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WEDNESDAY, JANUARY 23, 2019
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Portable pensions, redundancy fund under exploration By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net PORTABLE worker pensions and creating a National Redundancy Fund are among the reforms being eyed by the National Tripartite Committee’s strategic plan, it was revealed yesterday. Robert Farquharson, the former union head and labour director who now chairs the Committee, told Tribune Business that its three-year plan also intends to assess the feasibility of merging the Employment and Industrial Relations Acts into a single piece of legislation. Kick-starting the longawaited apprenticeship programme under the Skills for current and future jobs initiative, which is being financed by a $50m InterAmerican Development Bank (IDB) loan, is another focus as part of efforts to improve the “employability” of young and unskilled Bahamian workers. “The Minister of Labour [Dion Foulkes] has approved the three-year strategic plan from the National Tripartite Council,” Mr Farquharson said. “We’re looking at the possibility of establishing a National Redundancy Fund to ease the pressure on employers to pay employees what they are owed when the company fails. “We’re also looking at the possibility of a National Pension Plan. We feel more people would be willing to change jobs, and be more productive, if they could take their pension with them.” He added that the design of such pensions would be based on the US 401(k) model. A National Redundancy Fund has been proposed before, especially by trade union leaders such as Trades Union Congress (TUC) president Obie Ferguson, who have argued that it will provide appropriate protection for employees in terms of paying them severance and other benefits should their employer - especially a foreign one - either close down or skip the country. While that would have aided the likes of former Royal Oasis employees, and ex-Taylor Industries staff in a more recent example, the prime concern with such an initiative is how it would be financed, by whom, and how much they would pay. Further expanding The Bahamas’ social safety net frequently fills employers with dread, especially the many who are struggling, because it seems to promise an increased tax on both businesses and employees to finance it. Mr Farquharson, meanwhile, said the National Tripartite Council was seeking to identify 2,500 Bahamians between the ages of 17 and 40 to participate in the launch of a national apprenticeship
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‘Hundreds of acres’ for LPIA expansion
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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ASSAU airport’s managers are moving to secure “hundreds of acres” for potential future expansion of its runway and terminal “footprint”, a Cabinet Minister revealed yesterday. Dionisio D’Aguilar, minister of tourism and aviation, told Tribune Business that ensuring “the necessary land” is available to meet Lynden Pindling International Airport’s (LPIA) future needs was an issue already “in play”. He added that LPIA’s operator, the Nassau Airport Development Company (NAD), needed to “consider everything to
• NAD moves to secure future airport ‘footprint’ • Gets ‘Vantage’ of 10-year deal extension • Minister: Confidence boost for airport partners
DIONISIO D’AGUILAR accommodate” the steadily increasing passenger traffic that has resulted from Baha Mar’s opening and 16 percent year-over-year stopover visitor growth for much of the 2019 first quarter.
THE National Tripartite Council’s “number one priority” is to have draft productivity legislation and standards ready for tabling in Parliament by June, its chairman said yesterday. Robert Farquharson told Tribune Business that creating a National Productivity Council to oversee a rise in workplace output was uppermost in the body’s three-year labour reform plan that has just been approved by the government. He added that increased worker productivity was vital if The Bahamas is “to compete more effectively”
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• Enabling legislation targets June readiness • Vital for Bahamas ‘to compete more effectively’ • Calls for Productivity Council, standards
ROBERT FARQUHARSON in a world economy that is becoming ever-more technology driven, with national boundaries increasingly
falling away as an obstacle to commerce. Outlining the goals of the National Tripartite Council, which was created as a forum to address all labourrelated matters in The Bahamas through participation by government, private sector and unions, Mr Farquharson said it aimed to bring a two-year effort to craft appropriate productivity legislation to an end by summer 2019. “First and foremost we want to introduce national productivity legislation
By NEIL HARTNELL and NATARIO McKENZIE Tribune Business Reporters
before Parliament by June this year; have it ready for tabling by then,” he told this newspaper. “We want to establish a National Productivity Council. “The idea is to increase productivity at a national level. We feel that for The Bahamas to compete more effectively in the world we have to increase productivity at a national level. It’s already the number one priority of the National Tripartite Council now.
Canadian headquartered firm, to provide management services to LPIA’s operator. The minister said this, combined with the 20-year
Productivity increase ‘number one priority’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
‘No one went bust’ from Fyre Festival EXUMA’S Chamber of Commerce president yesterday said he did not know of any Bahamian companies that “went out of business” due to the Fyre Festival fiasco. Pedro Rolle, while acknowledging the suffering caused by unpaid debts left behind by the organisers, told Tribune Business that most residents have “moved on” and are “not dwelling” on the near twoyear-old debacle despite the renewed international media interest. Describing Fyre Festival as “a learning experience” for those unlucky enough to have been involved, Mr Rolle said: “I think Exumians, and locals in particular, they tend to deal with situations in the Family Islands. “Once that’s gone, people have a tendency to move on. I don’t see any people dwelling on the Fyre fiasco in any significant way. Now it’s come up again people are talking about it, and if you ask them of course they want to be be paid, but they’re not sitting down with their hands in the air about it. People have moved on. “This puts it back at the forefront, but our approach has to be to cause people to look at the positive then learn from it and move on.” As for the economic impact, Mr Rolle added: “I don’t know of any business entity that went bust because of losses on the Fyre Festival. I’m sure they suffered, but I don’t know of anyone who went out of business. “I don’t think it’s
LYNDEN PINDLING INTERNATIONAL AIRPORT Mr D’Aguilar’s insight into NAD’s planning challenges came as he revealed that the government has agreed on a ten-year extension to the existing deal with Vantage Airport Group, the
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Economy faces ‘real climb’ to dent unemployment rate By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Bahamas must see “a real climb in GDP growth” to at least 2.5 percent every year to break the cycle of double digit unemployment rates, a governance reformer warned yesterday. Robert Myers, a principal with the Organisation for Responsible Governance (ORG), told Tribune Business that the slight uptick in the national jobless rate to 10.7 percent in November 2018 was merely a reflection of the continued “sluggish” economy. Arguing that the latest Department of Statistics labour force data was of little surprise, he recalled International Monetary Fund (IMF) projections that The Bahamas needed
• ORG chief: We need consistent 2.5% • Jobless rise reflects ‘sluggish’ economy • No change from 2016: 25,000 still seeking work
ROBERT MYERS to achieve an average annual economic growth rate of 5.5 percent between 2013 to 2018 if it was to absorb all new workforce entrants and dent existing
unemployment by 50 percent - a rate it had fallen well short of. Expressing fears that The Bahamas faced “stagnation” if it did not snap out of a decade-long low-tono-growth trend soon, Mr Myers said “the big question” yet to be answered by any government or the private sector was why the economy has consistently under-performed. He again blamed the ease and cost of doing business for The Bahamas’ losing its competitive edge, which has left the economy unable to produce enough jobs to absorb the 3,000-6,000
annual high school leavers or make major dents in the unemployment hangover from the 2008-2009 recession. “They’re saying the same thing we’ve always said, which is you’ve got to focus on the ease and cost of doing business and making it more attractive and competitive for foreign direct investment (FDI) and local investors to invest in the Bahamian economy,” Mr Myers told Tribune Business of the latest unemployment data. “What we’re seeing is a sign of the sluggish climbing momentum of the economy.
It’s just as we said. There has to be a 5.5 percent growth rate to deal with the national debt and the unemployment rate. That number is no surprise to anybody. “It’s [5.5 percent] really aggressive, and we have to work very hard to get to a trajectory of that type of growth otherwise we’re going to stagnate. We need to see at least 2.5 percent growth year-over-year. We need to see a real climb in GDP growth.” The official unemployment data means that just over one in ten Bahamians seeking work cannot find it, representing a material number that suggests a significant segment of society is being left behind in the 21st century economy. While the twice-yearly
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THE TRIBUNE
New Dasani bottle plants its environmental roots By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Caribbean Bottling Company (CBC) has launched a new environmentally-friendly bottle for its Dasani mineral water range. The new, greencapped Dasani PlantBottle will replace the brand’s traditional bottle product. The 12 ounce and 20 ounce Dasani packages will also be the first-ever, fully recyclable plastic beverage bottles made partially from plants. The bottle looks and functions just like traditional plastic, but imposes a lighter footprint on the planet and its resources.
“We all have to do our part to preserve the environment,” said Nikia Wells, Caribbean Bottling Company’s marketing and communications manager. “The introduction of the Dasani Plant Bottle is just one of many projects and initiatives that we support in an effort to reduce our environmental footprint and recycle resources whenever possible. “In addition to our water conservation efforts, Caribbean Bottling Company has been recycling our wooden pallets and scrap cardboard for several years now. We also have recycling bins at our facilities, and we are dedicated to taking part in events and activities that
can encourage our fellow Bahamians to make small changes that can greatly impact our environment. The Bahamian drinks manufacturer and distributor has implemented several recycling and waste reduction programmes in recent years. PlantBottle packaging is intended to ultimately reduce dependence on fossil fuels, and will increase the use of renewable materials. To date, more than 35 billion PlantBottle packages have been distributed in nearly 40 countries. The technology has enabled Caribbean Bottling Company and other international CocaCola beverage bottlers to minimise carbon dioxide
THE NEW Dasani plant bottles.
emissions and significantly reduce the usage of petroleum products. In early 2018, CocaCola announced its global ambition to recycle all of its packaging by 2030. As the official bottler of Coca-Cola beverages in The Bahamas, the Caribbean Bottling Company will continue to look for new and innovative ways to make that goal a reality. Besides CocaCola, Caribbean Bottling Company also offers Schweppes, Fanta, Sprite, Barq’s Root Beer, Dr Pepper, Goombay Punch, Barritt’s Ginger Beer, Canada Dry, Vitamin Water, Dasani, Powerade, Minute Maid, Monster and Flavorful Juices.
Arbitrators plan seventh summit
FROM left (seated): Michael Diggiss, second vice-chair and public relations; Peter Maynard, chair; and Cherise Cox-Nottage, first vice-chair. Standing are William Higgs, chair of education and training; Magistrate Rengin Johnson, CIArbFreeport; Shelly Ingraham, assistant secretary; Justice Rubie Nottage (retired); Ryan Pinder, partner, Graham, Thompson and Company. Photo: Azaleta Ishmael-Newry
THE Chartered Institute of Arbitrators (CIArb) Bahamas branch held a luncheon meeting to plan this Friday’s seventh annual arbitration and investment summit at Baha Mar. “Several times a year, The Bahamas Branch of CIArb offers training courses in mediation, arbitration and construction adjudication in Nassau and in Freeport,” said Williams Higgs, its chair of education and training. “The cost is comparable to the London-based courses, and we expect to offer courses within the first quarter of 2019 and will share the details as soon as they are confirmed.”
“In the meantime, a great educational and networking opportunity will take place at the upcoming Arbitration and Investment Summit,” said Peter Maynard, head of the University of The Bahamas Law Department, and senior partner at Peter D Maynard & Company. Other speakers at the event include Sir Dennis Byron, former president of the Caribbean Court of Justice and president of the Commonwealth Judicial Education Institute; Barry Leon, arbitrator and mediator, and former British Virgin Islands (BVI) commercial court judge; and Anette Magnusson,
secretary-general at the Arbitration Institute of Stockholm, Sweden. The Charter Institute of Arbitrators (CIArb) Bahamas is one of 37 branches of professional arbitrators and mediators. CIArb supports more than 15,000 alternative dispute resolution practitioners in 133 countries around the world. CIArb Bahamas remains committed to promoting intelligent debate regarding arbitration; developing international arbitration as a core competency of the Bahamian legal profession; and building a critical mass of properly trained, accredited and experienced Bahamian arbitrators.
Chamber pledges to boost ties with govt over labour THE Minister of Labour and newly-appointed Chamber of Commerce chief executive have both pledged to strengthen their organisations’ partnership for the benefit of workers and businesses alike. This renewed commitment came as Jeffrey Beckles paid a courtesy call on Senator Dion Foulkes on Monday, January 21, at the minister’s office in Charlotte House on Shirley and Charlotte Streets. Mr Foulkes was accompanied by Cecilia Strachan, permanent secretary in the Ministry of Labour. Mr Beckles was joined by Khrystle RutherfordFerguson, vice-chair of The Bahamas Chamber of Commerce and Employers NEWLY-appointed Chamber of Commerce chief executive, Jeffrey Beckles, recently paid a courtesy call on the Minister of Labour, Confederation (BCCEC). Senator Dion Foulkes. From left: Cecilia Strachan, permanent secretary in the Ministry of Labour; Mr Foulkes; Khrystle RutherfordBoth parties discussed a Ferguson, vice-chair of the Chamber of Commerce; and Mr Beckles.
wide range of topics impacting the Bahamian business community.
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Wednesday, January 23, 2019, PAGE 3
GOVT HAILS YOUTH JOBLESS REDUCTION By NATARIO MCKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net THE Minister of Labour yesterday said the government was “extremely pleased” that youth unemployment appeared to be trending downward based on the latest official data. Dion Foulkes said that although the decrease was relatively small, with the Labour Force Survey showing a one per cent decline in the six months to November 2018, it nevertheless
DION FOULKES
represented an improvement from 24.1 percent in May. “In Abaco there was a three percentage decrease in the unemployment rate, something that is very significant,” he added. “In Grand Bahama, this is the second consecutive survey that has shown a decrease in the unemployment rate. “One of the things we have focused on as a government is decreasing the unemployment rate for young people. This survey, although it was only one
percentage point, there is an uptick of employment of young people between the ages of 15 and 25 that was revealed. We’re extremely pleased about that. One of the things we are concerned about is the unemployment disparity between men and women. Anecdotally, I don’t understand that because it seems like more women are working than men in the various industries.” Mr Foulkes said that the decline in discouraged workers was also
encouraging. This figure fell by 9.1 percent in New Providence and 9.8 percent in Grand Bahama. “This is an area that is not well understood by a lot of people,” he added. “The ILO describes a discouraged worker as a person who is not looking for a job because they believe there are no jobs out there. That is what a discouraged worker is. “A discouraged worker is not formulated, and is not included, in the unemployment statistics. Whenever
there is an increase in discouraged workers there can be an artificial decrease in unemployment. When there is a significant decrease of discouraged workers the unemployment rate can be squeezed because of that. “One of there reasons we think there was a significant decrease in discouraged workers is the various loan programmes we are doing with the IDB for young people, and also the Labour on the Blocks initiative we did last year.”
DNA to govt: ‘Get your act together’ By NATARIO MCKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net THE Democratic National Alliance (DNA) yesterday urged the government to “get its act together” and either implement a job-creating economic growth strategy or “vacate office”. Arinthia Komolafe, pictured, the DNA’s deputy leader, said of the slight unemployment increase unveiled by the latest Labour Force Survey: “The recently released preliminary results of the labour survey conducted in November 2018 confirm that the government has failed to adequately incentivise the private sector and stimulate the economy to put a dent on unemployment figures within our nation. Our people are suffering under an administration that failed to prepare for governance while in opposition, and assumed office without an economic growth plan.”
She argued that despite the “touted boom” in the tourism sector and record number of arrivals in 2018, “it is apparent that this has not translated into sufficient jobs for the Bahamian people during the referenced period”. “The true state of the economy is further worsened when the loss of high-paying jobs in the financial services industry and the level of underemployment is factored into the equation,” said Mrs Komolafe. “There is no empathy for an administration that has done little to alleviate the suffering of the masses,
and refused to implement deliberate policies aimed at economic empowerment of our people. On the contrary, the current administration has increased the rate of taxation within a regressive tax system that burdens the less privileged and middle class. “Bahamians may recall that the DNA had warned that the 60 percent increase in the value added tax rate to 12 percent would impact investor and consumer confidence while threatening the job security of Bahamians,” she continued. “The government of blunders has invested millions of dollars of taxpayers’ funds in a dilapidated hotel and passed a Commercial Enterprises Act without anything to show for these initiatives. It is conceivable that the recent voluntary separation exercise at the Grand Lucayan will further increase the rate of unemployment in Grand Bahama, which is anticipated to be reflected in the May 2019 figures unless the current trend is reversed.”
Mrs Komolafe said the increase in the unemployment rate from 10.1 percent to 11 percent on New Providence was significant given that capital accounts for 70 percent of the employed labour force. “This rise far outweighs the minimal decrease in unemployment in Grand Bahama and modest fall in Abaco,” she said. “The released statistics show that the government continues to fail the youth of our nation as unemployment within this important category stood at 23.1 percent in November 2018 when compared to 20.1 percent in May 2017. The unemployment rate among women was 11.3 percent when compared to ten percent among men; evidence of the lack of any specific focus on economic empowerment of our people. “While we laud the spirit of entrepreneurship of our people, the 11.9 percent increase in selfemployed persons between May 2018 and November
ASPIRING ENTREPRENEURS REWARDED FOR INNOVATION ASPIRING Eleuthera entrepreneurs have been rewarded for their ideas after participating in the Centre for Training and Innovation’s “The Next Boss” competition. Persons taking its Learn and Earn programme had to come up with a business idea and present it before their peers - and a pair of judges - during their entrepreneurship class. The top three innovations won prize money in the amounts of $500, $300 and $200, and the opportunity for further funding to develop their business ideas. Denise Hinds-Jordan, entrepreneurship course lecturer and the competition’s founder, moderated the event and provided feedback alongside the judges to
PARTICIPANTS in the Innovation Competition display their ideas for future businesses flanked by competition judges. the students on their various innovations and how they could make them more feasible. She reminded the students that “an investment in your business is really an investment in you”. The key points of the competition were for students to demonstrate what their idea was, how innovative it was, and what problem it would solve for themselves or the
community. Students were tasked with showing the judges how the business idea could potentially generate income. Serving as judges were Errol McPhee, who has significant experience in the area of entrepreneurship, including revising business plans and teaching business courses for many years, and Kenwood Cartwright, a
member of local government for South Eleuthera. “The students have some very good ideas that I really liked,” said Mr Cartwright. “Excellent ideas,” Mr McPhee added with a smile. Participating students researched what it would take to bring their ideas to fruition, presenting on concepts that interested them. “It was a big eye opener for me,” said participant Dariana Michel. “I learned about ways to get people to buy and want your product or service.” While picking her idea for the competition was not a challenge, she admitted she was nervous about presenting it to the judges and audience. “To my surprise it captured their attention and I was very happy about that.”
2018 could also be attributed to the softening of the jobs market and Bahamians resorting to starting their own businesses to make ends meet,” Mrs Komolafe added. “We maintain that deliberate actions, steps and initiatives have to be undertaken to achieve the desired and target growth levels. This must entail a combination of fiscal, monetary and
economic policies as well as social reforms. It is simply reckless and irresponsible to leave this to chance, luck or coincidence. On behalf of the Bahamian people, we petition the government to get its act together and implement an articulated economic growth plan or vacate office. There is too much at stake and our people have been suffering for too long.”
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‘Hundreds of acres’ for LPIA expansion FROM PAGE ONE
extension to NAD’s lease to operate LPIA, would strengthen the airport manager’s relationship with current and future business partners. He explained that both extensions would boost confidence among investors that long-term deals with NAD will not be impacted by expiring leases and subsequent political interference. With NAD looking to the future following its recent $139m debt refinancing, Mr D’Aguilar told Tribune Business: “We’re considering increasing the footprint of LPIA, and to secure the necessary land from the Crown to allow for future expansion of the runways and terminals. “It’s very important that we start to secure that real estate so no development takes place that impacts the natural expansion of the footprint. It’s important that people don’t build buildings in the way of future runways. They’re [NAD] thinking about all that now and getting it started. “All that is in play. An additional runway is quite big and wide, and needs
additional real estate, so one can assume that this would be in the hundreds of acres. It’s just to secure land for future expansion.” Mr D’Aguilar said such longer-term planning was in addition to “the infrastructure works NAD is contemplating on the airside sector”, which include runway upgrades, new aircraft taxiways and parking spaces, and further enhancements to LPIA’s terminals. “Obviously the traffic going through that airport is growing quite considerably,” he added, “and we now need to consider everything to accommodate the increase in traffic. There are a lot of things we need to rectify, and Vantage brings that expertise to the table. We want to keep that relationship.” LPIA remains arguably The Bahamas’ most important infrastructure asset, as it is the main gateway through which around 1.5m higherspending stopover visitors access this nation’s tourism product and fuel the country’s largest industry and wider economy. This role means it is absolutely critical that the airport keep pace with economic and tourism growth. NAD’s 2018 financial
statements, which were disclosed to potential investors as part of its recent $139m refinancing, also include a provision for resurfacing the existing LPIA runways that is currently valued at $32m with a 13 percent discount rate. Mr D’Aguilar, meanwhile, said the extensions of the existing arrangements with NAD and Vantage to March 31, 2057, and March 31, 2029, respectively, simply made good business sense as it gave the airport operator’s current and potential commercial partners certainty and predictability in knowing their investments were secure for the long-term. NAD’s initial 30-year lease was due to expire in less than 20 years from now, at end-March 2037, and the minister said the government had been informed that the relatively short remaining duration was unnerving parties talking to the LPIA operator. “The government has agreed to extend the lease,” Mr D’Aguilar confirmed in response to Tribune Business’s revelation of the 2057 extension. “Here we are in 2019 with less than 20 years to go. “It’s difficult for NAD to
negotiate relationships with less than 20 years left on its lease. The government saw fit to extend it by another 20 years, the lease from the Airport Authority to NAD, because anyone wanting to enter into a relationship with NAD knows that agreement is in place for the long-term. “People were saying: ‘What happens after 2037? It’s not even 20 years’. If potential investors at NAD are mentioning this as a stumbling block, it’s quick and easy to fix, so we’ve fixed that. The risk is very low from the government’s perspective because the Airport Authority is owned by the government, and NAD is owned by the government.” Mr D’Aguilar then revealed that the Minnis administration has extended Vantage’s NAD management contract, which was due to expire at end-March 2019, by a further ten years to 2029. “We were minded to do so because we were pleased with the performance of NAD/Vantage, and Vernice Walkine and the team of Bahamians she heads up that represent Vantage there,” he added. “They’ve successfully had the ratings on NAD’s debt
upgraded twice, albeit the second time was a minor modification from a ‘BB+’ to a ‘BBB-’, but it restored the investment grade rating and dropped the negative outlook.” Arguing that the combined effect of the two extensions would give LPIA investors major reassurance, Mr D’Aguilar told Tribune Business: “It makes persons considering entering into any relationship at the airport comfortable with the fact that the status quo is going to remain, and that NAD is going to be managing the airport and NAD will be managed by Vantage. “There are Bahamians in place managing NAD with the ability to draw on the expertise of Vantage. This is a good set-up and we want to continue that. Vernice Walkine and her team have done an excellent job to improve operations and the debt. “The recent refinancing of $139m of high interest debt took it to a more reasonable 7.5 percent, and we’re projecting that NAD - which has always been cash flow positive but suffered net losses - will still be cash flow positive but move into a net profit from 2019.”
NAD is projecting that it will turn a comprehensive profit of $2.56m for its current financial year to endJune 2019, driven by further increases in passenger facility fees and other forms of revenue. Its financial statements for the year to end-June 2018 revealed that its net comprehensive loss fell by almost $10m year-over-year - dropping from $14.153m to $4.371m - as it slashed losses by some 70 percent. The improved financial performance was driven by increased passenger traffic stemming from Baha Mar’s full opening, plus fee increases, both of which contributed to significant hikes in passenger processing and facilities fees. Passenger facility charge revenue grew by 15.5 percent or over $7m, rising from $45.464m to $52.508m, while processing fees were up by 51.4 percent from $7.525m to $11.396m. As a result, total operating revenue jumped from $77.028m to $89.396m, a 16 percent rise that put NAD closer than ever before to covering both operating expenses and $68.473m in financing costs.
Productivity increase ‘number one priority’ FROM PAGE ONE We need to increase productivity and find a mechanism to introduce productivity standards in the workplace.” The Bahamian private sector has long voiced concerns over what it sees as relatively low overall productivity by the workforce, and has been especially vexed at the quality - or lack thereof - of potential employees coming out of the public high school system. Frequently voiced complaints are that many employee candidates lack basic literacy and numeracy skills, and even rudimentary socialisation that will enable them to get along with both
colleagues and customers to deliver the required level of service. Increased worker productivity, so the theory of “supply-side economics goes”, will increase output and help lower a firm’s unit costs of production, thereby making Bahamian companies more price competitive on the goods and services they sell. Under the proposed legislation, the National Productivity Council will oversee this effort at a national level, acting as the co-ordinating body for the implementation and achievement of standards viewed as critical to the Bahamian economy’s future competitiveness.
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Mr Farquharson said the draft legislation, including both the Productivity Council and standards, had been based on “a combination” of what exists in Jamaica and Barbados. The National Tripartite Council now plans to visit Grand Bahama, Abaco, Exuma, Eleuthera, Andros and San Salvador over the February to March period for public consultations on the plan. Similar consultations will be held with the likes of the Bahamas Christian Council (BCC) and Bahamas Bar Association, in a bid to “clean up” the legislation and ensure it is fit for the government to take to Parliament by early June 2019. Mr Farquharson said
the National Productivity Council legislation’s roots could be traced back to 2016, when regional labour ministers agreed that worker output in all Caribbean countries was falling and reforms were needed to address this. “It was back then that the government, with the social partners, made a conscious decision to increase productivity at the national level,” he added. “We have been working with the International Labour Organisation (ILO), we’ve consulted with local, regional and international partners to draft the legislation. “It is the number one objective of the National Tripartite Council’s threeyear strategic plan. We look forward to working with the private sector and social partners to make the National Productivity Council a reality. All are on board with it.” The National Tripartite Council’s “white paper” outlining the rationale for Bahamian productivity legislation argues that it will
ultimately boost worker incomes and living standards, while generating private sector and economic growth that leads to a more sustainable economy. “The implementation of a productivity legislation in The Bahamas is likely to lead to highly-skilled employees who are competitive both at the regional and the global level”, the “white paper” says. “Therefore, the employees will be able to ask for higher salaries given their experience and professional mastery. “The higher salaries will increase the disposable income available to the employees, improving their access to better medical care and enabling them to contribute towards their retirement. Additionally, the employees can choose to invest their excess income in revenue-generating projects, hence further boosting their standards of living. “The consumers’ standards of living are likely to improve due to better employee productivity, since companies will be able to
operate more efficiently, passing the benefits of lower costs of production to the consumers.” Acknowledging that low labour productivity was “one of the major concerns of businesses in The Bahamas”, the “white paper” added: “Implementing the productivity legislation will lead to high levels of productivity in the country to the benefit of the private sector. Private companies will be able to produce more efficiently, hence lower the costs of production, and report higher profit margins. “This is possible when you consider that a highly-skilled workforce is related to a low employee turnover in firms. The increased profit margins can be ploughed back into the business, thus contributing significantly to a thriving private sector... “Furthermore, skilled employees are also likely to improve corporate governance, thereby leading to an accountable and transparent corporate leadership which instills trust in the private sector.”
Portable pensions, redundancy fund under exploration FROM PAGE ONE programme part-financed by the IDB’s loan. The National Training Agency (NTA) and Bahamas Technical and Vocational Institute (BTVI) will provide the training facilities, while the Bahamas Chamber of Commerce and other private sector bodies will place participants into on-the-job training. “The idea is to increase the employability of these people, improve their skills, certify their training and give them gainful employment,” Mr Farquharson added. “We’re also going to see if we can amalgamate the Employment Act and Industrial Relations Act into one document. We’ve had so many amendments of both over the years. “We also want to look at the possibility of having workers’ representatives involved in Heads of Agreement discussions with investors to ensure workers’ rights are respected. We also want to find a mechanism to transform the Industrial Tribunal into the industrial side of the Supreme Court. We think we have a mechanism now, so by the end of this year we will be able to move and have ready legislation to achieve that.”
THE TRIBUNE
Wednesday, January 23, 2019, PAGE 5
Economy faces ‘real climb’ to dent unemployment rate FROM PAGE ONE Department of Statistics survey represents a job market “snapshot” at a point in time, the data is particularly useful when compared with long-term trends over several years. Such analysis reveals that the total number of Bahamians unemployed has changed little over two years, representing much of the Minnis administration’s first term in office. Some 25,135 Bahamians were deemed unemployed in November 2018 compared to 25,365 in November 2016 - a decline of just 230 persons. “The big question is why is the economy not growing
‘No one went bust’ from Fyre Festival
FROM PAGE ONE
something that’s predominantly in Exuma business talk at all. It’s like a learning experience. If it comes again people will do it differently, but I think they have moved on. A lot of people learned lessons from it. “If you’re going to conduct business with certain entities they’re going to request upfront deposits, and don’t go ahead in good faith and do all this work and they don’t come through. Overall, lessons have been learned.”
fast enough?” Mr Myers told this newspaper. “In our view, that speaks to the ease and cost of doing business in The Bahamas and regional competitiveness. We’ve also got to focus on the cost of government and the cost that offloads on the private sector.” KP Turnquest, the deputy prime minister, acknowledged as much in yesterday’s interview with Tribune Business, where he said: “The reality is the government has been the major employer of record for too many years, and the burden of that public sector puts tremendous demands on the system for capital that should be employed in the private sector for more productive use.”
He confirmed that the government’s ultimate objective was to restructure and reposition the Bahamian economy for sustainable growth through a combination of strategies involving diversification beyond tourism and financial services; improvements in the ease and cost of doing business; deregulation; liberalisation; and a reduction in bureaucracy and red tape. Mr Turnquest, though, said it would take time to eliminate “structural bottlenecks” that have been allowed to persist for decades, with the intended benefits from the government’s actions possibly not materialising within the next two to five years. The government now has
to execute on its talk and plans, an area where many past administrations have been weak, with all political parties able to take parts of the latest unemployment data to make their case and support attacks on their opponents. The Minnis administration can point to the private sector employment gains, where numbers rose by 3.8 percent to 135,135 workers in the six months to November 2018, as a sign that its strategies are starting to bear fruit. It has also taken comfort in the 10,400 “net new jobs” created over the past 18 months since it was elected to office, including the 2,305 added during the half-year prior to the latest survey,
as another indication the Bahamian economy is starting to turn. The Opposition Progressive Liberal Party (PLP), though, can seize on the increase in the national unemployment rate even though Baha Mar’s full opening has taken place. The Ministry of Finance itself admitted that “the rate of job growth is still not adequate to absorb the number of school leavers entering the labour market each year.” These new entrants, typically numbering anywhere from 3,000 to 6,000, always show up in the November unemployment survey if they are unable to find work, typically increasing the jobless rate compared to
the May figures. The total Bahamian labour force, including both employed and unemployed workers, has increased by over six percent or some 13,660 persons over that same May 2017 to November 2018 period. Translated, this means there are 3,260 more persons seeking work than there were jobs available, hence the rise in the unemployment rate since the last general election. The pattern was repeated between the six months from May 2018 to November 2018, with 2,305 net new jobs created but the labour force, over the same period, expanding by 4,250 persons - meaning there were almost 2,000 more people than jobs created.
Mr Rolle, though, was less sure whether the government had “learned the lessons they should learn” from Fyre Festival despite assurances that it had. Dionisio D’Aguilar, minister of tourism, yesterday again lamented that a “greater level of due diligence” should have been carried out on the Fyre Festival’s promoters to determine if they had the necessary financial and organising capacity. He admitted that The Bahamas had suffered some reputational damage as a result. The festival, which was organised by tech-entrepreneur Billy McFarland and rapper Ja Rule, promised a “cultural moment created from a blend of music, art and food”. The claimed they set out “to provide a once-in-a-lifetime musical experience on the Islands of the Exumas”, and billed it as equivalent to the Coachella Valley Music and Arts Festival in southern California.
The festival was scheduled to take place, first on Norman’s Cay, and then on Great Exuma, over two weekends in April and May of 2017. When hundreds of festival-goers arrived at the site they were shocked to find that nothing was in place for a concert of the scale that was advertised. “The Fyre festival obviously was very unfortunate,” Mr D’Aguilar said. “This chap Billy McFarland came to The Bahamas and really committed a level of fraud, for which he has now gone to jail. He sucked a lot of people in and led many people to believe this was going to be a successful event. “The staff at the Ministry of Tourism did what they were supposed to do, which was facilitate the event in terms of Customs and importation and licensing. We do that all the time for many projects. Unfortunately, probably a greater level of due diligence
should have been done to ensure that the disaster that happened did not. While the Ministry of Tourism wasn’t complicit in the failure it regrettably caused the country some reputational damage.” Mr D’Aguilar added: “Moving forward, we really have to be mindful of that and not accept everyone willingly through the door. Maybe the previous minister in his exuberance to make the deal done went all in and, in hindsight, that was mistake.” Two separate documentaries released by Netflix and Hulu in recent days have
brought renewed interest in the festival, drawing attention to the now-infamous scheme which saw investors defrauded of significant sums of money, hundreds of festival attendees left stranded after its abrupt cancellation, and numerous vendors left unpaid. Customers who paid $1,200 to over $100,000 hoping to see Blink-182 and the hip-hop act Migos arrived on Exuma only to learn they were cancelled. Their luxury accommodations and gourmet food consisted of leaky white tents and packaged food. Customers subsequently
lashed out on social media with the hashtag #fyrefraud. The bust was an embarrassment to some famous people after it was promoted on social media by models and celebrities including Kendall Jenner, Bella Hadid and Emily Ratajkowski. Last October, McFarland was sentenced to spend six years in prison by a judge who called him a “serial fraudster”. McFarland, 26, admitted to defrauding investors of $26m on the Fyre Festival and over $100,000 in a fraudulent ticket-selling scheme after his arrest in the scam.
PAGE 6, Wednesday, January 23, 2019
THE TRIBUNE
Brexit battle looms as UK lawmakers attack May’s ‘Plan B’ BRITISH PRIME MINISTER THERESA MAY
LONDON Associated Press
NOTICE KATIE BOOTH LIMITED (In Voluntary Liquidation) NOTICE is hereby given in pursuance of Section 218(e) of the Companies Act, 1992 as amended by the Companies (Winding-up Rules Amendment) Act, 2011 that the Members of the above-named Company by resolutions passed on the 21st day of January 2019, authorized the voluntary winding up of the Company and the appointment of GSO CORPORATE SERVICES LTD. of 303 Shirley Street, Nassau, The Bahamas as the Liquidator. All persons having claims against the above-named Company are requested to submit particulars of such claims and proof thereof in writing to the Liquidator, GSO CORPORATE SERVICES LTD., 303 Shirley Street, P. O. Box N-492, Nassau, Bahamas not later than the 25th day of February, 2019 after which the books will be closed and assets of the Company will be distributed. DATED this 23rd day of January, A.D., 2019.
GSO CORPORATE SERVICES LTD. Liquidator
PRIME Minister Theresa May is determined to get a tweaked version of her rejected European Union divorce deal through Parliament. British lawmakers have other ideas — lots of other ideas. May’s Conservative government is headed for a showdown with Parliament next week, when lawmakers get to vote on the prime minister’s latest proposal, and can try to amend it to send her in another direction. Here’s how the battle is shaping up: MAY’S PLAN B After the divorce agreement struck between the UK government and the bloc was resoundingly
rejected by Parliament last week, May held talks with government and opposition politicians and came up with a “Plan B” — one that looked remarkably similar to her Plan A. May told the House of Commons on Monday that she was aiming to win lawmakers’ backing for her deal after securing changes from the EU to a contentious Irish border measure. The bloc insists that it won’t renegotiate the withdrawal agreement. And opposition lawmakers say the scale of May’s defeat last week — 432 votes to 202 — shows she must radically alter her deal if it is to have any hope of approval. But Parliament is deeply divided about what changes to make. Pro-Brexit lawmakers want to remove the Irish “backstop”, an
MARKET REPORT TUESDAY, 22 JANUARY 2018
t. 242.323.2330 | f. 242.323.2320 | www.bisxbahamas.com
BISX ALL SHARE INDEX: CLOSE 2,101.09 | CHG 0.15 | %CHG 0.01 | YTD -8.36 | YTD% -0.40 BISX LISTED & TRADED SECURITIES 52WK HI 4.50 20.91 7.50 5.39 1.60 0.56 3.68 10.20 6.60 4.85 12.50 2.74 1.78 8.21 6.30 13.20 6.99 4.48 13.50
52WK LOW 3.50 19.17 4.90 3.34 0.90 0.18 2.10 8.70 6.10 3.54 9.01 2.30 1.50 7.25 6.10 10.10 5.85 3.25 12.51
1050.00 1000.00 1000.00 1000.00
1000.00 1000.00 1000.00 1000.00
PREFERENCE SHARES
1.00 103.00 100.00 106.00 105.00 103.00 100.00 10.00 1.01
1.00 100.00 100.00 100.00 100.00 100.00 100.00 10.00 1.00
SECURITY AML Foods Limited APD Limited Bahamas Property Fund Bahamas Waste Bank of Bahamas Benchmark Cable Bahamas CIBC FirstCaribbean Bank Colina Holdings Commonwealth Bank Commonwealth Brewery Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank Finco Focol J. S. Johnson Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Commonwealth Bank Class E Commonwealth Bank Class J Commonwealth Bank Class K Commonwealth Bank Class L Commonwealth Bank Class M Commonwealth Bank Class N Fidelity Bank Class A Focol Class B
CORPORATE DEBT - (percentage pricing) 52WK HI 100.00
52WK LOW 100.00
115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 ##########
104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS EMAB FAM FBB FIN FCL JSJ CAB6 CAB8 CAB9 CAB10 CHLA CBLE CBLJ CBLK CBLL CBLM CBLN FBBA FCLB
SECURITY Fidelity Bank Note 22 (Series B) +
SYMBOL FBB22
Bahamas Note 6.95 (2029) BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-3Y BGS: 2015-10-5Y BGS: 2015-10-7Y
BAH29 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330 BG0403 BG0405 BG0407
BAHAMAS GOVERNMENT STOCK - (percentage pricing)
LAST CLOSE 4.43 17.43 7.00 5.39 1.60 0.56 2.30 10.20 6.16 4.44 11.00 2.48 1.78 8.25 6.30 12.85 6.98 3.62 13.01
CLOSE 4.43 17.43 7.00 5.39 1.60 0.56 2.30 10.20 6.16 4.44 11.00 2.50 1.78 8.40 6.30 12.85 6.98 3.62 13.01
CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.00 0.15 0.00 0.00 0.00 0.00 0.00
1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.40 100.00 100.00 100.00 10.00 1.00
1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.40 100.00 100.00 100.00 10.00 1.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
CLOSE 100.00
CHANGE 0.00
107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
LAST SALE 100.00 107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
VOLUME
20
VOLUME
EPS$ 0.147 0.932 -0.306 0.323 0.085 0.000 -0.523 0.700 0.480 0.154 0.627 0.102 0.209 0.000 0.481 0.762 0.578 0.277 0.631
DIV$ 0.120 1.260 0.000 0.240 0.000 0.020 0.000 0.710 0.220 0.120 0.620 0.060 0.060 0.084 0.280 0.500 0.150 0.130 0.600
P/E 30.1 18.7 N/M 16.7 N/M N/M -4.4 14.6 12.8 28.8 17.5 24.5 8.5 N/M 13.1 16.9 12.1 13.1 20.6
YIELD 2.71% 7.23% 0.00% 4.45% 0.00% 3.57% 0.00% 6.96% 3.57% 2.70% 5.64% 2.40% 3.37% 1.00% 4.44% 3.89% 2.15% 3.59% 4.61%
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
0.00% 0.00% 0.00% 0.00% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 7.00% 6.50%
INTEREST Prime + 1.75% 6.95% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25% 3.50% 3.88% 4.25%
MATURITY 19-Oct-2022 ############### 30-Jul-2018 16-Dec-2019 30-Jul-2020 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2018 26-Jun-2020 26-Jun-2022 26-Jun-2045 15-Oct-2018 15-Oct-2020 15-Oct-2022
MUTUAL FUNDS 52WK HI 2.20 4.21 2.03 182.41 158.55 1.60 1.74 1.68 1.11 6.99 8.54 6.15 10.52 11.46 10.46 10.00 8.69 11.79
52WK LOW 1.67 3.04 1.68 164.74 116.70 1.54 1.68 1.62 1.08 6.41 7.62 5.66 8.65 10.54 9.57 9.88 8.45 11.20
FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund FG Financial Preferred Income Fund FG Financial Growth Fund FG Financial Diversified Fund FG Financial Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Sub Fund Royal Fidelity Int'l Fund - High Yield Fund Royal Fidelity Int'l Fund - Alternative Strategies Fund Colonial Bahamas Fund Class D Colonial Bahamas Fund Class E Colonial Bahamas Fund Class F
NAV 2.20 4.21 2.03 182.41 158.55 1.60 1.74 1.68 1.11 7.43 8.57 6.57 10.37 11.68 10.32 9.92 8.69 11.79
NAV Date YTD% 12 MTH% 3.57% 4.03% ############### 1.65% 1.76% ############### 2.18% 2.45% ############### 2.08% 3.47% 30-Sep-2018 30-Sep-2018 3.35% 5.94% 31-Dec-2018 4.30% 4.30% 31-Dec-2018 2.60% 2.60% 31-Dec-2018 3.40% 3.40% 31-Dec-2018 1.46% 1.46% -1.08% 1.77% ############### -5.96% -3.05% ############### 1.90% 4.59% ############### 7.24% 11.96% ############### 2.77% 3.88% ############### 3.94% 4.69% ############### 30-Sep-2018 -0.71% 0.16% 30-Sep-2018 3.96% 7.75% 8.34% 14.88 30-Sep-2018
MARKET TERMS BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings
YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful
TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | FG CAPITAL MARKETS 242-396-4000 | COLONIAL 242-502-7525 | LENO 242-396-3225
insurance policy that would constrain British trade policy in order to ensure there are no customs checks between the UK’s Northern Ireland and EU member Ireland. Pro-EU legislators want May to lift her insistence that Brexit means quitting the EU’s single market and customs union. Amid the impasse, one thing is in short supply: time. BUY BREATHING TIME Britain is due to leave the EU on March 29, with or without a divorce deal. The political impasse over Brexit is fueling concerns that the country may crash out of the bloc without an agreement in place to cushion the shock. That could see tariffs imposed on goods moving between Britain and the EU, sparking logjams at ports and shortages of essential supplies. May says the only way to avert a no-deal Brexit is to back her deal, but lawmakers are trying to pause the clock. Groups of “soft Brexit”backing lawmakers, who want to keep close economic ties to the EU, are planning to use amendments during a Jan 29 debate on May’s plan to try to rule out a “nodeal” Brexit, delay Britain’s departure and put alternative plans on the table. Half a dozen amendments had been filed by yesterday, most aiming to allow time for Parliament to hammer out alternatives to May’s rejected deal. One of the most prominent, with support from both opposition and Conservative lawmakers, would give May until Feb 26 to pass a deal, or see Brexit delayed as Parliament took charge. It will be up to Commons Speaker John Bercow to decide which amendments are put to a vote. Any that are approved would not be legally binding, but as an expression of the will of Parliament would be hard for the government to ignore. SEEK A NEW REFERENDUM A growing group of campaigners argues that Brexit has become so divisive, complicated and gridlocked
that politicians can’t solve it, and the only answer is to ask voters again whether they want to leave the EU. May is strongly opposed to the idea. She said on Monday that a new referendum, less than three years after voters opted for Brexit, would “damage social cohesion by undermining faith in our democracy”. But others argue that it’s the only way to break the logjam. “Two and a half years ago we voted on an abstract idea, that’s the truth,” pro-EU Conservative lawmaker Dominic Grieve said yesterday. He said now that the details of Brexit were clearer, the best course was to “go back and ask the public whether they really want what the prime minister has negotiated and offer them the alternative, remain, instead”. DECISION TIME May says she plans to go back to Brussels after Jan 29 to seek changes to the deal from EU leaders — ideally after getting Parliament to pass a vote calling for a time limit on the border backstop. The bloc insists that the legally binding, 585-page withdrawal agreement cannot be reopened, and says the backstop is essential to keeping the Irish border open. EU spokesman Margaritis Schinas said yesterday that in “a no-deal scenario in Ireland, I think it’s pretty obvious, you will have a hard border.” The EU is more flexible about a non-binding political declaration laying out the framework of future relations between Britain and the bloc. But EU leaders say they won’t consider any changes until Britain figures out what kind of Brexit it wants. “I have a terrible sense of deja vu,” Schinas said, before using the words of the Spice Girls to send a message to British politicians. “We expect the UK to tell us what they want, what they really, really want,” he said.
THE TRIBUNE
Wednesday, January 23, 2019, PAGE 7
Stocks sink on growth fears and possible snag in trade talks
FORT LAUDERDALE Associated Press
NEW YORK Associated Press STOCKS fell sharply yesterday following new signs the global economy is weakening and reports of difficulties in trade talks between the US and China. That broke a four-day winning streak for US indexes. Major global indexes traded lower after the International Monetary Fund trimmed its economic forecasts for 2019 and 2020 and pointed to risks including trade tensions and rising interest rates. China’s government said its economy grew in 2018 at the slowest pace since 1990. US stocks took further losses after the Financial Times reported that the Trump administration cancelled a proposed a meeting with Chinese trade officials this week. Technology and internet companies skidded while energy companies sank with oil prices. Industrial companies also fell, hurt by the slower growth forecast and trade concerns as well as some weak fourth-quarter earnings. Bond prices climbed as investors looked for safer investments. “We began last year, 2018, with a synchronised global recovery, and what we have now is a slowdown globally,” said Quincy Krosby, chief market strategist at Prudential Financial. She said the reported difficulty in trade talks “has shaken up confidence that the US and China are moving closer in the negotiating phase.” The S&P 500 index lost 37.81 points, or 1.4 percent, to 2,632.90. The Dow Jones Industrial Average slid 301.87 points, or 1.2 percent, to 24,404.48. The Nasdaq composite fell 136.87 points, or 1.9 percent, to 7,020.36.
MEASURE PUSHING FLORIDA’S MINIMUM WAGE TO $15 MAY HIT BALLOT
The IMF is now says the global economy will grow 3.5 percent this year, down from its previous forecast of 3.7 percent. It cut its estimate for growth in 2020 to 3.6 percent from 3.7 percent. Earlier in the day, China reported its economy expanded by 6.6 percent in 2018. Lately, global markets have rallied as investors began to feel that a slowdown in the world economy might not be that painful. The S&P 500 is up five percent in 2019 and has jumped 12 percent since hitting its recent low on Dec 24. But yesterday’s losses were a reminder that investors will remain sensitive to clues that the global economy is weakening, and the trade dispute may be the top threat to economic growth. According to the Financial Times, two officials were scheduled to travel to the US ahead of meetings between the US and China’s top trade representatives next week. It said the meetings were cancelled because of a lack of progress on some critical issues, which underscores how far apart
the two sides remain. Technology and industrial companies took some of the worst losses. Farm equipment company Deere fell 3.5 percent to $158.84. Among technology companies, chipmakers absorbed sharp losses. Nvidia fell 5.2 percent to $148.77. Aluminum products maker Arconic slumped 16 percent to $17.09 after it said it is no longer considering a sale. Formerly a part of aluminum giant Alcoa, Arconic said it didn’t receive any offers it thought were in its best interests. The stock has gyrated over the last few months following reports the company was considering a sale. Power tools maker Stanley Black and Decker sank 15.5 percent to $115.69 after its forecast for 2019 fell short of Wall Street estimates. Bond prices rose. The yield on the ten-year Treasury note fell to 2.74 percent from 2.78 percent. Homebuilders also sank after US home sales cratered in December and price growth declined to the lowest level in more
than six years. The National Association of Realtors said yesterday that sales of already-built homes plunged 6.4 percent. Years of rising prices and the more recent increase in mortgage rates have both affected sales, as has the limited number of homes available for sale. EBay jumped 6.1 percent to $32.90 after activist investment firm Elliott Management disclosed a four percent stake in the online marketplace and pushed it to make changes. It said eBay’s classifieds and StubHub ticket resale division are both struggling, and eBay should consider separating them from its marketplace business. British Prime Minister Theresa May presented her Plan B for Britain’s exit from the European Union on Monday, but it looks a lot like the original and it’s not clear if she can win approval in Parliament, which gave her previous plan a resounding “no” last week. The European Union has said it won’t renegotiate that deal. Britain is scheduled to
leave the European Union in a little more than two months, and if it doesn’t have a trade deal in place, it could cause major hardships for numerous companies, especially banks. US crude lost 2.3 percent to $52.57 a barrel in New York. Brent crude, used to price international oils, fell two percent to $61.50 a barrel in London. The British FTSE 100 index slid one percent. Germany’s DAX and CAC 40 in France both gave up 0.4 percent. Japan’s Nikkei 225 index shed 0.5 percent and the Kospi in South Korea sank 0.3 percent. Hong Kong’s Hang Seng lost 0.7 percent. In other commodities trading, natural gas dropped 12.7 percent to $3.04 per 1,000 cubic feet. Wholesale gasoline fell 3.5 percent to $1.40 a gallon and heating oil lost 0.8 percent to $1.90 a gallon. Gold rose 0.1 percent to $1,283.40 an ounce and silver slipped 0.5 percent to $15.33 an ounce. Copper fell 2.2 percent to $2.66 a pound.
THE wealthy Florida attorney who pushed the state initiative legalising medical marijuana has a new target — increasing the state’s minimum wage to $15 an hour. John Morgan told an Orlando news conference yesterday that he’s submitting 120,000 signatures to get his initiative on the state’s November 2020 ballot, well over the 76,000 verified signatures required to get a judicial review. He would then need to reach 766,000 signatures to qualify for the ballot. The measure calls for raising the current minimum wage from $8.46 an hour to $10 in September 2021 with $1 an hour increases annually until it reaches $15 in 2026, a level no state currently has but some will hit by the mid2020s. Florida’s minimum wage is already higher than that of 22 states, according to the National Conference of State Legislatures. The federal minimum is $7.25 an hour. Morgan, a personal injury lawyer, bankrolled a failed medical marijuana initiative in 2014 and one that passed in 2016. He said a minimum wage increase will benefit Florida companies through lower turnover and a more motivated workforce and help taxpayers as the government won’t have to subsidise low-income workers through welfare payments. A $15 minimum would give workers food, water, shelter and medicine, allow families to afford childcare and lure people on welfare to get jobs, he said. “The single greatest issue facing Florida and America today is a living wage,” Morgan said. “People are working harder and harder and getting further and further behind.”
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