Caribbean Business Round-up

By Reay Greaves

Trinidad and Tobago
• Budget proposals for the fiscal year 2009–2010, will be read in Parliament on September 7, three days after the opening of the new parliamentary term.

 • The National Flour Mills (NFM) has posted a half-year after-tax profit of $0.4 million for the half-year period ending on June 30, 2009.

• The Central Bank announced that headline inflation fell to 8.4 percent on a year-on-year basis in June, from 10.3 percent in May. This was the first time in the past year that inflation had reached single digits.

 • The Trinidad and Tobago Chamber of Commerce and the Trinidad and Tobago Manufacturers’ Association say they are concerned about the decision by one of the country’s biggest shipping lines to increase its demurrage fees. As a result of this hike, prices of goods and services will likely increase in the lead-up to Christmas. (Demurrage is a charge required as compensation for the delay of a ship, freight car or other cargo beyond its scheduled time of departure.)

• The ANSA McAl conglomerate recorded a 0.5 per cent (estimated $7.5 million) increase in its profit margins for the year thus far, when compared to last year. However, the conglomerate saw the group’s top line turnover go down by 6.8 per cent.

• First Citizens and Scotiabank reduced their prime lending rate to 11.50 and 11.75 percent respectively, from 11.75 and 12 percent.

• Scotiabank reported total assets of $16.8 billion and an after-tax profit of $330 million as it completed its third fiscal quarter at the end of July.

• For the first half of 2009, Trinidad Cement Limited (TCL) reported a decline in revenue of $153 million—a 14 percent decline when compared to the same period in 2008. Group chairman, Andy Bhajan, and group chief executive, Rollin Betrand, blamed the economic downturn for the decline.

• While most companies are still feeling the effects of the economic downturn, The West Indian Tobacco Company (WITCO) saw increased profits of $120.9 million for the six-month period ended June 30, 2009. This represented an increase of $27 million when compared to the same period last year.

• The Ministry of Energy and Energy Industries held its first consultative meeting for stakeholders on the Government’s proposed new petroleum fiscal package for the petroleum sector.

• The Energy Services Sector Survey conducted by the South Chamber of Industry and Commerce recorded a drop in profitability, and the Chamber remains worried about the global economic uncertainty. In its Energy Services Sector Survey for the second quarter of 2009, the Chamber found that levels of optimism and business confidence improved slightly in the second quarter, “possibly due to the upswing in energy commodity prices since April.”

• Energy giant bpTT said it has reduced the amount of money it plans to spend in T&T on oil and gas projects in 2009. Chief Executive Officer Robert Riley said the company brought its capital expenditure down from a projected US$1 billion to US$600 million this year.

• State-owned Petrotrin closed a US$850 million bond to raise money to finance a gasoline optimisation project which is said to be a year behind schedule and more than US$3.6 billion over budget.

• The Ministry of Energy and Energy Industries awarded seven licences for sand and quarry blocks.
• The Point Lisas Industrial Port Development Corporation (PLIPDECO) saw a $15 million fall in second-quarter revenue. Chairman Rolph Balgobin says the decline was attributed to reduced domestic cargo at its Point Lisas port.

• The Central Bank announced that Trinidad and Tobago’s economy contracted by 3.3 percent in the first quarter of this year as activity in the nation’s energy sector declined by 2 percent.

• Malcolm Jones, chairman of State-owned Petrotrin, was appointed chairman of NGC. Jones replaced Keith Awong who resigned as chairman.

• Tourism Minister Joseph Ross announced that Chinese firm, the Beijing Liujian Group won the $233 million bid to restore and upgrade Maracas Beach.

• New Jersey-based AM Best downgraded CLICO to C (weak) from B (fair) in a rating action. In a statement sent from its US offices, AM Best said, “the ratings remain under review with negative implications.”

• The Caribbean Court of Justice (CCJ) dismissed claims by the Trinidad Cement Limited (TCL) against Caricom’s decision to suspend the Common External Tariff (CEF) on cement imports.

• Cabinet approved $5 billion to help the recovery of cash-strapped insurance giant CLICO.

 • The Trinidad and Tobago Electricity Commission (T&TEC) announced that from September 1, commercial customers would see a one percent increase in their electricity rates.

• Skylan Airways, a Jamaican-owned and operated air charter service, had its inaugural flight from the Norman Manley International Airport in Kingston to Sangster International Airport in Montego Bay.

• Standard & Poor’s (S&P) downgraded Jamaica’s rating to CCC+ and said the outlook on the country remains negative. The rating agency also cut the credit ratings on Air Jamaica and National Commercial Bank of Jamaica, bringing them in line, as its policy dictates, with Jamaica’s sovereign ‘CCC+’ rating on local and foreign currency debt, down from ‘B-.’

• National Commercial Bank (NCB), in a move aimed at cutting back on bad debts caused by delinquent credit card holders, started to block credit card accounts that were 15 days overdue.

• The Bank of Jamaica (BOJ) announced an additional 100 basis points reduction in open market instrument interest rates.

• The Bank of Jamaica (BOJ) received the first allocation of money from the International Monetary Fund (IMF) under the special drawing rights (SDRs).

• The International Monetary Fund (IMF) cleared the way for Jamaica to get approximately US$320 million (J$28.5 billion) from the fund by early September.

• The Ministry of Tourism signed an agreement with US Airways which provides for an increase in airlift out of the United States to Jamaica.

• Aluiminum producer, Alcoa, sealed a deal to buy Australia-based BHP Billiton’s bauxite and alumina operations in Suriname.

• The World Bank and Haiti signed a US$5 million grant to strengthen Haiti’s agriculture management and support its sustainable development.
• Venezuela’s State oil company, PDVSA, and BP Plc resumed production at the 113,000 barrel per day Petromonagas project in the Orinoco heavy crude region, after it had suspended output in January to meet OPEC cuts.

• Venezuela reaffirmed that no plans are being considered to require more money up-front from poor Caribbean and Central American nations buying oil on preferential terms under its PetroCaribe programme.

• Gross domestic product shrank 2.4 percent in the second quarter representing the first contraction for the Venezuelan economy since 2003.

Antigua & Barbuda
• The Government put an end to fuel subsidies.

• The Government announced that the Venezuela-led Bolivarian Alternative for the Americas (ALBA) provided US$50 million to help the country overcome a fiscal shortfall and pay hundreds of civil servants outstanding salaries and wages.

Other Regional News
• The Inter-American Development Bank (IDB) approved a US$1 million-dollar grant to support the design and implementation of an integrated disaster risk management plan for Guyana.

• The Economic Commission for Latin America and the Caribbean (ECLAC) and the World Tourism Organization (UNWTO) agreed to deepen their cooperation to strengthen statistics systems, tourism satellite accounts and tourism economic indicators in the region.

• The Bahamas Government suspended its Educational Guarantee Loan Programme (EGLP), saying too many students were defaulting on their loans. Educational Minister Carl Bethel said more than 61 percent of loans had not been serviced.

• The St Kitts Co-operative Credit Union (SKCCU) reported a surplus of EC$664,989 for the year 2008, the highest surplus to date in its 27-year-old history.

• The Montserrat telecommunication sector has been liberalised. A new Information Communications Development Act which came into force on August 1, opened the door to fair competition in Montserrat’s telecommunications sector.

• The Cuban Government released statistics showing an increase in its output of diesel and fuel oil in the first half of the year; but the figures also showed a drastic fall in gasoline production for the period.

• Sandals Resorts International (SRI) announced that it bought over the Four Seasons Resort Great Exuma in the Bahamas.

• The Peoples’ Republic of China granted a concessionary loan of US$35 million to the Government of Dominica for the construction of a new state-of-the-art college.

• The Butterfield Bank (Bahamas division) terminated six employees as part of its restructuring efforts to fit difficult market conditions.

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