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ECFH Closing Price as at October 19, 2018: $4.00

Market News

October 22, 2018

New investors for St Vincent hotel closed since 2016

The St Vincent & the Grenadines government says a trio of investors are taking over the Buccament Bay Resort, which has been closed since December 2016.

Prime Minister Dr Ralph Gonsalves said that the investors have already signed the heads of terms of agreement with Brian Glasgow, the trustee in bankruptcy for Harlequin, owners of the resort.

"We had a long session ... with all the persons involved in the Buccament matter, the investors," Gonsalves said, naming them as businessman Kelly Glass, Barry Ferdinand and Scotsman Jonathan Mills.

He said that Mills and Glass are involved in two tourism projects in Bequia.

"And they are branding them under a particular rubric," Gonsalves said. Glass also owns Blue Lagoon, a hotel in Ratho Mill on St Vincent's southwestern coast.

"So he and his group will be among the leading hoteliers, if not the leading hotelier in the country," the PM said.

Regarding Buccament Bay, Gonsalves said more discussions were needed with the new investors regarding the land on which a portion of the resort sits and that another meeting was scheduled for Friday.

"There are some other issues which are involved, because there are about two acres of beachfront land for the government. We are seeking to come to terms as to how we work those out those two acres.

"There are some other things which we undertake to do in respect with another parcel of land, because it was a very complicated property with different sets of owners and complicated practically and legally. That's why it has taken so long and the negotiations have been so difficult between the new investors and the trustees in bankruptcy."

Part of the resort is built on land belonging to the government, while another section is located on land belonging to two private citizens, according to court evidence in a lawsuit that the resort owners had brought against a previous service provider.

"We do some tidying up on some things. Hopefully, we can come to some financial conclusions about a couple matters between the investors and the state on Friday morning," the PM said. Gonsalves said he was happy that two of the investors are Vincentians, even as he noted that Glass was born in New Zealand. He said Mills is also involved in tourism projects in Scotland.

Buccament Bay Resort, which has the largest number of rooms of any tourism facility in St Vincent, was forced to close in December 2016, when the state-owned power company cut its electricity supply over non-payment of its electricity bill. This followed several weeks of protest by workers over the non-payment of wages.

Article published October 19. 2018 on Jamaica-gleaner.com

Bartlett pushing for Tourism Innovation City

ST JAMES, Jamaica — Minister of Tourism, Edmund Bartlett has disclosed plans to create a Tourism Innovation City in Montego Bay, "which will create a circular economy where nothing is wasted and everything is fully utilised".

According to the ministry, the purpose of the Tourism Innovation City is to develop areas of textile, manufacturing, farming and to boost the capacity to provide on the supply side of the tourism value chain.

Speaking at the Montego Bay Chamber of Commerce and Industry's Business and Investment forum held at the SeaGarden Beach resort on Friday, Bartlett said a tourism economy will be beneficial to Montego Bay, which is the "heartbeat of tourism" in Jamaica.

“The backward and forward linkages must be in place and when that happens tourism costs will begin to fall and revenues from consumption will increase. In the Dominican Republic, their revenue retention is 50 cents on each foreign exchange earned and this is so because they own the supply side —they manufacture uniforms for the sector and have processing plants to make the chutneys and jams needed by the guests. This is where a Tourism Innovation City in Jamaica would help to produce more of the items needed in the sector,” Bartlett was quoted as saying in a release from the ministry.

The Montego Bay Chamber of Commerce & Industry- Business & Investment Forum is designed for investors and business executives who want to discover the business opportunities available in St James.

The forum also showcases various developments within the primary growth sectors, while sharing a wealth of information about emerging opportunities in the Montego Bay and the western region, the ministry said.

Bartlett added that, “If Jamaica is to earn more of the foreign exchange brought in by visitors, we must be able to reduce importation of the inputs needed for the sector and increase our ability to supply on the demand.

“The Tourism Innovation City will create a circular economy where nothing is wasted and everything is utilised fully and the resources, income and earnings stay within that space. When we are finished building out grange pen and Barrett Hall, this will be a fertile area for this great experiment and I am in discussion with the Urban Development Corporation who are to do a design for this innovation city.”

The city of Montego Bay represents one third of Jamaica's room stock and is considered the hub of tourism activities in the island.

As part of efforts to improve the look and feel of the product, the Ministry of Tourism, through the Tourism Enhancement Fund (TEF) has so far invested J$6 billion in Montego Bay and its environs. The work carried out by the TEF includes road rehabilitation, drain cleaning and housing solutions, the ministry shared.

Article published October 21, 2018 on jamaicaobserver.com

Guyana gave away US$321M in tax exemptions but its foreign debt increased by US$82M in 2017

The Office of the Auditor General made note that the Guyana Revenue Authority (GRA) oversaw tax-exemptions to the tune of $64B in 2017, which is even more than the revenue foregone by the same mean in 2016.

This note was made in the Auditor General’s latest report covering the fiscal year ended 2017. The report was handed to the National Assembly last Thursday.

The report stated, “Exemptions from duties and taxes totalled $64.312 billion (US$321M) for the period under review, as compared to $56.073 billion in 2016. This represents an increase of $8.239B over the corresponding period.”

Auditors were keen to note that the value of revenue foregone for the year 2017 represents 37.52 percent of the actual revenue collections by the Authority.

For the same period, Guyana’s debt grew by US$82M up from US$1.766B to US$1.848B. The debt could have been reduced had Guyana cut back on its tax exemptions.

The Audit Office presented a table that provided overall details about the value of exemptions granted to eligible categories.

The table below gives details of tax exemptions granted according to concession categories.

The table indicated that tax exemptions granted to companies and businesses represented 57 percent equivalent to $36.4B of the total exemptions granted.

Most of the exemptions were from businesses, mining investments through GGMC, and Investments through Go-Invest.

However, the Audit Office noted that the total value of tax exemptions granted in respect of Investment Agreements facilitated through Go-Invest and GGMC could not have been determined.

Audit Office said that a review of GRA records revealed that that there were 58 investment agreements; 55 were approved and three were denied during the year 2017.

The report stated, “In the 2016 Auditor General’s Annual Report, Management assured that the IT Division is in the process of implementing a system that will facilitate a breakdown of the ‘Companies/Businesses’ category so that more informative reports can be generated. However, at the time of reporting in 2018, the Authority failed to provide these breakdowns.

This newspaper revisited that Audit Office’s 2016 report and indeed it was stated, “…the total value of tax exemptions granted in respect of Investment Agreements facilitated through the Guyana Office for Investment and the Guyana Geology & Mines Commission could not have been determined. A review of the records of the Authority revealed that a total of fifty-nine agreements in respect of forty-one investors were approved during the year 2016.”

Further, in the 2016 report, the Audit Office stated, “It should be noted that in accordance with the Investment Act №. 1 of 2004, a procedural audit of the incentives granted to an investor or an investment enterprise is required to be carried out annually by the Auditor General. However, no records/documentations were submitted to facilitate these audits.”

This continues to be the state of affairs. In the 2017 report, the Office noted that the audit could not have been done as “at the time of reporting, schedules were presented for various companies that benefited from exemptions through GO-INVEST and GGMC. It was agreed that other related documentations would be sorted and presented for audit review.”

GRA acknowledgement of the comments of the Auditors was reflected in the report.

GRA said, “The categories (Companies/Businesses) of tax exemptions in the report are those that were built into the system several years ago and are subject to limitations. However, the breakout feature was implemented on 17th April 2018 to facilitate the value of tax exemption granted in respect of Investment Agreements through Guyana Geology & Mines (GGMC) and Guyana Office Investment (GO-Invest).”

GRA continued, “Nonetheless, it must be noted that although the breakout feature was implemented in 2018, it cannot provide previous data thus, the value of tax exemption for the year 2017 would not be available. The reports on the tax exemption granted in respect of Investment Agreements through GO-Invest and GGMC for the year 2017 was submitted to the Auditors (on 10 September 2018) thus facilitating the audit procedures.”

The Audit Office recommended that the Authority “continue in its efforts to have the other documentation presented to facilitate audit procedures.”

Article published October 22, 2018 on kaieteurnewsonline.com

Stock futures rise after China rally, Italy's budget relief

(Reuters) - U.S. stock index futures rose at the start of a busy week for U.S. earnings on Monday, feeding into a rise in global stocks on hopes of economic stimulus in China and easing tensions over Italy’s debt.

Shanghai's benchmark blue-chip index .CSI300 surged over 4 percent after China promised to provide stimulus to stabilize its economy and offset the impact of U.S. tariffs, which lifted U.S. listed shares of Chinese stocks.

U.S.-listed shares of Chinese heavyweights Alibaba (BABA.N), JD.com (JD.O) and Baidu (BIDU.O) rose between 2.9 percent and 4 percent in premarket trading.

“Shanghai stocks rose over 4 percent, lifting the global markets spirits ahead the long list of Q3 earning reports due this week,” Peter Cardillo, chief market economist at Spartan Capital Securities in New York, wrote in a note.

Investors also took relief from a Moody’s report that maintained Italy’s sovereign rating outlook at stable, boosting shares in European stock markets.

The Italian Treasury said it did not intend to further expand the budget deficit in 2020 and 2021, easing some worries about the country’s debt.

At 7:32 a.m. ET, Dow e-minis 1YMc1 were up 102 points, or 0.4 percent. S&P 500 e-minis ESc1 were up 10.5 points, or 0.38 percent and Nasdaq 100 e-minis NQc1 were up 54.25 points, or 0.76 percent.

The latest developments helped U.S. markets enter the week with gains as investors await earnings from about 160 S&P 500 companies this week, including those of Microsoft (MSFT.O), Alphabet (GOOGL.O) and Amazon (AMZN.O).

Helped by a strong economy and deep corporate tax cuts, profit of S&P 500 companies are expected to grow 22 percent in the third quarter, according to Refinitiv data.

Halliburton (HAL.N) climbed 1.9 percent after the oilfield services provider posted quarterly profit that topped estimates

Intel gained 1.7 percent after Nomura upgraded the stock to “buy”, according to a trader.

The so-called FAANG group of members - Facebook (FB.O), Apple (AAPL.O), Amazon (AMZN.O), Netflix (NFLX.O) and Google-parent Alphabet gained between 0.5 percent and 1.2 percent.

Hasbro (HAS.O) dropped 7.2 percent after its quarterly revenue missed estimates, as the U.S. toymaker’s efforts to cushion sales disruption from the bankruptcy of retailer Toys ‘R’ Us fell short.

Rival Mattel (MAT.O) also fell 2.6 percent.

Article published October 22, 2018 on reuters.com