Economy — Page 36

Watch their money not their words

April 30, 2016 by IC Insider.com

Natalia Gobin-Gunter Chairman and Deputy Managing director inserting name strip to indicate listing of Key Insurance on the junior market.

Bank of Jamaica’s survey findings of perceptions of Present and Future Business Conditions in Jamaica reached the second highest levels in February 2016, since its inception in 2005. The data shows up the disparity of in how business executives think and what they do reflecting the real world, experience of a gulf between what people say they will do and what they in fact do. In the 2015 elections in Trinidad, 74 percent of voters indicated they were going to vote but 66.84 percent finally turned out to do so, while in Jamaica, pollsters said between 59 and 62 percent of the electorate were going to vote and only 48 percent did.
The survey findings of carried out amongst Jamaica’s business executives, show wild swings in their views on current conditions since the start of the data in 2005, while the index of future business conditions was far more predictive of actual business developments. The attached chart shows this up quite clearly. Other findings of the survey also points out that the top management of the various companies were was off the mark when it came to inflation, interest rates and the rate of exchange of the local dollar. One of the clearest measures to test what the executives say and do, is a comparison of the sentiments on business conditions and the performance of the stock market.
When it came time for the business community to put their money where their mouth is, it turned out to be vastly different from what they were saying in the Business Condition Survey. One measure of the business community’s bet on the future, is shown in the attached graph. The graph shows future expectations are is much more aligned with future business conditions than with current ones.

What the business sector did, reflected itself in a much smoother monthly movement than what they said about the future. When it comes to money, the stock market reflects what people are doing with their money as opposed to what they say. The chart shows the movement in the all Jamaica Composite Index, plotted against the two business surveys published by the country’s central bank.
The movement of the stock market seems a better predictor of future expectations, than the surveys, as shown by the smoother movement of the stock market compared with the sentiments data. What is also true, is that the future expectations and the stock market movements are fairly closely aligned with each other.

Filed Under: Economy, Feature Stories, JSE Main Market, Stock Market Tagged With: all-Jamaica Composite index, BOJ, business confindence survey, Jamaica Stock Exchange, Jamaican Stock

Prices down 1.3% in Jamaica’s Q1

April 18, 2016 by IC Insider.com

Price fall Prices as measured by the consumer price index fell 0.1 percent in March 2016 according to a report released by the Statistical Institute of Jamaica. For the calendar year-to-date there was a decline in inflation of 1.3 percent.
The fall in March was mainly due to sharp fall in the prices of Food and Non-Alcoholic Beverages that fell by 0.5 percent and was influenced by lower prices for Vegetables and Starchy Foods by 2.9 percent and 3.1 percent respectively. The category of Housing, Water, Electricity, Gas and Other Fuels fell by 0.1 percent and Transport by 0.4 percent. Reduced rates for water and sewage were chiefly responsible for the movement.
At the March 2016 quarterly media briefing, Jamaica’s Central Bank projection for 12-month inflation over the next four quarters, is between 4.5 percent and 6.5 percent.

Filed Under: Economy

Scotia positive on Jamaica

April 10, 2016 by IC Insider.com

SCotia Bnk Mby Jamaica’s creditworthiness is improving, Scotiabank’s economic units stated in the economic Executive Briefing on Jamaica. Fitch recently upgraded the country’s sovereign credit rating to “B” and assigned it a “stable” outlook Scotiabank Economic report says.
The revision reflects the successful implementation of the IMF program, strengthening external finances, and decreasing public debt the report stated. The report goes on to state, “Standard & Poor’s and Moody’s rate Jamaica in the “B” (stable outlook) and “Caa2” (positive outlook) categories, respectively. According to the IMF, the public sector debt reduction program is estimated to lower the general government debt-to-GDP ratio to below 115% in 2017 from 124.7% in 2015. Indeed, the buyback of PetroCaribe debt in August 2015 at a discounted face value lowered the country’s public debt ratio by 10 percentage points and will ease the external debt repayment burden.”

Filed Under: Economy Tagged With: IMF, Moodys, Scotia, Standards and Poor's

Scotia sees J$130 to US$ in 2017

April 10, 2016 by IC Insider.com

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After losing nearly 30% of its value since 2012, the Jamaican dollar (JMD) is expected to maintain a defensive tone against the US dollar (USD).
The value of the JMD will continue to be affected by weaker sentiment towards emerging markets as the US Fed gradually tightens monetary conditions, as well as by investors’ perceptions regarding the implementation of the austerity program under the four-year Extended Fund Facility (EFF) loan agreement with the IMF, a recent report released by the economic units of Canadian Scotia bank stated recently.
“ We forecast a further depreciation in the JMD from a year-end rate of 120 in 2015 to around 125 this year and 130 in 2017 per USD. Net international reserves stood at US$2.26 billion in February, equivalent to over 5 months of import coverage” Scotiabank Economics Report stated recently.
Neither forecast would represent major moves in the value of the currency percentage wise. IC Insider.com data suggests that the currency may well remain around current levels for a prolonged period, or head to around 125 with inflation for 2016 looking like it will be less than for 2015, with no new major taxes expected. The tax break for persons earning less than $1.5 million could have a moderating impact on wage settlements and inflation as well.

Filed Under: Economy Tagged With: Jamaica dollar, Scotiabank

GOJ in black with $6b collection

April 4, 2016 by IC Insider.com

Jamaica’s Ministry of Finance newest office building

Government of Jamaica collected $6 billion in the category divestments/other that was not a budgeted item, resulting in surplus of $4.5 billion in February. The big one item intake lowered the fiscal deficit to $32.5 billion for the 11 months to February versus $38.5 budgeted.
The Primary surplus ended at $3.5 billion below budget at $80 billion down from $83.5 originally planned, but the difference may be accounted for by the reduction in the target agreed by the IMF.
Elsewhere a $3 billion increase on income and profit tax above budget to February this year, helped the government to meet the deficit target set for the elven months of the fiscal year that ends in March. While the income and profits tax were ahead of target, taxes on production and consumption and on imports delivered $1.5 billion less than targeted and bauxite levy was down by $2.4 billion, no doubt caught up in the dispute and bankruptcy proceedings with Miranda Bauxite Company. Grants were also off by $3 billion from the amount budgeted.

The capital budgeted expenditure that is usually underspent in past years has been fully used up to the end of February but the government incurred less on debt servicing with lower interest cost of $3 billion for the elven months period.
The month with the largest inflows of funds, March is yet to be fully compiled and not yet released. Those numbers will be important for the government going into the new fiscal year, as it would indicate what is the likely capacity for increased spending, for the year ahead. What is known is that interest cost should fall in the year as Treasury bill rates to which a large portion of the national debt is tied have been declining and this should lead to lower cost in this area.

Filed Under: Economy, Feature Stories Tagged With: GOJ fiscal deficit, GOJ primary surplus

Record remittances for 2015

March 29, 2016 by IC Insider.com

US$ 100 Jamaica garnered just 3.2 percent or US$69 million in remittance inflows in 2015 bring total inflows for the calendar year to US$2.226 billion, after accounting for outflows of US$233 net remittances for the 2015 totaled US$1.99 billion, for a net increase of US$48 million over 2014.
For December 2015, remittance inflows amounted to US$211 million, an increase of a mere US$6 million or 2.9 percent relative to the corresponding month of the previous year. Net remittances totalled US$189 million, an increase of US$4.4 million or 2.4 per cent, relative to the corresponding period of 2014
Remittance inflows are the highest in Jamaica’s history, having hit US$2.157 billion in 2014, up from US$2.065 billion in 2013 and US$2.43 billion in 2012.

Filed Under: Economy Tagged With: Jamaica remittances

Jamaica’s record remittances

March 21, 2016 by IC Insider.com

FX_USPound Jamaica continued to enjoy positive inflows of foreign exchange from overseas in the area of remittances. For the first eleven months of 2015, total remittance inflows were US$2.015 billion, an increase of US$63 million or 3.2 percent over the similar period in 2014.
The 2015 take is the first time that the country has crossed the $2 billion mark by the end of November in any year.
Total remittance outflows which amounted $206.5 million in 2014, ended at $210.4 million for the first eleven months of 2015 and resulted in net remittances for the year to November 2015 of US$1.80 billion, an increase of US$59 million or 3.4 percent relative to the corresponding period of 2014.
In addition to remittances, other transfers into the country were almost on par with that of 2014 up to October, with inflows of US$115 million compared with $117 million in 2014. For all of 2014 other transfers amounted to $145 million.

Filed Under: Economy Tagged With: Jamaica remittances

Interest rates drop

March 2, 2016 by IC Insider.com

Interest rates payable on the latest round of Treasury bill instrument offered by the Government of Jamaica, declined but the 28 days instrument plummeted by 50 basis points to 5.54 percent from 6.04 percent out come at the January auction.
TBill 02-16 The 182 days instrument fell by 21 basis points to 5.73 percent but the 91 days instrument climbed back above the 6 percent mark to end at 6 percent, up from 5.94 percent in January.
Treasury bill Interest rates are coming from a high of 9.11 percent on the 182 days instrument, in March 2014 and has been falling since. The latest rates are the lowest since the early 1980s.
The issues were for a total of $400 million each, with the 28 days instrument attracting $569,799,800, the 91 days one pulling in only $418,580,000 and the 182 days instrument attracting $671,724,700.

Filed Under: Economy Tagged With: 182 days Treasury bill, 91 Days Treasury Bills, GOJ Treasury bills

Jamaica’s unemployment falls

February 1, 2016 by IC Insider.com

Jamaica’s Unemployment Rate fell by 0.7 percentage point in towards the end of September but remains at a stubborn 13.5 percent of persons said to be in the workforce, a decrease from to 14.2 percent at the same time in 2014.
Over the period, the unemployment rate for males declined from 9.9 percent to 9.3 percent and for females from 19.4 percent to 18.5 percent.
The number of persons Unemployed in September 2015 was 178,600, a decrease of 7,600 compared with 186,200 in September 2014. “The largest increase in the number of employed persons occurred in the industry group ‘Hotels and Restaurants Services’ and ‘Real Estate, Renting & Business Activities’ with a total of 23,700 persons,” the Statistical Institute of Jamaica (STATIN) said.
A total of 22,600 more workers were employed compared with September 2014 bringing the total to 1,146,600 employed persons in September 2015.

Filed Under: Economy, Feature Stories Tagged With: Jamaica's labour force, Jamaica's unemployment rate

Government capital spend jumps $3.7b

February 1, 2016 by IC Insider.com

Peter Phillips – Minister of Finance

Government had budgeted to spend $1.6 billion in December but doled out $5.3 billion instead, bringing the full nine months capital spend to $26 billion, in line with budget. The increased spend in December wiped out the underspending of $4 billion in this line item up to November.
Tax revenues continue to be on a positive path, with $6.6 billion over budget but grants are below by $3.1 billion resulting in revenues surplus of $2.5 billion. Government over spent on wages in the tune of $2.3 billion taking the total spend to $126.6 billion but interest cost continues to be lower than forecast by almost $5 billion at $91 billion. Spending on other expenses was below forecast by $3 billion. The overall deficit was in line with forecast, at $14.7 billion and the primary surplus was nearly a billion more than planned at $66 billion.