The government of Jamaica enjoyed increased inflows into their coffers in January, bringing the total to $34.4 billion, $1.4 billion more than the $33.2 billion projected. The major area contributing to the improvement is tax on interest delivering $1.2 billion more than forecast.
The intake took the 10 months revenues to $322 billion down by $8.6 billion, just 2.6 percent short of estimates. The major contributors to the year to date shortage is corporate taxes, down $7 billion and production and consumption taxes on local goods and services down by $7.3 billion. Out-performing the target set are, PAYE, non-tax revenues and taxes on interest.
Payments are down, with capital spend coming in at $10.3 billion below projection, interest cost is $5.6 billion lower than originally projected due no doubt to lower interest rates, wages spend is $2.6 billion less than forecast and other expenditure is up by $3.3 billion. The fiscal deficit came in at $6.5 billion ahead of target and the primary surplus at $76 billion is just slightly ahead of target.
The data suggests that the fiscal deficit originally projected at $11.4 billion is likely to end at less than $4.5 billion for the fiscal year.
BNS dumps US$19m in 2 days
Bank of Nova Scotia (BNS)
bought just US$3.9 million on Friday but sold US$17.8 million. On Thursday BNS sold US$12.6 million compared buying of only US$7.97 million, resulting in a net sale of US$19 in the two days.
On Thursday, National Commercial Bank (NCB) also sold more than they bought, with buying accounting for $6 million and selling US$10.5 million. NCB’s trade on Friday, was more balanced, with selling of just US$1 million more than they bought. While Scotia’s average selling rate was $115.70 on Thursday, on Friday it fell to $115.57, in contrast NCB’s average selling rate on Friday was $115.75 and $115.69 on Thursday.
There was more selling than buying of foreign currencies by dealers on Friday, with purchases of all currencies amounting to US$47,277,720 compared with US$42,778,081, on Thursday. Selling was the equivalent of US$64,474,492 versus US$52,219,662 sold on Thursday.
In US dollar trading, dealers bought US$44,421,153 compared to US$38,951,367 on Thursday. The buying rate for the US dollar climbed 5 cents to $115.28 and US$62,378,941 was sold versus US$49,786,691 on Thursday, the selling rate dropped 9 cents to $115.60. The Canadian dollar buying rate climbed 21 cents to $90.57 with dealers buying C$1,055,161, and selling C$1,040,220, at an average rate that remained unchanged at $92.62. The rate for buying the British Pound dropped $1.04 to $175.24 for the purchase of £1,068,882, while £726,396 was sold, at an average rate of $177.48, down by 44 cents. At the end of trading it took J$131.77 to purchase the Euro, 35 cents more than on Thursday, according to data from Bank of Jamaica, while dealers purchased the European common currency at J$129.28 for 34 cents over the rate on Thursday. Other currencies bought, amounted to the equivalent of US$402,706 while the equivalent of US$146,908, was sold.
Highs & Lows| The highest buying rate for the US dollar and the lowest buying rates remained at $115.90 and $94.52 respectively. The highest selling lost 11 cents to $121.12. The lowest selling rate fell 66 cents to $94.36. The highest buying rate for the Canadian dollar fell $1.68 to $92.32, the lowest buying rate dipped 92 cents to $73.12. The highest selling rate rose 12 cents to $95.56 and the lowest selling rate lost $1.10 to $88.10. The highest buying rate for the British Pound, dropped 74 cents to $177.76. The lowest buying rate climbed 21 cents to $142.97, the highest selling rate dropped $2.14 to $181.90 and the lowest selling rate was up 25 cents to $172.25.
Treasury-bill rates up
Interest rates on government of Jamaica latest Treasury bills auction rose for the first time since peaking in March last year. The three offerings at the February 20 auctions, resulted in a rise in rates for the 28 days and the 182 days notes, while the rate on the 91 days Treasury bill declined moderately.
The 182 days note closed at 7.164 percent, an increase from 6.99 percent at the January auction. The rate for the 91 days Treasury bills fell to 6.8796 percent, slightly down from of 6.8817 percent in January, while the rate on the 28 days ended at 6.417 percent up, from 6.295 percent at the January auction.
The change in the movement is consistent with the slowing pace of change at which the 182 days treasury rates were falling, having slowed from 0.34 percent dip in November to 0.15 percent at the January issue.
With Bank of Jamaica’s projection for inflation in 2015, in the range of 3-5 percent and with inflation for January coming in at negative 0.5 percent, its unlikely that the latest increase in the rates will last for too long, as there will be lots of room for the treasury rates to decline sharply in the months ahead.
All three instruments offered, were for $400 million each, with demand for the 28 days instrument amounting to $690 million versus $1.15 billion in January. The 91 days instrument attracted $1.298 billion up from $706 million in January and the 182 days instrument pulled in $822 million up from $717 million at the January auction.
Inflation drops again says Statin
The Statistical Institute of Jamaica (Statin) reports that the All Jamaica ‘All Divisions’ Consumer Price Index fell by 0.5 percent in January this year, the third consecutive monthly decline in the inflation rate for Jamaica. The inflation rate was 0.1 percent in October, November was negative 0.5 percent and December negative 0.3 percent. The downward movement in inflation for January was mainly attributable to a fall in the index for the three highest weighted divisions. The index ‘Food and Non-Alcoholic Beverages’ fell by 0.2 percent, followed by the division ‘Housing Water, Electricity,
Gas & other fuels fell 3.4% in january
The release went on to state that the divisions that recorded increases in the All Jamaica ‘All Divisions’ index were: ‘Alcoholic Beverages and Tobacco’ 0.4 percent, ‘Clothing and Footwear’ 0.9 percent, ‘Furnishings, Household Equipment and Routine Household Maintenance’ 0.3 percent, ‘Health’ 0.1 percent, ‘Recreation and Culture’ 0.1 percent, ‘and ‘Miscellaneous Goods and Services’ 0.6 percent, while Restaurants and Accommodation Services’ 2.5 percent, ‘Education’, and ‘Communication’ each remained unchanged.
Jamaica’s economy barely delivering jobs
Image courtesy of koko-tewan/FreeDigitalPhotos.net
The slow growth in the numbers on newly employed is a direct result of the low growth performance in the local economy as current government policy drives down demand for many goods and services in the country as government maintains the target of a balance fiscal operation.
Statin said the unemployment rate for males declined from 10.6 percent to 9.9 percent and for females from 20.0 percent to 19.4 percent.
“The number of persons in the Labour Force was 1,310,700, an increase of 6,200 (0.5 percent) above the 1,304,500 recorded in September 2013” Statin said.The number of persons employed according to the latest data for 2014 is 1,124,500 persons, 14,000 (1.3 percent) more than the 1,110,500 recorded in September 2013, the report indicated. The composition continues to show much more male employment than female, with 645,900 males and 478,600.
According to the report the largest increases in the number of employed persons occurred in the groups ‘Wholesale & Retail, Repair of Motor Vehicle & Equipment’ and ‘Agriculture, Hunting, Forestry & Fishing’. The number of persons employed in the group ‘Wholesale & Retail, Repair of Motor Vehicle & Equipment’ increased by 11,700 (5.5 percent) while the group ‘Agriculture, Hunting, Forestry & Fishing’ increased by 7,800 (3.9 percent).
JPS new plant set for 2017 completion
JPS Rockfort power Plant
The Project is to be located at the existing Old Harbour site and is nominally rated at 190 MW under site conditions (197 MW – new and clean). JPS will also seek to convert the existing Bogue combined cycle project in Western Jamaica to gas fuel. The main receiving terminal will be located at the Old Harbour project. “JPS has initially determined that an onshore terminal is cost effective, compared to the larger capacity and productivity of larger FSRU-type terminals. Construction should begin on the Old Harbour Terminal and Power Plant before the end of the year, and commercial operation is expected by the end of 2017” JPS said.
“An Independent Engineer has been retained for the Bogue conversion. JPS will present its recommendation to proceed with the project to the Jamaican Regulator, the Office of Utilities Regulation (OUR), at the end of February 2015. Pending regulatory approval for the costs of the gas conversion, the Bogue project is expected to enter construction in second quarter of 2015 and would begin use of gas fuel by first quarter of 2016,” the company stated.
JPS said it “has employed various market intelligence services, which suggest that LNG is expected to provide the most stable cost to the Jamaican economy. However, Natural Gas Liquids present a short term opportunity, particularly Ethane or LPG. JPS is considering floating storage, fixed tank or mobile tank systems as well as a combination of each storage option which could accept these different fuels or switch fuels cost effectively.”
Jamaica Public Service Company Limited (JPS) is an integrated electric utility company and the sole distributor of electricity in Jamaica. The Company is engaged in the generation, transmission and distribution of electricity, and also purchases power from a number of Independent Power Producers. JPS currently serves over 603,000 customers through a workforce of 1,700 employees. The Company owns and operates 4 power stations, 9 renewable plants, 43 substations and approximately 14,000 kilometres of transmission and distribution lines.
Remittances up 5% for 2014
Remittance inflows into Jamaica, continue to grow at consistent pace for 2014, and is now at the highest levels ever. The latest data from Jamaica’s central bank, Bank of Jamaica revealed that total remittance inflows for October last year, climbed US$9 million or 5.2 percent to US$180 million, compared to the same month of 2013.
For the month, net remittances were US$160 million, an increase of US$8 million or 5.3 percent relative to the 2013 corresponding period. “These inflows were above the average of US$161.8 million for the previous five corresponding periods,” the BOJ report stated.
For the review period, total remittance inflows amounted to US$1.784 billion, for an increase of US$81 million or 4.8 percent. Net remittances for the calendar year to October were up US$90 million or 6 percent to US$1.59 billion, relative to the corresponding period of 2013. The growth of net inflows seemed tied to greater stability of the exchange rates of the Jamaican dollar and more availability of foreign exchange in the local market, in 2014 compared to 2013.
The JSE at 19 months’ high
Friday’s activity on the Jamaica Stock Exchange saw the all Jamaica composite index soaring nearly 2,000 points to hit the highest level since closing at 87,362.77 points, on July 29, 2013. The major contributors to the strong move are, Carreras closing at $42, Scotia Group ending at $21.99, Jamaica Broilers, Jamaica Money Market Brokers and Sagicor Group.
A large part of the gain in the indices is due to Scotia Group jumping $1.97, as broker Scotia Investments, aggressively bought most of the shares to trade in that stock at the higher level. At the close, bids were well below at $20.50, leaving a large gap for the price to fall back. Trading resulted in the prices of 11 stocks rising and only 1 declining as 22 securities changed hands, ending in 3,765,154 units trading, valued at $31,624,763, in all market segments.
Main Market| The JSE Market Index gained 1,782.43 points to 79,120.65, the JSE All Jamaican Composite index rose 1,992.84 points to close at 87,178.87 and the JSE combined index gained 1722.34 by points to close at 80,967.47.
GOJ income falls but fiscal on track
The Jamaican government is on track to achieve their primary surplus target with the December data showing only half a billion positive balance over the budgeted target level, but that is well down on $6.2 billion excess achieved for the period to November.
The primary surplus at the end of December comes out at $66.5 billion and is up from November’s surplus of $54.4 billion. The excess over forecast was achieved although revenues are off by $10 billion, or more than $3 billion worse than the $6.8 billion at the end of November. Tax revenues fell short by $9.7 billion to November as economic measures bite, but non tax revenue was better than forecast by $2 billion and grants were off by $3 billion.
Tax on interest brought in $1.5 billion in revenue over budget and was up by 39 percent, PAYE rose by 4 percent or $2 billion to $49.9 billion. The shortfalls were mostly local GCT down by $5.4 billion or 10.6 percent to $5.5 billion. Corporation tax fell short by $6.6 billion or 30 percent, Special consumption tax dropped $1.7 billion or 19 percent
The wage bill that was on target to November shows $1.76 billion in savings to December, as government spent $121 billion on this item, interest cost is down by $4.5 billion to $95 billion and other cost fell by $671 million. Capital expenditure, underspent by $7.4 billion to November is now $8.3 billion below forecast or 31 percent reduction.
The fiscal deficit targeted at $33.87 billion is down by $5 billion to $28.9 billion thanks to cut in scheduled payments.
GOJ T-bill rate decline conftinues
Ministry of Finance Building Kingston, Jamaica
The 182 days note that fell to 7.14 percent at the December auction, the lowest level since June 201, returned a lower rate in the January auction at 6.99 percent.
The pace at which the 182 days treasury rates are falling, have slowed from 0.34 percent dip in November to 0.15 percent at the latest issue. With the latest announcement by Bank of Jamaica on projection for inflation for 2015 being in the range of 3-5 percent there will be lots of room for the treasury rates to decline sharply in the months ahead.
The latest auction, dated January 14, 2015, for the 28 days instrument, ended with an average rate of 6.29528 percent. The rate fell from the average rate of 6.38 percent at the December auction and from 6.71 percent in November and 6.826 percent in October, as $1.1 billion up from $686 million in December, chased the $400 million on offer.Investors’ demand for the 91 days Treasury bills, climbed to $706 million, from $531 million in December, but is still well below the $1.042 billion that chased the November auction offering. Demand for the longer-term 182 days instrument, was down to $717 million from $925 million for the December auction. The amounts available were $400 million for each for the Treasury bills on offer.
The Treasury bill for the 91 days period, Friday, January 23 to mature on Friday, April 24, attracted an average yield of 6.8817 percent down from 6.956 percent in December. November’s rate was 7.052 percent, 7.336 percent in October and 7.46952 percent, at the September auction. At the August auction the average rate out turn was 7.46767 percent. The yield for July was an average of 7.63643 percent, for the June issue 7.65893 percent and 8.2 percent in May, for the Treasury bill of same duration.
The offer of 182 days duration, dated December 2014, maturing on June 19, 2015, resulted in an average interest rate yield of 7.14 percent, down from 7.387 percent at the November’s auction. At the October auction the average rate declined to 7.73187 percent from 7.99887 percent, at the September auction, 8.11578 percent, in August, 8.21982 percent at the July’s auction and 8.36502 percent for the June issue, of the same duration. At the May auction, the rate came out at 8.932 percent.
