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Wednesday 12th December 2018  
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
11-Dec-18 6.7793 113.38 1.13 51.65 4.41 2.88 2.39 2.77 6,806.94 2,636.78 21,148.02 1,301.43
10-Dec-18 6.7793 113.33 1.14 51.00 4.55 2.86 2.38 2.77 6,721.54 2,633.08 21,219.50 1,306.91

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 32.78 32.80 32.80 32.80 1,326 32.81 100 32.80 11-Dec-18 676 32.80 0.02
 

Develop energy sector safety culture

Trinidad Newsday - 12 Dec 2018

ENERGY Chamber chief executive officer Dr Thackwray Driver has advised the fledgling Guyanese energy sector to develop a culture of safety if it is to optimise opportunities available in the sector.

Driver was addressing the Guyana Safety Forum at the Arthur Chung Conference Centre, Guyana on December 6. His speech, which is contained in the Chamber’s latest newsletter, drew examples from TT saying the South American country could learn from its Caricom neighbour.

He said one of the major barriers facing small contractors and service companies wanting to do business with international oil and gas companies is meeting the high safety, health and environmental standards demanded of suppliers.

Driver said international operators would not lower their standards to accommodate local contractors and the onus is on Guyanese companies to ensure that safety is a top priority.

“Meeting the high safety standards of operating companies can be a challenge in countries with new hydrocarbon industries, such as Guyana. This is especially the case if the country does not have an existing well developed national legislative framework and a history of a strong safety culture in other sectors. Note the word “and”; having good legislation is useless if it is not implemented,” Driver said.

For most local companies in Guyana, he continued, meeting the high standards of international operator companies will involve a serious step change. Driver said Guyana had to develop a cadre of “well-trained, seasoned and certified Guyanese HSE professionals who will discharge their responsibilities ethically and professionally. “

While the local private sector would have to “internalise a safety culture and understand that you cannot buy certification and you cannot buy safety.”

“If your objective is just to meet the requirements set by operators, you will fail. If your objective is to become a leader in safety and build a robust safety culture in your company, then you will be able to meet the requirements. Meeting the requirements is a measure, not an objective.”

He said the Safe to Work initiative implemented by the Chamber helped local energy service companies meet international oil, gas and petrochemical operator company HSE requirements while raising the overall levels of contractor safety management in the country.

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More power problems at desal plant

Trinidad Newsday - 12 Dec 2018

PUBLIC Utilities Minister Robert Le Hunte says electrical problems have caused a further delay in getting the Point Lisas desalination plant back up to full capacity.

He made the comment while responding to an urgent question in the Senate yesterday.

Le Hunte recalled on December 4 he informed the Senate the water supply had been disrupted on December 3 as result of an electrical defect caused by salt-water corrosion. He said production would be increased on a phased basis and by the following day the plant would be back up to full capacity.

He said, however, as a result of additional problems the plant was only able to go back up to 30 million gallons of the 40-million capacity, and on Sunday another problem occurred which dropped capacity down to five million before it was ramped back up to 30 million.

He reported additional parts were being flown in from Finland via air freight and were scheduled to arrive Tuesday night. This was expected to increase capacity from 30 to 36 million by Tuesday night and then full capacity this Friday.

"We apologise for the problems," he said.

Opposition Senator Wade Mark asked what the additional problems were. Le Hunte explained the electrical problem due to corrosion was fixed using spare parts, but there was another electrical problem when the plant was about to be started up, and a surge of electricity caused a burnout of another part. He said this was the part that needed to be flown in from Finland.

"So they are all electrical-related, but as one was fixed, another one happened."

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Library access for Riverside carpark homeless

Trinidad Newsday - 12 Dec 2018

More than 108 displaced people at Riverside carpark, PoS will benefit from having access to a well-established library after an estimated $25,000 donation from the Digicel Foundation.

At the official opening of the library today, Rudolph Boneo, national president for the Society of St Vincent De Paul said despite the many challenges on a daily basis, the society will continue to bring betterment for residents.

Boneo said work on the library started in the past but faltered.

He said the amount of work done by the society over the years would not have happened without the help from corporate TT.

"Today's event was one example where Digicel Foundation stepped-up in realising the work the society is doing for displaced people. The library is something we have started before. We are hoping that with this attempt we will be able to maintain it and can always be there for the residents."

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Stock Market report for 11 Dec, 2018

Trinidad & Tobago Stock Exchange - 12 Dec 2018

Overall Market activity resulted from trading in 17 securities of which 5 advanced, 4 declined and 8 traded firm.

Trading activity on the First Tier Market registered a volume of 168,141 shares crossing the floor of the Exchange valued at $2,657,373.89. JMMB GROUP LIMITED was the volume leader with 64,810 shares changing hands for a value of $114,426.80, followed by L.J. WILLIAMS LIMITED B with a volume of 33,500 shares being traded for $25,125.00. TRINIDAD AND TOBAGO NGL LIMITED contributed 20,169 shares with a value of $589,587.51, while REPUBLIC FINANCIAL HOLDINGS LIMITED added 15,613 shares valued at $1,674,649.53.

NATIONAL FLOUR MILLS LIMITED registered the day's largest gain, increasing $0.05 to end the day at $1.70. Conversely, MORA VEN HOLDINGS LIMITED registered the day's largest decline, falling $2.01 to close at $12.48.

CLICO INVESTMENT FUND was the only active security on the Mutual Fund Market, posting a volume of 88,083 shares valued at $1,779,276.60. CLICO INVESTMENT FUND remained at $20.20. CALYPSO MACRO INDEX FUND remained at $15.81. FORTRESS CARIBBEAN PROPERTY FUND LIMITED SCC - DEVELOPMENT FUND remained at $0.67. FORTRESS CARIBBEAN PROPERTY FUND LIMITED SCC - VALUE FUND remained at $1.70. PRAETORIAN PROPERTY MUTUAL FUND remained at $3.05.

MORA VEN HOLDINGS LIMITED was the only active security on the Second Tier Market, posting a volume of 1,000 shares valued at $12,480.00. MORA VEN HOLDINGS LIMITED declined by $2.01 to end at $12.48.

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Innotech tightens the screws

Nation News - 12 Dec 2018

Innotech Aquaserve Ltd is tightening the screws on the Barbados Water Authority (BWA).

On Tuesday, the company started to remove the community tanks from critical water-scarce parishes, including St Joseph, St Andrew and St John, leaving many residents upset.

Shocked officials at the BWA said they were informed that the move was as a result of BWA defaulting on the lease payment on its headquarters at the Pine, St Michael, and that by Wednesday all of the community tanks which they were renting from Innotech, which is also the landlord, would be removed.

Both BWA’s chairman, Leodean Worrell, and general manager, Keithroy Halliday, confirmed the situation pointing out that they were informed by Innotech that the company was selling the tankers because BWA had not paid its bill.

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Call to help jobless

Nation News - 12 Dec 2018

Deputy General Secretary of the Barbados Workers’ Union (BWU) Dwaine Paul has reminded the public to remember the sacrificial role played by those civil servants who have been retrenched.

And with this in mind, Paul has urged society to come to their aid during their time of difficulty as more workers could go home in the next phase of the Barbados Economic Recovery and Transformation (BERT) programme.

“These are people who have been selected by a system that looks simply at the date they were hired and they have committed no offence in their workplaces or otherwise,” Paul said on Tuesday before a meeting with Barbados Agricultural Management Company (BAMC) workers at Solidarity House.

“So, I would really like people to understand that these workers who are being sacrificed are being sacrificed for every single Bajan on this rock,” he added.

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GraceKennedy Foods USA to consolidate with Majesty Foods Factory for joint venture

Jamaica Observer - 12 Dec 2018

Grace Foods (USA), Inc (Grace Foods), a company owned by GraceKennedy Limited (GKL), a publicly traded Jamaican corporation listed on the Jamaica and Trinidad stock exchanges, has announced that it will acquire a 49 per cent equity stake in a new joint venture company, Majesty Foods LLC (Majesty Foods).

Majesty Foods is a Florida-based manufacturer of patty and empanada products. The range of Majesty's product portfolio is marketed under its own brands 'Patty King” and “Latin Delights” as well as under other third-party brands.

The company has extensive and valuable co-packing relationships with leading USA companies and its products are sold through multiple retailers in the USA including Whole Foods and Publix. Majesty Foods also sells to leading food services distributors including Sysco, Cheney Brothers and Jetro/Restaurant Depot.

In the USA, Grace Foods currently owns and operates a 23,000-square foot cold storage and food processing facility located in Florida. As part of the agreement, Grace Foods will outsource to Majesty Foods its current factory operations which include the production of a wide portfolio of frozen Hispanic and Caribbean products for the retail and food service channels.

“Majesty Foods is the current manufacturer of 'Grace' brand patties for the USA market which are available nationwide at leading retailers including Wal-Mart and Target. 'Grace' brand patties have been doing exceptionally well, experiencing double-digit growth in the market. The consolidation of these two entities will create a stronger and better capitalised business through various synergies allowing Majesty Foods to provide an enhanced service offering to all its customers,” said Don Wehby, GKL's Group CEO.

“We have been aggressively pursuing opportunities for mergers and acquisitions as a part of our long-term strategy. This joint venture is a step in the right direction for our foods division as we strive to leverage our leading position in the USA-Caribbean market to become one of the top players in the USA-Hispanic market through our 'La Fe' brand,” Wehby added.

The principals of Majesty Foods, Gary Tie-Shue and Colin Chang, who are also of Jamaican descent, will continue to lead the manufacturing operation that they started 20 years ago.

“We are very excited to be partnering with Grace Foods and look forward to embracing the challenge of transforming our business into the leading manufacturer of Hispanic and Caribbean food products in the USA,” said Gary Tie-Shue, president and director of Majesty Foods.

The transaction was arranged by GK Capital Management Limited.

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New Way To Get to Saint Lucia from Germany

Caribbean News Now -  11 Dec 2018

A new interline flights agreement between Condor and LIAT will make it easier to get here from Germany, the Saint Lucia Tourism Authority (SLTA) has announced.

The SLTA said the new service from Frankfurt, Germany to the George FL Charles Airport (SLU) in Castries begins in January 2019.

The Condor-LIAT agreement provides varying opportunities for travellers to get to Saint Lucia from the German market, the Authority noted in a news release.

However according to the SLTA, the fastest route to Saint Lucia is the Monday flight from Frankfurt to Saint Lucia with a transfer to Liat in Antigua.

“That service leaves Frankfurt every Monday at 9:40a.m. Germany time, with a connection to LIAT in Antigua that arrives in Saint Lucia at 7:05p.m. ECT. The return is available through Antigua,” the Authority noted.

It disclosed that an additional option to Germany from Saint Lucia is via Barbados on Tuesdays and Saturdays.

The Tuesday services leave Saint Lucia at 3:05p.m. and 6:10p.m. ECT with transfer in Barbados.

Both flights have the same connection in Barbados onto Condor that arrives in Frankfurt, Germany at 11:20a.m. German time the following day.

The Saturday services are similar, leaving Saint Lucia at 10:10a.m. and 3:05p.m. ECT with a changeover to Condor in Barbados that arrives in Frankfurt, Germany at 10:30a.m. Germany time the following day, it was observed.

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New ECCO CEO Looks Forward To Interchange With Members

Caribbean News Now - 10 Dec 2018

The new Chief Executive Officer of the Eastern Caribbean Collective Organization for Music Rights (ECCO) Inc., is looking forward to an interchange with members at a meeting Tuesday.

Davis Joseph told St Lucia Times that the meeting will be held at the office of the Cultural Development Foundation (CDF) from 5:00 PM.

“There we will answer members’ questions, inform them about the recent structural and policy changes. We also intend to attend to their questions, queries and concerns and give them a chance to share their ideas,” Joseph stated.

“In addition, the recent visits we made to Saint Vincent and Dominica – we will update them on the purpose and the outcome of those visits,” the CEO disclosed.

He explained that ECCO really wants its members to share their ideas since a new year is coming.

“Apart from sharing my vision, I wold like to hear their ideas because this has been something of an information gathering process for me. I could not come in with my own ideas. I prefer it to be something of an emerging strategy where I actually take in the ideas of from the members from across the region,” Joseph told St Lucia Times.

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Grenada PM calls for easier intra-Caribbean travel

Nation News - 12 Dec 2018

Grenada’s Prime Minister Dr Keith Mitchell has called on Caribbean countries to make sincere efforts to encourage easier intra-regional travel and do away with the heavy taxes that discourage free movement of the region’s population.

“We have to have more transport, sea and air transport. But if we have it and it is too costly, we still don’t have it,” Mitchell told the 40th annual convention of the ruling United Workers Party (UWP) in Vieux-Fort, south of here over the last weekend.

“So if Grenada has a pile of taxes on a ticket, St Lucia has a pile, Barbados has a pile, St Vincent has a pile, Trinidad and Tobago has a pile and making the ticket too costly for travel then we must drop taxes and let our people travel,” Mitchell said.

“We are not talking about dropping all of it, we are talking dropping (it) sufficiently to make the ticket easier for people to travel,” Mitchell said, supporting the idea by Prime Minister Allen Chastanet for a regional civil aviation authority.

Mitchell’s request comes less than a week after Caribbean Community (CARICOM) leaders met in Trinidad and Tobago to examine ways of improving the CARICOM Single Market and Economy (CSME) that allows for the free movement of goods, skills, labour and skills across the majority of the 15-member grouping.

The regional leaders have since agreed on a timetable to ensure that certain measures are put in place to facilitate the deepening of the regional integration movement through the CSME.

Mitchell told the UWP convention that there was a need to make “the Caribbean great again” even as he urged the region to build synergies and improve relations with global partners to enhance economic prosperity.

“The world must be made up of countries that understand philologically their own ideology and work together to improve the lives of the people of their own country.

“So I don’t subscribe to this philosophy of just make Grenada great again. Grenada can only be great, if St Lucia is also great again. So all the countries in the region we must all strive to make sure we all become great again or all remain great again,” Mitchell said.

The Grenada Prime Minister also called for greater unity in improving security across the region.

“So something happen in St Lucia, we should know in Grenada overnight. Something happen in Trinidad, we should know. Recently a gentleman shot two people in Trinidad and he ran to Grenada. Now if we did not have a very good system of checks that man could have been roaming in Grenada without anybody knowing,” Mitchell said, adding that the man was caught “within six days”.

“What I am saying therefore is that should happen in every single country. There should be no escape for criminals destabilising our society. Our children must grow up in a country of peace and stability,” he said.

Earlier, Prime Minister Chastanet, who was re-elected leader of the party, urged supporters to defend the government in the face of criticism from the opposition as it builds “an impressive track record”.

He said that the opposition had been critical of the economic policies of the government that are now bearing fruit

“We are going to the House (of assembly) on Tuesday and I hope many of you come and support us in which we are going to be borrowing US$150 million from the Taiwanese,” he said in order to pay for various development projects on the island.

He also promised to deal with the crime situation here. He said CCTV cameras will be installed in the northern section of the island later this month and the new telecommunication system for the police will also be in place.

“So I want to put the criminals on notice that their days are numbered. St Lucians are fed up and we will take it no more,” he told supporters.

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A new approach to tourism analysis is long overdue

Caribbean News Now - 10 Dec 2018

By David Jessop

Since the mid-2000s, the ability of the Caribbean tourism sector to generate rapid economic growth has been widely accepted by international financial institutions such as the IMF, World Bank and the Inter-American Development Bank. This seems to have occurred at the point at which it became apparent that services exports were starting to eclipse the export of goods and commodities in much of the region.

Despite this, and the now widespread recognition of the centrality of tourism to the Caribbean economy, development institutions continue to struggle to find sound data on which to undertake the analysis necessary to guide economic policy.

This is largely because the tools the region uses to measure tourism’s performance are still rudimentary and unreliable. So much so that decisions about pricing, taxation, competitiveness, and the possible impact that industry related decisions may have on national economic performance, are all too often based on flimsy data.

The consequence is that without evidence to the contrary, politicians and institutions have become used to equating increases in visitor arrivals with economic growth; a belief that visitors are prepared to bear almost any level of taxation; that airlines are in some way responsible for the high cost of a Caribbean vacation; and that building more hotel rooms automatically increases the revenues governments receive.

In response, researchers, academics and others have been struggling to obtain verifiable statistics and information that might support a better analytical framework for policy making towards tourism. Their hope has been that by doing so governments and the industry can then develop facts-based responses to issues such as sustaining competitiveness, the interrelationship between visitor numbers, taxation and earnings, and changing economic circumstances in source markets.

These are matters of some importance as there are indications that the region’s tourism sector may be performing less well than recent headlines suggest. This month, for example, the World Tourism Barometer produced by the UN’s World Tourism Organisation indicated that arrivals into the Caribbean have this year so far fallen by eight per cent. There are also other indications that Caribbean tourism is on average less competitive than other parts of the world.

This suggests that new approaches are required to tourism analysis and data gathering, and the relationship of both to forecasting and policy formulation.

Until relatively recently, the industry rarely figured in international financial institutions econometric modelling or in their subsequent recommendations, largely because of the absence of a substantial volume of reliable Caribbean statistics. However, this may be set to change as the growing availability of big data and more sophisticated algorithms now make it possible to produce indicators in much shorter periods of time using consistent information from multiple non-Caribbean data sources.

Since 2015 the IMF has been producing, largely for internal purposes, an index of the nominal cost of a one-week beach holiday in eighteen small and large Caribbean destinations. Inspired by the ‘Big Mac Index’, it measures the price of a basket of typical expenditures during a beach holiday based on three-star hotels, taxi fares, beverages, and meals, but does not include air travel costs. Despite some shortcomings, the figures clearly demonstrate that the nominal cost of an average one-week beach holiday in the Caribbean is consistently higher than on average elsewhere in the world.

The importance of this and its policy implications emerged in a recent webcast, ‘A Week on the Beach’, led by the economist Marla Dukharan.

The online broadcast, which can be seen on YouTube, indicated that, at a staff level, the IMF is now working towards developing a more sophisticated understanding of tourism in ways that will eventually allow the findings to be built into future economic modelling. To achieve this, the Fund staff intends making more use of ‘big data’ and is now teaming up with TripAdvisor and others, utilising their data and analytics to support the development of a more sophisticated analysis.

What in outline the ‘Week on the Beach’ exchanges revealed was that on average Caribbean three-star hotel costs more than in almost all other beach destinations; the Caribbean is 30 to 50 percent more expensive than Central America and Mexico; that the Asia Pacific region was still the cheapest region in the world; the average cost of a week in Cuba is comparable to Central America and significantly lower than in other sample Caribbean countries; the number of flights rather than airlines positively impacts on competitiveness; the number of rooms a destination has may not be significant; and the overall findings were largely consistent over the four year period surveyed.

It also indicated the importance of external factors.

During the webcast, Nicole Laframboise, the deputy division chief, for its Western Hemisphere southern division observed that a one percent increase in the exchange rate could lead to a 0.16 percent decline in arrivals, and that this and other influences required governments and the industry to contain exchange rates and costs, particularly at the lower more price-inelastic end of the tourism market.

The exercise still has shortcomings. For example, it is hoped that in time a separate methodology can be developed to value the competitiveness of all-inclusive hotels and cruise ships, and an approach created that can quantify less tangible impacts, such as crime.

The IMF hopes to create eventually a much bigger tourism related matrix to supplement existing Caribbean tourism indicators to inform all aspects of the IMF and World Bank analysis and forecasting for the region.

This new big data led approach should be welcomed, particularly if it enables the region and those beyond to understand what is really happening to Caribbean tourism and how it relates to and helps explain Caribbean economic performance.

Apart from enabling external development agencies to better advise – they still have very few experts on the sector – it should also enable more thoughtful voices in government and the industry to demonstrate why decision making on tourism must be seen in the round and is about much more than simply trying to balance the budget.

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China-U.S. trade war will get a lot more personal

Reuters - 11 Dec 2018

By Pete Sweeney

American executives who prayed for a trade war truce are a disappointed lot. Following the arrest of China telco Huawei’s chief financial officer in Canada, they’ve been sent to the front lines.

President Donald Trump is focused on the trade deficit. But administration hawks also want to thwart Beijing’s “Made in China 2025” plan to build state-subsidized global champions in sectors like aviation, AI, and communications. The 90-day tariff freeze Trump negotiated with Xi Jinping has only halted hostilities in one corner of a vast battlefield.

Meng Wanzhou could be the first big casualty of American extraterritorial force. The United States alleges the Huawei executive violated its sanctions on Iran. Whether she did or not, arresting the daughter of the telco’s iconic founder Ren Zhengfei fires a loud shot across China Inc.’s bow. Ditto for the October extradition of a Chinese intelligence agent from Belgium to face U.S. industrial espionage charges.

China could retaliate. It has already detained Canadian ex-diplomat Michael Kovrig, according to Reuters; his employer, International Crisis Group, says it is seeking his release. Huawei’s American rival Cisco Systems told employees not to travel to the Middle Kingdom after Meng’s arrest, although it later backtracked. Reuters reported the U.S. State Department is considering warning citizens not to visit the People’s Republic.

That might be prudent. Because it can be difficult to succeed in China without cutting corners, U.S. executives who have done so – or looked the other way while local employees did - are vulnerable, and can be held responsible for their company’s sins. Economic forces might also generate inadvertent flare-ups. Detention is a semi-legal negotiation tactic in the People’s Republic, usually the result of business disagreements over cancelled orders or price changes. In the past upset Chinese managers have held foreign representatives involuntarily inside offices or hotels until they concede. Police rarely intervene. Foreigners can also be banned from leaving China until a dispute is settled. Reports of such incidents rose sharply during the global financial crisis.

As rising costs, tariff threats and general anxiety cause U.S. companies like GoPro to move parts of their supply chains out of China, more detainments could ensue. Even legitimate arrests will feed conspiracy theories. The popular emotions such incidents unleash could easily undermine efforts for lasting peace.

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Futures point to strong start after Trump's upbeat trade comments

Reuters - 12 Dec 2018

U.S. stock futures rose about 0.7 percent on Wednesday, joining a global equities rally, as President Donald Trump’s encouraging comments fueled optimism over trade negotiations between the United States and China.

Trump, in an interview with Reuters, said trade talks with Beijing were taking place by phone and he would not hike tariffs on Chinese imports until he was sure about a deal.

He also said he would intervene in the Justice Department’s case against a top executive at China’s Huawei Technologies [HWT.UL] if it would help secure a trade deal.

“This does discreetly imply that it is possible that the Trump administration is starting to recognize some of the detrimental impacts that the long-standing U.S.-China trade tensions can have on the U.S. economy,” Jameel Ahmad, global head of currency strategy & market research at FXTM, said in a client note.

Trump’s optimistic comments helped set S&P 500 equity futures on course for their biggest one-day percentage jump since Dec. 3. The gains come a day after another volatile session ended with Wall Street finishing slightly lower after Trump’s threat to shut down the U.S. government and political uncertainty in Britain.

Technology stocks, particularly chipmakers, which are sensitive to trade-related news, rose in premarket trading.

Among Dow components, Apple Inc (AAPL.O), Cisco Systems Inc (CSCO.O), Microsoft Corp (MSFT.O), Intel Corp (INTC.O) gained between 1.1 percent and 1.6 percent.

At 7:07 a.m. ET, Dow e-minis 1YMc1 were up 161 points, or 0.66 percent. S&P 500 e-minis ESc1 were up 17.75 points, or 0.67 percent and Nasdaq 100 e-minis NQc1 were up 58 points, or 0.86 percent.

In the seven sessions in December, the three indexes have shed more than 4 percent in volatile trading, weighed down by fears over global growth, U.S.-China relations, interest rates and growing complications over Britain’s planned divorce from the European Union.

British Prime Minister Theresa May faces a no-confidence vote later in the day, triggered by Conservative lawmakers, with the result expected at 2100 GMT (4 p.m. ET). Wall Street ends choppy day higher

Some early losers included Verizon Communications Inc (VZ.N), which fell 1.2 percent after Morgan Stanley downgraded the wireless carrier’s shares, expecting limited 5G revenues and increased competition.

In economic data, a Labor Department report at 8:30 a.m. ET is expected to show consumer prices index remained unchanged in November after rising 0.3 percent in the prior month.

The core CPI, which strips out the volatile food and energy components, is likely to have risen 0.1 percent in November, lifting the year-over-year increase to 2.2 percent.

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Washington takes center stage in bank branch battles

Reuters - 12 Dec 2018

JPMorgan Chase & Co (JPM.N) has made a splash this year in Washington, D.C. opening branches for the first time in the nation’s capital.

Smaller branches, ATM kiosks and mobile phone apps are allowing the bank to go into markets more quickly and for less money now than five years ago, JPMorgan executives said.

Banks can venture out now because they have cleaned up regulatory problems since the 2007-2009 financial crisis. President Donald Trump’s tax cut left them with cash to invest.

Washington is a prime battle ground, and JPMorgan considers the region the third biggest in the country by population and gross domestic product.

No bank dominates. The top three hold between 14 percent and 17 percent of deposits in the region, compared with Chase’s 32 percent share in the New York City area.

“If you want to be the premier American bank you want to be in all of the key cities,” said Ken Thomas, a branch location consultant.

Washington offers banks the chance to build brands and make life-long national customers from people passing through as students or employees of changing governments

“You have a microcosm of America here in D.C.,” said Thasunda Duckett, the CEO of Chase Consumer Banking. “It is booming and it is a place we have always wanted to be.”

JPMorgan executives plan to build 70 Chase branches in Washington and Baltimore. Five years ago they probably would have set out to match the 150 Washington branches of Bank of America one-for-one.

Instead, they expect to make up the difference with 150 ATM locations and their mobile phone app and website.

Competitors include Wells Fargo & Co (WFC.N), which is No. 3 in Washington by deposits. Wells Fargo has been moving some branches from prime corner locations to smaller store fronts a few doors away.

Bank of America, to protect its No. 1 position, has been remodeling offices with new ATMs and rooms for video conferencing with loan specialists.

Capital One Financial Corp (COF.N), which is No. 2, is taking a different tack. The bank, which acquired one-time market leader Chevy Chase Bank and its 217 branches during the financial crisis, is closing branches and was down to 126 in June.

It is opening up hybrid “cafés.” They are legally not branches and subject to approval by regulators. But they have ATMs, Wi-Fi connections to the Capital One app, and bank employees for customers to ask about problems and opening accounts online. Capital One is putting a café at a prime corner JPMorgan wanted in the well-to-do Georgetown area. Capital One reportedly paid $50 million to buy the entire building. JPMorgan opted for a small store-front a few doors away where it can have a prominent sign, space for bankers and the latest ATMs.

“We feel really great about this location,” said Duckett.

The success or failure of the strategies could separate profit winners from laggards. Physical locations, including staff, real-estate, and handling checks and cash, are a big expense. Plus, new regulations make branch deposits more valuable for the biggest banks.

A sense of urgency has come as rising interest rates make customer service matter to keeping people from taking their deposits elsewhere.

The battle between banks is not limited to Washington. Huawei CFO seeks bail on health concerns

JPMorgan has also moved into Boston and Philadelphia – glaring East Coast gaps in the branch network of the New York City-based bank.

Bank of America Corp (BAC.N) has moved into Pittsburgh, Denver and Minneapolis. PNC Financial Services Group Inc (PNC.N) is moving into Dallas and Kansas City with incentives for online accounts backed by a few small branches.

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EU-Japan trade deal approved for 2019 start

Reuters - 12 Dec 2018

European Union and Japanese plans to form the world’s largest free trade area cleared their final hurdle on Wednesday when EU lawmakers backed a partnership set to enter force early next year.

The European Parliament voted 474 in favor to 156 against the agreement that binds two economies accounting for about a third of global gross domestic product and also signals their rejection of protectionism.

Both face trade tensions with Washington and remain subject to U.S. tariffs imposed by President Donald Trump on imports of steel and aluminum, although the two have agreed to start separate trade talks with the United States.

“This will bring clear benefits to our companies, farmers, service providers and others,” EU Trade Commissioner Cecilia Malmstrom said in a statement.

“Our economic partnership with Japan – the biggest trade zone ever negotiated – is now very close to becoming a reality.”

Japan had been part of the 12-nation Trans-Pacific Partnership that Trump rejected on his first day in office, turning Tokyo’s focus to other potential partners - such as the European Union.

The EU has also sought other partners after TTIP (Transatlantic Trade and Investment Partnership) negotiations with the United States stalled in 2016. It concluded an updated trade deal with Mexico earlier this year. Stock selloff snowballs on fresh fears for world growth

The EU-Japan agreement will remove EU tariffs of 10 percent on Japanese cars and 3 percent for most car parts. It will scrap Japanese duties of some 30 percent on EU cheese and 15 percent on wines as well as open access to public tenders in Japan.

It will also open up services markets, in particular financial services, telecoms, e-commerce and transport.

The European Commission, which coordinates trade policy for the 28 EU members, said Wednesday’s vote paved the way for the agreement to enter force on February 1. Japan’s parliament approved the deal on Saturday.

The flagship deal comes after widespread anti-globalisation protests threatened the EU-Canada Comprehensive Economic and Trade Agreement (CETA) when a region of Belgium objected to the deal in 2016. It finally entered force in 2017.

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Samsung to shut mobile phone plant in China's Tianjin

Reuters - 11 Dec 2018

Samsung Electronics will cease operations at one of its mobile phone manufacturing plants in China, the company said, as its sales in the world’s biggest smartphone market slumps amid rising competition from lower-cost local rivals.

The South Korean company has seen its share of the Chinese market shrink to 1 percent in the first quarter of this year, losing out to home-grown brands like Huawei [HWT.UL], according to market research firm Counterpoint, which pegs Samsung’s share of the pie at about 15 percent at mid-2013.

“As part of ongoing efforts to enhance efficiency in our production facilities, Samsung Electronics has arrived at the difficult decision to cease operations of Tianjin Samsung Electronics Telecommunication,” Samsung said in a statement, referring to the plant in northern Chinese city of Tianjin.

The factory, which currently employs about 2,600 people, is scheduled to be shut down by the end of this year.

Samsung, the world’s biggest smartphone maker, said it would offer compensation packages to the employees and also provide opportunities to transfer to other Samsung facilities.

The company, which has been focusing on low-cost countries like Vietnam and India for production, added it would continue to operate another Chinese phone factory in Huizhou, in the southern province of Guangdong.

“Samsung doesn’t need to stay in China because of rising labour cost and its almost non-existent Chinese market share. They can be better off in India and Vietnam,” said Greg Roh, a senior analyst at Hyundai Motor Securities. Apple loses in China court dispute with Qualcomm

Samsung’s Tianjin plant produces 36 million mobile phones a year and the Huizhou plant makes 72 million units, while two of Samsung’s factories in Vietnam combined make 240 million units a year, according to the South Korean newspaper Electronic Times.

Samsung declined to disclose the capacity of each factory.

“China remains an important market for Samsung and we are actively participating in China’s economic policies by fostering growth in the components industry,” Samsung said.

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OPEC offsets Iran oil loss, sees lower 2019 demand

Reuters - 12 Dec 2018

OPEC said on Wednesday it had offset a drop in sanctions-hit Iranian oil exports and lowered the 2019 forecast of demand for its crude, underlining the challenge the producer group faces to prevent a glut even after last week’s decision to trim output.

In a monthly report, the Organization of the Petroleum Exporting Countries said 2019 demand for its crude would fall to 31.44 million barrels per day, 100,000 bpd less than predicted last month and 1.53 million less than it currently produces.

Worried by a drop in oil prices and rising supplies, OPEC and its allies including Russia last week agreed to return to supply cuts next year. They pledged to lower output by 1.2 million bpd, of which OPEC’s share is 800,000 bpd.

OPEC expects global oil demand to slow next year and sees little support from the economic backdrop.

“Rising trade tensions, monetary tightening and geopolitical challenges are among the issues that skew economic risks even further to the downside in 2019,” OPEC said in the report. “The upside appears limited.”

In the report, OPEC said its oil output fell by only 11,000 bpd month-on-month to 32.97 million bpd in November, despite U.S. President Donald Trump’s reimposition of sanctions on Iran. Saudi Arabia pumped at a record rate.Iranian output posted the biggest decline, of 380,000 bpd. This was offset by increases of 377,000 bpd from top exporter Saudi Arabia and an extra 71,000 bpd from the United Arab Emirates.

The figures suggest there will still be a surplus in the market next year should OPEC fully deliver the 800,000-bpd cut and other things remain equal.

Qatar plans to leave OPEC in 2019 but, for now, remains in the OPEC group in the forecasts.

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$225 Million Investment in Energy Projects

Central America Data - 11 Dec 2018

In the first nine months of 2018, 33 environmental impact studies were presented in the countries of the region to develop energy generating plants and work on electricity grids.

The interactive platform "Construction in Central America", compiled by the Business Intelligence Unit at CentralAmericaData, includes an up to date list of public and private construction projects for which environmental impact studies (EIA) were submitted to the respective institutions of each country.

Panama is the country in the region with the highest investment, with approximately $160 million in energy projects, corresponding to 11 environmental impact studies submitted to the Ministry of Environment between January and September 2018.

It is followed by Guatemala, where 7 EIAs were presented, which together represent about $40 million in investment. In El Salvador, 8 projects were presented, with $16 million in global investment.

In Costa Rica, 7 studies were presented for work on different types of energy projects that total an investment of about $8 million.

CentralAmericaData has information on the construction projects to be developed in Central America, with details such as estimated investment, times and phases of the project, supplies and equipment that will be required during and after construction, water treatment, and parking structure, among other things.

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Automotive Market: Figures in Costa Rica

Central American Data - 10 Dec 2018

During 2017, companies dealing with vehicle sales in the country imported more than $1.4 billion, half of which was taken over by three companies.

Data from the report "Company's Corporate System", complied by the Business Intelligence Unit at CentralAmericaData, provides details on company information based on sector, main activity, imports, exports, contracts granted by the government and other data.

According to the information system Grupo Q, Purdy Motor and Agencia Datsun, were the main companies dealing with the sale of vehicles in Costa Rica, since last year reported about $720 million in imports.

With respect to the sales, maintenance and repair market for motorcycles and their parts, the platform details that companies in the sector registered imports of more than $100 million in 2017 in the country, 71% of which was contributed by five companies.

Regarding the commercialization of automotive parts and accessories, the system registers that last year the companies involved in this activity reported purchases abroad for approximately $230 million, of which 36% was imported by six companies.

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Coffee Production Would Go Down 11%

Central American Data - 11 Dec 2018

In Costa Rica, the coffee sector expects that for the 2018-2019 harvest will be produced about 1.8 million quintals, a volume that would be 11% lower than that recorded in the 2017-2018 season.

According to forecasts by the Costa Rican Coffee Institute (Icafé), between the 2017-2018 and 2018-2019 harvests, the country's production will fall from 2 million to 1.8 million quintals, a decline that would be caused by the cyclical behavior of plants and the aging of coffee plantations.

On this matter, the executive director of Icafé, Xinia Chaves, explained to Nacion.com that "... traditionally the ups and downs of the Costa Rican coffee harvest are caused by the cyclical behavior of the plantations, in other words, that one year they have a strong production and the following year they fall because of the recharge suffered. Effectively, this had an impact on the decrease of the current period, but in addition to this is the impact of the old age of the plantations."

The article adds that "... Data also provided by the Institute indicate that in the 2000-2001 harvest, the country obtained an average of 30 bushels of fruit per hectare (corresponds to the same number of bags of 46 kilos or quintals of benefited grain). Currently, the national average is below 23 bushels per hectare. This is because of the lack of plantation renewal. It is estimated that around 30,000 hectares have coffee plants with ages above 30 years, in other words, already exceeded the estimated useful life in three decades if they were given the necessary attention."

According to reports from CentralAmericaData, in the first six months of the year, coffee exports by Central American countries totaled $1,948 million, 9% less than what was reported in the same period in 2017.

In the first half of 2018, the largest coffee exporter in Central America was Honduras with $830 million, followed by Guatemala with $474 million, Nicaragua with $322 million, Costa Rica with $228 million, El Salvador with $83 million and Panama with $11 million.

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Firefighters to the rescue after German chocolate factory spill

Yahoo Odd News - 11 Dec 2018   

Firefighters in the town of Werl in western Germany tackled an unusual emergency late on Monday when a tank at a local firm making liquid chocolate overflowed and poured out onto a street.

"About a ton of chocolate ran out into the yard and from there onto the street," a spokesman for the Werl fire department said in a statement.

The firefighters closed off the street and shoveled the chocolate - about 10 square meters (108 square feet) - to one side before a specialist cleaning company cleaned the road.

"Despite this heartbreaking incident, it is unlikely that a chocolate-free Christmas is imminent in Werl," the fire department said.

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