Online Banking

Latest News

Government Electric Vehicle Trial Programme Launched Published: 14 July 2022

  • The Government’s Electric Vehicle (EV) Trial programme, now underway, will assist in converting many state-owned fleets to EVs. The Government will continue to transform the public transportation sector by using more renewable energy and electric vehicles (EVs).
  • EVs demonstrate a positive change in public awareness of the climate crisis, which is exacerbated by the use of fossil fuels by motor vehicles worldwide.
  • Prime Minister Holness lauded the trial programme as one which will “give policymakers a first-hand understanding of what it means to drive and use an electric vehicle.” He further pointed out that the programme will assist in the government’s data gathering, while it builds out an “ecosystem around electric vehicles.”
  • This announcement comes as the Electric Mobility Policy for the public transportation sector has been completed. With a government policy to incentivize the importation of EVs now approved by Cabinet, we expect an increase in the number of consumers who will be able to afford these vehicles.
  • This is expected to contribute to a reduction in Jamaica’s carbon dioxide emissions and assist with the government’s mandate to have 50% renewable energy by 2030. It is also anticipated to help residents cushion the impact of the high fuel prices being experienced as a result of geopolitical tensions.

(Source: JIS News)

Ground to Be Broken Saturday for Mobay Bypass Project. Published: 14 July 2022

  • The ground is scheduled to be broken on Saturday (July 16) for the construction of the long-awaited Montego Bay Perimeter Road.
  • Thousands of road users will benefit from the project, which will entail the construction of a 14.9-km bypass of the city to ease traffic congestion affecting the area, rehabilitation of Barnett Street and West Green Avenue, and construction of the Long Hill Bypass, as well as a drainage study.
  • A US$274.5Mn contract was signed between the Ministry of Economic Growth and Job Creation and China Harbour Engineering Company Limited (CHEC) last November, for the undertaking.
  • The road will allow persons to go through without jamming up the town and is expected to assist persons in getting to and from the airport within a shorter time frame. Montego Bay is Jamaica’s main resort town and is home to the island’s largest and busiest international airport, with roughly 4,200 passengers arriving and departing per hour.
  • The project is expected to benefit the tourism sector through the increased ease of access from the Montego Bay airport to various tourist attractions. Construction of the perimeter road is also anticipated to increase productivity, as Jamaicans living and working in the area will spend less time in traffic.

(Source: JIS News)

Latin America Steel Demand To Fall In 2022-Industry Report Published: 14 July 2022

  • Steel demand in Latin America could dip through 2022 as the industry faces regional inflationary pressures, price hikes from the Russian invasion of Ukraine and political instability.
  • The regional steel sector rebounded in 2021 following coronavirus-related restrictions in 2020, topping previous production levels, according to the report from the Latin American Steel Association (Alacero).
  • However, with the attack on Ukraine causing energy prices to skyrocket, as well as inflationary strains and unpredictable election cycles in Latin America, the largest steel-using industries, like construction and auto production, have shrunk so far in 2022. Further, demand is expected to fall 2% (y-o-y) in 2022 from a y-o-y growth of 26.6% in 2021 owing to a confluence of negative factors.
  • The construction sector in Latin America contracted 3% in the first quarter, while the automotive sector fell 1.2% year-over-year from February to April. In Mexico alone, the construction sector contracted 0.2% year-over-year in May, while its mining sector shrank 1.7%, according to the country's statistics agency. However, demand could recover by 2023, growing some 4% from this year.
  • Infrastructure projects like the Vaca Muerta pipeline could give Latin America, and the steel industry, a much-needed boost. "This puts us in a privileged position, and we have great steel companies and engineering with the capacity to carry out the titanic task of building pipelines, creating direct and indirect jobs,” Wagner said.

(Source: Reuters)

Euro-Zone Recession Risk Seen Rising Even as Inflation Peak Near Published: 14 July 2022

  • The risk of a euro-area recession is growing as the likelihood of natural gas shortages rises and inflation remains at record levels, according to economists polled by Bloomberg.
  • The probability of an economic contraction has increased to 45% from 30% in the previous survey and 20% before Russia invaded Ukraine. Germany, one of the most vulnerable members of the currency bloc to cutbacks in Russian energy flows, is more likely than not to see economic output shrink.
  • “We assume a recession based on the already implemented oil embargo and the effect of higher input prices on industry,” said Erik-Jan van Harn, a strategist at Rabobank. “The German economy is already slowing down and the trend is clearly downward.”
  • The rising cost of living is taking an increasing toll on businesses and consumers who’re emerging from two years of the pandemic. Lower shipments of gas from Russia, meanwhile, pose a threat to winter energy deliveries.
  • Inflation forecasts were raised from the previous poll, though price growth is still expected to slow to the European Central Bank’s 2% target in 2024. Respondents continue to see it peaking in the current quarter.
  • The ECB is expected to raise its deposit rate to 0.75% by year-end and to 1.25% at its March meeting. It was previously seen reaching that level only in June.  The euro zone “is likely to enter a mild recession in the second half of this year, but this won’t be enough of a drag on demand to return inflation to target, leaving the ECB on a path of gradual rate hikes,” economists led by James Rossiter at TD Securities said.

(Source: Bloomberg News)

China's Exports Bounce Back, But Global Risks Darken Trade Outlook Published: 14 July 2022

  • China's exports rose at the fastest pace in five months in June as factories revved up after the lifting of COVID lockdowns, but a sharp slowdown in imports, fresh virus flare-ups, and a darkening global outlook pointed to a bumpy road ahead for the economy.
  • The rebound in exports reflected an easing of supply chain disruptions and port congestion that hammered the world's second-largest economy in spring when the government rolled out widespread lockdowns.
  • Outbound shipments in June rose 17.9% from a year earlier, the fastest growth since January, official customs data showed on Wednesday, compared with a 16.9% gain in May and much more than analysts' expectations for a 12.0% rise. "This jump reflects the easing of supply chain disruptions coming out of lockdowns and, most importantly, fewer bottlenecks at ports," said Julian Evans-Pritchard, senior China economist at Capital Economics.
  • However, economists say the strength in exports is likely to fade as rising global interest rates to rein in inflation begin to sap demand and broader economic growth. The threat of further pandemic restrictions at home also hangs over Chinese businesses and households, while the Ukraine war has put renewed pressure on world supply chains and raised exporters' operating costs.

(Source: Reuters)

Year End Profit Plummet at Wigton Windfarm Limited Published: 13 July 2022

  • Wigton Windfarm Limited (WIG) reported a net profit of $472.12Mn for the 12 months ended March 31, 2022, which represents a 40.4% decline in the net profit of $792.70Mn reported in 2021.
  • Revenue for the period decreased by 20.9% due to lower levels of production from wind turbines owing to lower wind speed in tandem with lower availability of turbines.
  • Also contributing to the decline in the bottom-line was a 3.9% increase in direct costs and 23.9% rise in general administrative expenses.
  • Wigton continues to search for ways to reduce the impact of climate change and diversify its revenue base. As such, it is aggressively exploring business opportunities in non-traditional areas, both locally and regionally.
  • Additionally, the company is in the process of verifying and certifying emissions reductions from Wigton Phase I and Wigton Phase II. This verification and certification is expected to result in the resumption of the sale of carbon credits by Wigton which will boost revenues.
  • WIG’s stock price has increased by 1.9% since the start of the calendar year. The stock closed Wednesday’s trading session at $0.53 and currently trades at a P/E of 13.3x which is below the Main Market Energy, Industrials and Materials Sector Average of 18.2x.

(Sources: JSE & NCBCM Research)

Budgetary Support of $268Mn for JBI Published: 13 July 2022

  • The House of Representatives has approved the withdrawal of $268.48Mn from the Capital Development Fund (CDF), to provide budgetary support to the Jamaica Bauxite Institute (JBI) for the 2022/23 financial year. Total budgetary support for the CDF is expected to cover approximately 73% ($268.48Mn) of the JBI’s operating expenditure of $367Mn.
  • The Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, said the JBI was established by the Government in 1975 as a regulatory planning and development agency, to manage the sovereign aspects of the Government’s participation in the bauxite-alumina industry.
  • The JBI is responsible for monitoring and studying the alumina industry and advising the Government on matters pertaining to the industry, locally and internationally. The organization is said to be primarily funded from levies on the bauxite industry through the CDF.
  • The JBI’s primary operations are not revenue-generated activities. However, over the years the JBI has expanded its operations to include the provision of laboratory services on a commercial basis to generate some revenue.
  • The Minister said the JBI has been granted budgetary support totaling $1.2Bn from the CDF during the five-year period 2017/18 to 2021/22. The balance in the CDF as at the end of the 2021/22 fiscal year was $3.8Bn, which is adequate to provide the support required for the JBI in 2022/23.

(Source: JIS News)

Guyana Now Expects Economic Growth Of 57.8%; Producing 350,000 Barrels Of Oil Per Day Published: 13 July 2022

  • Guyana’s economic growth rate has been revised up from 47.5% and 49.7% projected in the 2022 national budget and by the World Bank, respectively. The country is now expected to grow by 57.8%, according to Finance Minister Dr. Ashni Singh.
  • The announcement comes even as the mid-year report is yet to be released but also with some 350,000 barrels of oil being produced per day in the offshore basin of the new oil-producing nation.
  • Additionally, the country has a wealth of oil amounting to 11Bn barrels of proven reserves and still counting. As such, the country is well positioned to benefit from elevated oil prices. Guyana is now seen as the fastest growing economy with the third-largest reserves in Latin America and the Caribbean and the 17th in the world.
  • Of note, the start-up of Phase 2 of the Liza Development with the arrival of the Liza unit storage and production facility in October 2021, has pushed daily output in South America’s newest oil-producing nation to above 300,000 barrels per day. This will support the country’s goal of producing one million barrels of oil per day by 2029.
  • The country’s strong non-oil sector is also expected to grow by 7.7% this year, building on the 4.6% growth recorded last year.

(Source: Newsroom)

IMF Again Cuts U.S. 2022 Growth Forecast To 2.3% As Consumer Spending Cools Published: 13 July 2022

  • On July 12, 2022, the International Monetary Fund, once more cut its growth forecast for the United States to 2.3% for 2022 from its estimate of 2.9% in late June. The report cites recent downward revisions to first-quarter U.S. GDP output and consumer spending in May as reasons for the change in projections.
  • The IMF also cut its 2023 U.S. real GDP growth forecast to 1.0% from 1.7%, based on data revisions that showed "significantly less momentum" in private consumption and spending of savings built up over the pandemic.
  • The IMF said that U.S. inflation pressures are broad-based, with declining price growth in durable goods largely offset by an acceleration of prices for shelter, healthcare, and other services, along with rising food and energy prices. "The policy priority must now be to expeditiously slow wage and price growth without precipitating a recession," the IMF said in the Article IV staff report.
  • The Fund said Fed monetary policy tightening should help bring down inflation to 1.9% by the fourth quarter of 2023, compared with a forecast of 6.6% for the fourth quarter of 2022. It is also of the opinion that this will further slow U.S. growth and also allow the country to avoid a recession.

(Source: Reuters)

Inflation Rose 9.1% In June, Even More Than Expected, As Price Pressures Intensify Published: 13 July 2022

  • U.S. consumer prices accelerated in June as gasoline and food costs remained elevated, resulting in the largest annual increase in inflation in 40-1/2 years and cementing the case for the Federal Reserve to hike interest rates by 75 basis points later this month.
  • The consumer price index rose 9.1% from a year earlier in a broad-based advance, the largest gain since the end of 1981, Labour Department data showed on July 13. The widely followed inflation gauge increased 1.3% from a month earlier, the most since 2005, reflecting higher gasoline, shelter and food costs.
  • Economists projected a 1.1% rise from May and an 8.8% year-over-year increase, based on the Bloomberg survey medians. This was the fourth-straight month that the headline annual figure topped estimates.
  • The so-called core CPI, which strips out the more volatile food and energy components, advanced 0.7% from the prior month and 5.9% from a year ago, above forecasts. Treasury yields and the dollar jumped, while US stock futures fell following the report.
  • The red-hot inflation figures reaffirm that price pressures are rampant and widespread throughout the economy and continue to sap purchasing power and confidence. That will keep Fed officials on an aggressive policy course to rein in demand by hiking interest rates by additional 75 basis points, and adds pressure to President Joe Biden and congressional Democrats whose support has slumped ahead of midterm elections.
  • While many economists have suggested this data will be the peak in the current inflationary cycle, several factors such as housing stand to keep price pressures elevated for longer. Geopolitical risks including COVID lockdowns in China and Russia’s war in Ukraine also pose risks to supply chains and the inflation outlook.

(Source: Bloomberg)