Your Guide To Caribbean Financial Markets
The International Monetary Fund has just completed its tenth review of Jamaica’s performance on its programme and has agreed to loosen the country’s primary surplus target. The primary surplus can be defined as what is left to service debt after … Continue reading
The IMF today announced that it completed Jamaica’s third review under the Extended Fund Facility Arrangement and Approves a US$71.4 Million Disbursement. The full release reads: The Executive Board of the International Monetary Fund (IMF) today (March 19, 2014) completed the … Continue reading
The International Monetary Fund today confirmed that Jamaica has passed its first quarterly test and qualifies for an additional disbursement. The Executive Board of the International Monetary Fund (IMF) today completed the first review of Jamaica’s performance under an economic … Continue reading
After the Trinidadian government imposed a 15 percent Common External Tariff (CET) on chicken imports four months ago, poultry dealers have begun to complain about shortages in the local market. This has particularly affected southern and central Trinidad. Continue Reading
Investors, householders, businesses, consumers and everybody else will be waiting with bated breath to finally hear the details of the 2013-2014 budget as Minister of Finance Dr. Peter Phillips, releases it today April 18, 2013 in parliament.
Please see just issued release from the International Monetary Fund “Since the conclusion of a staff-level agreement with the Jamaican authorities in February on an economic program that can be supported by the Fund, the authorities have submitted documentation to … Continue reading
Three of a reported eight financial companies have said they will participate in a second round of the National Debt Exchange to help the Government plug a shortfall in the funds needed to drive down its debt-servicing costs.
The three institutions which have already indicated their willingness in participating are Scotia Group Jamaica, National Commercial Bank Jamaica and GraceKennedy Ltd (parent of First Global Financial Services), while the other five institutions are Sagicor, JMMB Group, Jamaica National Building Society, First Global Financial Services (subsidiary of GraceKennedy), Victoria Mutual Building Society and Guardian Life Limited.
On Mar 28, 2013 the National Commercial Bank reported its participation in a private debt exchange, organized subsequent to the publicly announced National Debt Exchange to plug an additional estimated J$25 billion shortfall in funds needed to reduce the government’s debt bill. This Private Debt Exchange (called in some circles as NDX2) was done with some of the major holders of government securities.
NCB reported that;
National Commercial Bank Jamaica Limited and its subsidiaries exchanged in aggregate approximately J$7 billion of Government of Jamaica securities in the private debt exchange. The securities were exchanged for other securities with lower coupons and different maturity dates.
The company expects an adverse impact during the current financial year (ending September 30, 2013) on the company gains on foreign currency and investment activities, and interest income from securities held. Given that the coupons on the securities offered were higher than those on the securities received after the exchange, if the company continues to hold the securities received, the interest earned on them would continue to be lower until those securities mature. There may, therefore, continue to be an impact on the interest earned in future years, though there are greater uncertainties around predicting the impact that will be experienced in the future years. Of course, this does not take into account the positive impact of mitigating measures and the overall impact of the change in the environment which has happened, and is still happening, in the context of the NDX and the recent private exchange. We do not anticipate that there would be any material impact on capital.
The Jamaica Gleaner is reporting that “Big bank Scotia Group Jamaica and top insurer Sagicor Life Jamaica have separately announced an acceptance of the Government’s debt exchange in order to effectively avoid what one called an IMF-imposed haircut.”
The Gleaner reports;
The NDX agreement is seen as more attractive to what would have been a IMF-imposed haircut of 25 per cent on all bonds, said Sagicor Life President and CEO Richard Byles at a Sagicor Breakfast Forum on Friday [Feb 15, 2013] at Terra Nova Hotel in New Kingston. It would have slashed debt to GDP from 140 to 110 per cent, he added.
JMMB and its subsidiaries exchanged in aggregate approximately $58.3 billion of Government of Jamaica securities in the recently concluded National Debt Exchange (NDX). JMMB reported that there are additional factors which have impacted the Company’s position, some of those factors along with prior actions will mitigate the negative effects of the NDX. As a result, the net effect on JMMB Group’s capital is not significant.
The National Commercial Bank, Jamaica largest commercial bank, participated in the Government’s National Debt Exchange (NDX). Please see their release to stock exchange about their participation in the National Debt Exchange below;
National Commercial Bank Jamaica Limited and its subsidiaries exchanged in aggregate approximately J$118 billion of Government of Jamaica securities in the National Debt Exchange (NDX). The company expects an adverse impact during the current financial year (ending September 30, 2013) on the company gains on foreign currency and investment activities, and interest income from securities held. Given that the coupons on the securities offered were higher than those on the securities received after the exchange, if the company continues to hold the securities received, the interest earned on them would continue to be lower until those securities mature. There may, therefore, continue to be an impact on the interest earned in future years, though there are greater uncertainties around predicting the impact that will be experienced in the future years. This does not take into account the positive impact of mitigating measures and the overall impact of the change in the environment which has happened, and is still happening, in the context of NDX.
Please see Mayberry’s release to stock exchange about their participation in the National Debt Exchange
Mayberry Investments Limited (MIL) has advised that the company participated in the National Debt Exchange Programme (NDX) and submitted $4.09 billion in securities for exchange. This exchange transaction will result in a write off of unamortized premiums of $337.5 million in the Company’s income statement for the year ending 31 December 2013. MIL continues to maintain capital significantly in excess of regulatory requirements.
As stated in our going public prospectus in 2005, MIL is exiting this line of business. Over the years, the company has strategically reduced its exposure to these securities by almost $10 billion, often against the orthodox market strategies at the time. While this had a negative impact on profitability, this decision has placed MIL on a secure footing to weather the current financial challenges, which will redound to the long term benefit of the shareholders.
Jamaican Money - Coins Photo by JAHeadley
SELL Scotia Investments, NCBJ and JMMB; HOLD GraceKennedy Ltd and Sagicor Financial Corporation, and BUY Guardian Holdings Limited. These are recommendations from Bourse, recently published in the Trinidad Express.
Since the National Debt Exchange Offer was announced and up to March 27, 2013, there has been a noticeable fall in stock prices for companies directly affected by the exchange, and this is what their analysis shows. Almost all the companies have seen their stock prices plummet since the NDX as there were declines in the price of GraceKennedy – 21%, NCBJ – 10%, JMMB – 22%, SIJL – 25%, Sagicor – 16% while Guardian Holdings increased by 1%. Continue Reading
Financial Analyst Dennis Chung addresses two major foreign exchange related issues that have affected us in recent weeks. His view is that “Jamaica’s foreign exchange crisis is driven primarily by the way we approach challenges.” Continue Reading
Jamaica National Building Society (JNBS) says it stands to lose J$1.2 billion from its participation in the National Debt Exchange (NDX).
The projected loss is close to J$1.3 billion that the society said it lost under the first debt swap three years ago, the JDX, according to information conveyed to JNBS members at a meeting in Kingston on Tuesday.
NHT - The Key To Your Home
The only bother to the National Housing Trust after the Finance Minister announced that the government will be taking an eye-opening amount from the organization, is that the current business plan would have to be redone. One would expect some kicking and screaming, but that’s not the case here. Continue Reading
Thought Jamaica was bad? Belize is undergoing its second debt restructuring after missing coupon payments and defaulting on bonds. The Guardian reports;
Final terms for bringing Belize back on track with its debt obligations were announced by Prime Minister Dean Barrow as he piloted Government of Belize External Debt Restructuring Motion through the House of Representatives. According to the details within the bill, the Belize government proposes to extend maturities and cut the coupon on the country’s US$544 million of defaulted debt as part of the country’s second debt restructuring since 2007.
To the IMF againThe EconomistJamaica should do better than this. The island has plenty of well-educated, English-speaking people. It has great beaches, a near-perfect climate for farming, useful deposits of bauxite and a port which is just a short hop … Continue reading
Frustrated. Certainly They must be able to figure it out by now! | Photo by jonwatson
The Private Sector Organisation of Jamaica (PSOJ) members are unable to “turn the frown the oda way aroun'” after reading into the new tax measures proposed by the Jamaican government recently, in addition to the vision projected by the government for the country’s economy. Continue Reading
THE Government is asking holders of public debt to take up to a five percentage point reduction on interest rates.
It is also asking them to accept a deferral on the repayment of their principal for at least another three years.
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