

mandate? I do understand the drive of the Minister of Agriculture... but

you see where we are,' Hinds said.

Hinds continued: 'The cost of janitorial services jumped by $10,000, what

accounts for that? The (new) place must be six times bigger. And with a

small staff and a small team. This is a matter of concern.'

Hinds added: 'I see a subhead here (in the financial accounts) for

donations and sponsorships. Are you saying that this company sponsors

and gives donations, in your circumstances?' Hinds asked. Rudder began

to respond, but Hinds told him that he didn't think he was not the

appropriate person and that the CEO and the Chief Financial Officer

(Mala Partap) should be the ones addressing this issue.

CEO Leon Granger said the original office of the Cocoa and Coffee

Board consisted of two floors. But at the time of transition there was a

residual staff of a driver and an administrative assistant and so the

company gave up one floor, bringing the rent down to $17,000. But he

said the building at Yard Street was not OSHA-compliant, the landlord

wanted to increase the rent and there was limited parking space at the

site.

Noting that the company was supposed to be servicing the cocoa

farming fraternity of 11,000-plus, and based on its mandate and strategic

plan, the company looked for a new building and considered five

different properties in Chaguanas at rents of $56,000; $125,000; $40,000

and $65,000 and $72,000. He said apart from the building for $72,000 a

month, the other buildings would have required considerable outfitting

costs and the current building was the cheapest on a square foot basis.

Hinds did not agree with the 'special taste and focus for Chaguanas' and

felt that the company could operate anywhere, but Granger begged to

differ.

On a more positive note, Rudder reported that Trinidad and Tobago

remains one of ten countries whose cocoa is considered to be high

quality and fine favour and receives a good price (US$6,000 to $7,000 a

tonne). High quality cocoa receives between US$3,500 to $10,000 a tonne

as opposed to bulk cocoa which receives US $2,000 per tonne. Rudder

also stated that a local value added industry had developed, creating

local chocolatiers. However production has declined over the years and

the CDC is attempting to reverse this position. 'The challenge is to ramp up

production, which is currently 500 metric tonnes a year, while keeping the

quality high, Rudder said. The aim is to facilitate an increase in production

to 12,000 metric tons in the coming years, he said.

<< Back to news headlines >>

NCB trades $4m Thursday 7th February, 2019 – Trinidad and Tobago Express

OVERALL market activity resulted from trading in 14 securities of which five

advanced, eight declined and one traded firm.

The Composite Index declined by 2.12 points (0.16 per cent) to close at

1,304.95. The All T& T Index declined by 0.36 points (0.02 per cent) to close

at 1,707.09. The Cross Listed Index declined by 0.54 points (0.44 per cent)

to close at 121.97. The SME Index remained at 99.50 Trading activity on the

first tier market registered a volume of 549,060 shares crossing the floor of

the Exchange valued at $5,540,135.16.

NCB Financial Group was the volume leader with 472,460 shares changing

hands for a value of $3,968,694.50, followed by JMMB Group with a

volume of 51,813 shares being traded for $90,672.75. Republic Financial

Holdings Ltd contributed 9,725 shares with a value of $1,045,734.41, while

NGL added 3,278 shares valued at $95,711.30.

Massy Holdings registered the day's largest gain, increasing $0.17 to end

the day at $47.66. Conversely, ANSA McAL registered the day's largest

decline, falling $0.20 to close at $55.

CLICO Investment Fund was the only active security on the mutual fund

market, posting a volume of 70,376 shares valued at $1,415,954.94. CLICO

Investment Fund declined by $0.04 to end at $20.12. Calypso Macro Index

Fund remained at

$13.50.

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.

<< Back to news headlines >>

Sagicor hires Alignvest executive as new CFO Thursday 7th February, 2019 – Trinidad and Tobago Express

SAGICOR Financial Corporation said yesterday that it had appointed

Alignvest executive Andre Mousseau as its chief financial officer (CFO),

effective from last Friday.

Mousseau's appointment as CFO was signalled in late November when

Sagicor announced an agreement to be acquired by Alignvest

Acquisition II Corp in an offer valued at US$536 million.

Alignvest Acquisition II Corporation is a Canadian company, listed on the

Toronto Stock Exchange, that is special purpose acquisition corporation

(SPAC).

Under Canadian law, the SPAC programme offers an alternative path for

listing on the Toronto Stock Exchange, through the establishment of shell

companies, which raise funds, 90 per cent of which must be used to

acquire an operating company within 36 months of listing.

Mousseau was previously a partner at Alignvest Private Capital, and has

also been a portfolio manager at Ontario Teachers' Pension Plan.

Mousseau is currently a director at Edgewood Health Network, an

investee of Alignvest.

In a separate notice yesterday, Sagicor announced that it had obtained

an order from the Supreme Court of Bermuda on Friday, permitting

Sagicor to convene a special meeting of its shareholders to consider and

vote on the proposal for 100 per cent of the insurance company to be

sold to Alignvest.

Yesterday's notice says that Sagicor will give its shareholders 21 days

notice of the special meeting and will provide its shareholders on record

as of January

31, 2019 with a statement explaining the scheme of arrangement.

Sagicor did not give the date of the special meeting. The approval of the

insurer's shareholders at the special meeting is one of the conditions for

the success of the proposed transaction.

If Sagicor's shareholders approve the transaction, one of the

consequences is that the company would be delisted from the T& T,

Barbados and London stock exchanges.

<< Back to news headlines >>

Oil steadies as investors weigh up odds of global supply squeeze Thursday 7th February, 2019 – Reuters

Oil steadied on Thursday as growing expectations that global supply

could fall significantly short of demand this year lent support, offsetting the

negative impact of a rise in U.S. inventories.

Brent crude oil futures were last down 12 cents at $62.57 a barrel by 1022

GMT, while U.S. crude futures were down 7 cents at $53.94 a barrel.

The oil price came under pressure earlier in the day following weekly data

from the U.S. Energy Information Administration on Wednesday that

showed an unwelcome increase in stocks of crude oil.

Still, some analysts were relieved that U.S. crude oil inventories only rose by

1.3 million barrels in the week to Feb. 1, according to the EIA, compared

with expectations for an increase of 2.2 million barrels.

PVM Oil Associates strategist Tamas Varga pointed out that the rise in

crude inventory masked a bullish decline in stocks of refined products.

“The weekly report from the EIA on U.S. oil stocks was bullish for outright

prices, plain and simple. The large draws in distillate ... made sure that

commercial oil inventories fell for the second week, this time by 3.4 million

barrels,” he said.

“Additionally, the builds in crude (+1.3 million bbls) and gasoline stocks

(+0.5 million bbls) were less than anticipated.”

U.S. distillate stocks fell by 2.3 million barrels, while inventories of other

refined fuels dropped by 2.9 million barrels.

The oil price is still showing a 20 percent gain so far this year, but has

struggled to return to the near-four year highs of late 2018, given the

concern that a slowing global economy could eat into fuel demand, with

German industrial output unexpectedly falling in December for the fourth

consecutive month.

Yet some investors believe these concerns may be overblown, in light of

the decline in OPEC production and a squeeze on supply from Iran and

Venezuela from U.S. sanctions.

“We believe that financial markets may be overestimating the risks of a

global recession. Moreover, lower oil prices – prices were between 14

percent and 18 percent lower in January than their 2018 average – are

likely to stimulate economic activity and oil demand, particularly in

emerging markets,” said Jean-Pierre Durante, Head of Applied Research

at Pictet Wealth Management.

Providing global markets with price support are supply cuts led by the

Organization of the Petroleum Exporting Countries (OPEC) aimed at

tightening the market.

Meanwhile, U.S. sanctions against Venezuela’s oil industry are expected to

freeze sales proceeds of Venezuelan crude exports to the United States.

“Around a third of Venezuela’s exports head to the U.S. As such, we

expect Venezuelan exports to quickly fall by 300,000 barrels per day (bpd)

to around 700,000 bpd,” ANZ bank said on Thursday.

<< Back to news headlines >>

BB&T to buy SunTrust in biggest bank deal since 2009 Thursday 7th February, 2019 – Reuters

BB&T Corp will buy SunTrust Banks Inc for about $28 billion in an all-stock

deal, the companies said on Thursday, creating the sixth largest U.S.

lender in the biggest bank deal since the 2007-2009 financial crisis.

The two companies called it a merger of equals, valued at $66 billion.

The combined company will operate under a new name and have

around $442 billion in assets, $301 billion in loans and $324 billion in

deposits, and will rival Citigroup Inc and Bank of America Corp.

The deal comes at a time when the Trump administration is pushing for

easing crisis-era regulations that restricted expansion and added

increased regulatory scrutiny on big banks.

Added to that, changes in the U.S. tax laws that lowered corporate tax

also freed up capital and Wall Street has long been expecting a wave of

dealmaking in the banking sector.

As part of the deal, SunTrust shareholders will receive 1.295 shares of BB&T

for each share they own. The per share deal value of $62.85 is at a 7

percent premium to SunTrust’s closing price on Wednesday, according to

a Reuters calculation.

Atlanta-based SunTrust rose 5.5 percent to $62 before the opening bell, a

few cents short of its acquisition price.

BB&T shareholders will own 57 percent of the combined company and

SunTrust will own the rest.

The deal, expected to close in the fourth quarter, will likely result in annual

cost savings of around $1.6 billion by 2022, the companies said. The

merger is will generate an internal rate of return of about 18 percent.

Kelly King, BB&T’s chief executive officer, will be the CEO of the combined

company until Sept.12, 2021, after which SunTrust CEO, William Rogers Jr

will take over.

<< Back to news headlines >>

Bank of England sees weakest outlook for UK since 2009 on Brexit, world

slowdown Thursday 7th February, 2019 – Reuters

The Bank of England said Britain faced its weakest economic growth in 10

years in 2019, blaming mounting Brexit uncertainty and the global

slowdown, but it stuck to its message that interest rates will rise, if a Brexit

deal is done.

While other central banks say they will hold off from raising borrowing

costs, the BoE restated that gradual and limited rate rises lie ahead for the

world’s fifth-largest economy, as along as a no-deal Brexit in just 50 days’

time is averted.

“UK economic growth slowed in late 2018 and appears to have

weakened further in early 2019,” the Bank’s policymakers said after they

voted unanimously to keep rates at 0.75 percent, as expected in a

Reuters poll of economists.

“This slowdown mainly reflects softer activity abroad and the greater

effects from Brexit uncertainties at home.”

Britain is due to leave the European Union on March 29, but Prime Minister

Theresa May is holding out for more concessions from the bloc in an

attempt to get her divided Conservative Party behind her plan.

The BoE has previously said a worst-case Brexit scenario, with no deal for a

transition period and a sudden loss of confidence in Britain among foreign

investors, could hammer the economy more than the global financial

crisis did.

The central bank on Thursday sharply lowered its 2019 economic growth

forecast to 1.2 percent from its previous estimate of 1.7 percent, made as

recently as November.

That represented the biggest cut in its projections since the period

immediately after the 2016 Brexit referendum and put Britain on course for

its weakest economic growth in the 10 years since the global financial

crisis.

The BoE saw a fall this year in business investment and housebuilding,

which have been weak in the run-up to Brexit, as well as a halving of the

growth rate in exports, reflecting the global slowdown.

For 2020, the overall economic growth outlook was also cut to 1.5 percent

from 1.7 percent before picking up to a stronger-than-previously

expected 1.9 percent in 2021.

The weaker growth outlook came even as the Bank acknowledged that

investors have scaled back their expectations on how much interest rates

are likely to rise, a key factor underpinning its own projections.

The BoE said markets were now pricing in its Bank Rate rising to 1.1 percent

by the end of 2021, compared with 1.4 percent at the time of its last

forecasts in November.

But it sent a reminder to investors that rates might rise more quickly by

saying it saw inflation in two years’ time at 2.1 percent, a touch above its 2

percent target.

Inflation was likely to fall below its target because of the global fall in oil

prices in the coming months before bouncing back above 2 percent in a

year’s time.

The main reason the BoE thinks underlying inflation pressures will grow is

faster wage growth after Britain’s unemployment rate hit its lowest level in

more than 40 years.

The BoE kept its wage forecasts largely unchanged with earnings rising by

more than 3 percent a year over the next three years.

The bigger picture remains weak. Private-sector business surveys have

suggested the economy has slowed to a crawl ahead of Brexit.

The BoE said on Thursday a survey it conducted of more than 200

businesses showed that half had begun to prepare for a no-deal Brexit,

something a majority expected would cause the economy to shrink and

unemployment to rise.

It repeated its message that it could either cut or raise interest rates after

a no-deal Brexit, although many economists think it would be forced to

help the economy with more stimulus, as it did after the Brexit referendum

shock in 2016.

A rate rise by the BoE would contrast with moves by other central banks.

Last week the U.S. Federal Reserve signaled its three-year run of raising

rates might be ending and earlier on Thursday, India’s central bank cut

borrowing costs.

The European Central Bank has sounded more worried that the euro

zone’s recovery has run out of steam. German industrial production data

published on Thursday raised fears that Europe’s biggest economy might

be heading for a recession.

Carney is due to give a news conference to explain the central bank’s

latest thinking at 1230 GMT.

Most economists polled by Reuters expect interest rates to rise later this

year if Brexit goes smoothly.

But financial markets - factoring in the chance of a no-deal Brexit - see

only slightly more than a 50 percent chance of an increase.

<< Back to news headlines >>

Bank of England to reinvest proceeds from maturing QE gilt Thursday 7th February, 2019 – Reuters

The Bank of England said on Thursday it will reinvest 20.6 billion pounds of

proceeds from a maturing government bond held as part of its

quantitative easing program.

The reverse auctions will start in the week beginning March 7, the BoE said

in a statement.

<< Back to news headlines >>

British PM May takes demand for Brexit renegotiation to Brussels Thursday 7th February, 2019 – Reuters

Prime Minister Theresa May was in Brussels on Thursday to plead with EU

leaders to change the Brexit divorce deal she negotiated last year, in

order to get it through parliament, after they offered little hope they were

willing to do so.

A cool handshake for the cameras with European Commission President

Jean-Claude Juncker did little to conceal the tension, just 50 days before

Britain could leave the European Union without measures in place to keep

trade flowing freely.

Neither spoke, with one reporter shouting to the retreating leaders: “Is this

hell, prime minister?” EU summit chair Donald Tusk said on Wednesday

that Brexit promoters deserved “a special place in hell” - a blunt display of

frustration in Brussels that drew condemnation from many in Britain.

<< Back to news headlines >>

EU slashes euro zone growth outlook, expects inflation to slow Thursday 7th February, 2019 – Reuters

The European Commission sharply cut on Thursday its forecasts for euro

zone economic growth this year and next because it expects the bloc’s

largest countries to be held back by global trade tensions and an array of

domestic challenges.

In its quarterly economic forecasts, the EU executive also revised down its

estimates for the inflation in the 19-country currency bloc next year, which

now is expected to be lower than forecast by the European Central Bank

- likely complicating the bank’s plans for an interest rate hike this year.

The Commission said euro zone growth will slow to 1.3 percent this year

from 1.9 percent in 2018, before rebounding in 2020 to 1.6 percent.

The new estimates are far less optimistic than those released in November,

when Brussels expected the euro zone to grow 1.9 percent this year and

1.7 percent in 2020.

All countries in the 28-state European Union are poised to continue

growing, with the bloc expected to post its seventh consecutive year of

expansion, but the larger member states will brake significantly.

The Commission cited global trade tensions and China’s slowdown as the

main drags on the European Union’s economy.

But it also mentioned internal factors as causes for the worsened outlook,

notably slower car production in Germany, social tensions in France and

“strong uncertainty on budget policies in Italy,” EU economics

commissioner Pierre Moscovici told a news conference.

The euro fell to a two-week low after the cut in forecasts was released.

In Germany, the bloc’s largest economy, growth is expected to slow to 1.1

percent this year from 1.5 percent in 2018. The Commission had previously

forecast 1.8 percent growth this year.

France’s economic expansion is expected to slacken to 1.3 percent this

year from 1.5 percent in 2018, after “yellow vest” protests weakened

growth over the last months.

Italy, the third largest economy in the euro zone, is expected to post the

slowest growth rate in the whole EU with a mere 0.2 percent expansion this

year.

All euro zone countries will grow this year at a slower pace than in 2018,

the commission forecast, except Greece, which after exiting its bailout

program in 2018 is expected to expand by more than 2 percent both this

year and next.

Britain’s growth is expected to slow to 1.3 percent this year - a touch

higher than its previous forecast - up from 1.4 percent in 2018. However, it

underlined that forecasts on Britain are based on the “technical

assumption” that EU-UK trade will not be affected by Brexit.

ECB HEADACHES

The economic slowdown forecast by the Commission is worse than that

seen by the ECB in its latest projections released in December, when the

bank expected the euro zone to grow by 1.7 percent this year.

The Commission also stressed the outlook was subject to large uncertainty

and risks of further downward revisions caused mostly by the unclear Brexit

process.

In a further concern for the ECB, the Commission expects euro zone

inflation to be at 1.4 percent this year, below ECB estimates of 1.6 percent

rate, and further away from the bank’s target of a rate close to 2.0

percent.

Since December, ECB policymakers have said that the bank’s forecasts

are likely to be revised down in March.

Core inflation, which excludes volatile prices and is closely watched by

the ECB for its policy decisions, will increase gradually, the commission

predicted, citing positive labor market developments.

<< Back to news headlines >>

EU cuts Italian growth outlook, says government caused recession Thursday 7th February, 2019 – Reuters

The European Commission slashed its forecasts for Italy’s economic growth

in 2019 and 2020 on Thursday, saying uncertainty over government

policies and higher borrowing costs have pushed the country into a

recession.

Italian gross domestic product was likely to grow by 0.2 percent in 2019,

the Commission said, down from 1.0 percent in 2018. It forecast 1.2

percent growth last November.

In 2020, the Italian economy was likely to expand by 0.8 percent, “helped

by a positive carry-over effect and two more working days”, the

Commission said. It had forecast 1.3 percent growth in November.

The forecasts depressed the FTSE Italia all-share index .FTITLMS and Italian

borrowing costs rose as 10-year bond yields increased 10 basis points to a

one-month high of 2.942 percent

The Italy-Germany 10-year yield spread rose 14 bps DE10IT10=RR to its

widest in two months.

Italy’s GDP contracted 0.1 percent in the third quarter and 0.2 percent in

the last three months of 2018, putting the economy into a technical

recession for the first time in five years.

“The recent slackening of economic activity is more attributable to ...

uncertainty related to the government’s policy stance and rising financing

costs took its toll,” the Commission said.

Italy’s borrowing costs surged in the second half of 2018 as investors grew

worried that the populist government in Rome wanted to borrow more to

finance generous welfare and pension policies, even though Italy already

has the second-highest public debt in Europe at 132 percent of GDP.

ITALY NEEDS RESPONSIBLE POLICIES

“What Italy needs is deep structural reforms and decisive action to bring

down high levels of public debt, in other words, responsible policies that

support stability, confidence and investment,” Commission Vice President

Valdis Dombrovskis said.

The Commission forecast Italian quarterly growth would be zero in the first

three months of 2019 and just 0.1 percent in the second quarter against

the previous three months.

Italian Economy Minister Giovanni Tria played down the economic

difficulties, saying growth had stalled but it was wrong to say the country

was in a recession.

“For now, we can talk about a setback rather than a real recession,” Tria

told parliament. But he added that indicators showed that Italy was

facing “growing difficulty in maintaining previous output levels”.

The weak economic performance raises questions over whether Italy can

deliver the planned budget deficit of 2.04 percent of GDP this year — a

hard-won compromise agreed with the Commission last year.

The Commission had wanted to put Italy into an EU disciplinary procedure,

which could mean fines, over Rome’s plan to increase the budget deficit

to 2.4 percent of GDP in 2019 through tax cuts and spending on welfare

and earlier pensions.

In the end, Italy avoided the disciplinary steps by cutting the target to 2.04

percent, but that assumed economic growth would be 1.0 percent.

Tria said that the government had no plans to adopt corrective measures

to rein in the budget deficit.

<< Back to news headlines >>

Daimler says its emissions will rise in 2018-2019 Thursday 7th February, 2019 – Reuters

Daimler’s average emissions levels in Europe will rise in 2018 and 2019

because stricter anti-pollution testing rules have revealed higher results,

Chief Executive Dieter Zetsche said on Thursday.

European Union lawmakers have demanded that carmakers cut average

carbon dioxide (CO2) emissions levels by 40 percent between 2007 and

2021, a goal that has become harder to attain after WLTP emissions tests

were introduced in 2018.

Carmakers including Daimler are now struggling to lower their average

emissions of carbon dioxide by 2021.

“We have not finalised and published the 2018 number but it is fair to say it

is an increase which makes the gap to 2021 even bigger,” Zetsche told

analysts during a presentation of 2018 earnings results.

To compensate higher emissions readings, Daimler, which owns the

Mercedes-Benz and Smart brands, will push sales of electric and hybrid

vehicles, Zetsche said.

<< Back to news headlines >>

Euro slips to two-week low after EU cuts growth forecast Thursday 7th February, 2019 – Reuters

The euro fell to a two-week low on Thursday after the European

Commission sharply cut its forecasts for economic growth in the euro

zone.

Global trade tensions and growing public debt are hastening a slowdown

in the largest countries of the bloc, complicating the European Central

Bank’s plans for an interest rate hike this year and weakening the single

currency.

The euro has lost around 1.3 percent over the last week as investors bet

the ECB will keep monetary policy accommodative faced by low inflation

in the single currency area.

The currency was down 0.2 percent at $1.1332, a two-week low.

It dropped earlier in the session after German industrial output

unexpectedly fell in December for the fourth consecutive month,

underscoring fears about a broader slump in Europe.

“Another day, another piece of terrible German data. EUR/USD risks a

move to $1.1300,” said ING’s chief EMEA FX and interest rate strategist,

Petr Krpata.

Elsewhere the Australian dollar weakened further on expectations that

interest rates will come down this year due to growth risks at home and

abroad.

In a remarkable shift from its long-standing tightening bias, Australia’s

central bank on Wednesday opened the door to a possible rate cut and

acknowledged threats to the economy.

That saw the Aussie slump 1.8 percent in its worst one-day decline since

June 2016. Investors were caught off-guard because a day earlier the

Reserve Bank of Australia steered clear of an easing signal.

On Thursday the Aussie hovered near a more than one-week low at

$0.7103.

The New Zealand dollar was down 0.3 percent at $0.6765 following

weaker-than-expected unemployment data on Thursday.

The dollar index, a gauge of its value versus six major peers was up 0.2

percent at 96.52, hovering close to its two-week high. The index has

gained for three consecutive sessions.

Elsewhere, sterling was marginally lower at $1.2914. The British pound has

weakened by 1.3 percent in February due to Brexit woes.

The United Kingdom is on course to leave the European Union on March

29 without a deal unless British Prime Minister Theresa May can convince

the bloc to reopen the divorce agreement she reached with it in

November.

The Bank of England is scheduled to meet later on Thursday and is widely

expected to keep interest rates unchanged.

“The BoE won’t even consider changing interest rates until the terms to

leaving the EU become clear,” said Kathy Lien, managing director of

currency strategy at BK Asset Management.

“BoE Governor Mark Carney will reiterate his warning about the risks of a

disorderly Brexit and reassure investors that they are ready to increase

stimulus if it causes a major disruption in the markets,” Lien added.

<< Back to news headlines >>

Ambani to invest $1.4 billion in Indian state, will help e-commerce

expansion Thursday 7th February, 2019 – Reuters

India’s Reliance Industries will invest 100 billion rupees ($1.4 billion) in the

eastern state of West Bengal, a part of which would fund the company’s

new e-commerce venture, its chairman Mukesh Ambani said on Thursday.

The energy and telecoms conglomerate, which already runs retail stores,

has announced plans to diversify into e-commerce at a time when India’s

new foreign investment curbs have dealt a blow to Amazon.com Inc and

Walmart’s Flipkart.

The investment announcements also come as a boost for the state’s chief

minister, Mamata Banerjee, who has in recent weeks rallied regional

parties and the main opposition Congress to forge an alliance to beat

Prime Minister Narendra Modi in upcoming elections, which must be held

by May.

Ambani’s so-called “new commerce” venture aims to connect small

merchants with his retail network and warehouses, helping them better

manage their inventory. It already has more than 500 retail stores in the

state, selling everything from clothes to groceries, and the new plan

would “increase manifold” its warehouse space in the next 24 months in

West Bengal, he said.

The new e-commerce platform “will bring win-win benefits to consumers,

retailers and producers” and help 30 million small shopkeepers, Ambani

said.

The billionaire businessman has been more vocal about his e-commerce

plans after India in December imposed new restrictions on how foreign

companies operate in the e-commerce sector. The new rules, which

kicked in on Feb. 1, have disrupted product listings on Amazon.com’s

India website.

Addressing a business summit in West Bengal’s Kolkata city, Ambani also

said he plans to expand the reach of his telecom services in the state and

swiftly open a data centre which would be “as good as the ones in Silicon

Valley”.

“There is no area of the economy, governance or life which is untouched

by the revolutionary potential of digital technologies,” Ambani said.

<< Back to news headlines >>

World shares go weak as dollar extends power surge Thursday 7th February, 2019 – Reuters

World shares ground to a halt on Thursday as the dollar scored its longest

winning streak since a hot run in early October that helped set off a wave

of global ‘bear’ markets.

Some poor earnings and weak data out of Germany ensured Europe’s

main bourses started lower and kept MSCI’s main index of world stocks

heading for only its second two-day run of falls of the year so far.

The extent of the current slowdown in the global economy was

highlighted as India unexpectedly cut its interest rates and the euro got hit

to $1.1346 by Germany’s fourth consecutive drop industrial output.

That only compounded the 1.3 percent the euro has lost over the last

week and the tailwind behind the dollar, which has risen every day since

Friday’s strong U.S. jobs data. It has also recovered almost all the losses

suffered after the Federal Reserve all but abandoned plans for more rate

hikes last month.

“Another day, another piece of terrible German data. EUR/USD risks a

move to $1.1300,” said ING’s chief EMEA FX and interest rate strategist,

Petr Krpata.

Elsewhere the pound was struggling near $1.29 again ahead of a Bank of

England meeting, while gloomy jobs data saw New Zealand’s dollar suffer

a similar flop as its Australian counterpart had seen the previous day.

The kiwi slid to $0.6744, losing nearly 2 percent in the past 24 hours, as

investors wagered on the risk of a cut in interest rates there. The country’s

central bank holds its first meeting of the year next week.

Asian trading was still light overall though with China on holiday and no

major economic data on the diary.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.1

percent as it rose to its highest since early October.

The index has risen steadily since early January as the U.S. Federal Reserve

changed its tune and emerging markets have surged more broadly after

a torrid 2018.

Australia’s benchmark stock index jumped 1.2 percent amid expectations

of easy monetary policy after the country’s central bank chief shifted

away from his previous tightening bias.

Japan’s Nikkei slipped 0.6 percent though and the caution quickly spread

to Europe.

London’s FTSE was the only major bourse clinging to positive territory

whereas the rest were down at least 0.2 percent as were E-Mini futures for

the S&P 500 and Dow.

WE’RE ALL DOVES NOW

One of the day’s big surprises came from India where its central bank

unexpectedly lowered interest rates to 6.25 percent to boost a slowing

economy after a sharp slide in the inflation rate.

Italy’s bonds were back under pressure with the European Commission

slashing its 2019 growth forecast.

Italy agreed a deficit target of 2.04 percent in December, averting a

major fall-out with the EU, though this was based on a growth assumption

of 1.0 percent. Slowing growth in Italy could make it harder for the country

to remain within EU rules.

However, Benjamin Schroeder, rates strategist at ING, said he did not

expect the EU to demand more fiscal tightening from Italy, should its

forecasts be reduced.

“The EU has another thing to deal with — Brexit — and the other thing is do

you want to infuse the campaign ahead of the parliamentary elections

with this topic.”

The next major trigger for markets will more likely be any breakthrough in

the U.S.-Sino tariff talks when the two sides meet in Beijing next week.

U.S. President Donald Trump offered little new to chew on in his State of

the Union speech but Treasury Secretary Steven Mnuchin said on

Wednesday he and other U.S. officials will aim to clinch a deal next week

to avert a March 2 increase in U.S. tariffs on Chinese goods.

Probably more pressing though for the U.S. markets is the threat of another

government shutdown, Nick Twidale, an analyst at Rakuten Securities

Australia said.

“With both sides of the house standing firm on the contentious border wall

issue at present and the deadline approaching swiftly on Feb 15 we could

be back where we were just a few weeks ago.”

The broad dollar gains put pressure on gold, which eased to $1,303.96 per

ounce, slipping further from last week’s top of $1,326.30.

Oil prices eased too after U.S. crude inventories rose and as production

levels in the country held at record levels.

Brent crude futures slipped 23 cents to $62.46. U.S. crude eased 19 cents

to $53.82 a barrel.

<< Back to news headlines >>

Saudi Arabia pumps 10.24 million bpd in Jan, below its OPEC's target Thursday 7th February, 2019 – Reuters

Saudi Arabia, the world’s top oil exporter, told OPEC it pumped 10.24

million barrels per day (bpd) in January, two OPEC sources said, as the

kingdom follows through on its pledge to reduce output to help balance

the oil market and support prices.

The Organisation of the Petroleum Exporting Countries, Russia and other

non-OPEC producers - an alliance known as OPEC+ - agreed in

December to reduce supply by 1.2 million bpd from Jan. 1.

Under the agreement, Saudi Arabia should cut its production to 10.311

million bpd, but its energy minister Khalid al-Falih has said the country will

over-comply with the supply-cutting pact to show its full commitment.

The kingdom pumped 10.643 million bpd in December.

<< Back to news headlines >>

Dominican agricultural sector wants to declare emergency, due to the

drought Thursday 7th February, 2019 – Dominican Today

The agricultural producers of the Dominican Republic will formally request

the Government to declare the emergency in the areas most affected by

the drought, where the crops are drying up, and the livestock has begun

to die, after months without rain to alleviate the agostamiento of the field.

This was confirmed on Tuesday by Efe, the president of the National

Confederation of Agricultural Producers (Confenagro), Eric Rivero, who

pointed out that tomorrow this formal request will be made to the

authorities, given the situation suffered by the northern and southern

regions but, on all, the northwest line.

Rivero described the situation as “terrible” for a region where most

municipalities are agricultural producers, “everything is drying up,” crops

are being lost, among them, those of organic bananas, one of the main

items exported, although at the moment it does not count on figures of

economic losses.

Also, between 150 and 200 head of cattle have already died, and milk

production in populations such as Santiago Rodríguez, which represented

120 million pesos per month (about 2.4 million dollars), has been reduced

to 35% of what It is usual, explained the president of Confenagro.

Seeing the conditions in which the field is “heartbreaking,” they are

experiencing “very difficult” moments, he said. Hence they will request an

emergency declaration in the most affected areas, as the measures that

have been put in place Government are not enough to alleviate the

situation.

The authorities launched an emergency plan on the northwest line last

Sunday that includes measures such as the delivery of food rations in the

communities most in need, the distribution of molasses to feed livestock,

and the shipment of tankers to supply water to the population and

agricultural producers.

However, Rivero considers these and other actions insufficient and draws

attention to the fact that, although it is the most affected, not only does

the Northwest line need help, also in the south and in the north, they are

suffering the consequences of lack of rainfall.

For starters, it would take more trucks carrying water, more sugar cane for

livestock, and more facilities for small producers, for whom “it is difficult to

transport what is necessary to save the cows,” he said.

He also noted that the state’s investment in the construction of dams and

aqueducts “has been paralyzed” in recent years, and is considered

necessary to create more infrastructure for the collection of water,

something that would not only help to alleviate the drought but would

improve the problem of lack of electrical power, he said.

The National Office of Meteorology (Onamet) last week declared a state

of drought in the south, southwest and northwest regions of the country

due to the continuous deficit of rains in these areas.

From January to November 2018 there was a drought classified as weak

to severe; and in December the country had a general balance of

rainfall, 58.2% lower than average values.

The situation continued in January, a month in which 84% of the

measurement stations analyzed showed some degree of drought, with

the most alarming negative balances being those of the southwest (-

98.3%), Northwest (-85.8%) and south of the country (79.4%).

An additional problem, and derived from the lack of water, is the

presence of a plague of the pine beetle (Ips calligraphus) in the Sierra de

la Cuenca del Rio Yaque del Norte, an area that is suffering the most

intense drought it has sustained on record.

This insect lodges under the bark of the tree and dries it quickly, especially

during periods of prolonged droughts, when the trees are weak and can

not produce resin to defend themselves, so that, although it is also acting

to end the plague, the lack of water also endangers one of the most

important natural areas of the country.

<< Back to news headlines >>

Russia approves 38 million euro loan to Cuba's military Thursday 7th February, 2019 – Reuters

Russia has approved a 38 million euro ($43.27 million) loan for Cuba’s

defense sector, a senior Russian defense official was quoted as saying on

Wednesday.

The deal was first announced in November after Russian President Vladimir

Putin met Cuban President Miguel Diaz-Canel in Moscow.

It has now been finalised by Russia, Dmitry Shugayev, head of the Russian

Federal Service for Military-Technical Cooperation, said in an interview

published in Russia’s Kommersant newspaper.

Kommersant had previously reported Moscow planned to grant Cuba a

loan to buy Russian hardware such as tanks, armored vehicles and

possibly helicopters.

Communist-ruled Cuba is a close ally of Venezuela, where Moscow-

backed President Nicolas Maduro is facing pressure from the opposition

and Western governments to step down.

Private Russian military contractors who carry out secret missions for the

state flew into Venezuela last month, Reuters reported, citing two people

close to the contractors.

One of the sources said they flew there via Cuba.

In the newspaper interview, Shugayev said Russia has concerns about the

Venezuelan crisis and was not considering scaling back defense

cooperation with Caracas.

According to Shugayev, cooperation with Venezuela is limited to

maintaining previously supplied arms and helping build military facilities.

<< Back to news headlines >>

Venezuela opposition plans to get oil money from U.S. fund Wednesday 6th February, 2019 – Reuters

Venezuela’s opposition on Wednesday said it would use a U.S.-based

fund to receive some of the country’s oil income in a key step to bankroll

its efforts to dislodge President Nicolas Maduro.

The fund would receive income accrued by state-run oil firm PDVSA’s U.S.

unit Citgo Petroleum Corp since last month, when U.S. President Donald

Trump recognized Juan Guaido as Venezuela’s legitimate head of state,

opposition legislator Carlos Paparoni told Reuters.

Guadio, head of Venezuela’s National Assembly, last month declared

himself to be the South American country’s interim ruler.

White House national security adviser John Bolton said on Wednesday the

United States would consider lifting sanctions on senior Venezuelan military

officers if they recognize Guaido as interim leader. “If not, the

international financial circle will be closed off completely,” Bolton wrote

on Twitter.

Aside from one senior general, who recognized Guaido in a video and

urged others in the military to do the same, most of Venezuela’s top

military officers have not defected from Maduro.

Citgo, the eighth-largest U.S. refiner and Venezuela’s top foreign asset, is

in the middle of a tug of war as the United States has made aggressive

moves to remove it from Maduro’s control and imposed sanctions on

OPEC-member Venezuela’s oil industry.

“This is already quite advanced, I hope that next week it can be

announced by our representative in the United States,” Paparoni said,

though he did not give details about the nature of the U.S.-based fund or

the financial institution involved.

Pressure is building on Maduro, a socialist, to resign amid an economic

crisis marked by widespread shortages and hyperinflation. Maduro was re-

elected last year in a vote critics have called a sham.

Yon Goicoechea, a member of Guaido’s policy team, told Reuters that

Guaido was in contact with PDVSA’s international partners and they were

willing to keep operating in Venezuela. He did not identify the partners.

Guaido’s team is planning for a post-Maduro government with an

emergency arrangement to supply fuel domestically, given widespread

shortages across Venezuela, Goicoechea said.

Most Latin American and European countries also recognize Guaido,

although Italy so far has not. Guaido has reached out to Italy’s ruling

coalition seeking its support.

Maduro, who retains control over the state, denounces Guaido as a U.S.

puppet who is seeking to foment a coup against him. He is supported by

China and Russia, while Slovakia on Wednesday joined Italy in defying the

coordinated action of European Union nations and the United States.

GOLD SALES

The opposition has also sought to prevent the government from selling

gold, believing that it is using the proceeds to try to stay solvent as the

sanctions cut off other revenue streams.

But Maduro’s government last year sold 73 tonnes of gold to Turkey and

the United Arab Emirates without the required approval of the opposition-

led National Assembly, Paparoni told a news conference. Abu Dhabi

investment firm Noor Capital bought the largest amount, 27.3 tonnes of

gold, and a Turkish firm bought 23.9 tonnes, Paparoni said.

“We will keep working so that not one more gram of gold can be sold,”

Paparoni said.

Venezuela had gold reserves of 132 tonnes between the central bank’s

vaults and the Bank of England at the end of November, according to

central bank data.

Venezuela’s Information Ministry did not immediately respond to requests

for comment. Noor Capital said it “does not engage in any illegal or

prohibited transactions.”

In recent days, at least five tankers carrying gasoline, gasoil for power

generation and naphtha have been ordered to unload at Venezuela’s

ports as fuel inventories dwindle. PDVSA issued court orders for most of the

tankers to discharge, according to shipping and PDVSA sources.

Guaido asked Italy’s ruling coalition leaders in a letter to meet with his

representatives as he seeks their explicit backing. Italy’s hard-right League

has expressed strong support for Guaido, but coalition partner the 5-Star

Movement has not, making Italy the only major European Union nation

not to recognize him as Venezuela’s interim head of state.

League leader and Deputy Prime Minister Matteo Salvini’s office on

Wednesday said he would meet Guaido’s envoys on Feb. 11.

As the world’s countries line up to support either Maduro or Guaido, the

United Nations warned against using aid as a pawn. The United States has

sent food and medicine to Venezuela’s border, even though it is unclear

how it will get past the objections of Maduro.

“Humanitarian action needs to be independent of political, military or

other objectives,” U.N. spokesman Stephane Dujarric told reporters in New

York.

The International Committee of the Red Cross has doubled its budget in

Venezuela in recent weeks and is also helping Venezuelan migrants in

neighboring Colombia and Brazil, ICRC President Peter Maurer said in

Geneva.

<< Back to news headlines >>

Still no pay Wednesday 6th February, 2019 – Barbados Today

Former employees of telecommunications company, Ozone Wireless who

were laid off last year feel betrayed by their former employer and left in

the dark about thousands of dollars owed them and which have been

outstanding since last May when they were dismissed.

Irate employees are also up in arms about what they believe is a lack of

care and professionalism on the part of the labor department in response

to their plight.

Two employees told Barbados TODAY they were at their wits end following

failed attempts to recover the outstanding money from directors and

former directors of the company- mostly non-nationals, who, since the

company came to the brink of collapse last year, had resigned and

virtually vanished.

Although the company was still clinging to life months after its near

collapse, Barbados TODAY understands that sacked employees at all

levels were still seeking outstanding vacation money and payment in lieu

of notice from their former employers, leaving some in severe financial

difficulties.

“This is the first time in my life that I have had to face a bailiff,” said one of

them.

Others said when they were sent packing last May, they had not been

given any formal correspondence from the company informing them of

retrenchment. Instead, they were given National Insurance (NIS)

unemployment forms and told to report to government’s labor office.

“On the day in question there was just a whole set of green papers being

handed out and persons who knew better were saying ‘they can’t do

this’ and some of us had to send an email to the principal investor to say

we need letters indicating what has happened,” said one former

employee who said she was informed that no such correspondence

would be forthcoming.

In response to their claims, disgruntled workers described the labor

department as being “virtually useless”.

“You go to the labor office, you get assigned to a labor officer and there

is no logic to how you are assigned to a labor officer. So for instance, of

the over 50 persons opening a case on the Ozone matter, there seemed

to have been no communication between the labor officers,” he said.

Meanwhile his colleague charged there had been a blatant lack of

responsiveness by labor department officials.

“I remember the very first day I was given my green paper, I came home

and called the labor department to verify what I was entitled to. They said

no officers were available at the time… the receptionist took my

information and promised she would have somebody call me back. I

didn’t hear her and nobody called me back, so I had to contact a

lawyer.”

Efforts to reach Chief Labor Officer, Victor Felix and Ozone’s CEO Dr.

Nicholas Kelly were unsuccessful. However, the company’s St. Lucia

based telecommunications consultant, Lester Edwards acknowledged

that the company still had outstanding debts to its employees.

“There is no objection to the responsibilities that have been committed

to… there is no resistance. There is new management and new

management has no resistance in compensating them,” he said without

giving a timeline for when monies would be paid.

While struggling to make ends meet over the last seven months, ex

workers say the terms of their dismissal were making it very difficult for

them to find employment elsewhere.

“We can’t even say to prospective employers that we have been

retrenched. There’s no correspondence stating why I am no longer with

this company. You have not acknowledged that you owe payment in lieu

of notice, vacation pay, and the value of it or anything like that. Verbally,

I was told by the interim General Manager that the Principal Investor is not

writing any letter for me and that I should take the green paper and go,”

said the woman.

Ex employees also shed light on the atmosphere at Ozone Wireless in the

months leading up to the company’s tough decisions. One employee

revealed that some members of middle management knew as early as

October 2017 that the company was not meeting its targets and

experiencing some financial challenges.

The company is said to have paid employees late in January and

February of 2018. However, the first true indication that the company had

found itself in serious difficulty came in March when workers were given an

ultimatum. They would either have to accept a pay cut or be laid off.

“It was not said officially, but it was indicated that we were at a critical

juncture, so if you are not willing to take a salary cut, then you could go

through the door… it wasn’t optional and that was understood.

“Some of us would have taken a pay cut from as low as ten per cent to as

much as over 50 per cent,” said the worker.

Former employees were reportedly told that the cuts were intended to

give the company a lifeline as directors sought to raise investment and

capital.

“Some of us would have been working on some of those investment

pitches, trying to get additional funding, but even then it was not shared

with us that there was a cash flow problem as severe as we later

discovered.

“We know for sure, every single person took some sort of cut,” she said,

adding that the lack of opportunities on the local job market also

deterred former employees from resigning.

The sources told Barbados TODAY that some staff members had resigned

from other local telecommunications companies in a bid to help

revolutionize the local industry by increasing competition in the industry

dominated, by two companies, Flow Barbados and Digicel.

“We were determined to make a difference and we did, because we

caused the other companies to seriously revise their product offerings. It

actually caused Flow for example, to pay greater attention to its customer

service. They started to look at the level of service because of what was

unfolding at Ozone,” said the employee.

“Ozone brought a lot of value to Barbados, so I am not being vindictive. I

am one of the persons that badly wanted it to work. But when we realized

perhaps it was not going to work we simply advised them to wrap things

up properly, but unfortunately they have not done that,” said the

discouraged ex worker.

<< Back to news headlines >>

FTC, CAC To Merge Wednesday 6th February, 2019 – Jamaica Gleaner

A new agency is to be created to undertake the functions of the Fair

Trading Commission, FTC, and the Consumer Affairs Commission, CAC, a

process that is expected to get under way this year.

Although the November 2018 International Monetary Fund (IMF) country

report identified other public bodies which would be combined as part of

the public sector transformation programme, the FTC and the CAC were

not among them.

The tie-up of the two watchdog agencies was disclosed in the January

2019 edition of FTCNewsonline.

Cabinet Decision

The competition agency said the combination with the CAC was a

Cabinet decision and is part of the public sector transformation

programme where emphasis is placed on merging entities with similar

functions to achieve more effective service delivery.

It said the new entity will carry out the functions of both the FTC,

Jamaica’s competition agency which includes both competition policy

and consumer protection issues, and the CAC which has oversight of

consumer protection matters.

The Financial Gleaner sought to determine whether the operations of

both agencies will be housed under the same roof, and how it would

impact the existing workforce at the two entities, but Executive Director of

the FTC, David Miller, declined to comment at this time on anything

beyond what was reported in the newsletter.

The CAC was established to inform, educate and empower consumers to

protect themselves in the marketplace and was formerly known as the

Prices Commission, which was established based on amendments to the

Trade Act passed in July 1970.

The FTC said that for the calendar year to December 2018, it investigated

149 complaints for breaches of the Fair Competition Act, FCA. That

comprised 109 cases that were unresolved at the end of 2017 and 40

cases which were received during 2018.

It said the automobile and telecommunications sectors triggered the

largest number of complaints with informants alleging misleading

advertising as it relates to price or features of products or services.

For instance, it said, a complaint in the automobile sector concerned the

failure of a dealer to honour the terms of a cash back promotion with the

purchase of a particular model vehicle.

The FTC staff intervened and the informant received the full benefit of the

promotion.

Between January 1, 2018 and December 31, 2018, 47 cases were

resolved. Of the 149 cases investigated 113 were classified as matters

concerning misleading advertising, 27 as offences against competition, six

as request for opinion, and one as tied-selling.

Two complaints were considered as being outside the purview of the FCA

and, where appropriate, were forwarded to other agencies.

The IMF report listed the operational merger of the HEART Trust/NTA,

Jamaica Foundation for Lifelong Learning and the National Youth Service

as part of the public sector transformation programme. The finalisation of

that merger resulted in the displacement of some workers recently.

Under the standby agreement with the IMF, the Jamaican authorities also

committed to prioritize essential government functions and services to

free-up resources for urgently-needed social and capital spending.

As a step in that direction, the government said it would be accelerating

the merger, closure or reintegration of 18 public bodies by September

2019.

Out of 190 public bodies, action was reportedly taken on only 14 so far,

with little fiscal savings.

Going forward, the IMF staff suggested that in addition to streamlining the

number of public bodies, the reform should strike a balance between the

government’s public service priorities and maximizing fiscal savings.

<< Back to news headlines >>

JPS Full Switchover From HFO To LNG To Go Beyond 2020 Wednesday 7th February, 2019 – Jamaica Gleaner

Power utility Jamaica Public Service Company Limited, JPS, will

decommission all its plants that run on heavy fuel oil, HFO, a programme

that will extend beyond 2020 amid the continued switchover to liquefied

natural gas, LNG, as its main fuel source.

That policy and operational shift means that the utility’s main source of

fuel will no longer be Jamaica-controlled Petrojam, but that company will

remain its source of alternative fuel – automotive diesel oil or ADO.

JPS power stations are being upgraded to combined cycle plants fired by

LNG or, alternatively, ADO. The switchover affects four power plants: the

first conversion was the 120MW Bogue plant in Montego Bay, which was

completed and commissioned in 2016; the 190MW Old Harbour station in

St Catherine is already under redevelopment; and the conversion of the

Hunts Bay and Rockfort power stations in Kingston is pending.

JPS director of communications Winsome Callum says the commissioning

of replacement capacity for the plants to be retired will begin in the latter

part of 2019.

“Hunts Bay B6 and all the Old Harbour Bay units are scheduled to be

retired by the end of 2020,” said Calllum. “However, the Rockfort units are

to be retired at a later date, subject to the finalised Integrated Resource

Plan, which is being developed by the Ministry of Energy,” she added in

an updated email on Tuesday.

To date, JPS has invested US$330 million in the reconstruction of the Old

Harbour plant and US$15 million to upgrade the Bogue station – both of

which are supplied with LNG by New Fortress Energy. The cost of the

remaining two plant-conversion projects was not disclosed.

Callum said that currently, 22 per cent of the electricity supplied by JPS is

produced with natural gas. This is expected to increase to over 50 per

cent by the time HFO is taken offline at the end of 2020. The Jamalco

94MW LNG plant – a project of gas supplier New Fortress and the alumina

refinery – is also due to come online that year. That plant will supply

electricity to the JPS-operated national grid under contract as an

independent power provider.

In the interim, JPS’s Old Harbour plant, which is scheduled to come online

in June, is expected to push LNG-fired power to 45 per cent this year,

while JPS’s projection for renewables – wind, solar and hydropower – in

that same time frame is 15 per cent of the energy mix.

JPS reported last week that it spent US$191 million on heavy fuel oil in 2018

but expected to carve 25 per cent off those costs this year to US$155

million with the commissioning of the Old Harbour plant at mid-year.

“The price of LNG, along with a diversified fuel mix, competitively priced

alternatives such as renewable technology and government regulations

will determine accelerated LNG usage,” Callum said.

<< Back to news headlines >>

Torpedo Microlender Acquired By Foreign Firm Wednesday 6th February, 2019 – Jamaica Gleaner

Silva Investment Limited, a foreign firm engaged in multiple businesses, has

acquired Torpedo Micro Loan Financing in what it said is a strategic move

to get a foothold in Jamaica’s growing financial market.

In addition to the fixed assets, Silva has bought Torpedo’s loan portfolio,

trade name, and, most important, according to the company,

maintenance of the business model for which it is famously known, ‘no

guarantee, no collateral’ – a model it said many microfinancing

companies have attempted and failed.

Torpedo was the pioneering microfinancing company to remove the

requirements for collateral and guarantors to offer easily accessible

personal and small-business loans to Jamaicans, Silva said in a statement.

Silva declined to comment on the sum paid for the acquisition, which

concluded on January 15, as well as details about two Jamaican entities

with which it said it is currently in negotiation to complement the

operation of Torpedo.

Torpedo Loan Micro Financing was founded by its executive director,

Rohan Silvera, 12 years ago after finding himself repeatedly lending and

giving advances to truck drivers.

His military background gave rise to the name of the firm. The torpedo is a

cigar-shaped self-propelled underwater missile designed to be fired from

a ship or submarine or dropped into the water from an aircraft and to

explode on reaching a target. Silvera reportedly admired it for its speed

and efficiency – characteristics he is said to have adopted into the

operations of his microfinance company.

The loan agency opened its first branch in Spanish Town in 2008 and has

since developed into a 32-branch network with 200 employees.

“The business model, backed by the experienced and knowledgeable

middle management and an efficient collections department, has

helped to mitigate risks associated with such a business,” the company

said in a statement.

Silva said the company’s profitability, low delinquencies and 30,000

customer base were what “made this acquisition attractive”.

Silva Investment has a presence in the English-speaking Caribbean, West

Africa, and North America and is looking to establish itself as an industry

leader in the Americas.

The company, which is registered in St Lucia, has a diversified portfolio

made up of assets across multiple sectors, including a real estate

investment trust or with properties locally and internationally; a real estate

development company; a debt collection agent already managing debt

collection for some companies within Jamaica; a debt consolidation

company operating in Jamaica, and a business development company

operating in Jamaica, St Kitts-Nevis, Gambia and Antigua and Barbuda.

“The acquisition of Torpedo Micro Loan Financing is a strategic move to

get a foothold into Jamaica’s growing financial market,” said regional

lead of Silva Investment, Courson Robinson.

<< Back to news headlines >>

Scotiabank’s decision to sell Caribbean banking assets precipitous,

presumptuous and reckless, says Antigua-Barbuda PM Wednesday 6th February, 2019 – Caribbean News Now

In a letter on Tuesday to David Parks, managing director, Caribbean East,

of the Bank of Nova Scotia in Barbados, Antigua and Barbuda Prime

Minister Gaston Browne described Scotiabank’s agreement to sell its local

banking operations to Trinidad-based Republic Financial Holdings Limited

(RFHL) without consultation with his government as “precipitous,

presumptuous and reckless of the interests of BNS’s shareholders to whom

you owe a fiduciary responsibility.”

Browne also asserted that an earlier letter from Parks contained

“inaccuracies of fact”.

RFHL announced in November that it has agreed to acquire Scotiabank’s

operations in the Eastern Caribbean, including Anguilla, Antigua and

Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent

and the Grenadines, as well as operations in Guyana and St Maarten.

However, Browne stopped Scotiabank from proceeding with any sale of

its operations in Antigua and Barbuda until application is made to the

government and approval given.

Browne also wanted assurances that local banks will be given priority to

purchase Scotiabank’s operations in Antigua, and that local customers’

investments and saving will be protected.

In response to Parks pointing out that Scotiabank had agreed to sell not

only its operations in Antigua, but eight other countries in the Caribbean

as well, Browne said, “You will appreciate that what BNS does in other

jurisdictions is not the business of the government of Antigua and

Barbuda; we are concerned with our own jurisdiction. In this regard, it was

presumptuous of BNS, if not contemptuous, to enter into arrangements

with anyone to ‘sell’ its operations in Antigua and Barbuda without, at the

very least, consulting with the government.”

Browne also took Parks to task over his statement that “…this agreement

(and those in the other Eastern Caribbean countries) is subject to

regulatory approval and customary closing conditions” and that “We and

Republic are working through the ECCB to obtain these approvals”.

“In repeating this statement, BNS continues to ignore the reality that a

vesting order by my government is integral and essential to any sale, and,

as I have stated, unequivocally, my government, as the warden of the

national interest of Antigua and Barbuda, and after consultations with

local banks, does not consider a sale to (Republic) to be in the best

interest of our jurisdiction. This remains our firm position,” Browne said.

“In any event, integral to the laws of Antigua and Barbuda is that any sale

is subject to a vesting order being issued by the government. This is a

requirement of which BNS has full knowledge but appears to wish to

disregard,” he added.

While welcoming a further meeting with Scotiabank representatives,

Browne said he does not now see any merit in a meeting that includes

representatives of RFHL, unless its principals are willing to consider a joint

venture operation with Antigua and Barbuda entities to purchase the

Scotiabank holdings in Antigua.

“You will recall that when, in a spirit of compromise and to be helpful to

you, my government suggested a purchase of BNS holdings in Antigua by

a joint venture between Republic and a consortium of local stakeholders,

Republic spurned that offer in scornful language,” Browne noted.

Scotiabank’s domestic and international press offices did not respond to

requests for comment.

<< Back to news headlines >>

It Was An Audit—Premier Insists Wednesday 6th February, 2019 – BVI Platinum News

Outgoing Premier and Finance Minister, Hon. Dr. D. Orlando Smith has

denounced that the review conducted into the $85M cruise pier and land

side development was not an audit.

After being marred by several delays, on January 15, the findings of the

review done by KPMG was laid on the table of the House of Assembly,

making it public.

“That was an audit…review of the procedures, that is an audit. It was that.

It was to search all the figures that were available and [make the]

comparison [to the first projected cost]…which essentially says , the

government received value for money,” Premier Smith said to BVI

Platinum News.

Due to comments on the cover letter of the document, many persons,

including Opposition Member, Hon. Andrew Fahie, called out

government, stating that it was clearly not an audit.

The cover letter of the report states that the procedures were performed

solely to assist in the performance of your review of the cruise ship pier

and landside development in Tortola.

It went on to stated that because the agreed-upon procedures do not

constitute either an audit or a review made in accordance with

International Standards on Auditing or International Standards on Review

Engagements, they do not express any assurance on the financial

information provided.

“Had we performed additional procedures, or had we performed an

audit or review of the financial statements in accordance with

International Standards on Auditing or International Standards on Review

Engagements, other matters might have come to our attention that

would have been reported to you,” the report outlined.

Hon. Fahie said that monies were wasted to pay for an audit. Government

paid KPMG some $194,000 to carry out the work.

“They misled the House and that has been the order of the day for the last

eight years. Now that the report is out, everyone is realizing it’s not an

audit. We spent a lot of money with a company to get nothing,” Hon.

Fahie said.

The project, which was executed under the BVI Ports Authority (BVIPA),

has been at the centre of corruption allegations from the onset, with an

initial budget was $50M which ballooned to $85 million.

<< Back to news headlines >>

ExxonMobil strikes again in 11th and 12th well – Stabroek Block has

potential for five platforms – Energy Director Thursday 7th February 2019 – Kaieteur News

There is continued success in the wells that ExxonMobil has been drilling in

its offshore concessions in the Stabroek Block. Two more wells have struck

oil.

Director of Energy, Dr. Mark Bynoe, yesterday morning, announced that

the Stabroek Block operator, ExxonMobil, has made its 11th and 12th

discoveries offshore Guyana at the Tilapia-1 and Haimara-1 wells in the

southwest section of the Stabroek Block.

“This continues to be positive news for the people of the Co-operative

Republic of Guyana, but the real substance of these finds will come when

all Guyanese are able to benefit from these discoveries, whether directly

and/or indirectly,” he said.

In December, Dr. Bynoe announced that ExxonMobil made its 10th

discovery offshore Guyana at the Pluma-1 well. That discovery had

increased the estimated recoverable resource for the Stabroek Block to

more than five billion oil-equivalent barrels.

The Tilapia-1 is the fourth discovery in the Turbot area that includes Turbot,

Longtail and Pluma discoveries.

“Tilapia-1 encountered approximately 305 feet (93 metres) of high-quality

oil-bearing sandstone reservoir and was drilled to a depth of 18,786 feet

(5,726 metres) in 5,850 feet (1,783 metres) of water. The well is located

approximately 3.4 miles (5.5 kilometres) west of the Longtail-1 well,” Dr.

Bynoe disclosed.

“The rate of these finds remains well above industry standards and

continues to allow for further de-risking of the deep and ultra-deep one,

but we still have a substantial way to go before we can confidently say

the one has been de-risked,” Dr. Bynoe said.

He noted that the Noble Tom Madden drillship started drilling the well on

January 7, 2019 and will next drill the Yellowtail-1 well, approximately six

miles (10 kilometres) west of Tilapia-1 in the Turbot area. The Baseline 4-D

seismic data acquisition is underway.

The 12th discovery at the Haimara-1 well, encountered approximately 207

feet (63 metres) of high-quality gas condensate-bearing sandstone

reservoir. The well was drilled to a depth of 18,289 feet (5,575 metres) in

4,590 feet (1,399 metres) of water.

“The Department continues to work assiduously with its partner institutions

towards setting the requisite framework in place to ensure the benefits

from these discoveries redound to the benefit of all Guyanese,” the

Director added.

Located approximately 19 miles (31 kilometres) east of the Pluma-1

discovery, the Haimara -1 had been deemed a potential new area for

development. The Stena Carron drillship began drilling that well on

January 3, 2019.

Dr. Bynoe noted too that there is potential for at least five floating,

production storage and offloading vessels (FPSO) on the Stabroek Block

producing more than 750,000 barrels of oil daily by 2025.

ExxonMobil is preparing to start Guyana’s first oil production as early this

year-end with the Liza Destiny floating vessel to arrive after the first half of

the year.

The offshore discovery is said to be one of the biggest in the world.

<< Back to news headlines >>

Govt. raises tender threshold for ministries, state agencies Thursday 7th February 2019 – Kaieteur News

The National Procurement and Tender Administration Board (NPTAB) has

announced adjustments to thresholds that will allow ministries and state

agencies to spend more without going to that body.

According to a circular issued Monday, February 4, Deputy Chairman of

NPTAB, Mark Bender disclosed that there are “New thresholds for

Restrictive Tendering and Request for Quotations Methods of

Procurement”.

The new changes will see the thresholds for goods and services at $10M,

while the limits for contracts for construction will be $20M.

The threshold for Request for Quotations method of procurement is now

$3M.

Previously, in contracts for goods and services, ministries and state

agencies could have only internally approved up to $3M while the limit for

construction contracts was $10M.

The limit for Requests for Quotations was $1.5M.

According to Bender, in the circular to Permanent Secretaries, Agencies,

Corporation Heads and Regional Administrations, the new thresholds take

immediate effect.

The idea is to reduce the bottlenecks that come with contracts that

sometimes have to wait months to be awarded because the ministries

and agencies don’t have authorization.

However, the Opposition is wary of the decision to raise the threshold.

According to Juan Edghill, a former Junior Finance Minister under the

People’s Progressive Party (PPP), he has information that the Government

has “illegally facilitated and created the architecture to corruptly award

contracts to friends and family by way of arbitrarily amending the Public

Procurement Act subsidiary legislation Chapter 73:05 (Regulations 9 of

2004).

“This action enables award of contract without public advertisement, by

way of restricted tendering and subverts the use of qualifications for this

procurement process to be confined to specialized services or

procurement of highly-complex items as stated in 26 (1) (a) of the

Procurement Act of 2003.

The threshold catered for in 26(1) (b) of the Procurement Act has been

increased, Edghill said in a statement.

“In layman’s terms, the action has made it possible to give contracts to

unqualified persons and companies for the procurement of Goods and

Services from $3M to $10M (233%), which was already increased when this

APNU/AFC came into office and for construction from $10M to $20M

(100%) and the three quotation system from $1.5M to $3M (100%).”

According to Edghill, this development would have come one month

after the Coalition Government was “defeated” by way of the successful

no confidence vote on December 21, 2018. “Article 106 (6) of our

Constitution states that on passage of a no confidence motion by the

majority of all elected members of the National Assembly, the President

and his Cabinet shall resign, coupled with the CJ’s ruling of January 31,

2019 that following the passage of the motion, the President and Cabinet

stands resigned. Therefore, they are merely in office in a caretaker

capacity and as such, these actions are unconstitutional.”

He said that the letter by Bender is illegal and will lead to criminal

proceedings being instituted against public officials who may be tempted

to act on such a directive, which is illegal.

“It can only be concluded that this decision is to facilitate corruption,

cronyism and nepotism, by way of handpicking friends and cronies and

awarding them contracts. This is a blatant political scheme to buy votes

and especially pilfer the public purse and to enrich officials of the

APNU/AFC over the few remaining days in office ahead of the March 19,

2019 General elections, which will see a change in government.”

Edghill said that public officers and heads of budget agencies are

forewarned, “to keep notes, log all correspondences given and be

reminded that as accounting officers, they will be held responsible for any

unapproved spending of the public’s money. Beware for whom the bell

tolls, for it tolls for thee.”

<< Back to news headlines >>

Fidelity Eyes ‘$7.5m-Plus’ Profit Boost in Affiliate Exit Wednesday 6th February 2019 – Tribune 242

Fidelity Bank (Bahamas) will enjoy a $7.5m-plus profit “boost” for 2019 as a

result of selling a 50 percent equity stake in its investment banking affiliate,

it was revealed yesterday.

Gowon Bowe, pictured, the BISX-listed bank’s chief financial officer, told

Tribune Business that its independent directors and advisers had

determined that disposing of its ownership interest in RoyalFidelity

Merchant Bank & Trust was the best way to “maximise shareholder value”.

Fidelity Bank (Bahamas) will receive $16.449m, plus half the investment

bank’s undistributed earnings and retained earnings when the deal

closes, in return for selling its stake as part of a management-led buyout

that was approved on Monday.

Describing RoyalFidelity’s acquisition as akin to “a child leaving the nest

but having to pay the parent” to do so, Mr Bowe said its BISX-listed affiliate

had decided the deal was in its best interests as it allowed for the instant

creation of shareholder value.

The deal, which will result in RoyalFidelity leaving its parent once it closes

and receives the necessary regulatory approval, effectively represents the

break-up of the Fidelity Group of Companies, one of the largest and best-

known financial services providers in the local market.

The group was itself created by a management buyout of British

American’s Bahamas-based banking interests in the mid-1990s, and

RoyalFidelity’s departure means the parent, Fidelity Bank & Trust

International, now retains as its main local interest its 75 percent majority

stake in Fidelity Bank (Bahamas).

While no longer members of the same financial services group, Mr Bowe

said Fidelity Bank (Bahamas) would still look to its former affiliate as “the

first choice” when directing clients to providers of capital markets

products and wealth management services.

He added that RoyalFidelity had matured to the point where it could “fly

on its own”, with independence allowing its management and new board

to seize new growth opportunities and take the investment bank in their

preferred direction.

“Fidelity Bank (Bahamas) 2019 results will be boosted by the sale of

RoyalFidelity,” Mr Bowe confirmed to Tribune Business. “It’s difficult to say

exactly until the unwinding of the undistributed profits, but effectively

you’re looking at a $7.5m gain to the bottom line plus any profits earned

from operations up to the date of closing.”

That date is currently projected to be early March 2019 (see other article

HERE), meaning that Fidelity Bank (Bahamas) will be able to book its share

of the merchant bank’s profits for the 2018 full year and first months of

2019.

Describing this as an “extraordinary profit” for Fidelity Bank (Bahamas)

parent and the 25 percent minority shareholders, Mr Bowe said the BISX-

listed institution had elected to reap the benefits of its 50 percent

RoyalFidelity interest now rather than over time.

Explaining that the Board’s independent directors and advisers had

determined it was better to realise “the present value of future cash flows

today”, he added that this was “the best opportunity to maximise

shareholder value, and we believe this achieves that”.

The RoyalFidelity stake has provided a significant boost to Fidelity Bank

(Bahamas) own profitability, boosting this by $2.348m and $2.105m in 2017

and 2016, respectively, and accounting for around 10 percent of the

bottom line in both years.

As a result, some shareholders and external observers may question the

decision to exit now. Fidelity Bank (Bahamas) also received some $5.668m

in dividends from its investment banking affiliate in 2016, with the total

value of its investment pegged at just over $13m a year later.

#However, the $16.449m “base” that Fidelity Bank (Bahamas) is due to

receive alone represents an 84.8 percent increase on the $8.9m price it

paid to acquire the 50 percent RoyalFidelity interest from its parent in the

first place.

“It really boils down to the sale price,” Mr Bowe said of the decision to sell.

“While you will be foregoing future profits, you are going to include in the

sales price a projection of those future profits discounted for today.

“The sales price is a consideration of the profitability of the entity and

value to shareholders of Fidelity Bank (Bahamas). The final recognition for

this transaction is equal to projected earnings over time equivalent to the

investment.

“This gives the new entity [RoyalFidelity] the opportunity to fly on its own,

grow and do the things it wants to do. Fidelity Bank (Bahamas)

shareholders will have the opportunity to maximise value and, upon

completion of the transaction, excess and surplus capital will be

distributed to the shareholders,” he continued.

“It will be an extraordinary dividend and give Fidelity Bank (Bahamas)

shareholders the opportunity to invest in other opportunities that may

come forward.”

The Fidelity Bank (Bahamas) chief financial officer added that the

merchant bank’s split from its parent was a typical transaction in more

developed economies, where subsidiary companies “matured to the

point where they can venture off on their own” and be spun-off to

generate greater value for all parties involved.

“It’s a little bit like the child leaving the nest, but in this case the child is

paying the parent,” Mr Bowe told Tribune Business. “In life there’s always

evolution, opportunities and new horizons. It’s the next stage of the

evolution process. It [RoyalFidelity] was birthed, grown, took on a partner,

and now is going off on its own.”

He said clients of both Fidelity Bank (Bahamas) and RoyalFidelity “won’t

see any change” as a result of the transaction, with both parties

continuing to refer customers to each other for products/services they

themselves do not offer.

“Where our customers have an interest in pensions, mutual funds, the

capital markets and trusts that RoyalFidelity continues to offer, we would

see them as providers of first choice,” Mr Bowe said, “knowing the

structures, individuals and product lines.

“There’s still mutually beneficial opportunities that continue, and we will

seek the best terms and opportunities for both sets of clients to utilise each

other’s services despite not being in a subsidiary-parent relationship.”

<< Back to news headlines >>

Game Changer: Cabinet Studying ‘Mega Deal’ For Port and Lucayan Wednesday 6th February 2019 – Tribune 242

Freeport's economy "won't look back" if Royal Caribbean's partnership

with a Mexican group to develop mega cruise berths and buy the Grand

Lucayan succeeds, Tribune Business can reveal.

The cruise line's tie-up with ITM, a developer of adventure-based theme

parks and village-style destinations, was among the investment projects

said to be under consideration by the Minnis Cabinet during its Freeport

meeting yesterday.

The deal, which will likely have a greater economic impact that Carnival's

$100m "Grand Port" project if it comes to fruition, would solve Freeport's

tourism woes by developing the city into a sustainable long-term

destination while also taking the troublesome Grand Lucayan off the

Government's hands.

Dionisio D'Aguilar, minister of tourism and aviation, declined to comment

when contacted by this newspaper about the ITM/Royal Caribbean

proposal, but did not deny its existence or that it was discussed yesterday.

"We were discussing a number of projects, but nothing I'm at liberty to

discuss right now," he said.

Multiple Tribune Business sources, well-placed to know and speaking on

condition of anonymity, suggested that the Cabinet discussions focused

on whether to give the proposal an "approval in principle" to allow ITM to

firm up its financing and potential project partners such as hotel

operators.

They added that ITM, which has a strong track record of developing

cruise-style destinations in its homeland, and locations such as the

Dominican Republic and Maracaibo, had presented a proposal that was

far superior to any other Grand Lucayan purchase offer submitted to-

date.

"It's going to be big, very big," one source told this newspaper of ITM's

proposal. "This is going to be the start of Freeport's turnaround. The next

thing will be the harbour and the hotel. That will be within three to four

months. Then we're off to the races.

"They're going to build four mega cruise ship berths down at the [Freeport]

harbour and an adventure land park. The main thing will be the hotel,

and they're going to build around the hotel. We will have these three

things going on."

Visiting cruise ship passengers would be transported from the harbour to

the Grand Lucayan and surrounding area, with other lines besides Royal

Caribbean able to use the new berths.

Critically, the source said Hutchison Whampoa, which has management

control and a 50 percent stake in Freeport Harbour Company, was behind

the ITM proposal with both sides having seemingly reached agreement

after three years of negotiations.

"I expect the Government will have approved this," the source added.

"This is going to turn us around. Freeport won't look back after this. They've

[ITM] done about six of these in Mexico now. They're very big.

"They're a group that is very professional and done it all before, so they will

go to work immediately. It's very exciting. It's going to happen very

quickly. All the work is done, they've spent millions, and the plan is put

together. They have hotel partners and any kind of partner you want.

These are beautiful guys."

Another contact, speaking on condition of anonymity, confirmed that

they knew of ITM's proposal and that it was "very substantial" in terms of

including both the harbour and Grand Lucayan.

"There's seems to be the most viable offer yet," they said, "in terms of cruise

ships and airlift to the hotel. They seem to have their act together and no

one else has so far. What they've proposed is two [parks] - one at the

harbour and one at the hotel.

"There's a lot of moving parts on it that need to be tied down. We've got

sparks, and while we haven't lit the fire yet, at least there's sparks. The

cruise ship companies are building so many ships they have to find

additional places. This is not going to take any business from anybody. It's

got to take the additional passenger load they have."

The source added that ITM's proposal offered the prospect of creating

critical tourism mass in Freeport, which the destination has not had for

many years, while the mix of air and sealift would help combat the high

Grand Bahama International Airport costs that are a frequent complaint

of airlines.

"If you begin to bring in more people through the airport it makes it more

viable," they said.

Another contact argued that the ITM proposal "could be dynamite" and

"the answer to the prayers a lot of people and be a latent touristic

explosion for Grand Bahama. It could be the best example of disruptive

creation that totally reconfigures the island's tourism scene".

The Government will be especially eager to announce further good

economic news for Grand Bahama, not least because it pledged to focus

on revitalising the island's economy upon taking office and during its

election campaign.

It will also be keen to limit taxpayer exposure to the Grand Lucayan,

which carried a $65m purchase tag and other associated costs that have

continued to mount as it seeks a buyer for the property. The deadline to

receive bids is February 15, with a decision on the preferred bidder due by

end-March 2019.

The Government injected $45.4m into the Grand Lucayan resort, including

$13m to cover its operational costs, during the six months to year-end

2018, exposing the scale of the potential drain on Bahamian taxpayers if

the government is unable to realise its goal of selling Freeport’s “anchor

property” by the second quarter.

“On the equity side, developments continued to be dominated by the

government’s investment in the special purpose vehicle, Lucayan

Renewal Holdings, formed to acquire the Our Lucaya properties in Grand

Bahama during the first quarter of the fiscal year," the Government's latest

fiscal report said.

“For the first half of fiscal year 2018-2019 these investments totaled

$45.4m—reflective of the original $32.4m in equity contribution alongside

an additional $13m, for operational expenses.”

<< Back to news headlines >>