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  Wednesday 17th April 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
16-Apr-19 6.7793 112.00 1.13 64.05 2.57 2.59 2.42 2.60 7.469.92 2,905.58 22,221.66 1,331.05
15-Apr-19 6.7793 112.04 1.13 63.40 2.59 2.55 2.41 2.60 7,436.87 2,907.41 22,169.11 1,331.20

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 36.57 - - 36.57 500 36.89 890 36.55 15-Apr-19 - 36.57 -

Le Hunte: Less than 30 % get water 24/7

Trinidad Newsday - 16 Apr 2019

PUBLIC Utilities Minister Robert Le Hunte says about 30 per cent of citizens are receiving water 24/7 in the dry season and described claims of "water for all" as a "farce."

He was responding to a question in the Senate yesterday from Opposition Senator Wade Mark, who asked about reports that residents of Four Roads, Tamana have not received a pipe-borne water supply for more than two years, and what was being done to rectify this situation.

Le Hunte said the information from WASA does not support the allegations and there has been an intermittent supply over the years. He explained the area is supplied with pipe-borne water from a rural intake which requires higher levels of chlorine being put in the water.This, he explained, results in a rapid build-up of calcium in the distribution network,which causes frequent clogging of the mains and leads to a disruption of the pipe-borne supply from time to time.

Le Hunte said as a temporary measure to supplement the supply to affected customers, the authority has installed seven 1,000-gallon capacity communal tanks at various points in the Four Roads, Tamana area which are replenished regularly. A truck-borne supply of water is also available to individuals on request.

Mark asked when WASA would take steps to provide the community with a 24-hour supply.

Le Hunte replied: "We have had a lot of clichés around this country about 'water for all.' The reality is that, coming into office, that again has been a myth. And there is not a constant supply of water for all in this country.

"So 24/7 water is something which we have to work to, and based on the information, less than 50 per cent, and especially during the dry season, less than 30 per cent of this country receive water for all (24/7)."

He said this administration is working towards achieving the goal of a more regular supply.

On the Four Roads area he said there was never a 24/7 water supply and added the area has grown to 450 households and about 1,300 residents. In addition to the intake that supplies the area, he said, there is a plan to take water from the North Oropouche area, and this requires putting down between five and seven kilometres of pipe. He reported the works were being scoped and funding will be sought in the Public Sector Investment Programme next year.

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TT, Kenya strengthen security ties

Trinidad Newsday - 16 Apr 2019

NATIONAL Security Minister Stuart Young has welcomed the strengthening of ties between TT and Kenya.

Young expressed this sentiment when he received a delegation from the Kenyan National Defence College at his Temple Court office in Port of Spain on Monday.

Led by Brig Gen Godfrey Peter Aumah Buluma, the delegation will be in TT until April 21.

A statement issued by the National Security Ministry said the purpose of the delegation's visit is to learn about TT's strategic direction and management of national security and related public policy.

Young said the visit creates a forum for an exchange of knowledge between the delegation and local law enforcement and defence agencies and is an opportunity to share ideas on mitigating emerging threats to international security.

Buluma shared Young's views on the importance of the visit.

The National Defence College is a Kenyan Defence Force-sponsored institution responsible for developing and improving the intellectual capacity of senior military and government officials on a broad range of national security issues.

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AG: Suspect gets back property within 14 days, or asap

Trinidad Newsday - 17 Apr 2019

PROPERTY seized by the State as possible criminal assets, but which is later shown not to be such, must be returned to its owner within 14 days-plus, the Senate agreed in committee yesterday. Under debate was the Civil Asset Recovery and Management and Unexplained Wealth Bill 2019.

Opposition Senator Wade Mark had urged the property be returned forthwith, but most Senators instead supported a fortnight-plus period proposed by Attorney General Faris Al-Rawi.

However, one Independent Senator, Amrita Deonarine, joined with the six Opposition members to vote for Mark’s amendment, while her eight colleagues backed the Government’s stance to defeat Mark’s amendment by 23 votes to seven.

The final draft said after an initial seizure order expires, the property must be returned “within 14 days, or as soon as is reasonably practicable.”

Before the vote, Independent Senator Anthony Vieira told the AG that the asset seizure, done with justification, renders the subject a victim and leaves him out of his home or out of his business for the period of confiscation. The AG quipped, “But you are not out of due process.”

Opposition Senator Gerald Ramdeen remarked, “There are cases before the courts of exhibits retained for eight or nine years because there is no provision in law that compels them to return it.” The AG countered that he must adjudge the practicality of how quickly the State was to return an item, as he considered the case of a yacht in St Martin.

Vieira retorted by saying the business of the yacht owner, innocent of any wrongdoing, would be in trouble for the period his boat was confiscated, as he urged a balance between the rights of the State and those of the individual. 

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Stock Market report for 16 Apr, 2019

Trinidad & Tobago Stock Exchange - 17 Apr 2019

Overall Market activity resulted from trading in 14 securities of which 5 advanced, 4 declined and 5 traded firm.

Trading activity on the First Tier Market registered a volume of 139,133 shares crossing the floor of the Exchange valued at $3,480,001.89. TRINIDAD CEMENT LIMITED was the volume leader with 49,394 shares changing hands for a value of $128,424.40, followed by TRINIDAD AND TOBAGO NGL LIMITED with a volume of 43,485 shares being traded for $1,287,579.60. SCOTIABANK TRINIDAD & TOBAGO LIMITED contributed 16,875 shares with a value of $1,055,300.00, while MASSY HOLDINGS LTD. added 8,099 shares valued at $436,119.50.

MASSY HOLDINGS LTD. registered the day's largest gain, increasing $0.76 to end the day at $53.85. Conversely, SCOTIABANK TRINIDAD & TOBAGO LIMITED registered the day's largest decline, falling $0.46 to close at $62.54.

On the Mutual Fund Market 79,071 shares changed hands for a value of $1,814,305.01. CLICO INVESTMENT FUND was the most active security, with a volume of 78,671 shares valued at $1,808,501.01. CLICO INVESTMENT FUND declined by $0.04 to end at $22.99. CALYPSO MACRO INDEX FUND remained at $14.51. 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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Official airline for Crop Over

Nation News - 17 Apr 2019 

It is Caribbean Airlines and the announcement was made by Minister of Tourism and International Transport, Kerrie Symmonds, after the inaugural non-stop flight from Jamaica to Barbados touched down at the Grantley Adams International Airport on Monday night.

The minister was joined by officials from the Barbados Tourism Marketing Inc., the Grantley Adams International Airport, the Caribbean Tourism Organisation, chief executive officer of the National Cultural Foundation, Carol Roberts-Reifer, travel agents from Barbados and Jamaica, Caribbean Airlines pilot Captain Ian Wilson and his co-pilot Tanisha Clover as well as media from Barbados and Jamaica in the Grace Adams Suite for the event.

Symmonds said the decision came after “lengthy discussions” with the airlines.

“Caribbean Airlines itself has been working with us on its own aspect of the marketing campaign. They have a theme called the Caribbean Identity which, as I understand it, goes a great distance in this region towards showcasing the commonality of the region and also the region’s commitment and dedication to culture and to arts,” the minister said.

“The ideal of bringing the region closer together has, for a long time, been at the forefront of my administration’s priorities. We feel that every step must be taken to keep our people in contact with each other for tourism purposes, for cultural purposes.

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Mottley calls urgent meeting on transportation

Nation News - 17 Apr 2019

Prime Minister Mia Amor Mottley has summoned an urgent meeting of all major players in the public transport sector to look at the current state of the system.

This meeting will take place at 11 a.m. tomorrow, at Government Headquarters on Bay Street, and will be attended by officials of the Transport Authority, the Transport Board, the Ministry of Transport, Works and Maintenance, and representatives of the various organizations representing public sector vehicle operators.

According to Press Secretary, Roy Morris, “there is no doubt that the gap between the expectations of commuters and what is being delivered by both public and private sector operations is too great for business as usual to prevail, and it would not be a misrepresentation to describe what now obtains as being in crisis or near crisis.

“However, the Prime Minister has made it clear that she is determined to ensure there are short term solutions put in place while the country awaits the arrival of new buses”.

He added: “And while the Prime Minister has been out of the island over the past week, she has so continued to keep a very close watch on the situation, and tomorrow's meeting is to ensure that all players understand that the best interest of commuters must always be at the forefront of decision making and actions taken.”

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Sagicor now Jamaica's 2nd most profitable listed company

Jamaica Observer - 17 Apr 2019

In a media briefing on Monday, President and CEO Chris Zacca announced that Sagicor Group Jamaica had become the Jamaica Stock Exchange's second most profitable listed company, with increased profits of $14.23 billion on total revenue of $70.66 billion, or 18 per cent above the $12.07 billion net profit recorded in 2017, moving it up from third and continuing its long run of increasing annual profitability.

This was despite an $875 million impairment provision against their investment in Government of Barbados bonds, and the general cost of implementing the new forward looking Expected Credit Losses (ECL) methodology following the adoption of the new IFRS 9 accounting standard in their 2018 calendar year.

Stockholder's equity had increased by nine per cent to $74.34 billion, after the distribution of $1.20 in dividends per share in 2018, and an interim dividend of 79 cents per share will be paid on May 9, up from 66 cents per share last year.

Earnings per share increased by 17 per cent to $3.65, giving a very healthy return on equity of 20 per cent. Total group assets at December 2018 were $394 billion, up from $352 billion.

Zacca re-introduced his management team, and observed that in their core business, Sagicor Life, they remained the market leaders in individual life insurance (around 65 per cent), group health (around 68 per cent), group life insurance (over 50 per cent), and pension fund management (over 30 per cent), and were actually continuing to grow market share, resulting in a combined $9 billion in net profits.

He emphasised that Sagicor Bank had also had a very good year, with a 60 per cent increase in profits to $2.85 billion for 2018, all on a 14 per cent increase in revenues to $12.4 billion, with no increase in fees, driven instead by double-digit growth in loans and credit cards, and the introduction of two new products aimed at improving financial inclusion — namely SWYPE (a mobile point of sale that fits in a pocket) and MYCASH (a prepaid card partnering with Digicel using internationally accepted mastercard).

Zacca advised the bank also has two more products in this space awaiting central bank approval. Sagicor Bank CEO Chorvelle Johnson described her strategy as listening, focusing on clients “pain points” and training team members to address these areas.

Zacca noted the bank had seen sharply increased customer satisfaction scores. They were also in the process of reviewing their fees, which would be announced shortly.

Zacca noted that Sagicor Investments, led by Kevin Donaldson, recently completed one of the largest local bond transactions for utility company JPS, a debt financing of US$180 million, with strong support from Sagicor Bank, which led the raising of US$66 million in syndicated loans.

Their asset management business had grown from $89 billion to $140 billion under management, and they were in the process of expanding their regional asset management and investment banking business.

They had an asset management business in Cayman, and were in the process of applying for an investment banking licence there, and were already doing investment banking deals across the region in Barbados, Trinidad and St Lucia.

They would soon be launching an infrastructure fund, and were involved in several real estate developments that were being started or coming to fruition.

Importantly, and a reason for the delay in their financial statements, Executive Vice-President Finance and Group CFO Ivan Carter noted that they had reclassified their 15 per cent holding in Playa Hotels to an “associate” company from June 2nd, from a “portfolio” investment, reflecting their “significant influence”, meaning that they would “pick up” the corresponding portion of their net profits.

This influence reflects the fact that in addition to Sagicor having two board directors on Playa, Zacca is a member of their audit committee, and Richard Byles is a member of their “capital allocation” committee, which reviews all significant new investments.

Playa is expanding with a new 750 room hotel in the Dominican Republic, and has recently converted two of its hotels to the Hilton Brand. Zacca noted that Playa had four main shareholders, the largest being a hedge fund, with Sagicor as the second largest, ahead of Hyatt, whose brands include Hilton. The stock is thinly traded on Nasdaq, and therefore volatile, and in his view this better reflects their strategic investment role.

The group also took control of the X Fund from October 1st, and now accounts for it as a subsidiary rather than as an associate, reflecting their effective control despite only owning 31 per cent. As a result, they recognised a one-off gain of $1.52 billion, of which $1.29 billion relate to stockholders.

Effective December 1st, they also acquired a 51 per cent stake in a micro – financing business, Travel Cash.

In response to a question on the deal with Scotia Insurance, he noted that the Scotia Life partnership was at the level of their parent company, and would be part of the overall deal to list Sagicor Financial Corporation on the Toronto Stock Exchange which was still subject to shareholder approval.

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Thousands of Saint Lucians To Benefit From Tax Savings

Caribbean News Now - 17 Apr 2019

In a Budget Address that centred on people-centric growth and bringing relief to Saint Lucians, Prime Minister Honourable Allen Michael Chastanet announced Personal Income Tax Reform that would see thousands of low income earners pay less and in some cases no personal income taxes.

This is a bold initiative and in keeping with the Government’s promise of less onerous taxes on the people of Saint Lucia.

Under the theme “Growth by Empowerment for a Better Future” the Minister for Finance presented the Appropriation Bill 2019-2020 which focused on “opportunities that will propel every Saint Lucian to an acceptable standard of living and offer the chance to build wealth for themselves and their families.”

Part of this plan, explained the Prime Minister, was the reform of the personal income tax system to make it simpler, more progressive and less burdensome.

During his presentation to the House of Assembly on Monday April 15th 2019, the Prime Minister explained the challenges and disadvantages of the current system, among them: the burdensome filing of a number of documents; many individuals find the tax computation complicated with the four tax bands and four tax rates; the system is not sufficiently progressive, as the greatest burden of taxation does not always fall on the higher income earners.

The Prime Minister explained that the new regime seeks to provide income tax relief to lower income earners. Prime Minister Allen Chastanet

“A large number of low-income employees will no longer be required to pay personal income tax, while others will benefit from reduced tax liabilities,” said PM Chastanet. “However, high income earners will be expected to pay more as a result of the progressive nature of the tax system. As such, the new regime is expected to be revenue neutral with no adverse impact on the government’s revenue collections from PAYE.”

Expected to come into effect 1st January 2020, the new system will be as follows:

· The personal allowance will be increased from $18,000 to $23,000. What this means is that for an average income earner, the first $23,000 of annual income will be tax free;

· There will be three (3) tax bands with the following rates:

(i) The first $0 to $10,000 of chargeable income will be taxed at a rate of 10%,

(ii) the next $10,001 to $20,000, at a tax rate of 20% and

(ii) the remaining amounts above $20,000, at a tax rate of 30%;

· Limit the amount of total deductions that can be claimed up to a maximum or cap of $25,000 in any given year.

· Restrict the number of allowable deductions to the following four (4) categories: Housing Deductions, Future & Financial Benefits, Medical Deductions and Child and Education Benefits.

The Prime Minister then demonstrated in detail how progressive this new system will be with low earners as beneficiaries.

“An employee with annual earnings of $26,000 and allowable deductions of $5,000 pays tax of approximately $300 under the existing regime. However, under the new regime, this employee will not pay any tax, resulting in a savings of $300,” he noted. “An employee with annual earnings of $50,000 and allowable deductions of $10,000 pays tax of approximately $2,900 under the existing regime. However, under the new regime, this employee will pay $2,400, which is a reduction of $500.”

The Minister for Finance further noted that pensioners and persons 60 years and over, will not pay any tax on the first $31,000 of their income compared to $24,000 under the current regime.

Preliminary assessments of the proposed reform showed that for a given year, over 11,000 persons or approximately 50% of filers will pay lower personal income taxes under the proposed regime.

The Prime Minister added that the greatest number of beneficiaries under this reform are individuals earning incomes ranging from $20,000 to $30,000 and $30,000 to $40,000.

“In these two income brackets, some 3,570 and 3,280 individuals will benefit. My government anticipates significant tax savings for the majority of individuals who will be better off under the proposed tax regime,” stated PM Chastanet.

The Prime Minister said it is anticipated that the entire country will benefit from the new tax regime and this will have a spill-over effect on the economy as a whole as consumer spending power will increase.

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Stiff Penalties For Offenders Under New Antigua Litter Act

St. Lucia Times - 17 Apr 2019

The Litter Act – that will result in stiffer penalties for people caught dumping illegally – will take effect from tomorrow, Thursday.

Minister of Health and the Environment Molwyn Joseph made the announcement Monday on OBSERVER Radio, stating that over the next few weeks the ministry will engage in discussions with the business community and other key stakeholders, beginning with those in the capital, St. John’s.

“We hope to engage the business establishments in Antigua and Barbuda to alert them of the new rules in putting out their waste for collection. It is going to require specifics in terms of how you package your waste,” Joseph said.

One implication is that businesses will no longer get away with discarding empty boxes on the side of the street in expectation that they will be collected as is.

“They are going to be required to break down those boxes and have them bound so that another collection process will take place because those are recyclables,“ Minister Joseph said.

The Litter Control and Prevention Bill was passed in February this year, repealing the current Litter Act. In anticipation of the enforcement of this new law, several garbage receptacles were placed in strategic locations, beginning in the city of St John’s.

The minister also addressed concerns from residents about the size of the bins, which some opined were too small. He admitted that the government was not able to afford larger bins, but stated that this is to encourage recycling in the country.

“We wish we could have afforded bins slightly larger, but the reason for the size of these bins is for the recycling process. We ultimately hope to be in a position where the mothers and the fathers and the children, when they are at home, will be able to separate their waste,” Minister Joseph said.

“If we can separate waste in terms of their streams, we will not have any need for the mounds of garbage down at the sanitary landfill,” he added.

However, in noting that the size of the bins may not allow for the disposing of all waste material, Joseph said a contractor has been hired and will be going through the city every two hours, monitoring the bins.

“As we study that, if it requires faster rotation, we will increase it and if it requires less rotation, we will make the adjustments,” Joseph said.

He expounded further by saying that the people involved in policing the bins are required to document and report the state of the bins so that provisions can be made if additional bins are needed at a site.

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Guyana pushing green energy with new solar farm

Nation News - 13 Apr 2019

A one-megawatt solar farm valued at $565M is expected to be constructed in Lethem.

The plan for the solar farm is currently awaiting approval from the international tender, after which the construction will commence.

The project, which “is anticipated to take a year to come into fruition,” will provide Lethem with a more stable source of electricity.

It is also expected to supplement the diesel-based electricity supply and according to Minister of Public Infrastructure, David Patterson, within two-and-- half years, Lethem will be fully operable on renewable energy.

The establishment of the Lethem Solar Farm is part of a larger, national project to equip the Rupununi and other outlying areas, such as Mabaruma, Bartica and Mahdia, with enough access to a reliable energy source by 2020.

The government commissioned a 0.4MW solar farm in Mabaruma in 2018 and a solar photovoltaic (PV) system is expected to be constructed in Mahdia in June of this year.

Patterson told the Department of Public Information that a loan from the Islamic Development Bank was recently approved to fund the feasibility study for the establishment of a $1.4 billion hydropower system, using the Moco Moco and Kumu Falls located in the Rupununi.

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Selling or saving the soul of the OAS

Caribbean News Now - 16 Apr 2019

By Sir Ronald Sanders

The Organisation of American States (OAS), already a broken institution, was shattered even more April 9 at a meeting of its permanent council. It is now an organisation whose membership is deeply divided and amongst whom mistrust, and bitterness now predominate.

How this huge problem will be fixed – if it can be fixed at all – is the paramount challenge that now confronts its 33 and a half members. I will return to the half-member later in this commentary.

Nothing that I say in this commentary is a secret. The permanent council meeting of April 9 was played out in a live webcast on the OAS’ website.

The meeting was held, after weeks of efforts by the United States and most of the members of the so-called Lima group, to secure the adoption of a resolution that would unseat the representative of the Nicolas Maduro government and replace him with the nominee of Juan Guaidó. Guaidó is the self-proclaimed “interim president” of Venezuela, so recognised by roughly 50 of the more than 200 governments in the world.

The maneuverings behind the scenes had a single purpose, and that was to procure 18 votes, constituting a simple majority of the 34 member-states, to impose Guaidó’s nominee as Venezuela’s representative.

It took some time for the core 14 countries to woo the support of 4 others, not least because the manner of pushing the resolution through the permanent council defied international law and the charter and rules of the OAS. Governments had to dig deep to balance disregard for the integrity of the OAS as an institution and a desire to help those countries that were determined to seat Guaidó’s representative.

The meeting was summoned for high noon April 9, and all delegations were cautioned to be on time for a prompt start. As it turned out delegates were forced to wait until after 1 pm to start the meeting because, at the last minute, Jamaica — one of the faithful 18 — insisted on new language, causing a commotion among the group and threatening to derail its entire effort.

Even when the resolution was presented to the permanent council meeting and was being debated, it was unclear what text was being considered. What was before the meeting was the original text, omitting the Jamaica language. A request from me, as the representative of Antigua and Barbuda, for clarification, resulted in a break in the meeting’s proceedings to produce the final text of the resolution. Its primary purpose remained to accept the appointment of “the national assembly’s designated permanent representative.”

There was much solemn and serious debate about the entire proceedings, but in the end, 18 countries, using their razor-thin majority, forced the vote through.

Some self-interested governments have characterised the April 9 meeting as a clash of support for or against the contending forces in Venezuela. Sections of the media have followed that line.

However, far from being about Maduro/Guaidó and Venezuela, the meeting was about selling or saving the soul of the OAS; it was about disregarding international norms and ignoring the institutional framework of the organisation for the short term political purposes of a few; and it was about arguing for the retention of the OAS’ integrity.

At the end of the vote, passed by a simple majority, the ambassador of Mexico, Jorge Lomónaco Tonda, summed-up the meeting well. He said: “There were no winners or losers; only losers.” Moreover, the biggest loser was the OAS itself.

Nowhere in the charter of the OAS, or its rules, does the permanent council have the authority to decide on the recognition of a government. Further, as was stated repeatedly at the meeting, the recognition of a government is the sovereign right of states and cannot be determined or imposed by a multilateral organisation. At the very least, the matter, given its high political importance, should have been considered by a special session of the general assembly, the highest organ of the OAS.

What the hasty, ill-considered process succeeded in doing is damaging the OAS as an institution, tainting its structure and governance, harming relations between its member states and rendering it unfit for anything but achieving the purposes of a willful majority of 18 countries.

The vote on recognition of the national assembly’s representative was really about the de-recognition of the Maduro government’s representative. While that may have been achieved within the OAS, it has changed nothing in the international community. Countries that recognise Maduro or Guaidó as president of Venezuela continue to do so.

Nothing has changed in Venezuela either. This vote has achieved no new negotiations and no solution to the humanitarian situation. If anything, it has served only to harden the opposing sides in the political conflict, closing the door to solutions.

To return now to the 33 and a half members of the OAS. The national assembly’s representative may be seated in front of the Venezuelan flag, but he cannot speak for the government that is in charge of Venezuela. A vital test of recognition of a government, in international law and practice, is whether it exercises effective control of the affairs of the country. The national assembly does not have effective control of Venezuela, and its representative cannot speak, in the OAS, for the de facto government.

There is a further question regarding the authenticity of the representative’s credentials which appear to have been overlooked, deliberately or otherwise by the OAS Secretariat.

The national assembly nominated a “special” representative to the OAS, but there is no such category of representation. Further, as pointed out in the meeting by the ambassador of Guyana, Riyad Insanally, the letter to the Secretary-General from Guaidó, signed as “interim president of Venezuela,” designating the “permanent” representative, was dated January 22, 2019. However, his proclamation as “interim president” took place on January 23, 2019. In other circumstances, these discrepancies would not have been accepted.

The OAS is now in many ways a sadly compromised organisation. The fight on April 9, 2019, to sell or save its soul defines it now and can limit its effectiveness in the future.

Why should we care? Because it is the only hemispheric organisation in which all countries (except Cuba) sit, and which had the mandate and the opportunity to keep the region peaceful and to pursue cooperation that could make a difference to the lives of all its people. All that is now corrupted.

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Share surge is a bet China is back on track

Reuters - 17 Apr 2019

By Christopher Beddor

The world’s second-biggest economy may be getting back on track, at least judging by the 35 percent rise in the benchmark CSI300 index .CSI300 so far this year. Growth may have been lacklustre in the first quarter, but stock investors are optimistic, encouraged by an impressive lending rebound. The test will be how long these animal spirits alone can keep momentum going.

China’s first-quarter GDP was up 6.4 percent compared to a year earlier, official data showed on Wednesday. That’s the same rate of growth as the fourth quarter of last year. But look elsewhere, and there is newfound confidence: the Shanghai Composite Index .SSEC has been one of the top-performing global indexes this year.

There are good reasons for the chirpier mood. A deal to end the U.S.-China trade conflict appears on the horizon. Fixed-asset investment in the year to March notched up 6.3 percent year-on-year growth, and policymakers announced tax and fee cuts worth around 2 percent of GDP. Some high-frequency indicators delivered pleasant surprises: factory activity returned to growth last month, according to one purchasing managers’ index.

Perhaps the biggest single factor behind the excitement, however, is lending. After last year’s squeeze to control bad debt, officials let up a bit in the first three months of 2019. The amount of outstanding total social financing, a measure of credit, rose almost 11 percent year-on-year in March. Banks extended 1.69 trillion yuan of net new yuan-denominated loans last month, more than expected. Such disbursements have a delayed impact, meaning an uptick should arrive later in the year.

So far, so good. Wary policymakers appear to have supported growth so far without letting credit rip. They haven’t sunk the budget either.

But it’s unclear what happens if business confidence sags later in the year. Beijing has ever-shrinking space to step in by increasing lending or fiscal support without either blowing past the budget deficit target, or doing an about-turn on hot-button issues like the need to deleverage companies and control property price growth.

Escalating intervention might also raise questions about whether economic growth above 6 percent may simply no longer be possible without ever-increasing dollops of credit. For now, however, policymakers can bask in some warmer sentiment.

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U.S. trade deficit narrows to eight-month low in February

Reuters - 17 Apr 2019

The U.S. trade deficit fell to an eight-month low in February as exports to China surged, helping to eclipse a rebound in overall imports, which could boost economic growth estimates for the first quarter.

The Commerce Department said on Wednesday the trade deficit dropped 3.4 percent to $49.4 billion, the lowest level since June 2018. January’s trade gap was unrevised at $51.1 billion.

Economists polled by Reuters had forecast the trade shortfall would widen to $53.5 billion in February. The goods trade deficit declined 1.7 percent to $72.0 billion, also the lowest level since last June.

The trade data have been volatile in recent months amid big swings between exports and imports because of the United States’ conflicts with trading partners, including China.

Washington last year imposed tariffs on $250 billion worth of goods imported from China, with Beijing retaliating with duties on $110 billion worth of American products. U.S. President Donald Trump has delayed tariffs on $200 billion worth of Chinese imports and talks to end the trade impasse continue.

The politically sensitive goods trade deficit with China - a focus of Trump’s “America First” agenda - decreased 28.2 percent to $24.8 billion in February as imports from the world’s No. 2 economy tumbled 20.2 percent. Exports to China jumped 18.2 percent in February.

When adjusted for inflation, the overall goods trade deficit fell $1.8 billion to $81.8 billion in February. The average goods trade deficit for January and February is below the fourth-quarter average. This suggests that trade could provide a boost to gross domestic product in the first quarter after being neutral in the October-December period.

Growth estimates for the January-March quarter are in a 1.5 percent to 2.3 percent annualized range, largely reflecting an accumulation of inventories amid slowing domestic demand. The economy grew at a 2.2 percent rate in the fourth quarter, slowing from the July-September period’s brisk 3.4 percent pace.

The trade deficit in February was pushed down by a 1.1 percent jump in exports to $209.7 billion. Exports of services were the highest on record.

Goods exports increased 1.5 percent to $139.5 billion in February. The surge in goods exports is a hopeful sign for global economic growth, which has showed signs of slowing in recent months.

Exports of motor vehicles and parts increased by $0.6 billion in February. Shipments of civilian aircraft soared by $2.2 billion in February. But commercial aircraft exports are likely to decline in the months ahead following Boeing’s decision to suspend deliveries of its troubled 737 MAX aircraft.

The MAX planes have been grounded indefinitely following two deadly crashes.

In February, imports rose 0.2 percent to $259.1 billion. Consumer goods imports increased by $1.6 billion in February, led by a $2.1 billion rise in imports of cellphones and other household goods. Imports of industrial supplies and materials fell by $1.2 billion.

Crude oil imports fell to 173.7 million barrels, the lowest since March 1992, from 223.1 million barrels in January. An increase in domestic production has seen the United States become less dependent on foreign oil. Imported oil prices averaged $46.89 per barrel in February, up from $42.59 in January.

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Wall Street set for higher open on encouraging China data, earnings

Reuters - 17 Apr 2019

Wall Street was set to open higher on Wednesday, as upbeat economic data from China and a jump in Qualcomm shares sparked gains in chipmakers, with sentiment also lifted by largely positive earnings reports.

China’s economy grew at a steady 6.4% pace in the first quarter, defying expectations for a further slowdown, adding to optimism that the economy may be starting to stabilize even as Beijing and Washington appear moving closer to a trade deal.

The data, along with semiconductor equipment maker ASML’s forecast of faster growth due to demand from China, lifted semiconductor stocks in premarket trading.

Qualcomm Inc surged 12.2% after the company won a major victory in its legal dispute with Apple Inc that called for the iPhone to once again use Qualcomm modem chips.

Shares of Intel Corp, Advanced Micro Devices and Nvidia Corp were up between 0.7% and 4.41%.

“We’ve had a tailwind from Chinese economic data, and in general earnings reports have been mixed, but for the most part it was better-than-feared,” said Art Hogan, chief market strategist at National Securities in New York.

“We’ve bounced up to a level where we are pretty fairly valued and we are going to need something significantly new like the U.S.-China trade deal for a higher estimate in 2019.”

At 8:49 a.m. ET, Dow e-minis were up 50 points, or 0.19%. S&P 500 e-minis were up 8.5 points, or 0.29% and Nasdaq 100 e-minis were up 40.75 points, or 0.53%.

If current premarket gains hold, the S&P 500 will open 0.9% below the record high hit in late September. Stocks have surged this year on growing hopes of a trade deal with China and better-than-expected earnings reports.

With earnings season in full swing, analysts now expect first-quarter S&P 500 profits to have dropped 1.8% year-on-year, according to Refinitiv data. While a solid improvement over recent estimates, it would still mark the first earnings contraction since 2016.

Of the 42 S&P 500 companies that have posted so far, 81% have beaten consensus, compared with the 65% average beat rate going back to 1994.

Netflix Inc shares reversed course to gain 3.4%. The video streaming service provider gave a weak forecast but its quarterly results beat estimates.

International Business Machines Corp fell 2.7% after reporting a bigger-than-expected drop in quarterly revenue.

PepsiCo Inc rose 2.1% after quarterly results beat Wall Street estimates on higher demand for its snacks and low-sugar sodas.

United Continental Holdings Inc rose 3.2% after reporting a better-than-expected jump in quarterly profit and lifted other airline stocks.

Morgan Stanley shares rose 1.7% after the lender reported quarterly profit above expectations, wrapping up earnings for big U.S. banks.

At 2 p.m. ET, the Federal Reserve issues its so-called Beige Book, a compendium of anecdotes on the health of the economy, drawn from the central bank’s sources across the nation.

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U.S. handbags, shovels on $20 billion EU tariff list over Boeing

Reuters - 17 Apr 2019

Handbags, tractors, shovels and fish are part of an 11-page list of U.S. imports worth $20 billion that the European Union on Wednesday said it could hit with tariffs in a transatlantic aircraft subsidy dispute. 

The United States and the European Union have been battling for almost 15 years at the World Trade Organization over subsidies given to U.S. planemaker Boeing and its European rival Airbus.

After partial victories for both sides, each is asking a WTO arbitrator to determine the level of countermeasures they can impose on the other.

The Trump administration last week proposed targeting a seven-page list of EU products for tariffs, ranging from large aircraft to dairy products and wine, to counteract the harm from EU subsidies for Airbus worth an estimated $11 billion.

Brussels has responded with its own list of some $20 billion worth of U.S. imports, including agricultural produce from dried fruit to ketchup, planes, fish, tobacco, handbags, suitcases, tractors, helicopters and video game consoles.

The published list will now be open to consultation until May 31 and could then be revised.

“The EU remains open for discussions with the U.S., provided these are without preconditions and aim at a fair outcome,” EU Trade Commissioner Cecilia Malmstrom said in a statement.

In both cases, WTO arbitrators have yet to set an amount, but the U.S. case against Airbus is more advanced, with a ruling possible in June or July. The EU case against Boeing could come early in 2020.

Both sides have said they would prefer a settlement that did not lead to the imposition of tariffs.

The European Union has meanwhile declared itself ready to start formal trade talks with the United States.

The Commission is set to start two sets of negotiations - one to cut tariffs on industrial goods, the other to make it easier for companies to show products meet EU or U.S. standards.

However, it has insisted that agriculture not be included, putting the 28-country bloc at odds with Washington, which wants farm products to be part of the talks.

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China goes all-in on home grown tech in push for nuclear dominance

Reuters - 17 Apr 2019

China plans to gamble on the bulk deployment of its untested “Hualong One” nuclear reactor, squeezing out foreign designs, as it resumes a long-delayed nuclear program aimed at meeting its clean energy goals, government and industry officials said.

China, the world’s biggest energy consumer, was once seen as a “shop window” for big nuclear developers to show off new technologies, with Beijing embarking on a program to build plants based on designs from France, the United States, Russia and Canada.

But after years of construction delays, overseas models such as Westinghouse’s AP1000 and France’s “Evolutionary Pressurised Reactor” (EPR) are now set to lose out in favor of new localized technologies, industry experts and officials said.

China signed a technology transfer deal with the United States in 2006 that put the AP1000 at the “core” of its atomic energy program. It also pledged to use advanced third-generation technology in its safety review after the 2011 Fukushima nuclear plant disaster.

But by the time the world’s first AP1000 and EPR made their debuts in China last year, Chinese designs had become just as viable.

Though China has yet to complete its first Hualong One, officials are confident it will not encounter the delays suffered by rivals, and say it can compete on safety and cost.

Beijing has already decided to use the Hualong One for its first newly commissioned nuclear project in three years, set to begin construction later this year at Zhangzhou, a site originally earmarked for the AP1000. 

“The problem with AP1000 – the delays, the design changes, the supply chain issues and then the trade problems – has forced their hand, and it has become Hualong,” said Li Ning, a nuclear scientist and dean of the College of Energy at Xiamen University.

He added that China’s licensing procedures would also be an advantage for the home grown tech. “For the Hualong, there are four reactors already under construction and one of them is near completion already. It is a Chinese design so it wouldn’t be very hard to license the next four,” he said.

EDF, France’s state-run utility, which helped build the EPR project at Taishan in Guangdong province, declined to comment. Westinghouse, now owned by Brookfield after entering bankruptcy restructuring, also did not respond to a request for comment.


China’s ambitions for the Hualong One extend overseas as well. The first foreign project using the reactor is under construction in Pakistan and the model is in the running for projects in Argentina and Britain.

“(Hualong One) is competitive,” said Li Xiaoming, assistant general manager of the state-owned China National Nuclear Corporation (CNNC). “The technologies are now just about the same as those of the United States, France and Russia.”

“This is the foundation that we will rely on for our future survival and our international competitiveness,” Li said.

China already has four Hualong Ones under construction, with the first, in the southeastern coastal province of Fujian, set to go into operation late next year, ahead of schedule, said Huang Feng, a member of the expert committee of the China Nuclear Energy Association.

“China has already become one of the small number of countries that has independently mastered third-generation nuclear power technology, and it has the conditions and comparative advantages to scale up and go into mass production,” he told an industry conference.

As Beijing gets ready to commission eight reactors a year in order to meet its 2030 clean energy and emissions targets, construction speed will be a crucial consideration, benefiting local developers.

Huang said the estimated costs of Hualong One and the AP1000 were now roughly the same, and much now depended on scaling up production to cut costs and allow the Chinese design to compete not only with other reactors, but also with coal-fired power.

Li of CNNC said while foreign-designed projects would still be built, it would “make no sense” to rely on foreign technology if China’s own domestic reactors were equally safe and reliable.

“There are probably some technologies where we will continue to cooperate, but overall we will gradually turn to our own,” he said.

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Aramco plans to buy Shell's stake in Saudi refining JV

Reuters - 17 Apr 2019

Saudi Aramco plans to buy Royal Dutch Shell’s 50 percent stake in Saudi refining complex SASREF, a joint venture between the firms, two sources said on Wednesday.

One of the sources said an agreement has been reached between Aramco and Shell.

Aramco and Shell declined to comment.

Saudi Aramco Shell Refinery Co (SASREF), based in Jubail Industrial City in Saudi Arabia, has a crude oil refining capacity of 305,000 barrels per day (bpd).

Shell has sold over $30 billion of assets in recent years as it shift its focus to lower carbon businesses such as natural gas and petrochemicals.

Energy Intelligence first reported the stake purchase plan earlier on Wednesday.

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Peru's ex-president Garcia shoots himself when police tried to arrest him

Reuters - 17 Apr 2019

Peru’s former president Alan Garcia shot himself early on Wednesday after police arrived at his home in the capital Lima to arrest him in connection with a bribery investigation, a police source said.

Garcia was immediately taken to the Casimiro Ulloa hospital, said the source, who was not authorized to talk to the media.

Local TV channel America reported Garcia was undergoing emergency surgery and was in critical condition. It broadcast images of Garcia’s son and supporters arriving at the hospital.

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State-owned Electric Plant Begins to Promote Its Bonds

Central American Data - 16 Apr 2019

On April 12, Panama's state-owned electric company began the marketing stage for the potential issuance of international bonds, which would be at least $500 million.

"Once the issuer's international risk ratings have been obtained and after several months of arduous preparation, we are ready to market among the most important investors in the United States, Europe and Latin America, our company's first long-term bond issue," explained Gilberto Ferrari, general manager of Empresa de Transmisión Eléctrica, S.A. (ETESA).

From Etesa statement:

Empresa de Transmisión Eléctrica, S.A. (ETESA) has announced the beginning of the marketing stage for the potential issuance of international bonds.

"The process starts today April 12 in Panama and will be extended for a two-week period to the most important financial centers in the world," said Gilberto Ferrari, general manager of ETESA.

"Once the issuer's international risk ratings have been obtained and after several months of arduous preparation, we are ready to market among the most important investors in the United States, Europe and Latin America, our company's first long-term bond issue", commented Ferrari, who will lead the mission.

ETESA, rated Baa1 (Stable) by Moody's and BBB (Stable) by Fitch, will hold a series of fixed income investor meetings from Friday 12 April 2019. The company expects to have about 20 meetings in which it will present to at least 60 fixed income investors (bonds) the characteristics of the company's business model and the issue to be made, which will be at least US$500 million, with a long-term amortization profile.

This announcement is neither an offer to sell nor an invitation to buy the securities to be issued. Therefore, it should be considered indicative and non-binding.

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Textile Sector: Trade Mission to Brazil Prepared

Central American Data - 16 Apr 2019

The Chamber of Foreign Trade of Costa Rica is recruiting businessmen who wish to attend a business roundtable, to be held from May 13 to 17 in the city of Brusque, Santa Catalina in southern Brazil.

Depending on the profile of each company, there is the option of covering tickets and lodging for one attendee per company at the event, informed authorities of the Costa Rican Chamber of Foreign Trade (Crecex).

From the Crecex statement:

Friday, April 12. For 20 consecutive years in the city of Brusque, Santa Catalina in southern Brazil will be held the most complete Business Roundtable of the textile sector in the region called "Pronegócio". This event brings together all summer trends in one place.

Pronegócio is organized by the Association of Micro and Small Companies of Brusque (AMPE), which will have more than 200 brands, where the female, male and children's fashion stands out, the main objective of this roundtable is to facilitate negotiations between brands and buyers.

"In this business roundtable, the quality and variety of the brands stand out, as well as the ease with which the buyer can negotiate with the manufacturers the quantities, as well as the delivery times", commented Francisco Mafezzali, representative of AMPE.

AMPE through Crecex is recruiting businessmen who wish to attend this event, "depending on the profile of each company, the option is opened to cover tickets and lodging of one attendee per company to the event," said Katherine Chaves, executive director of Crecex.

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Workers save dog spotted more than 100 miles off Thailand coast

Yahoo Odd News - 17 Apr 2019   

A Thai animal rescue group welcomed a dog who was rescued nearly 220 kilometers (136 miles) from shore Monday.

The dog, named Boonrod - a Thai word which roughly translates to "the saved one" - was brought to shore for a health check after being found dehydrated and hungry by workers on an oil rig on Friday.

Video from the rescue group Dog Smile House showed people greeting Boonrod on a dock in Hat Yai in Songkhla province, southern Thailand, showering him with pats and giving him a garland. Photos taken by oil rig workers showed him being brought up with a rope and given food and water before being transported to a boat, which brought him back to Hat Yai.

Boonrod is expected to go to his adoptive home in Khon Kaen in northeastern Thailand after he recovers.

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