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06th Feburary 2010
FirstCaribbean Daily Markets Report
Thursday, February 04th, 2010

Global Markets
• The productivity of U.S. workers increased in the fourth quarter. A measure of employee output per hour rose at a 6.2 percent annual rate, capping the biggest one-year gain since 2003, the Labor Department said today in Washington.
• Service industries in the U.S. expanded less than anticipated in January, a sign the recovery will be slow to spread from manufacturing to the rest of the economy.
• Benchmark gauges of corporate credit risk in North America and Europe rose as growing concern that governments will fail to close budget gaps sparked a global drop in stocks and bonds.
• The Bank of England paused its 200 billion-pound ($317 billion) bond-purchase plan and left open the option to buy more as officials gauge the health of the U.K.’s recovery.
• European Central Bank President Jean-Claude Trichet said he’s confident Greece can get its budget deficit under control and signaled officials have no plans to raise their key interest rate from a record low of 1 percent.
• Portugal and Greece led a surge in the cost of insuring against losses on sovereign debt to a record as concern that nations will struggle to cut budget deficits deepens a “crisis of confidence” in Europe.
• Deutsche Bank AG, Germany’s biggest bank, posted a fourth straight quarterly profit, buoyed by a tax gain, a year after reporting a record loss.
• Royal Dutch Shell Plc, which vies with BP Plc as Europe’s biggest oil company, laid out plans for 1,000 extra job cuts and savings of $1 billion this year because of a “challenging” outlook for refining.

Figure 1: U.S. Daily Economic Indicators


 
 
Caribbean Markets
Bahamas
• Press reports that LEGO Systems, Inc., the North American division of one of the world’s most iconic toy brands, today announced a strategic partnership with Atlantis, Paradise Island resort, considered to be one of the top family resorts in the world. The alliance creates a multi-tier program that kicks off the official opening of the resort’s new, state-of-the-art Kid’s Club, Atlantis Kids adventure, designed to offer innovative experiences to families with children and marking the first time LEGO Systems has partnered with a family resort.

Barbados
• Local press reports Dr. David Estwick, Minister of Economic Affairs, Innovation, Trade, Industry and Commerce commenting that the domestic market has experienced serious challenges where national revenues, especially in the tourism sector, have been falling and continue to fall.
• The Minister explained that real GDP contracted by 5.3%, unemployment is estimated at over 10% up from 8.1% in 2008 and the fiscal deficit widened to 8.4 % of GDP from 6.4% in 2008. In response, the Government has taken the hard stance of reducing its expenditure and aiming for a deficit somewhere in the region of 2.1 to 2.5% of GDP.

Netherland Antilles
• Commissioner of Tourism Frans Richardson is in Brazil this week following up on tourism opportunities for St. Maarten. St. Maarten has been looking at its positioning strategy as it relates to the fast growing South American market.

Jamaica
• Fitch has upgraded Jamaica’s long-term foreign and local currency IDRs to ‘CCC’ and placed both ratings on Rating Watch Positive. Fitch has also upgraded Jamaica’s short-term foreign currency rating to ‘C’ and affirmed the Country Ceiling at ‘B-’.
• The upgrade of the sovereign ratings takes into account the successful outcome of the domestic debt exchange. The authorities estimate that the participation rate has already reached over 90% of eligible securities. This in turn will yield important fiscal savings in terms of debt service.
• Fitch believes that successful outcome of the exchange is likely to lead to the approval of the USD1.3 billion IMF Stand-By program. ‘With the orderly execution of the debt
• Mission Director for the United States Agency for International Development (USAID) chapter in Jamaica, Dr Karen Hilliard, said that USAID is to pump US$16.7million over five years into a new tax reform initiative to help streamline the process, reduce corruption and improve the ease of doing business in Jamaica.
• The Chinese government has pledged to continue supporting Jamaica’s economic development with a focus on expanding cooperation in infrastructure construction, mining and tourism. The offer came as Jamaica’s Prime Minister, Bruce Golding, met with Chinese Premier Wen Jaibao on Wednesday during a five-day visit to the Asian country.

Trinidad
• Claude Musaib-Ali, the chief executive at struggling insurance giant CLICO, resigned yesterday, sources close to the CL Financial subsidiary said.
• Musaib-Ali, a former CLICO and British American Insurance executive, was brought back to the failing insurance company last year after Government and the Central Bank rescued the company and its parent conglomerate, CL Financial.
• Musaib-Ali’s resignation at CLICO follows several at CL Financial. CL managing director Steve Bideshi left the group on January 31. Former group financial director Michael Carballo also resigned. Last year, former Central Bank governor Dr Euric Bobb resigned as CL chairman, but remains a director on the board.

Figure 2: Tracking key Caribbean financial indicators

DISCLAIMER- This document is for informational purposes only. This information is based on the close of the previous business day activity. The information presented is from usually reliable sources. FirstCaribbean has not independently verified the facts, assumptions, and estimates contained in this report. No representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, or completeness of the information and opinions contained in this report. FirstCaribbean International Bank accepts no liability for any loss occasioned by reliance on any information contained herein which may prove to be incorrect. For current market bids and offers, please contact: David Whitcroft, Treasury Sales & Trading, FirstCaribbean International Bank, Phone 246-367-2272 (Barbados), and Fax: 246-421-9207 (Barbados); david.whitcroft@FirstCaribbeanBank.com

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