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FRIDAY, FEBRUARY 28, 2020
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Ex-minister explores poultry farm revival By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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FORMER Cabinet minister yesterday revealed he is in the “advanced” stage of exploring whether to revive a Grand Bahama poultry operation that once produced 3m-5m pounds of chicken annually. Zhivargo Laing, who is the government’s chief World Trade Organisation (WTO) negotiator, confirmed to Tribune Business he and his business partners were examining the feasibility of restarting an operation they “suspended” in 2015-2016. He explained that changed “circumstances”
setbacks”, Mr Laing said that “having learned those lessons” he had also been informed by international poultry producers that such issues are typical for industry start-ups. Describing the investment that would be required as “manageable rather than massive”, the ex-Cabinet minister suggested it was possible to re-start operations within one year of the decision being taken. Recalling that Harmony had created 64 jobs when in operation, Mr Laing said he was especially “proud”
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that 90 percent of its workforce had been comprised of Bahamians. “I’m exploring re-opening the farm, yes, myself and my partners,” he told Tribune Business. “I’m exploring the opportunity to bring it back on stream because I think there might be a need for it. “I actually operated the farm until 2015-2016. It’s the same operation I operated for two years, Harmony Poultry Producers. We just produced chicken for
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Environmental nod ‘huge milestone’ for oil explorer
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
A BAHAMAS-based oil explorer yesterday hailed the receipt of all necessary environmental approvals from the government as “a massive milestone” towards drilling its first exploratory well. Simon Potter, pictured, the Bahamas Petroleum Company’s (BPC) chief executive, told Tribune Business that it took “huge encouragement” from the granting of Environmental Authorisation for the well it plans to drill in April 2020. The go-ahead from Romauld Ferreira, minister of the environment, effectively removes the last major obstacle to BPC targeting a sub-sea structure in which up to 800m barrels of oil could be held based on seismic testing and other
• Govt removes last main hurdle to BPC well • Gives company ‘massive encouragement’ • Targets 0.8bn-2bn barrels in first structure
geological studies. If the presence of oil is proven at that location, Mr Potter said “close to 2bn barrels” would likely be present in a surrounding field that stretches for 80 kilometres, taking the discovery “up to the field size they’re finding in Guyana”. The BPC chief confirmed
Tourism set for $325m Dorian hit through ‘22 By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Bahamian tourism industry will lose some $325m over the three-year period required to make a “full recovery” from Hurricane Dorian, a newlypublished study has revealed. A 218-page Inter-American Development Bank (IDB) report, representing a full analysis of the category five storm’s impact, said 85.2 percent of this sum represented the loss of Abaco’s stopover visitor market due the extent of the devastation on that island.
Describing these “losses” as disruption in tourism flows due to Dorian’s passing, coupled with perceptions about the damage and loss of key infrastructure, the report said New Providence and Grand Bahama collectively accounted for just $47m of the $325m figure. It added that the losses suffered by Grand Bahama were far less than those incurred from Hurricane Matthew, which is likely due to the fact that much of the island’s room inventory was already off-line due to the Grand Lucayan’s closure.
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‘End insurance VAT for small business’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE government should extend the elimination of VAT from insurance premiums to small and micro-sized business following Hurricane Dorian, the Inter-American Development Bank (IDB) is urging. The multilateral lender, in its full 220-page study of Dorian’s impact, reiterated the need “to increase insurance penetration” to both reduce risk and the burden on Bahamian taxpayers in
the wake of future natural disasters. While admitting that VAT’s removal from homeowner insurance premiums has yet to spark an increase in residential coverage penetration, the IDB voiced optimism that the extent of Dorian’s devastation might prompt a rethink among those who are not mandated by mortgage lenders to takeout full coverage. “While most large business were well insured, many small and micro enterprises
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that the oil explorer received Environmental Authorisation approval, confirming that the government is satisfied with all environmental, safety, security and health measures it is taking, late on Wednesday evening after the Bahamas Environment, Science and Technology (BEST) Commission gave a “no objection” to submissions involving ten years’ worth of work. He added that the extensive analysis of both BPC’s Environmental Impact Assessment (EIA) and Environmental Management Plan (EMP) should reassure environmental
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Oil drilling is ‘reckless response’ to debt woe
• Laing eyes return to 3m-5m pound output • Says ‘some room’ now for local producers • ‘Lessons learned’ from prior ‘suspension’ internationally, and domestically post-Dorian, had potentially created “some room” for Bahamian producers to drive into a local market that consumes around 40m pounds of chicken annually. As a result, he is studying whether to re-open the Harmony Poultry Producers business he operated for two years on a leased portion of Minas Vardoulis’ Grand Bahama Farm. Acknowledging that Harmony closed after it suffered some “early challenges” that resulted in “financial
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activists and others opposed to oil exploration activities in Bahamian waters that any risks associated with its project had been minimised to negligible levels. And, recalling how he was recently asked on a radio show whether The Bahamas can afford to accommodate BPC’s activities, Mr Potter said he responded by saying: “Can you afford not to do this” given the economy’s rising debt and high unemployment levels that have been further exacerbated post-Hurricane Dorian. “This is a massive encouragement to us,” Mr Potter
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By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net ACTIVISTS yesterday blasted the government’s decision to give the environmental go-ahead for oil drilling in Bahamian waters as “a reckless and irresponsible response” to the country’s debt woes. Sam Duncombe, reEarth’s president, told Tribune Business that providing the necessary Environmental Authorisation (EA) for Bahamas Petroleum Company’s (BPC) exploratory activities was an attempt at a “quick fix” for the nation’s fiscal and economic woes. Arguing that tourism and the environment are The Bahamas’ two main industries “whether we like it or not”, she accused successive PLP and FNM administrations of “failing miserably” to protect the country’s natural resources for the benefit of present and future generations. While The Bahamas stands to earn a royalty fee, calculated as a percentage of each barrel produced, if oil is found, Mrs Duncombe said citizens “need to wakeup from the dream” that they will see any benefit from such proceeds. Parliament has already passed a law to create a sovereign wealth fund, which would hold the government’s share of oil exploration revenues, but Mrs Duncombe accused it of using this mechanism to convince Bahamians “everyone will get a piece of the action when they will not”. Her concerns were echoed by Casuarina McKinneyLambert, executive director for the Bahamas Reef Environment Educational Foundation (BREEF), who yesterday told this newspaper that approving BPC’s exploration activities is “a very dangerous move for The Bahamas and the region”.
SAM DUNCOMBE She argued that it was “hypocritical” of The Bahamas to permit fossil fuel exploration in its waters given the sector’s impact on climate change, which this nation last year experienced the full brunt of with climate change. Mrs Duncombe, meanwhile, said the prospect of oil exploration in Bahamian waters had always been treated “as a get-rich-quick scheme” by the government and many citizens when this was not the case. “It’s a reckless and irresponsible response to the fact we don’t have enough money to pay our debt,” she argued to Tribune Business. “Stop borrowing so much bloody money. It’s not only this government; every government has looked for a quick fix to the monetary issues in this country rather than empowering people to make money themselves and become part of the tourism industry. “Tourism, whether we like it or not, is our main industry. We need to protect that because it’s our main business, and we need to protect the environment because it’s our main business. We’ve failed to do that miserably, and continually. In 2020 it’s no longer acceptable.” BPC has stressed that its first exploratory well, which will be dug in waters southwest of Andros near the maritime boundary with Cuba, will only be used to determine the presence of commercial quantities of oil
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Apprenticeship students get first workplace taste CR Walker students in the Organisation for Responsible Governance’s (ORG) apprenticeship initiative have enjoyed their first on-site visit to an employer. They visited Bon Vivants Café and Young’s Fine Wines to learn about careers in service, food and beverage, marketing and wholesale distribution. The students heard from Bon Vivants co-owner and Young’s vice-president, Kyle Jones; marketing manager, Joanne Robertson; and general manager, Stefon Lockhart, about their own career journeys, skills development, the importance of attitude, and how to succeed during job interviews. Tiffany A Bain, ORG’s education consultant and interim engagement coordinator, said the visit was the first of what she hopes are many educational outings for programme participants. “The students were engaged and had an awesome time,” she said. “We can’t thank our hosts Bon
ORG’s Tiffany A Bain, and participants in the ORG apprenticeship programme, meet the Young’s Fine Wines vintage car after learning about branding from company vice-president, Kyle Jones, and marketing manager, Joanne Robertson. Vivants and Young’s Fine Wines, nor our partners at Bahamas Experience Tours, who provided transportation, enough. Private sector partnership in education and youth development is a crucial link in developing a brighter future for young Bahamians. “Exposure to professional and workplace environments is key to instilling important work skills for students, and our aim is to not only have
YOUNG’s Fine Wine general manager, Stefon Lockhart, speaks to participants. additional workplace visits but to secure short-term
work placements for each of the programme’s participants. We would love to have additional private sector partners and encourage businesses interested to step forward and contact ORG.” ORG teamed with CR Walker and its other partners to launch the apprenticeship programme in fall 2019. It aims to enhance job readiness, and improving future career prospects, for under-performing or non-academic learners. The initiative is an intervention designed to facilitate socio-emotional learning, develop skills and, ultimately, empower marginalised youth. It seeks to create alternative pathways to education and employment for young Bahamians underserved by the traditional education system. To-date, 13 students are enrolled in the programme. Businesses interested in mentoring, apprenticing or hosting a workplace excursion should contact ORG at info@orgbahamas.com
Digitise human resources to drive better efficiencies
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MPROVING productivity and efficiency is critical for companies of all sizes in 2020 and beyond. And human resources information systems (HRIS) are helping them achieve this goal consistently. Acquiring HRIS software not only automates these tasks but ensures that the human resources department - and company as a whole - operates according to globally acceptable standards. A huge HRIS benefit is that recurring tasks can be expedited with automation. Job letters, the calculation of incremental salary increases, training reports and other functions that are currently being manually generated are easily produced using this software. HRIS is a lifesaver for sourcing and recruitment processes. It improves the ability to reach large candidate pools when it comes to job openings. This software can apply higher selection standards to applications, speed up the onboarding process with mobile accessibility, and reduce associated paperwork - thereby saving costs. HRIS makes distributing up-to-date materials easier. Company policies and procedures can be sent to all employees simultaneously and immediately. An HRIS system can eliminate paper and turn all of your employee records into easyto-access online data. These can be retrieved simply by anyone with authorisation, and are backed up remotely to ensure safety. Self-service options creating greater employee engagement and empowerment are another critical advantage from implementing an HRIS system. Far too often, the unavailability of trained human resources professionals prevents
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critical functions from being carried out. Self-service options in basic HRIS software systems allow employees to resolve the vast majority of their issues. HRIS greatly improves and enhances employee tracking. Tracking employees has nothing to do with micro management. When you know who is in your main office, who is working from remote locations and who is unaccounted for, you enhance work flow and security. With biometric timekeeping, your human resources team knows in real time where employees are in case they are needed. This can be especially helpful in situations where deliveries need to be made or customers need in-person help. • NB: Ian R Ferguson is a talent management and organisational development consultant, having completed graduate studies with regional and international universities. He has served organsations, both locally and globally, providing relevant solutions to their business growth and development issues. He may be contacted at tcconsultants@coralwave.com.
BAHAMIAN LAW COMPANY JOINS EUROPEAN NETWORK A BAHAMIAN law firm yesterday announced it has joined the Association of European Lawyers, also called the AEA International Lawyers Network. “We are incredibly thrilled and honoured to accept the AEA’s invitation,” said Jacy Whittaker, partner at ParrisWhittaker. “We know that we are joining a truly elite group of top-notch law firms from around the world, and look forward to building new and prosperous partnerships.” The AEA International Lawyers Network aids collaboration by bringing law experts and groups together. It was established in Europe in 2004, but has since spread across the entire globe with members from Japan, Dubai, Canada and Brazil. With the
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JACY WHITTAKER addition of ParrisWhittaker, the network now has a presence in The Bahamas. “Businesses in any sector can flourish when they find like-minded companies who are also looking for the classic win-win relationship. That’s what the AEA International Lawyers Network is all about and we’re excited to see what the future holds,” added Mr Whittaker.
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Friday, February 28, 2020, PAGE 3
URCA CLOSE TO BPL BLACKOUT PROBE END MERCHANTS SEE MIXED CORONAVIRUS IMPACTS By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE energy sector regulator yesterday said it anticipates concluding its probe into Bahamas Power & Light’s (BPL) daily summer 2019 load shedding “within the next month”. Shevonn Cambridge, the Utilities Regulation & Competition Authority’s (URCA) lead energy regulator, told Tribune Business: “URCA is in the process of completing its investigation into the New Providence load shedding events of summer 2019, and we anticipate being in a position to conclude our findings and to propose next steps to BPL within the next month.” URCA last year fined BPL some $229,535 for failing to co-operate with investigations into its summer blackouts and Clifton Pier fires. As a result, it found the stateowned utility monopoly in breach of its Public Electricity License and the Electricity Act for failing to act on the supervisory body’s request to supply information on these incidents. URCA also said it regarded BPL’s actions as “repeated and continuing breaches” of both the law and its licence that were “sufficiently serious to warrant the imposition” of the fine. However. BPL is understood to have appealed both URCA’s ruling and the fine to the Utilities Appeal Tribunal. Mr Cambridge, meanwhile, vowed that URCA will perform its “regulatory duties accordingly” over the problems BPL has encountered in providing a cooling
system for the new 132 megawatts (MW) of generation capacity installed at the Clifton Pier power station. “URCA has taken note of the issue and concerns expressed,” he added. “As the regulator of the utility and energy sector, URCA will conduct enquiries into the matter by way of requesting appropriate information from BPL to first find the facts, and then carry out our regulatory duties accordingly.” Tribune Business revealed earlier this week that BPL’s new ‘Station A’ had literally “hit the rocks” after the stateowned utility encountered unanticipated difficulties with its preferred solution for cooling the Wartsilamanufactured engines. BPL’s plan to dig four 800-feet deep wells to provide a water source has run into harder-than-expected coral rock structures that have proven difficult to penetrate, with multiple drill bits breaking. It has been forced to source and order a closed radiator system as a back-up in case the wells are not in place in time to meet peak summer demand. Desmond Bannister, minister of works, told this newspaper that a cooling solution needs to be implemented by May so that all seven engines are fully operational by June to meet peak summer demand. This means BPL has somewhere between two-and-half and three-and-a-half months to prevent a repeat of the daily load shedding and blackouts that plagued New Providence last summer. It has so far managed to reach just over 50 percent of the target depth on two of the four wells,
with only two of the seven Wartsila-supplied engines that comprise BPL’s new generation capacity currently online and being used amid the wait for the cooling solution. The utility is thus engaged in a race against time. BPL finally released an official statement some two days after Tribune Business’ article appeared, downplaying the cooling system problems while admitting that it had run into issues with drilling the wells. “It is a fact that some of the wells are taking longer to complete than anticipated,” it said. “This is due to the fact that the rock into which we are digging is harder than expected. In fact, two drill bits broke during early drilling efforts. We have taken this as a matter of urgency, however, and have brought in new drilling equipment better suited to the job at hand, and we are now making progress.” Dr Donovan Moxey, BPL’s chairman, added: “In no way did the issues dealing with the cooling wells affect our generation supply. The delays drilling the cooling wells are well within our anticipated timeframe, and we expect to have a full supply of water to run the plant by the end of March, well ahead of our internal timeline.” Whitney Heastie, its chief executive, added: “In an effort to mitigate delay we are connecting cooling systems from Station C to Station A as backup.” He said all the engines at Clifton Pier are boreholecooled, not just those in Station A.
ENGINEERS CHIEF HAILS BUILDING CODE PLEDGE By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE Bahamas Society of Engineers (BSE) president yesterday hailed the Ministry of Works pledge to engage the private sector in reforming the nation’s building code. Quentin Knowles told Tribune Business he was enthused by the interview that Craig Delancy, the ministry’s building control officer, had given to this newspaper earlier this week about the Government’s intention to involve stakeholders such as architects, engineers and contractors in the process. “The fact that he mentions the architects, contractors and engineers, which is oddly enough the first acronym of our organisation that we have formed, the ACE alliance, and the mere fact that he is out there in the public saying he will engage the private sector, particularly those building industry professionals, to give substantial input into the building code updates, is exactly what is needed and will make it a very successful endeavour,” Mr Knowles said.
“We welcome it, and what I say is representative of the wider construction industry. We will welcome any opportunity to provide input into this process. Substantial input and we look forward to it.” Discussing whether he would prefer that the current Bahamas Building Code be revised, or an internationally-accepted code be adopted, Mr Knowles said: “The current code is not far off international standards. You have to realise a code is just a document that references other codes. For instance, The Bahamas building code references the National Fire Protection Association’s codes. “These are light safety codes that deal with everything from exit and emergency lighting to egress paths; things that make a building safe from a fire protection standpoint. They also reference other codes related to structures and what have you, so by reference to those international codes it is a very robust code. “The base document, on the other hand, is outdated. Even though it’s robust it is out-dated. So I think that is what Mr Delancy is referring to.”
Mr Knowles argued, though, that totally discarding the current Bahamas Building Code would be akin to “throwing the baby out with the bathwater”. He explained: “For instance, I am in the electrical business. The code references the Canadian electrical code and the latest version. So, by reference, the electrical requirements are based on a world-class code now.” Explaining that it is rare to be part of an intensive consultation with the government and other stakeholders, Mr Knowles said: “We have been invited to meetings where there is 30 people in a room and everyone gets a minute to talk. “I see that that they are considering hiring consultants to help lead them through the process. It is a process that is not ordinarily done here, so you need outside help, but I am hoping that this consultant or whomever this entity is would have a process in place where we go through a step-by-step procedure where they would request input from the people who use the code every day. I’m talking about the architects, engineers and contractors.”
By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net BAHAMIAN merchants yesterday said the coronavirus outbreak’s supply chain impact depends on how heavily they depend on China for product and components. Andrew Sweeting, the Computer Store’s general manager, told Tribune Business his company has not been affected as yet, but some vendors are urging him to stock up while they have limited supplies in what he described as a “get it while it’s hot” scenario. While not directly impacted, Mr Sweeting added: “I don’t order out of China, as most of my stuff is US-based, but then with that being said one of them, in particular, said their supply chain was being affected, so they were encouraging people not to leave it to the last minute to come in when you needed supplies. “What they were talking about was Dell computers, but they specifically spelled out that they had limited Dell units available, and that it was going to be a while before they got more. So they told us if we needed some start to order them now.” Mr Sweeting said it was
“really hard to say” when the coronavirus outbreak will ease up, adding: “Our prices fluctuate based on the market, so if the market goes up then yeah, we will have to go up as well.” Ryan Cartwright, operations manger at Micronet, said: “The coronavirus has indeed begun to impact our supply chains. We have multiple distribution channels that we work closely with to ensure that we can source our products. “Most of our distributors have said they are confident that they can support regular hardware demands through March, but based on current information there is a risk of product availability issues beginning in April. However, even with that being said, we have already seen limited availability on certain product lines. “As of right now, it is unclear how this will impact our prices. In an effort to mitigate this issue as much as possible, we are trying to stock up on supplies that may prove difficult to get in the next few months.” A major downtown textile store, speaking on condition of anonymity, said: “We had a few orders that have been cancelled. It has been across the board, all types of different items. I’m just saying that the number of orders that we have placed has been delayed several times, and then the final verdict on it was that they cancelled the order. These are coming from China.” The store said that while there had been no feedback in terms of when their shipments will resume, sourcing product from the US will
probably increase price consumers pay by 30 percent to 40 percent as labour costs are much more expensive. Doreen Rolle, general manager at Rolle’s Auto Parts, said: “We stopped ordering from China in the recent months, actually from last year. So we really don’t have an issue, but I have a few orders pending that I cancelled because I don’t want any reaction from those things coming out of China. “We usually get our coils and stuff like that out of China; just the order was cancelled. We cancelled them from January after the outbreak in China. We haven’t gotten anything from them. We don’t expect to get anything from them in the near future.” Responding to concerns that this will affect her business, Ms Rolle said: “We don’t have inventory to carry us over until after this thing has passed. So we were proactive before all of this started to really take shape.” Dwayne Higgs, general manager of WHIM Automotive, said: “We are getting ready to have a shipment within the next few weeks. As far as we have been told by our supplier everything should be fine. Hopefully everything is going to be under control and contained, and they can find something to manage the system and not allow it to spread to other people. “We have spoken to our supplier because we do get some of these right-hand drive parts out of China. They don’t anticipate any delays.”
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Ex-minister explores poultry farm revival FROM PAGE ONE
feeding. All it was was broiler chicken, nothing else.” Harmony leased the poultry facilities and chicken houses from Mr Vardoulis’ Grand Bahama Farm, and Mr Laing said a similar business model - focused on the broiler chicken segment would be pursued this time around should they decide to move forward. “The reality is that chicken consumption in the country is very large, and the production is very low,” he told Tribune Business. “There is some room for local producers to produce, which is why I got into it. “The operation was suspended because early challenges caused us to have some financial setbacks. The idea is having learned
those lessons, and given the circumstances in the international community, there might be an opportunity to make a viable operation there. “The licence for the operation has been suspended, not eliminated. We requested the suspension of the licence in Freeport in the hopes we could maximise the operation at some point. I wouldn’t say we’re close [to restarting] at all. I would say we’re very much in advanced exploration.” Confirming that Harmony would focus on the domestic market for broiler chicken if it restarts, Mr Laing added that there was “perhaps even a great need” for its revival to occur given the damage Dorian inflicted on the northern Bahamas and this nation’s one remaining poultry producer. He voiced optimism that Abaco Big Bird farm would soon resume operations and “satisfy some of the market”, revealing that both parties had been in discussions on how they could co-operate to meet some of the Bahamian demand for chicken. “What it would take to bring the operation on
THE TRIBUNE stream in terms of time would not be extensive. If we put everything in place less than a year is possible,” Mr Laing told Tribune Business. “It’s not a massive investment at all. It’s a manageable investment that’s required. “When we operated it before we had created 64 jobs, and 90 percent of the people who worked there were Bahamian. In the first time in the history of the operation we had reached 90 percent Bahamian employment. It was a new enterprise for us but we were proud of what we were able to do in a couple of years. “I’ve spoken to operators around the world, and they indicated to me that the early challenges are typical of these operations. Once you overcome them you can build a viable operation. This country can benefit from all kinds of economic activity, and all kinds of efforts to shore up its food security and provide quality goods and services. All and sundry should look in that direction.” Mr Laing said that based on previous production levels Harmony’s output
could be between 3m-5m pounds per year, which would be “significant” for the company but no more than around ten percent share of the total market. Yet the ex-Cabinet minister and his business partners, who he declined to name, are not the only Bahamians to examine the possibility of starting a poultry operation. The Bahamas Striping Group of Companies last year unveiled plans to invest $10m in developing poultry farms and processing facilities on Andros and Eleuthera, together with a New Providence distribution centre, only to place them on hold citing uncertainty over the outcome of The Bahamas’ WTO negotiations. “Entrepreneurship is not easy,” Mr Laing said. “Sometimes you win, and sometimes you lose. Sometimes you succeed, sometimes you don’t, but where would be if people did not take a chance? It’s agriculture, and quite frankly enthusiasm about agriculture is not great. It’s something to work on for sure.”
Tourism set for $325m Dorian hit through ‘22 FROM PAGE ONE “Full recovery is assumed to occur by September 2022, even though some of the infrastructure destroyed may never recover, particularly those uninsured small properties,” the IDB document, seen by Tribune Business, said. “The total losses over a three-year period, starting in September 2019, are $325m. These losses are heavily concentrated in stopover visitors to Abaco, representing about 85.2 percent of total losses. The losses in New Providence amount to $28m, while the losses for Grand Bahama are forecasted to be $19m. “The remainder of the losses will be accrued in the rest of the Out Islands, which is the result of the disruption in the flow of tourists. These islands can expect to see a minor positive impact due to the diversion of tourists that otherwise would have gone to Abaco,” the study continued. “Most of the losses will be accrued in the high season of 2019 and 2020, tapering off as the recovery is expected to gain momentum. It is crucial to bring back anchor properties as soon as possible. After the recovery of the key infrastructure and services, room capacity will be the limiting factor in tourism recovery.” All Dorian-related losses suffered by New Providence’s tourism industry were incurred during the period August to September 2019 as a result of the disruption to tourism flows coming into The Bahamas. Some 47 percent, or $13.374m, of these losses
represented room revenues foregone. “Grand Bahama was impacted directly by the storm,” the IDB study added. “However, the damage is far less than that from Hurricane Matthew. The total expected losses are $19m - about $10.5m due to the loss of stopover visitors, and $9m from cruise visitors. There are also some minor losses due to day visitors. “A large fraction of the visitors to Grand Bahama comes from cruises. Many cruises were diverted or canceled, and in some occasions the cruise ships were used to provide relief. The recovery faces an important challenge regarding the recovery of the Grand Bahama International Airport which suffered severe damage.” As for Abaco, Dorian is expected to cost its tourism industry some $271.09m over the next three years, with some $171m coming from room revenues alone. “This is the biggest category of spending in the Out Islands, and particularly in a place like Abaco with relatively high-end visitors,” the IDB study said. “The losses in meals and drinks are estimated at $32m, followed by the losses in activities at $22m. Among the most important water activities are flats sport fishing, deep sea sport fishing and sailing. Tourismrelated shopping losses would total $22m, where a big portion of them will come from the mentioned boating visitors. Transportation related to tourism will suffer losses estimated to near $20m. Other losses are calculated to be around $5m.”
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Friday, February 28, 2020, PAGE 5
Environmental nod ‘huge milestone’ for oil explorer FROM PAGE ONE told this newspaper of the Environmental Authorisation approval. “We’ve been able to work collaboratively and collegially with the government and their advisers over an extended period of time to deliver this. “The original question was: Is this a big milestone? The answer quite simply is: Yes. To illustrate how big a deal this is, we started the work in 2010 when we began to collect the environmental data and how to implement processes and procedures to cause the drilling of a safe and environmentally responsible well.” BPC’s original EIA was accepted by the BEST Commission in 2012, but the oil explorer had to wait a further four years for Parliament to pass laws strengthening the oil exploration regulatory regime - enhancing it to international standards - before further progress could be made. Mr Potter said this introduced an “extra tier, layer of approval” that BPC had to go through. It submitted its Environmental Authorisation application, including both the EIA and EMP, in 2018 and has for the past two years been working with the BEST Commission and its consultants, Black & Veatch, to address any concerns and issues before the final approval was granted. “It’s a big milestone, so I’m pleased and very proud of the people in this organisation, especially the Bahamians, who worked over such a long time at such high at such high standards,” Mr Potter said. He explained that the environmental data collection effort had involved at least five ship-based surveys of the area where BPC planned to drill its first exploratory well using remote cameras to go down and assess the seabed. The ocean currents, waves, tide and wind were also extensively studied, while BPC also conducted “unique” mapping exercises across entire sectors of The Bahamas to study coastlines, flora and fauna. BPC also had to satisfy BEST and its advisers over its planned responses to certain incidents and hazards that might occur, and demonstrate that this was adequate to handle the situation. “It was not just about the environment either in terms of the documentation and scope of work we had to do,” Mr Potter added. “It covers social responsibility, community engagement and the extent to which people have a voice with regard to this particular
piece of work. “It covers operational health. We’re quite familiar with the issue of the coronavirus. As we bring staff to the rig from many nations around the world we have to be very clear how we deal with operational health as they come off the rig and back.” The BPC chief said safety is another big element covered by the Environmental Authorisation, along with security and the need to enforce a 500 metre exclusion zone around the rig in compliance with international standards and best practices. Addressing the continued scepticism of environmentalists, Mr Potter said the project had several features that will mitigate any adverse impacts. “First of all, the location,” he told Tribune Business. “The location is over 100 miles from Andros, and sits in a shipping lane adjacent to the maritime border with Cuba. “It is 15 miles from the border, and the closest landfall is Cuba. It’s a very distant and remote location. The rig is effectively a ship that sits in the shipping lane. It will be there very temporarily - probably for 45-60 days. It’s there for two months and then will leave. “The third thing is it’s an exploratory well. While we certainly think oil is there, it’s not proven until we drill down and find it. We may not find any there. We’re not drilling in pressured zones. We’re not going to produce with this well,” Mr Potter continued. “The process has eliminated a lot of the uncertainty, but the Environmental Authorisation process has sought to identify all the issues and to hold us to account so that we have systems and responses to these hazards identified. In terms of this being a hazardous operation it’s relatively benign. It’s our intent not to have any incidents, and the whole purpose of this planning process over ten years is to make sure we don’t.” Mr Potter said BPC can now focus on logistics and execution of its first exploratory well, Perseverance One, with the Environmental Authorisation behind it. The well will be located on the northern part of an 80 kilometre long structure that the oil explorer believes has strong prospects for producing a positive discovery. “We’re targeting close to 0.8bn barrels in this segment of the structure,” Mr Potter revealed. “If we find oil there, almost inevitably there will be oil in the rest of the structure and that
‘End insurance VAT for small business’ FROM PAGE ONE were not insured or were underinsured,” its report on Dorian’s aftermath found. “As insurance is a key factor in the financial protection pillar, efforts should be made to increase insurance penetration, both for property and loss of business. “In 2018, the government removed the VAT requirement from homeowners’ insurance. Something similar can be done for small and micro enterprises. While discussion with the Bahamas Insurance Association revealed that this measure has not yet significantly increased insurance penetration among homeowners, witnessing the level of devastation left by Hurricane Dorian may influence both homeowners and small business owners to increase their coverage. “Another suggestion that arose in discussions was the possibility of government subsidising insurance for homeowners and small businesses. While this would increase the government’s annual expenditure, it may reduce the total relief expenditure in the event of another disaster. Besides direct subsidies, the government could also promote
business associations and support their requests for group insurance and rates.” The IDB report also urged the government to take out insurance on key public infrastructure assets, as has been done in nations such as Ecuador. “The purchase of insurance for public sector infrastructure should be further considered and the culture of insurance should be promoted,” it added. “Financial protection should be established starting with new public works. For this, it is important to conduct negotiations with private insurance companies to include costs that the government would incur when buying this service. This policy is followed in other countries, such as Ecuador, where the purchase of insurance for public infrastructure is mandatory.”
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will be close to 2bn barrels, which kind of gets you up to the field size they’re finding in Guyana. “From a government point of view it will be a considerable additional income stream to the economy. If we are successful there it completely removes the geological uncertainty associated with the rest of the structure.”
BPC said in a statement that itself and the government have agreed to resolve the amount of licence fees it owes for the period to 2018, and the two years to December 2020, within the next 60 days. Mr Potter was quoted as saying: “On the way to delivering our singleminded goal of safely completing the drilling
of the Perseverance No.1 exploration well there will be no more important milestone than receipt of Environmental Authorisation from the Government of The Bahamas. “Today’s approval reflects our steadfast commitment to ensuring that Perseverance No.1 will be drilled in an entirely safe and
responsible manner, in full compliance not only with the stringent laws and regulations in place in The Bahamas, but also in accordance with all applicable international standards, and adherence to global best practices as defined by the guidelines and performance measures adopted by multiple international agencies.”
PAGE 6, Friday, February 28, 2020
THE TRIBUNE
Oil drilling is ‘reckless response’ to debt woe FROM PAGE ONE rather than extract it. As a result, the prospects of any spill or impact to the environment are minimal. With the government poised to add more than $1.5bn to the national debt
post-Dorian, taking the direct charge to over $9.2bn by mid-2023, and a national unemployment rate still stubbornly in the double digits, many observers have argued that prospect of discovering commercial quantities of oil is one The Bahamas simply cannot
LEGAL NOTICE
DIRLETON FINANCIAL INC. Company No. 248255 (In Voluntary Liquidation) NOTICE is hereby given pursuant to Section 204 (1)(b) of the BVI Business Companies Act, 2004 that DIRLETON FINANCIAL INC. is in voluntary liquidation. The voluntary liquidation commenced on 26th February, 2020 and CHRISTOPH WENAWESER of Kirchstrasse 1, 9490 Vaduz, Principality of Liechtenstein, has been appointed as the Sole Liquidator.
afford to ignore given its need for an economic “game changer”. Mrs Duncombe, though, decried such notions yesterday. “How is it a game changer if we’re being paid a couple of million dollars a year and BPC is being paid billions of dollars a year?” she argued. “And that’s only if they find oil. We need to put that to rest. “We have an amazing country in terms of its natural resources, and we need to start learning to appreciate them so that they serve us in the long run. That’s not happening with any administration I’ve seen. No one gets it. They’ve given it away here, there and everywhere to the highest bidder.” BPC has previously said its commercial terms with the government involve a “sliding scale” of royalty fees, with the rates tied to production (the daily volume of oil, measured in per barrel terms) that is extracted from Bahamian waters. The royalty rates range from a low of 12.5 percent for 75,000 barrels per day to a peak of 25 percent for 350,000 barrels per day or more, with a
production licence granted for 30 years. The government’s share of these revenues would be deposited into a sovereign wealth fund, with the proceeds to be used to benefit the Bahamian people. However, Mrs Duncombe expressed scepticism, adding of BPC’s project: “It’s always been treated as a ‘get rick quick’ scheme. That’s not going to happen. “For people who believe somewhere down the line that every Bahamian will get a piece of the oil action they need to wake-up from that dreamscape because they’re not going to get it. I think the government is duplicitous in how they’re portraying this sovereign wealth fund - that everyone will get a piece of the action. They’re not. “The Bahamian people think they’re going to get a pay cheque at the end of the month if they find oil. They need to wake up. We have nothing to do with BPC except a tiny, tiny piece of the action if they find oil. This sovereign wealth fund is a red herring to make people believe they will get $1,000
INTENT TO CHANGE NAME BY DEED POLL The Public is hereby advised that I, Lavrene Margaret Brown of #64 Jobson Ave, Freeport, Bahamas, intend to change my name to Margaret SaunderS Parker. If there are any objections to this change of name by Deed Poll, you may write such objections to the Deputy Chief Passport Officer, P.O.Box N-742, Nassau, Bahamas no later than thirty (30) days after the date of publication of this notice.
LEGAL NOTICE
NOTICE ADALA BL LIMITED N O T I C E IS HEREBY GIVEN as follows:
NOTICE
(a)
ADALA BL LIMITED is in voluntary dissolution under the provisions of Section 138 (4) of the International Business Companies Act 2000.
(b)
The dissolution of the said company commenced on the 26th February, 2020 when the Articles of Dissolu tion were submitted to and registered by the Registrar General.
NOTICE is hereby given that YOLETTE SAINT-CUR BAPTISTE of , Spanish Wells, Eleuthera, Bahamas, is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 21st day of February 2020 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
(c)
The Liquidator of the said company is Leeward Nom inees Limited, Vistra Corporate Services Centre, Wick hams Cay 11, Road Town, Tortola, British Virgin Islands. Dated this 28th day of February, A. D. 2020 _________________________________
Leeward Nominees Limited Liquidator
MARKET REPORT www.bisxbahamas.com
(242) 323-2330
THURSDAY, 27 FEBRUARY 2020
(242) 323-2320
ALL SHARE INDEX: CLOSE: 2,206.97 | CHG: 3.76 | %CHG: 0.17 | YTD: -24.63 | YTD%: -1.10 BISX LISTED & TRADED SECURITIES 52WK LOW 3.35 20.91 5.50 5.38 1.77 0.67 2.00 9.91 5.60 3.95 6.10 2.53 1.76 8.00 6.40 14.00 6.80 3.01 13.85
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
SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS EMAB FAM FBB FIN FCL JSJ
1000.00 1000.00 1000.00 1000.00
1000.00 1000.00 1000.00 1000.00
Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Fidelity Bank Class A Focol Class B
CAB6 CAB8 CAB9 CAB10 CHLA FBBA FCLB
PREFERENCE SHARES
1.00 10.00 1.00
1.00 10.00 1.00
CORPORATE DEBT - (percentage pricing) 52WK HI 100.00
52WK LOW 100.00
115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
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
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 3.35 17.43 6.00 6.68 2.10 1.62 3.21 11.61 6.00 4.32 6.10 3.44 5.06 10.99 8.00 15.08 9.33 3.70 15.20
CLOSE 3.35 17.43 6.00 6.68 2.10 1.62 3.21 11.61 6.00 4.32 6.10 3.35 5.06 10.72 8.00 15.08 9.33 3.79 15.20
CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.09 0.00 -0.27 0.00 0.00 0.00 0.09 0.00
1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00
1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00
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
500
1,000 100
VOLUME
EPS$ 0.239 0.932 1.760 0.369 0.070 0.000 -0.438 0.722 0.449 0.184 0.140 0.102 0.467 0.646 0.728 0.816 0.939 0.203 0.631
DIV$ 0.170 1.260 0.000 0.260 0.000 0.020 0.000 0.720 0.220 0.120 0.000 0.434 0.060 0.328 0.240 0.540 0.200 0.120 0.610
P/E 14.0 18.7 N/M 18.1 N/M N/M -7.3 16.1 13.4 23.5 43.6 32.8 10.8 16.6 11.0 18.5 9.9 18.7 24.1
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
YIELD 5.07% 7.23% 0.00% 3.89% 0.00% 1.23% 0.00% 6.20% 3.67% 2.78% 0.00% 12.96% 1.19% 3.06% 3.00% 3.58% 2.14% 3.17% 4.01% 0.00% 0.00% 0.00% 0.00% 6.25% 7.00% 6.50%
INTEREST Prime + 1.75%
MATURITY 19-Oct-2022
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%
20-Nov-2029 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
YTD% 12 MTH% 3.73% 3.73% 2.93% 2.93% 2.67% 2.71% 5.76% 5.76% 12.81% 12.81% 0.58% 4.04% -1.09% 5.26% 0.22% 4.45% 2.29% 9.61% 11.57% 11.57% 18.35% 18.35% 5.17% 5.17% 15.86% 15.86% 5.67% 5.67% 3.40% 3.40% N/A N/A 10.80% 2.60% 10.40% -4.00%
NAV Date 31-Dec-2019 31-Dec-2019 27-Dec-2019 31-Dec-2019 31-Dec-2019 31-Jan-2020 31-Jan-2020 31-Jan-2020 31-Jan-2020 31-Dec-2019 31-Dec-2019 31-Dec-2019 31-Dec-2019 31-Dec-2019 31-Dec-2019
MUTUAL FUNDS 52WK HI 2.29 4.37 2.09 195.13 166.73 1.67 1.83 1.76 1.23 8.34 10.26 6.94 12.01 12.35 10.74 10.00 8.98 11.79
52WK LOW 1.67 3.04 1.68 164.74 116.70 1.67 1.83 1.76 1.23 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 Leno Preferred Income Fund Leno Growth Fund Leno Diversified Fund Leno 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 2.29 4.37 2.09 195.13 166.73 1.67 1.83 1.76 1.23 8.34 10.23 6.94 12.01 12.35 10.73 N/A 8.98 11.40
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 | COLONIAL 242-502-7525 | LENO 242-396-3225 | BENCHMARK 242-326-7333
30-Sep-2019 30-Sep-2019 30-Sep-2019
in the world to the adverse effects of climate change. “In light of this, it is inappropriate and hypocritical to embark on a new industry drilling for fossil fuels in our waters to release into the atmosphere more of the very greenhouse gasses that are driving climate change. “In addition, the location of the leases for oil drilling are in vast areas of The Bahamas that are critical areas for our fishing and tourism industries. As countless oil spills from the Exxon Valdez in Alaska to the Deepwater Horizon spill in the Gulf of Mexico have demonstrated, oil drilling is a dirty industry that is not compatible with fishing and that jeopardises our reputation as a clean tourism destination. “It is time to look carefully at this, discuss broadly and transparently taking into consideration the diverse stakeholders who may be impacted, and truly evaluate the risk that oil drilling poses before allowing any drilling to take place. The future of all of us and of future generations depends on it.”
NOTICE
PuBLIC notICe
Dated this 26th day of February, 2020 Sgd. CHRISTOPH WENAWESER Voluntary Liquidator
52WK HI 4.45 22.65 7.00 6.70 2.60 2.00 5.47 12.77 6.17 4.50 10.84 3.64 5.10 10.88 8.00 16.99 9.40 3.80 15.20
a month if they find oil. It won’t happen. Wake up.” Mrs McKinney-Lambert, BREEF’s executive director, voiced concern that the leases BPC holds for drilling cover areas of importance to both the fishing and tourism industries. She argued that oil/fossil fuel exploration was also incompatible with the fight against climate change, especially since The Bahamas is one of the most vulnerable nations to this. “I am deeply concerned to hear this news,” she told Tribune Business of BPC’s environmental authorisation permit. “This is a very dangerous move for The Bahamas and the region. “Hurricane Dorian clearly exposed our vulnerability in the face of increasingly intense climatefuelled hurricanes that impact our low-lying islands. It was a stark reminder of the dangers of moving ahead with oil drilling or refining.” Mrs McKinney-Lambert continued: “Last year, The Bahamas declared a state of climate emergency, recognising that we are one of the most vulnerable countries
NOTICE is hereby given that METRETS ROSEMINE of ,P.O.Box East Street, Nassau, Bahamas, is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 21st day of February 2020 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas. LEGAL NOTICE International Business Companies Act (No. 45 of 2000)
PAC International Fund Ltd. (the “Company”)
In Voluntary Liquidation Notice is hereby given that, in accordance with Section 138 (4) of the International Business Companies Act, (No.45 of 2000), PAC International Fund Ltd. (the “Company”) is in Dissolution. The date of commencement of the Dissolution is the 26th day of February, 2020. Gustavo Dos Santos Vaz is the Liquidator and can be contacted at Rua General Leite de Castro, 200 -Bloco B Cedro Apto 71 - Jardim Santa Cruz (Sacoma), Sao Paulo, Brazil. All persons having claims against the abovenamed Company are required to send their names, addresses and particulars of their debts or claims to the Liquidator before the 26th day of March, 2020. ____________________________ Gustavo Dos Santos Vaz Liquidator
February
2020
12th
THE TRIBUNE
Friday, February 28, 2020, PAGE 7
US ECONOMY GREW AT 2.1% RATE IN Q4 BUT VIRUS THREAT LOOMS WASHINGTON Associated Press THE US economy grew at an annual rate of 2.1% in the final quarter of last year, but damage from the spreading coronavirus is likely depressing growth in the current quarter and for the rest of the year. The overall pace of growth in the October-December quarter was unchanged from its initial estimate a month ago, though the components were slightly altered, the Commerce Department said yesterday. A slowdown in business restocking was less severe than first believed. But a cutback in business investment in new equipment was more of a drag on growth than initially thought. Economists have been downgrading their forecasts for the first quarter of this year as fears of the impact
of the virus has escalated. Stock markets have plunged this week on news that the number of coronavirus cases worldwide has now topped 81,000. Yesterday, the Dow Jones Industrial Average plunged 4.4%, intensifying a weeklong market rout as investors worried that the coronavirus outbreak will seriously damage the global economy. The virus, which started in Wuhan, China, has spread to more than 30 countries, including the United States, Italy and South Korea. Vital supply chains from China that companies in the United States and elsewhere depend on have been disrupted, and that problem is expected to worsen. Microsoft and Apple have warned about adverse impacts from the supply chain disruptions. US companies with sizeable operations in China are being impacted directly. McDonald’s has closed hundreds of stores there. Starbucks has closed more than half of its locations. While it’s begun to open stores in China where the outbreak has abated, it is now spreading faster outside of China. In a report to investors yesterday, Goldman Sachs said the fallout from the virus would likely wipe out
NOTICE Pursuant to the provisions of Section 138 (8) of the International Business Companies Act (as amended), NOTICE is hereby given that Setsoto Enterprises Limited has been dissolved and has been struck from the Register with effect from 11th December 2019. Beecham Braynen and Lorna Kemp LIQUIDATORS c/o Clairmont Trust Company Limited Pineapple Grove #5 Lyford Cay P.O. Box SP-64284 Nassau, Bahamas
all the earnings growth it had been predicting for 2020 if the virus continues to spread. David Kostin, a strategist for the firm, said his baseline estimate is now for zero growth in S&P 500 earnings per share this year, down from an earlier forecast of 5.5% earnings growth. The rising fears about the economic damage the virus can do have inflicted the worst losses on US stocks in two years, less than a week after Wall Street was hitting record highs. To try to demonstrate the government’s resolve to deal with the spread of the virus, President Donald Trump announced on Wednesday that he was appointing Vice President Mike Pence to take the lead in coordinating US actions. But economists are warning that if the virus turns into a global pandemic, the impact could be severe enough to push the global economy and the US economy into recessions. “The global economy was already very weak because of the trade war, and it would
not take much to shove it on its heels,” said Mark Zandi, chief economist at Moody’s Analytics. Zandi said his baseline forecast, which optimistically assumes that the outbreak remains largely contained in China and dissipates by spring, projects that global growth will slow to 2.4% this year — 0.4 percentage point lower because of the virus. He expects the annual pace of US growth to slow to 1.3% in the current quarter, down by 0.6 percentage point because of the virus. He said for the year, he is forecasting US growth of 1.7%. That would be the slowest annual growth of the Trump presidency and far below the 3%-plus growth that Trump had promised to deliver during the 2016 campaign. Because of the market turbulence and the rising potential of adverse effects from the virus, expectation of interest rate cuts by the Federal Reserve have risen. The CME Group tracker of investment sentiment has put the possibility of a
quarter-point cut as early as March at 37%, up from just 7% a week ago. Diane Swonk, chief economist at Grant Thornton, said the possibility of two rate cuts this year “has gone up dramatically” because of the virus threats. Until recently, many economists had expected that the Fed could keep rates unchanged the whole year after three rate cuts last year, when it was struggling to cushion the impact of Trump’s trade war with China and a slowing global economy. The estimated 2.1% annual growth pace in the October-December quarter followed an identical gain in the third quarter. For 2019 as a whole, the economy grew by 2.3%, the slowest pace since a 1.6% increase in 2016. Trump is counting on a strong economy to propel him to re-election in November. But for each year of his presidency, economic expansion has fallen below the levels he had promised to deliver during the campaign,
when he derided the growth rates achieved under President Barack Obama. While growth did jump to 2.9% in 2018, propelled by the 2017 tax cut and increased government spending, it returned last year to near the average achieved by Obama. Yesterday’s report from the Commerce Department was its second of three estimates of economic growth for the October-December quarter. It showed that consumer spending, which accounts for 70 percent of economic growth, grew at a 1.7% annual rate in the fourth quarter, down from an initial estimate of 1.8% growth. Business investment on new plants and equipment was also lower, falling at a 2.3% rate, worse than the initial estimate of a 1.5% drop. These weaker numbers were offset by more business restocking of store shelves and upward revisions to residential investment and federal government spending.
PAGE 8, Friday, February 28, 2020
THE TRIBUNE
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