• Oil prices lost more than 1% last Monday as the Middle East conflict's limited impact on crude output prompted profit taking after oil benchmarks gained 2% last week.
• Several tanker owners steered clear of the Red Sea, and multiple tankers changed course on Friday after the U.S. and Britain launched strikes against Houthi targets in Yemen. The strikes started after the Iran-backed group's attacks on shipping in response to Israel's war against Hamas in Gaza. The conflict has also held up at least four liquefied natural gas tankers travelling in the area.
• "The realization that oil supply has not been adversely impacted is leading last week's bulls to take profit, with the move down somewhat exacerbated by a slightly stronger dollar," said Tamas Varga of oil broker PVM.
• On Sunday, the Houthi militia threatened a "strong and effective response" after the United States carried out another strike overnight. The U.S. later said it shot down a missile fired at one of its ships from Yemen. The chief negotiator for Yemen's Houthis on Monday warned that attacks on ships headed towards Israel will continue.
• "As the Middle East conflict is currently not affecting oil production, the geopolitical risk premium priced in oil prices now appears modest based on the implied volatility of options," Goldman Sachs analysts said in a note.
• There have been no oil supply losses so far, but the shipping disruption is indirectly tightening the market by keeping 35Mn barrels at sea. This is owed to longer journeys shippers have to take to avoid the Red Sea, Citi analysts wrote. In Libya, people protesting against perceived corruption threatened to shut down two more oil and gas facilities after shutting the 300,000 barrel per day in the Sharara field on January 7.

(Source: Reuters)

• Massy Holdings Ltd has appointed Wendy Kerry, its former Senior Vice President, Corporate Governance & Corporate Secretary division, as the acting general counsel effective January 8, 2024. This decision follows the December 27^th resignation of Angelique Parisot-Potter, the Executive Vice President of Business Integrity and Group General Counsel.
• Mrs. Parisot-Potter was placed on paid administrative leave on December 20, pending the completion of an internal investigation related to claims she made during the company’s annual general meeting on December 18. She alleged that Massy was “spending scarce foreign exchange on an executive management programme in Fort Myers, Florida”.
• Massy has since denied these allegations and has initiated an independent process to investigate the claims made by the Group’s former General Counsel.
• Despite the incident and subsequent press releases, there were no significant movements in Massy’s stock price. The stock price closed at $89.07 on January 11, 2024. At this price, it trades at a P/E of 9.98x earnings, which is below the Main Market Conglomerate Sector Average of 10.20x.

(Sources: JSE, MASSY & NCBCM Research)

• At JMMB’s general meeting held on December 13, 2023, shareholders of Preference Shares due January 14, 2024, reached a resolution to extend the maturity date for two out of the four classes of the maturing preference shares.
• The cumulative redeemable 7.50% variable rate JMD preference share class is to be extended to January 14, 2030. Under the new arrangement, a revised fixed interest rate of 9.5% will be applicable for the first year, followed by the 180-day weighted average treasury bill yield (WATBY) plus 2.5%, capped at 6% thereafter. The new International Securities Identification Number (ISIN) assigned to the share is JMMBGL9.50.
• Similarly, the cumulative redeemable 6.00% USD preference shares class is to be extended to January 14, 2030, and the fixed interest rate will be increased to 8.5%. The new ISIN is JMMBGLUSD8.50.
• However, the proposed extension for both the Cumulative Redeemable 7.25% Variable Rate JMD Preference Shares and the Cumulative Redeemable 5.75% USD Preference Shares were not approved. Consequently, these shares will be delisted from the Jamaica Stock Exchange and paid out on January 12, 2024.

(Sources: JSE & JMMB)

• The People’s Progressive Party Civic (PPP/C) delivered four national budgets since its return to office in 2020, but none of those fiscal plans imposed new taxes. In fact, those budgets reversed a number of taxes.
• Similarly, Vice President Dr. Bharrat Jagdeo disclosed on Thursday that the 2024 national budget, to be presented next Monday, will not be funded by the imposition of any new tax on Guyanese. “It has been a trend of PPP governments, and this is something we promised in our local government campaign, no new taxes, but I can also say that at the national level, there will be no new taxes,” Jagdeo said.
• Additionally, while Finance Minister Dr. Ashni Singh will unveil the details of the budget on Monday, Jagdeo said Guyanese can look forward to the continuation of infrastructural development. He confirmed, “You’re going to see economic infrastructure continuing, projects that will expand productive capacity, you will see support for industries, and you will see social infrastructures”.
• Singh said previously that budget 2024 aligns with the administration’s manifesto of 2020, which laid the foundation for prosperity for all. It will be shaped upon two primary pillars, which include the implementation of mechanisms aimed at increasing disposable income in the hands of citizens and the development of Guyana’s economic and social infrastructure.
• Last year, on January 16, Dr. Singh presented a $789.1Bn budget in the National Assembly under the theme ‘Improving Lives Today, Building Prosperity for Tomorrow’. That budget saw critical development programmes for the government being fast-tracked and many more expanded to reflect the government’s continued transformational agenda for the country.

(Source: Guyana Newsroom)

• The United States reaffirmed the crucial nature of its partnership with the Caribbean Community (CARICOM) as a two-day meeting commenced in Grenada on Wednesday, January 10, 2024. 
• The Technical Working Group meeting, orchestrated by the United States Agency for International Development (USAID) in collaboration with the Grenada government and the CARICOM Secretariat, signals a significant step forward in the joint efforts to combat the pressing issue of youth crime and violence.
• USAID emphasises that the Caribbean Basin Security Initiative (CBSI) serves as a testament to the importance of adaptability in response to evolving circumstances. 
• This collaborative initiative underscores the commitment of the United States to work hand in hand with CARICOM nations in tackling shared challenges.
• Since its inception in 2010, the United States has been actively engaged with Caribbean governments through CBSI. The overarching goals have been to curtail illicit trafficking, enhance citizen security, and confront the underlying factors contributing to crime and violence in the region.

(Source: Caribbean National Weekly)

• According to the International Monetary Fund (IMF), global economic growth will remain "resilient" this year after a stronger-than-expected 2023, but work is needed to boost global growth rates above an anemic 3% range in the medium term.
• IMF spokesperson Julie Kozack explained that the global economy appeared headed for a "soft landing" with inflation subsiding and labour markets resilient, but low-income countries could still fall further behind.
• Kozack said dire predictions of recessions in many regions that were prevalent a year ago did not materialize in 2023. "So we've had a relatively resilient global economy so far. We expect that resilience to continue into 2024," Kozack said, noting that inflation was coming down.
• However, the news is "not all good" because recent and near-term growth of about 3% is lower than previous pre-COVID global average growth rates of around 3.8%. "So we do have work to do to lift global growth, especially over the medium term," she noted, adding that the situation pointed to the need for sound policies and reforms that could raise productivity.
• Asked if the economic resilience in 2024 would spread beyond the United States, Kozack said there is a divergence of fortunes among countries and regions, with a risk that low-income countries could fall further behind. "Low-income countries are having the hardest time recovering from a series of shocks, including the pandemic, the food and oil price shocks," as such, the Fund’s work in 2024 will have a strong focus on helping its most vulnerable member countries.

(Source: Reuters)

• The rocky path of getting inflation back to the U.S. Federal Reserve's 2% target rate reflected in the latest Consumer Price Index (CPI) figures suggests that it would likely be too soon for the central bank to cut its policy rate in March, Cleveland Fed President Loretta Mester said on Thursday.
• Overall consumer price inflation on a 12-month basis rose to 3.4% in December from 3.1% the month before. However, excluding volatile food and energy costs, the pace of price increases fell to 3.9% from 4%, showing ongoing moderation in underlying price pressures.
• "I think March is probably too early in my estimation for a rate decline because I think we need to see some more evidence," Mester said. "I think the December CPI report just shows there is more work to do, and that work is going to take restrictive monetary policy."
• Mester cited the need for goods, housing, and shelter, excluding housing categories in the inflation measurement to "see more progress" as well as for wage gains to slow. Earlier on Thursday, the difficulty in bringing inflation back down was underscored by a stronger-than-expected reading on price pressures as Americans paid more for shelter and healthcare.
• Furthermore, inflation figures followed the closely watched monthly jobs report last Friday, which showed a still-resilient labor market, with employers adding 216,000 jobs in December and annual wage growth edging up. The data could deter the Fed from rate cuts.
• Investors are still maintaining bets, though, that the Fed will begin to cut its policy rate at the following meeting in March, according to an analysis of fed funds futures contracts by the CME Group. The Fed's rate-setting committee next meets on January 30-31, when the central bank is expected to keep its policy rate unchanged in the current 5.25% - 5.50% range.

(Source: Reuters)

• According to the World Bank’s Global Economic Prospects Report (2024), Jamaica’s economic growth is projected to reach 2.0% in 2024, 0.3 percentage points (pp) above its previous estimate of 1.7% in its June 2023 report. 
• The upward revision to the growth forecast in 2024 reflects stronger external demand due to improved U.S. growth expectations, as well as higher-than-expected government spending. Inflation in the region is anticipated to continue slowing, converging to national targets by late 2024. As such, central banks are expected to continue reducing rates.
• Further, as monetary policy eases, investment growth is expected to pick up in 2024 and 2025. Consequently, the local economy is also expected to continue growing in 2025, albeit at a slower pace, with real GDP growth projected to reach 1.4%. 
• The drag on economic activity from earlier monetary policy tightening is expected to diminish throughout 2024. Additionally, the expected further easing in policy rates amid moderating inflation is set to bolster growth in 2025. 
• The Bank also revised its 2023 projection to 2.3% from the 2.0% estimate in June 2023.
• However, it is important to note that there are downside risks to the forecast, including a possible escalation of the conflict in the Middle East, which could disrupt energy markets and send oil prices soaring. Additionally, persistent core inflation in advanced economies could lead to higher-than-expected global interest rates and tighter financial conditions, constraining monetary and fiscal policies in Latin America and the Caribbean. Lastly, the ongoing El Niño weather pattern heightens the risk of climate-related disruptions and disasters. 

 (Sources: World Bank and NCBCM Research) 

• Local Coffee farmers will be prioritised under the new Food Security, Agribusiness Development, Climate Smart Technologies and Export Expansion (FACE) initiative, says Minister of Agriculture, Fisheries and Mining, Hon. Floyd Green.  
• The Minister disclosed that in the next financial year, they will launch the Crop Restoration and Establishment Programme (CREP), which is focused on rebuilding Jamaica’s coffee industry.  
• “It is tailored to suit 5,000 coffee farmers and 102,000 farm families. We’re going to be focusing on sustainable growth by ensuring that we embark on our biggest ever replanting programme that Jamaica has seen for Blue Mountain Coffee,” Mr. Green said.
• The Minister underscored that, like other agricultural crops, coffee farmers are affected by harsher climatic conditions, ageing farming populations, and increased costs for agricultural inputs. Over the next three to five years, he said, the objective is to increase output to 450,000 boxes of coffee and boost farmer productivity.
• This anticipated boost in local coffee production should bode well for companies such as Salada Foods, whose revenues and earnings would have been severely impacted due to the limited availability of Jamaican green coffee beans necessary for production of its coffee products. 

(Sources: JIS & NCBCM Research) 

• The World Bank, in its Global Economic Prospects report for Latin America and the Caribbean, noted that in 2023, the region experienced a significant economic slowdown, growing just 2.2%, down from 3.9% in 2022. This deceleration came within the context of heightened inflation, tight monetary conditions, weak global trade, and adverse weather events.
• “The economic outlook for the region suggests a gradual recovery, with growth projected to increase to 2.3% in 2024 and 2.5% in 2025. While the lingering effects of previous monetary tightening will continue to influence near-term growth, their impact is expected to diminish. As inflation slows, central banks are expected to reduce interest rates, alleviating obstacles to investment growth, the World Bank reported.
• The World Bank noted that excluding Guyana, which is experiencing a resource boom, Caribbean economies are expected to grow by 4.1% in 2024 and 3.9% in 2025, partly due to the ongoing expansion of the tourism sector.
• The Bahamas is estimated to have registered growth of 4.3% in 2023, then fall to 1.8% in 2024 and 1.6% in 2025. Barbados, which registered growth of 4.6% last year, will record 4.0% and 3.0% growth over the next two years.
• Similarly, Belize's estimated 4.5% growth last year is predicted to fall to 3.5% and 3.3% in the next two years. St Lucia's 3.2% economic growth in 2023 will decline to 2.9% and 2.3% over the next two years.
• Regarding the region's downside risks, the World Bank anticipates that escalating geopolitical tensions, especially in the Middle East, could disrupt energy markets and cause oil prices to surge.

(Source: World Bank Group)