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Friday 21st June 2019  
Start Your Day With A Medley Of Financial News From Sources Around The World Courtesy First Citizens Investment Services
Caribbean Editorial / Commentary
International Weird News

Financial Indicators At A Glance

  TTD/US$ (First Citizens) Yen/US$ US$/EUR Crude Oil WTI(US$/bbl) Natural Gas Henry Hub (US$/ mmbtu) US 10 Yr Treasury Yield (%) US 90 Day T-Bill Yield (%) 3 month Libor (%) London FTSE 100 US S&P 500 Japan Nikkei TTSE Composite
20-Jun-19 6.7793 107.3 1.13 56.65 2.19 2.03 2.13 N/A 7,424.44 2,954.18 21,462.84 N/A
19-Jun-19 6.7793 108.1 1.12 53.76 2.28 2.02 2.16 2.39 7,403.54 2,926.46 21,333.87 N/A

First Citizens Bank Ltd.

Symbol Open Price ($) High ($) Low ($) O/S Bid ($) O/S Bid Vol. O/S Offer ($) O/S Offer Vol. Last Sale Price ($) Last Sale Date Volume Traded Close Price ($) Change ($)
FIRST 39.46 40.00 39.49 39.75 28,824 40.00 4,127 40.00 18-Jun-19 3,763 39.67 0.21
 

Massive losses expected

Trinidad Newsday - 21 June 2019

Regional Corporation heads predict flooding

With the TT Met office forecasting “near normal” rainfall totals for the 2019 wet season, the heads of two regional corporations are warning that flooding is expected to occur in traditional flood-prone areas.In a candid interview, yesterday, Penal/Debe Regional Corporation chairman Dr Allen Sammy said while they cleaned a significant number of minor watercourses, the Ministry of Works only cleared portions of the larger watercourses in his region.

“The Oropouche River for example, they have not cleaned it in its entirety. They have cleaned parts so upstream will flood, and downstream will flood and I don’t think it will be that much better this year, unfortunately,” Sammy said.

He added, “Last year we had millions of dollars of property and crop loss and I suspect that if the rain falls like it did last year, then we are going to be no better off.”Sammy said the ministry claimed it had no money and no equipment to clean major rivers during the severe dry season.

“But they offered some contracts, so I am not saying there was no cleaning done, but I am saying they themselves told me the cleaning they considered high priority is where there are people and businesses.”He said he submitted a six-point plan to the ministry last year to address the issue, but it was ignored.

“You will have to wait for the UNC to get back into government for a comprehensive plan to be implemented, and you can quote me on that,” he said defiantly.Meanwhile, Couva/Tabaquite/ Talparo Regional Corporation chairman Henry Awong said while some work had been done, the larger rivers which emptied into the Gulf of Paria had not been cleaned sufficiently.

“It was done piece meal in some areas and not done totally. In some of the major watercourses, nothing was done, like the Guaracara River which affects places like Gasparillo and Williamsville and which had significant flooding last year.”

Asked what he expected for the current wet season, he said, “I don’t want to say I am expecting the same thing but we are bracing for flooding.”He said while persons were focused no floods, there were other occurrences associated with the wet season such as landslips. He said the corporation did not have enough resources to purchase sandbags or maintain its equipment to assist families who may become marooned in their homes due to landslides or floods.

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Deadline extended for Trinidad Petroleum bondholders

Trinidad Newsday - 20 June 2019

Trinidad Petroleum Holdings Ltd has extended the deadline for bondholders to exchange their bonds for new securities until today (Friday) at 5pm Eastern Standard Time (EST).

In a release yesterday, the company said that as of 5pm EST, Wednesday – the original deadline – the company had received approximately US$528.1 million of the principal amount of existing notes in the Exchange Offers. Since this exceeds $500 million, those who have tendered their notes for the exchange on or afterJune 5 will not be able to withdraw from the offer, as per the terms and conditions outlined in a press release from the company on June 6. Note holders who tendered after June 5 will also not be able to withdraw.

Since Wednesday and Thursday were public holidays in TT, the company decided to extend the deadline to ensure everyone who was interested in taking up the offer was able to do so. Since the company has crossed its threshold for the conversion it can now start the refinancing/bond reissue process. Those who have decided not to take up the offer will be paid the difference in cash.

On May 31, TPHL had announced it received US$720 million in term loans from a Cayman Islands-based syndicate of banks led by Credit Suisse for refinancing the company’s debt. The loans would be guaranteed by TPHL’s subsidiaries, Heritage Petroleum Ltd, Paria Fuel Trading Co Ltd, and Guaracara Refining Co Ltd. The new bonds will be due in 2026 and have an interest rate of 9.75 per cent. The first interest payment will be in September.

The company has been in the process of refinancing its debt, which includes these bonds, one for US$850 million due in August and a US$750 million bond in 2022, both incurred by TPHL’s predecessor Petrotrin to finance its failed gas to liquid and ultra-low sulphur diesel plants.

In a release on April 15, TPH announced an exchange programme to bondholders of the 9.75 per cent unsecured 2019 notes and six per cent 2022 notes, offering to exchange them for new 9.75 per cent secured 2026 notes. The 2019 bondholders could also exchange their notes for cash up to US$425 million, but that could be increased to US$600 million. That deadline was May 10. The company received a buy in for $130 million, leaving a difference of $720 million – the amount of the term loan.

A group of shareholders through their advisor, BroadSpan Capital had initially rejected TPHL’s offer to refinance, as they did not agree with some of the terms and conditions, but the group accepted TPHL’s amendments to the offer, including more transparency and discourse with bondholders for this new issue.

As it stands, according to the release, TPHL has received US$415,655,000, or just about 49 per cent of the outstanding notes for the 2019 bond, and US$112,476,000 or 60 per cent of the $187.5 million for the 2022 bond. (The originally issued principal amount of the 2022 notes was US$750 million.

At the launch of the Exchange Offers, those notes had been paid down to US$218,750,000, or about 30 per cent of the originally issued principal amount. Subsequently, a $31,250,000 amortisation payment made on May 8, 2019, brought the outstanding principal amount down to US$187,500,000, or approximately 25 per cent of the originally issued principal amount.)

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Imbert: NIS fund had $226M deficit

Trinidad Newsday - 20 June 2019

FINANCE Minister Colm Imbert said on Tuesday the National Insurance Scheme (NIS) had a deficit of $226 million last year.

He made the statement in the House of Representatives during debate on a motion to approve Senate amendments to the Miscellaneous Provisions (Tax Amnesty, Pensions, Freedom of Information, National Insurance, Central Bank and Non-Profit Organisations) Bill, 2019.

Imbert recalled there were allegations during debate on the bill in the Senate on Monday that not allowing transient workers to register for NIS will “deprive the fund of income.” He said “the complete opposite is true.”

Last week Imbert said registered Venezuelan migrants will not have to contribute to NIS but will have to pay taxes, including health surcharge.

He said the NIS fund was never designed for transient workers coming in large numbers and accessing benefits by paying “a pittance of contribution.” He added, “That could destroy the fund.”

The minister said it would be foolhardy, irresponsible and “anti-Trinidadian” to do anything to cause damage to the fund. He said the amendment to Clause Eight of the bill has fixed that problem.

In the fund’s current structure, Imbert said a person can make one NIS contribution of $11 in order to get an injury benefit for one year. He added a person can receive maternity benefits after making ten NIS contributions of $11.

He rejected Opposition claims that he was discriminating against former prime ministers with respect to their pensions.

Declaring he was neither a seer man nor a psychic, Imbert said he had to make inquiries to get the facts. He said Kamla Persad-Bissessar and Basdeo Panday are the only former prime ministers who will benefit from amendments to prime ministers’ pension legislation.

Imbert also said contrary to an Express article, the Government circulated an amendment to legislation governing judges’ pension at 11 am on Monday in the Senate. He said newspapers in TT “don’t go to press at 11 am.”

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Stock Market report for 18 June, 2019

Trinidad & Tobago Stock Exchange - 19 June 2019

Overall Market activity resulted from trading in 17 securities of which 1 advanced, 10 declined and 6 traded firm.

Trading activity on the First Tier Market registered a volume of 195,363 shares crossing the floor of the Exchange valued at $3,754,342.92. JMMB GROUP LIMITED was the volume leader with 87,836 shares changing hands for a value of $178,322.08, followed by TRINIDAD AND TOBAGO NGL LIMITED with a volume of 63,419 shares being traded for $1,826,125.27. FIRSTCARIBBEAN INTERNATIONAL BANK LIMITED contributed 12,000 shares with a value of $98,400.00, while SCOTIABANK TRINIDAD & TOBAGO LIMITED added 9,430 shares valued at $589,375.00.

FIRST CITIZENS BANK LIMITED enjoyed the day's sole price increase, climbing $0.21 to end the day at $39.67. Conversely, THE WEST INDIAN TOBACCO COMPANY LIMITED registered the day's largest decline, falling $0.31 to close at $111.69.

CLICO INVESTMENT FUND was the only active security on the Mutual Fund Market, posting a volume of 6,551 shares valued at $159,844.40. CLICO INVESTMENT FUND declined by $0.05 to end at $24.40. CALYPSO MACRO INDEX FUND remained at $15.30. EPPLEY CARIBBEAN PROPERTY FUND LIMITED SCC - DEVELOPMENT FUND remained at $0.67. EPPLEY CARIBBEAN PROPERTY FUND LIMITED SCC - VALUE FUND remained at $1.70. PRAETORIAN PROPERTY MUTUAL FUND remained at $3.05.

The Second Tier Market did not witness any activity. MORA VEN HOLDINGS LIMITED (SUSPENDED) remained at $12.00.

The SME Market did not witness any activity. CINEMAONE LIMITED remained at $9.95.

The USD Equity Market did not witness any activity. MPC CARRIBEAN CLEAN ENERGY LIMITED remained at $1.00.

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More financial help needed for SMEs

Barbados Today - 21 June 2019 

The $5,000 and $10,000 loans being offered by Government to help entrepreneurs start or grow their businesses are simply not enough.

This assessment has come from Chief Executive Officer of the Small Business Association (SBA) Senator Lynette Holder, who said Barbados and the rest of the region was at point where there was a need for the small and medium enterprises (SME) sector to be better incentivized and facilitated.

“Recently, Government announced a Trust [Loan] Fund programme for start-ups. I dare say that is a commendable effort. It, however, does not go far enough. We are of the view that there is a need to go beyond the $5,000 and the $10,000 that will be provided in trust loans . . . You need to be able to access $50,000 and $100,000,” said Holder.

“So we are of the view that we need to go a step further. We need to ensure that once and for all, we have access to finance so that our firms can build capacity,” she told the opening of a regional workshop on Leveraging the CARIFORUM-EU Economic Partnership Agreement (EPA) at the Radisson Resort on Thursday.

Under the $10 million fund, which was launched eight months ago, qualifying applicants are able to access loans of up to $5,000 with an opportunity to borrow twice that amount after successfully repaying the initial loan.

Turning her attention to the signing of the EPA in 2008 between the EU and CARIFORUM, Holder said since that time there have been a lot of changes across both landscapes, but research showed that the kind of response needed from the private sector was not forthcoming.

However, she suggested that accessing the right amount of funding was still one of the main hindrances, explaining that while the country had a number of funding schemes in place, accessing adequate financing for starting, expanding or getting a business ready for export was still too difficult.

Holder told the regional workshop that while several Barbados-based firms were doing “great work” locally and in some regional markets, they were still in need of “a leg up”.

“The Small Business Association is of the view that, yes, our SMEs need to look beyond our domestic borders and even our regional ones to consider international trade,” said Holder.

“We are also of the view that there is a need to strengthen our SME sector. There is a need to ensure that we build capacity to be able to export. The issue of access to finance is still a bothersome one for us,” she insisted.

Officials are hoping that at the end of the two-day event they will be able to help SMEs to better access required financing and build capacity.

The workshop, which is put on by the SBA in collaboration with the Caribbean Export Development Agency (CEDA) and the EU office here, is being attended by more than 20 small business operators from Barbados and the rest of the Caribbean. They will explore a range of topics including EU rules and regulations and forming strategic partnerships.

Holder said there was a need for small businesses offering similar products and services in the region to form clusters so they would have a better chance of being able to access some international markets.

She said she also saw the need for more policies that encouraged firms to use technological tools “to do better business”.

“It is not our intention that is another talk shop . . . but it is our intention that we put our heads together over these two days and identify concrete solutions that will take us forward,” said Holder.

Minister in the Ministry of Foreign Trade Sandra Husbands said Barbados was in need of export-led growth, and she believed the SME sector would play a critical role in this strategy.

Husbands also expressed dissatisfaction with the level of trade under the EPA over the past decade, saying since its signing, “we honestly struggle to quantify the tangible benefits of the agreement”.

However, she said, “No blame should be cast on either side of the situation. The time has long past for us to really engage the agreement in the manner that the drafters intended.”

Husbands said it was up to the business community to “translate the benefits on paper into economic gains in practice”.

“I challenge you to use the agreement and test the strength of its provisions and to share with us your experiences as you seek to engage it,” she said.

Manager of Competitiveness and Export Promotion at the CEDA Damie Sinanan agreed there was need for increased trade under the EPA.

Without providing details, he said in September his organisation would be taking 16 firms from the region to a forum in Germany as they seek to continue to help regional businesses take advantage of the preferential agreement.

“We are going to work with them to make them ready and to introduce them to vetted and committed buyers so that we can facilitate that type of trade,” he said.

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BTMI banks on ‘fam tour’ to bring more Brits

Barbados Today - 21 June 2019

Barbados could soon be welcoming hundreds more visitors from the United Kingdom onboard British Airways, if a Barbados Tourism Marketing Inc-sponsored familiarisation tour for travel agents pays off.

The BTMI has brought 28 agents from across the UK to the island as part of the airline’s 65th Anniversary Megafam Trip.

The group, which arrived here yesterday for a five-day stay at host hotel, Sea Breeze Beach House in Maxwell, Christ Church, are to experience for themselves the destination and its offerings so they could sell the island to British holiday seekers.

Sharon McConway, who works for major UK tour operator Kuoni Travel, told Barbados TODAY during a welcome dinner and gala at Sea Breeze last night that Britons are looking to spend quality memorable and relaxing times with their loved ones away from home.

“First and foremost, they have worked hard and want to spend quality time with their families or their friends or honeymoon. So it’s a special occasion for them. So they want to feel relaxed, feel special…I don’t want to say pampered, but have an extra-special trip.”

Now on her first trip back to Barbados in ten years, she said her clients would also want to experience the hospitality that makes this country different from the rest along with its culture and music.

She added: “Most people would keep coming and coming.”

“People want to come to the island and celebrate a landmark birthday. So instead of one family, you find multi-generations.

“It might be grandparents taking their grandchildren and those families keep coming back…children grow up and they would take their children. It becomes a special place to make memories.”

She noted that people come into her company and know exactly where they want to stay, but others come and need inspiration.

“And here is with our knowledge, we [can] direct them to Barbados…and also to what type of hotel to stay at and what type of experience they are going to have,” McConway declared.

She said the last time she was here, she fell in love with the people, culture and cuisine and discovered what made Barbados so different to the other islands.

So this time around, the travel agent is seeking to learn what has changed.

McConway told Barbados TODAY: “It has a lot to offer different types of clients. I have to learn more and see certain landmarks and combine that with the hotels experience and share the passion with the UK market.”

The Sales and Marketing Manager for the Oceans Hotels Group, Jacqui McDermott, who was on hand to welcome the visitors to Sea Breeze, said the hotel will play its part in ensuring the agents have a memorable experience so they could better promote the island on return to the UK.

McDermott said: “We are treating them to a gala night…and that is our idea to have New Year’s Eve every day at Sea Breeze. Why do we limit it just to one day? So we do it once a month in the summer…and every week in the winter we have a special gala night where we have a fabulous buffet.”

The BTMI London office’s Senior Business Development Officer Marc McCollin said the team of agents will take in a range of activities while here including trips to St Nicholas Abbey Heritage Train, Atlantis Submarine, Mount Gay Distilleries and various hotel properties.

“It is a bit of taste of everything, said McCollin. “All the things that they need to help sell the destination better. Most of them are persons who are top sellers.

“We work very closely with British Airways in terms of their key players…persons who have been selling Barbados this year and over the last few years.

“And funny enough, a lot of them who been selling Barbados over the years, have never been [here].”

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US$50-million deal

Jamaica Observer - 21 June 2019

Sagicor Investments Jamaica (SIJ) is acquiring majority stake in Advantage General Insurance Company Limited (AGIC) from NCB Capital Markets Limited in a US$50.5-million deal.

News of the acquisition was released last night by Sagicor, which said that while the transaction's conclusion is subject to all regulatory approvals, it is expected that it will be finalised in the coming months.

Upon closing, the transaction will see Sagicor acquiring a 66 per cent stake in what it described as “the most profitable general insurance company in Jamaica”.

A newly formed entity headed by Mark Thompson, CEO of AGIC, will hold a 34 per cent stake in the company, while premier portfolio management company Resource in Motion, led by well-known Jamaican investor Donovan Lewis, will hold six per cent.

“We have done our due diligence and are confident that this deal will see us affording our clients, team members, shareholders and the wider Jamaica a more expanded financial conglomerate with a wider suite of services,” Chris Zacca, president and CEO of SIJ parent company Sagicor Group Jamaica, and a director of SIJ, is quoted in the news release.

Thompson described the acquisition as “a bold move for both Advantage General and Sagicor, one which we believe will give us the opportunity to expand our footprint and serve our clients better”.

Added Thompson: “Our management team, which has been in large part responsible for the market-leading performance of this company, will remain on board and will continue to drive innovation, and, working along with Sagicor, create a world-class client service experience.”

NCB Capital Markets Limited is a subsidiary of National Commercial Bank Jamaica Limited.

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RUBiS celebrates

Jamaica Observer - 21 June 2019

RUBiS Energy Jamaica last night staged an anniversary cocktail reception at The Valencia, Spanish Court Hotel in New Kingston, to celebrate its investments in the country.

The multinternational company, which specialises in the distribution and marketing of petroleum and chemical products, boasts on its website that it operates in 17 territories across the Caribbean, with Jamaica being the largest single entity with the largest privately owned fuel storage facility.

The company said that following its acquisition of The Antilles Group retail assets in 2013, it has made significant investment in refurbishing its network of service stations by embarking on a major rebranding exercise to establish the RUBiS brand in Jamaica.

“The new-look RUBiS stations are fresh, modern and appealing. This includes new canopy design, LED forecourt lighting, digital price boards, RUBiS-branded fuel dispensers, free air pumps, and new uniforms for staff,” the company stated.

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Mayor Sets September Target For Parking Terminals In Castries

St. Lucia Times - 19 June 2019

Castries Mayor Peterson Francis has announced that the Castries Constituency Council (CCC) has set a September 2019 target date for the installation of parking terminals in the Saint Lucia capital.

Francis made the announcement to reporters Wednesday during a news conference.

“We are making tremendous progress on that,” he explained.

According to Francis, the final ‘go ahead’ is currently being awaited from the Development Control Authority, which has to grant permission for the terminals to be placed on the sidewalks.

“We are looking at a target date of September and we should have these terminals installed and running,” he stated.

“We are not going to stop there because we now have a work in progress where you find that we are looking at parking overall not only in the North, but even the South and so on. What we are working on presently is a situation where you find people will now be able to use their phones,” Francis disclosed.

He explained that persons will be able to use the scan feature on their phones to obtain a parking spot and pay online.

“Let’s say for instance, as soon as that is done, when we have jazz – we have anything up North and people are parking everywhere; that will be something of the past. So you could leave your home at whatever time; you don’t have to rush to go anywhere. If something starts at 7.00 pm, you have to go from 3.00 pm to see where you could park – that is something that we are going to rectify,” Francis told reporters.

He also disclosed that the minister has the authority to declare any area a parking site.

“For example if something is happening in Gros Islet and you have a yard large enough to accommodate vehicles, the minister could declare that area a parking area and obviously it’s not that they will be taking over your land – you will be compensated.”

“That is the good news that we have about parking Islandwide because any place they’re going to have activities we can do that,” the Castries Mayor told the news conference.

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Ghana, IMF to provide assistance to operationalise NRF

Guyana Chronicle - 21 June 2019

GUYANA’S Natural Resource Fund (NRF) will be operationalised well in advance of ‘first oil’ in 2020, as the Ministry of Finance is in the process of engaging international experts to assist in this regard.

Plans are in the pipeline for this assistance to come from Ghana and from the International Monetary Fund (IMF). This was an update provided by Minister of Finance, Winston Jordan, on Tuesday.

In an earlier interview with the Guyana Chronicle in March, the Minister had indicated that the process to operationalise the Fund was to implement the Act and set up the committees mandated by the legislation. These include the Macro-Investment Committee and the Public Oversight Committee (POC); the latter will examine proposals to manage the fund’s resources. The POC is slated to be the largest body with 22 members, representing a wide cross-section of society including individuals representing the interest of women, civil society, trade unions and youths.

“We are trying to get an expert out of Ghana who serves on a similar committee, the Public Interest Committee,” Jordan explained. “…some of the representatives on that committee [to be formed in Guyana] would pose some problems in terms of who would be the nominee for youth, for women, for civil society. There’s no particular women’s group or youth group that you can point to so they have to get maybe some examples of how Ghana did theirs.”

Letters are still being sent to various groups which would be represented on the committee, inviting them to have sensitisation sessions at a future date. The Finance Minister stated that once the Ghanaian expert/s arrive, the government will seek to host a major workshop, perhaps in September 2019, which would see the attendance of all requisite stakeholders.

Earlier in May, the Ministry of Finance met with private sector and the Guyana Bankers Association to collect input from involved parties and inform them of a timetable for operationalistion. While the Opposition was also invited to the meeting, Jordan relayed that they were a no-show. Nonetheless, he stated: “We will continue unabated where this is concerned. As you can see, in the concluding statement [of the International Monetary Fund] we were given kudos for passing the legislation [and] for the strength of the legislation that we have passed and believe that it will stand the test of time and we should have that legislation operationalised well in advance of first oil,” he said.

Added to this, Jordan told the newspaper that Deputy Division Chief in the Caribbean division at the IMF, Arnold McIntyre, who recently visited Guyana had offered to bring an expert to the country or come himself to assist with education in this regard. “We’re thinking even of broadening the participation to other sectors so we have one grand meeting that can have the benefit of the expertise from Ghana and the International Fund,” Jordan said.

This weekend, Jordan will be heading off to Malta for a Sustainable Development Goal (SDG) meeting hosted by the Commonwealth where he will seek out further assistance to operationalise Guyana’s NRF.

In addition, three technical officers from the Ministry will be heading to London this weekend for a workshop on Sovereign Wealth Fund (SWF) They will also be speaking with the Commonwealth Secretariat for additional assistance. The Act governing Guyana’s NRF was assented to on January 23, 2019 by President David Granger and will aid significantly in managing the country’s natural resource wealth.

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Clearing the way

Trinidad Newsday - 21 June 2019

Editorial

THE CARIBBEAN Court of Justice (CCJ) this week upheld Guyana’s no-confidence parliamentary vote, in the process clearing the way for national elections. The ruling marks the end of another chapter of Guyana’s political history, one which has often been dogged by racial strife and turmoil. Guyanese authorities must comply with the ruling to ensure there is no repeat of history in the upcoming poll.

The question of the legitimacy of the vote was litigated extensively, perhaps too much. The argument advanced by the government of David Granger that a proper majority was not acquired despite the clear 33-32 result provoked widespread derision and downright scorn. Yet, while an air of legal sophistry lingered over the proceedings, the court case demonstrated convincingly the workings or two key arms of the Guyanese state: its judiciary and, ultimately, its parliament. Now the electoral process will be put to the test. An immediate concern will be the re-constitution of the body that is to govern elections, a matter that will require the mending of fences across the political divide.

In a separate ruling, the CCJ found fatal flaws in how the chairman of the Guyana Elections Commission (GECOM) was appointed. The court concluded the most sensible approach to the process of appointing the chairman is for the leader of the opposition and Granger to communicate with each other in good faith and, perhaps, even meet to discuss eligible candidates for the position. The court further invited both sides to present arguments on how the issue should be rectified.

The GECOM chairman will have to preside over a candidate selection process that has been badly hit by questions surrounding how Charrandas Persaud’s ineligibility slipped the net for so long. The CCJ sensibly found this week that it was too late to question the MP’s standing, but the importance of proper vetting should not escape the attention of authorities especially given Guyana’s history of having coalition governments with slender majorities.

The violence and authoritarianism that has been a feature of Guyana life - specifically under Forbes Burnham - cannot be allowed to recur. Guyana’s judiciary must be stabilised through the appointment of substantive office holders in the positions of judiciary chancellor and Chief Justice. A spirit of cooperation must prevail.

It should, finally, be observed that the role played by the CCJ in all of this has been key. The court has shown its importance as a final court of appeal, an irony given this country’s failure to accede to it even as we host its headquarters

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Evergrande can ill-afford an electric- car fantasy

Reuters - 20 June 2019

By: Katrina Hamlin

Evergrande’s electric dreams have taken an alarming turn. The property giant has already put over $4 billion into green vehicle brands and dealers. Next, it plans to plough 280 billion yuan ($41 billion) into research facilities and factories, according to statements shared on its website last week. For the same money boss Hui Ka Yan could buy Tesla, valued at $39 billion. But he’s no Elon Musk, and this could derail a debt clean-up.

As a property developer, Hui faces a long wait to reap returns on investments. The outlook is uncertain too. Although prices for new homes are rising, the government could introduce new curbs to cool the market. To hedge against such risks, the group is turning to electric cars, a new technology enjoying strong support from Beijing. But hasty diversification could do more damage than a softening real estate cycle.

A slowdown in China’s auto sales and a glut of Tesla wannabes has taken a toll. Funding is evaporating. After raising $7.7 billion in 2018, local companies attracted less than $800 million capital this year, Reuters reported on Wednesday. Luxury electric-car maker Nio has seen its stock price halve since its September listing. Evergrande’s investment into ill-starred startup Faraday Future has gone into a tailspin too.

A market correction might make it cheaper for Hui to buy the assets he needs to create a vertically integrated operation extending from battery production to dealerships. But Evergrande has little experience making cars, and could struggle to squeeze synergies from multiple acquisitions.

The expenditure could strain the balance sheet too. The group’s flagship Hong Kong-listed China Evergrande reported revenue over 450 billion yuan last year, but it is fighting to reduce leverage; its debt to EBITDA ratio is over 4, higher than most peers, according to Eikon. It has made progress, but credit ratings agency Fitch says the company’s ability to generate free cash flows rests in part on a commitment to spending less than 20 billion yuan on non-property businesses this year, and no more than 5 billion yuan the following year.

It is not yet clear which unit will foot the bill, or what the timeline will be. But if Hui moves too fast, shareholders might suffer whiplash.

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Goldman slashes Tesla price target by $42 on demand concerns

Reuters - 20 June 2019

Goldman Sachs on Thursday cut its price target on Tesla Inc by 21%, to third lowest on the Street, on concerns about the sustainability of demand for the electric car maker’s models.

Earlier this month, Chief Executive Officer Elon Musk told shareholders that Tesla was on track to hit its volume production goal for the year and had “a decent shot at a record quarter on every level”.

Goldman Sachs analyst David Tamberrino believes although the second quarter has been witnessing a better environment for demand for Tesla’s cars, he doesn’t think it is sustainable.

“While there is potential upside surprise from a faster ramp or pull forward of Model Y ahead of schedule, there is likely cannibalization of current Model X and Model 3 product demand with a crossover variant,” Tamberrino wrote in a note.

Analysts have questioned if there is global demand for the hundreds of thousands of Model 3 sedans and other vehicles Tesla aims to produce, after deliveries fell 31% in the first quarter.

“We believe that is the largest question for investors to underwrite at this point — what are sustainable demand levels for the Model S, Model X, and Model 3 — and how does that change with the introduction of Model Y production,” Tamberrino said.

The brokerage maintained his “sell” rating on the stock and cut its target by $42 to $158, 34% below the median target, saying the Street is “still modeling too optimistic sustainable volumes for Tesla”.

Tesla stock has seen more session wins in June than losses, a rare for the company which has lost 33% in value so far this year. However, led by Musk’s near-term delivery promises, shares have bounced back lately. June so far has been the best month since October for Tesla stock.

Tamberrino expects the downward spiral for shares to resume as it becomes more clear that sustainable demand for Tesla’s products are below expectations.

Shares of the company were marginally down at $226.10 in early trading.

Twelve of 31 brokerages covering the stock rate it “buy” or higher, 7 “hold” and 12 “sell” or lower, according to IBES data from Refinitiv.

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Exxon's $53 billion Iraq deal hit by contract snags, Iran tensions - sources

Reuters - 21 June 2019

 Just weeks ago, U.S. energy giant ExxonMobil looked poised to move ahead with a $53 billion project to boost Iraq’s oil output at its southern fields, a milestone in the company’s ambitions to expand in the country.

But now a combination of contractual wrangling and security concerns, heightened by escalating tensions between Iraq’s bigger neighbor Iran and the United States, has conspired to hold back a deal, according to Iraqi government officials.

The negotiations have been stymied by terms of the contract that Baghdad objects to, said four Iraqi officials involved in the discussions who spoke to Reuters on condition of anonymity due to the sensitivity of the matter.

The main sticking point, they said, was the means by which Exxon proposed to recoup its development costs, with the company aiming to share the oil produced by two fields - something Iraq opposes, saying it encroaches on state ownership of production.

One of the Iraqi negotiators said Baghdad would not sign anything with the current terms proposed by Exxon.

ExxonMobil declined to comment on the terms of the contract or the negotiations, with a spokeswoman in Texas saying: “As a matter of practice, we don’t comment on commercial discussions.”

The deputy oil minister for upstream affairs, Fayadh Nema, said on Wednesday that talks were ongoing and he expected a deal soon.

The negotiations have also been held up by two separate evacuations of Exxon staff from Iraq, a result of escalating regional tension between the United States and Iran.

The first was in May after hundreds of U.S. embassy staff were sent home over unspecified security threats from Iran, which backs a number of Shi’ite armed groups in Iraq. The second was this week following a rocket attack thought to have targeted the company which local officials blamed on Iran-backed militias.

Tehran has not commented on the attacks, but the evacuations highlighted the persistent instability in Iraq that is hindering business, fueled by the U.S.-Iran tensions.

Iraq one of the only nations in the world to have friendly relations with both Washington and Tehran; the arch-enemies are its two biggest allies and Baghdad is caught in the middle as they vie for influence in the country.

Many Iraqi officials say the stalling of talks with Exxon and disruptions to its staffing point to the limits of American power in Iran’s smaller neighbor, and that U.S.-Iran tensions have led to a series of security incidents including unclaimed attacks on oil tankers in the Gulf.

“Exxon pulled its staff from Iraq in response to regional unrest. The question is how they will run a $53 billion project with constant regional instability,” said an Iraqi oil official who oversees foreign companies’ operations in the south. “They might abandon work again and that will hurt our energy sector.”

CONTRACT WRANGLES

Iraq is the second-largest oil exporter in OPEC and has long-term aims to boost output curtailed by decades of war and sanctions. Such projects are among the most valuable prizes in the world for international oil companies.

An initial agreement would be a boost for Exxon’s plans to expand in Iraq. Under the deal, it would build a water treatment facility and pipelines needed to boost oil output capacity. It would also get the rights to develop at least two southern oilfields - Nahr Bin Umar and Artawi.

In May, U.S. Secretary of State Mike Pompeo discussed the deal with Iraqi Prime Minister Adel Abdul Mahdi twice in three days, during a telephone call and a surprise visit to Baghdad, a separate Iraqi government official told Reuters.

Mahdi said last month that Iraq was close to signing the $53 billion, 30-year energy agreement with project leader Exxon and its partner for the deal, PetroChina.

But the officials who shared details with Reuters over the proposals from the American oil major said there were differences between the two parties that could prevent even a preliminary agreement anytime soon.

Exxon has proposed a production-sharing agreement whereby it recoups its development costs by sharing the output of the Nahr Bin Umar and Artawi fields with the government.

However Iraq has largely opposed such contracts and over the past decade has favored so-called service contracts where companies are paid at a fixed dollar-per-barrel rate.

“We told them that we totally reject any production-sharing mechanism as it contradicts government energy policy,” said an official who is part of the negotiating team.

The official added it was too early to say what kind of contract Iraq would favor. The country has also in the past struck infrastructure deals with investment contracts where companies take a slice of profits.

Another official involved in the talks said Exxon’s production-sharing model included a proposal to sell some Iraqi crude itself, rather then through the state oil marketer SOMO, a plan the government strongly rejected.

POLARIZING OIL DEAL

 Relations between Washington and Tehran have deteriorated since U.S. President Donald Trump withdrew last year from a 2015 nuclear deal between Iran and world powers agreed by his predecessor Barack Obama, and reimposed and extended sanctions.

The complications facing the Exxon deal have come against the backdrop of a rapid escalation in recent weeks, with Tehran rejecting accusations by Washington it was behind attacks on oil tankers and facilities in the Gulf.

Tensions reached further heights this week when Iran shot down a U.S. military drone that it said was on a spy mission over its territory, an incident that fanned fears of wider military conflict in the Middle East. Trump said on Thursday that Iran had made “a very big mistake”.

In a sign of the frustrations felt by Baghdad, Iraqi Oil Minister Thamer Ghadhban said in May that Exxon’s decision to evacuate all its foreign staff from the country then was “unacceptable and unjustified”.

He said it was a political move rather than a genuine security precaution, without elaborating, and that it had hampered the dealmaking.

“Now they are out of the country, why should I run after them?” he said at the time.

Exxon did not comment on Ghadhban’s characterization of its temporary evacuation of Basra staff as “political”.

The U.S. State Department did not immediately respond to a request for comment on whether U.S. Iran policy might have affected the deal.

The tussle for influence in Iraq between Washington and Tehran is reflected in Iraqi politics, with the proposed $53 billion deal a polarizing issue.

Basma Baseem, an Iraqi lawmaker and a member of the parliament energy committee said Iraq should push forward with the deal with Exxon to help Iraq develop its energy sector.

“It’s a major company with billions of dollar of assets and investments across the world and a cutting edge expertise in the oil industry,” she added. “Iraq can benefit significantly from this large deal.”

However politicians from Iran-aligned Shi’ite Muslim parties portray the deal as extortion, calling it “a new occupation” by the United States.

“The government is under a lot of pressure from the Americans to sign long-term energy and power deals,” said lawmaker Kareem Alewi of the Iranian-backed Badr Organization, one of the Iraqi parliament’s two biggest groupings.

“This is a trick to control our economy.”

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Euro zone business growth stayed weak in June as optimism wanes

Reuters - 21 June 2019

Euro zone business activity picked up a touch this month but worries about slowing global growth and the impact of spreading trade conflict meant firms were at their least optimistic in nearly five years, a survey showed.

Activity was at its strongest since November but it was unbalanced, with manufacturing activity contracting for a fifth month, overshadowing a small uptick in the services industry.

The downbeat showing comes just days after European Central Bank President Mario Draghi signaled one of the biggest policy reversals of his eight-year tenure and said the Bank would ease policy again if inflation failed to accelerate.

Despite years of ultra-loose monetary policy, prices have failed to rise as fast as the ECB wants, while a slew of recent data have suggested growth is slowing.

IHS Markit’s Flash Composite Purchasing Managers’ Index (PMI), which is considered a good guide to economic health, only nudged up to 52.1 this month from a final May reading of 51.8, beating the median expectation in a Reuters poll for 51.8.

Earlier figures from the bloc’s two biggest economies, Germany and France, remained weak but surprised on the upside, offering a boost to European equities.

“The small improvement in the flash PMIs for June will not be enough to deflect the ECB from its new plan to ease policy within the coming months,” said Andrew Kenningham, chief Europe economist at Capital Economics.

Kenningham reckons the ECB will formally strengthen its forward guidance next month and then cut the deposit rate by 10 basis points to -0.5% in September.

A Reuters poll last month, taken before Draghi’s comments, found no prospect of the ECB raising interest rates through to the end of 2020 and that its next policy move would be to tweak its forward guidance towards more accommodation.

MISMATCH IHS

Markit said the PMI pointed to GDP growth of just over 0.2% this quarter, below the 0.3% predicted in the Reuters poll.

Firms in the bloc’s dominant service industry staged a modest upturn, with that PMI rising to 53.4 from May’s 52.9, ahead of expectations for no change.

But manufacturing activity contracted again. The factory PMI held well below the 50 mark separating growth from contraction, registering 47.8 compared to last month’s 47.7 and missing expectations for 48.0.

An index measuring output, which feeds into the composite PMI, dipped to 48.8 from 48.9.

“The dichotomy between services and manufacturing is only getting larger. The big question remains for how long this can continue,” said Bert Colijn, a senior economist at ING.

Demand declined for a ninth month, and factories were running down backlogs of work to stay active, as they have since September. The new orders sub-index held steady at May’s 46.6.

As demand also remained weak for services, firms there barely increased headcount this month. The employment index fell to 53.8 from 54.0.

With forward-looking indicators painting a downbeat picture, optimism waned. The composite future output PMI fell to 58.7 from 59.8, its lowest reading since October 2014.

Purchasing managers were concerned about weakening global growth, trade conflict, dampened demand conditions and rising geopolitical risks, IHS Markit said.

The United States has hit the European Union with tariffs and threatened more. On Tuesday, U.S. President Donald Trump criticized Draghi’s comments that further monetary policy changes may be needed by the ECB, saying it would spark unfair European competition against the United States.

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Huawei says shipped 100 million smartphones this year as of end-May

Reuters - 21 June 2019

Huawei Technologies said on Friday it has shipped 100 million smartphones this year as of May 30.

Huawei consumer business group’s smartphone product line president He Gang revealed the numbers at a launch event in Wuhan, China for its new Nova 5 phone. The phone is powered by Huawei’s new 7-nanometer chipset Kirin 810.

Huawei has been hit by devastating curbs ordered by Washington, which threatens to cripple its supply chain.

Founder and chief executive Ren Zhengfei said on Monday the ban could cost the company $30 billion in revenue this year, and that smartphone sales outside China already dropped 40 percent in the past month.

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Brent oil up 6% in one week on fears of U.S. attack on Iran

Reuters - 20 June 2019

Brent oil rallied above $65 per barrel and was set to notch up a 6% gain this week on fears of a U.S. military attack on Iran that would disrupt flows from the Middle East, which provides more than a fifth of the world’s oil output.

Brent crude was up $1.02, or 1.6%, at $65.47 a barrel by 1038 GMT. The global benchmark jumped 4.3% on Thursday and was up around 6% for the week, in its first weekly gain in five weeks.

U.S. West Texas Intermediate crude was up 58 cents, or 1%, at $57.63 a barrel. The U.S. benchmark surged 5.4% on Thursday and was on track for a 10% increase this week.

“Crude prices are spiking on increased Middle East tensions after Iran shot down a U.S. drone in what the U.S. claims is international airspace,” said Jefferies analyst Jason Gammel.

Iran said it had shot the drone over its territory.

Iranian officials told Reuters on Friday that Tehran had received a message from U.S. President Donald Trump through Oman overnight warning that a U.S. attack on Iran was imminent.

The officials said they had responded by saying that any attack would have regional and international consequences. They also said Supreme Leader Ayatollah Ali Khamenei was against talks but said they would convey the U.S. message to him.

The New York Times reported on Friday, citing sources, that Trump had approved military strikes against Iran but pulled back from launching the attacks.

Tensions have been on the rise because U.S. sanctions on Iran have severely reduced oil exports from OPEC’s third largest producer and Washington has blamed Tehran, which denies any role, for a series of attacks on oil tankers in the Gulf.

“There is no doubt that a severe disruption to the transit of oil through this vulnerable route would be extremely serious,” said consultancy FGE Energy in a note.

The demand-side outlook has also improved, said Jefferies, with appetite for risk assets rising after the European and the U.S. central banks signaled possible rate cuts this week.

A weaker greenback tends to support oil prices because crude is usually priced in dollars.

Another macroeconomic factor supporting prices is the plan by Beijing and Washington to resume talks to resolve a trade tariff war that has hit economic growth prospects.

“Trade anxiety has died down, pushing energy prices higher as global growth will not be pressured by a prolonged tariff war,” said Alfonso Esparza, senior market analyst at OANDA.

Concern about slowing economic growth and a U.S.-China trade dispute had pulled oil lower in recent weeks. That came after Brent reached a 2019-high above $75 in April.

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GDP Up 3% in First Quarter 2019

Central America Data - 18 June 2019

During the first quarter of the year, constant GDP totaled $10.599 million, 3% more than reported in the same period of 2018.

Transport and communications, financial intermediation, electricity and water supply, construction and government services provided good performance during this period, according to the Comptroller General of the Republic.

The report states that "... The Gross Added Value of the agricultural sector registered a 2.4% increase, because of the behavior of activities such as: the production of fruits that are commercialized in the rest of the world, among them banana, watermelon and melons, showed a 24.6%, 36.7% and 125.4% increase, observed in their exports, the production of sugar cane and vegetables that registered 8.8% and 5.2% increases respectively, reflected in the planted and harvested hectares. The growth of the sector in this period slowed the production of rice with a 1.8% drop and corn of 8.8%, linked to the planted area; at the same time pineapple fell 17.8%, associated with its exports.

On the other hand, the livestock sector showed a 5.5% increase in cattle and 1.7% in poultry. Meanwhile, the slaughter of pigs registered a 6.5% drop. Regarding animal by-products, poultry egg production registered growth of 4.1%, while the purchase of natural milk decreased by 13.0%.

Mining activity presented an increase in its quarterly Value Added of 4.5%, mainly due to the use of basic material, especially stone and sand, used by the construction sector, in the execution of infrastructure projects, developed by the public and private sectors."

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Dollar Price Keeps Going Down

Central America Data - 19 June 2019

In 2018, the dollar price against the Colon was on an upward trend, however, between February 6 and mid-June of this year, there has been a fall of up to 28 colones per dollar. Click to interact with graph

Figures from the Central Bank of Costa Rica (BCCR) specify that so far this year have been reported ups and downs, as between January 1 and February 6 the average exchange rate against the Dollar in the wholesale market Monex increased from ¢609.05 to ¢613.87, but recent months have been marked by a downward trend, to register on June 18 the lowest level in 2019, ¢585.82.

This downward trend was noticed by the country's export sector, which weeks ago asked the Central Bank "to avoid distortions in the fixing of the exchange rate by the oversupply of dollars from the sources of financing of the fiscal deficit.”

Gerardo Corrales, an economist, explained to Elobservador.com that "... the exchange rate is sustained at low levels as a result of lower imports of vehicles, white goods and other durable goods. There is a greater supply of dollars coming from the conversion of investments from dollars to colones, to take advantage of higher interest rates."

Alberto Franco added that "... high local interest rates attract financial capital. High local interest rates, in turn, are the result of a fiscal deficit financed with domestic resources.

Daniel Succar, thinks that "... The country is going through a period of slow economic activity. People are saving, with a view to what might happen with VAT."

Regarding the behavior of economic activity, the latest BCCR report explains that to April of this year the Monthly Economic Activity Index reported in April a 1.6% year-on-year increase, variation that is lower to the 1.8% growth reported in March.

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Honduras Maintains Debt Rating

Central America Data - 18 June 2019

Moody's kept the rating of long-term issues and senior unsecured bonds at B1, arguing that there is a "solid fiscal framework that has stabilized debt at lower levels compared to its rated peers.

Honduras' fiscal balance behaves favorably with respect to GDP and has been enough to stabilize overall government debt at around 41% of GDP, Moody's report explains.

From Moody's statement:

New York, June 12, 2019 - Moody's Investors Service ("Moody's") has today affirmed the Government of Honduras' B1 long-term issuer and B1 senior unsecured bond ratings. The outlook remains stable.

The rating affirmation at B1 balances: 1. A comparatively strong fiscal framework that has stabilized debt at levels lower than rated peers' 2. Rating constraints stemming from weak institutions, domestic political risk and comparatively low wealth levels Honduras' long-term foreign-currency bond ceiling remains unchanged at Ba2. The foreign-currency bank deposit ceiling remains at B2, while the local-currency bond and bank deposit ceilings remain at Ba2. The short-term foreign-currency bond and bank deposit ceilings remain unchanged at NP.

RATINGS RATIONALE FOR THE RATING AFFIRMATION AT B1

FIRST DRIVER: FISCAL FRAMEWORK THAT HAS STABILIZED DEBT LEVELS

 On 6 May, the government of Honduras and the International Monetary Fund (IMF) reached a staff-level agreement on a precautionary Stand-By Arrangement and Standby Credit Facility program. The agreement with the IMF will further support the fiscal consolidation efforts in place since 2014 and will likely improve the financial position of the public electricity company.

As a result of fiscal consolidation efforts, Moody's expects Honduras' general government to post modest fiscal surpluses averaging 0.2% of GDP in 2019 and 2020, compared to fiscal deficits averaging 2% of GDP in 2013-2017. Improvements in the fiscal balance are a result of both higher revenue intake and lower expenditures. A new streamlined tax agency has enabled the government to increase its revenue intake by 3% of GDP since 2013 -- a notable accomplishment considering that most Central American sovereigns have been unsuccessful in their efforts to increase their tax intake.

Honduras' fiscal balance compares favorably to the -2.5% of GDP median for B1-rated sovereigns (2019), and has been sufficient to stabilize general government debt at around 41% of GDP, lower than the 52% of GDP median for similarly rated sovereigns. Debt as a percentage of government revenue, which the rating agency projects will reach 152% this year, also compares favorably to the 229% median for B1-rated peers. Because Moody's expects the government debt burden to remain relatively stable over the next two to three years, only fiscal consolidation measures beyond what is currently planned would allow for debt ratios to fall in the coming years.

SECOND DRIVER: CONSTRAINTS ON THE RATING STEM FROM WEAK INSTITUTIONS, DOMESTIC POLITICAL RISK AND LOW WEALTH LEVELS

Honduras' rating is constrained by a weak institutional framework, evidenced by the country's low rankings in the Worldwide Governance Indicator scores. Honduras scores in the 10th percentile of all rated sovereigns in terms of both government effectiveness and the rule of law. Domestic political risk is also a relevant factor, as evidenced by the administration's decision to backtrack on education and health reforms that were approved last year after protests against government policies.

The rating is also constrained by the small size of the economy, its limited degree of diversification given high dependence on maquila- and agriculture-based activities, and a low level of overall economic development. Honduras' nominal GDP, which Moody's estimates at $25 billion in 2019, is less than half the $52 billion median for B1-rated sovereigns. GDP per capita on PPP terms in 2018 (latest available data) reached $5,212, compared to the $9,804 B1 median. The income gap will likely increase over time as Honduras is growing slower than similarly rated sovereigns, with an average annual real GDP growth of 3.4% for the next three years compared with a 4.2% average for B1 peers.

RATIONALE FOR THE STABLE OUTLOOK The stable outlook reflects Moody's expectation that medium-term growth prospects and the government's commitment to prudent fiscal and monetary policies will maintain debt ratios at close to current levels, despite pressures arising from high poverty levels and relatively weak institutions.

WHAT COULD CHANGE THE RATING UP Faster and sustained GDP growth coupled with continued fiscal discipline that leads to declining government debt ratios could generate upward pressure on the credit profile.

WHAT COULD CHANGE THE RATING DOWN Conversely, downward pressure could emerge on Honduras' credit profile if future policy behavior is not consistent with recently created institutional arrangements, preventing additional progress on fiscal consolidation and stalling the positive trends observed in recent years.

GDP per capita (PPP basis, US$): 5,212 (2018 Actual) (also known as Per Capita Income)

Real GDP growth (% change): 3.7% (2018 Actual) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 4.2% (2018 Actual) Gen. Gov. Financial Balance/GDP: 0.2% (2018 Actual) (also known as Fiscal Balance) Current Account Balance/GDP: -4.2% (2018 Actual) (also known as External Balance) External debt/GDP: 37.6% (2018 Actual)

Level of economic development: Low level of economic resilience Default history: No default events (on bonds or loans) have been recorded since 1983. On 07 June 2019, a rating committee was called to discuss the rating of the Honduras, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have not materially changed. The issuer's institutional strength/framework, have materially decreased. The issuer's fiscal or financial strength, including its debt profile, has not materially changed. The issuer has become less susceptible to event risks.

The principal methodology used in these ratings was Sovereign Bond Ratings published in November 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

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Bar scales back 'free shot per goal' promotion after U.S. 13-0 win

Yahoo News - 13 June 2019   

A Miami bar that offered customers "free shots" for every goal scored by the United States at the Women's World Cup has scaled back its offer in the wake of the team's record-breaking 13-0 thrashing of Thailand this week.

The American Social Bar & Kitchen used its social media page for the promotion, clearly not expecting the U.S. to rack up the tournament's biggest-ever win in their opening game in Reims, France on Tuesday.

The rampant U.S. team, a traditional powerhouse of women's football, face unfancied Chile on Sunday but thirsty Florida customers should not be expecting another night of multiple free shots and will have to settle for a single drink.

"Our 'free shots' promotion is not meant to be taken literally, especially when records are shattered," a furiously back-pedalling Paul Greenberg, one of the managing partners at American Social, said in an email to Reuters.

"No one expected this, so instead of passing around shots, we have welcomed our patrons back for a round on us during the match against Chile on Sunday."

The bar is a favorite meeting place for the local chapter of the U.S. soccer supporters group, the American Outlaws.

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