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CREAD Presented With Country Assessment Of Dominica’s Geothermal Resources Published: 13 April 2022

  • A country assessment of Dominica’s geothermal resources has been handed over to the Climate Resilience Execution Agency of Dominica (CREAD). 
  • The assessment focused on creating a roadmap for the utilisation of Dominica’s geothermal resources to build a resilient economic future for the country while supporting regional and global low-carbon energy transition was conducted by the Kenesjay Green Limited (KGL). 
  • Dominica is a geothermal resource-rich country and as such its geothermal resources provide tremendous potential for spurring Dominica’s green industrialisation. This will support the diversification of the economy and lead to the achievement of a robust economy, which is one of the six result areas in its Climate Resilience Recovery Plan. 
  • There is now significant interest around the world in green hydrogen, and Dominica has the unique opportunity to position itself to be able to supply some of that demand. Consequently, the country has targeted 2030 to have 100% power generation through renewable energy, this will result in among other things, greater energy security, and an improvement in the country’s resilience.

(Source: Dominica News Online)

Oil Settles Up On Shanghai Lockdown Easing, Russian Production Cuts Published: 13 April 2022

  • Oil prices settled higher on Tuesday as lockdowns eased in Shanghai and as Russian oil and gas condensate production fell to 2020 lows and OPEC warned it would be impossible to replace potential supply losses from Russia. 
  • Brent crude futures rose $6.16, or 6.3%, to settle at $104.64 a barrel by 1:48 p.m. EDT. U.S. West Texas Intermediate rose $6.31, or 6.7%, to settle at $100.60. This increase followed a 4% decline in both benchmarks on Monday.
  • Shanghai said more than 7,000 residential units had been classified as lower-risk areas after reporting no new infections for 14 days. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) warned it would be impossible to replace 7 million bpd of Russian oil and other liquids exports lost in the event of sanctions or voluntary actions. 
  • Russian oil and gas condensate production fell below 10 million barrels per day (bpd) on Monday to its lowest since July 2020, two sources familiar with data said on Tuesday, as sanctions and logistical constraints hampered trade.

(Source: Reuters)

Consumer Prices Rose 8.5% In March, Slightly Hotter Than Expected And The Highest Since 1981 Published: 13 April 2022

  • Prices that consumers pay for everyday items surged in March to their highest levels since the early days of the Reagan administration, according to Labour Department data released Tuesday. 
  • The consumer price index, which measures a wide-ranging basket of goods and services, jumped 8.5% from a year ago on an unadjusted basis, above even the already elevated Dow Jones estimate for 8.4%. 
  • Excluding food and energy, so-called core CPI increased 6.5% on a 12-month basis, in line with the expectation. However, there were signs that core inflation appeared to be ebbing, as it rose just 0.3% for the month, less than the 0.5% estimate. That in turn sparked some hope that inflation overall was easing and that March might represent the peak. Markets reacted positively to the report as stocks rose and government bond yields declined. 
  • To combat inflation, the Fed has begun raising interest rates and is expected to continue doing so through the remainder of the year and into 2023. The last time prices were this high, the Fed raised its benchmark rate to nearly 20%, pulling the economy into a recession that finally defeated inflation.

(Source: CNBC News)

Increased Visitor Arrivals Drive ECL’s Net Profit  Published: 12 April 2022

  • Express Catering Limited (ECL) reported a net profit of US$364.51k for its nine months ended February 28, 2022 which is a significant increase over the US$2.44Mn net loss recorded in the prior period. This improvement was fostered by an increase in the number of passengers accessing the departure lounge of the Sangster International Airport, which influenced a 323.3% growth in revenues. 
  • In total, passenger arrivals were 1.21Mn, compared to just 318k for the similar period in the previous year. This led to increased demand for food and beverage products from ECL’s branded sports bars and restaurants. 
  • The company also experienced higher input costs (ranging from ingredients to utilities) that are associated with the logistical challenges caused by the COVID-19 pandemic and the recently started war in Ukraine. Owing to this, direct costs increased by 474.8%; however, this was outweighed by the rise in revenues. 
  • It is anticipated that ECL will see further recovery this year as the rebound in the tourism sector continues. Jamaica is expected to see increased visitor arrivals supported by increased flights to the island; reduced warnings on travel to Jamaica; and the execution of expansion plans by stakeholders. This will support ECL’s financial performance in the coming quarters through increased demand for its airport food services.
  • ECL’s stock price has increased by 26.7% since the start of the calendar year. The stock closed Monday’s trading session at $6.48 and currently trades at a P/E of 57.5x which is above the Junior Market Average of 23.8x

(Source: Company Financials and NCBCM Research)

World Bank Predicts Panama Growth At 6.5% This Year Published: 12 April 2022

  • The World Bank predicts that Panama will grow 6.5% this year, which represents one of the highest growth rates for the region. It is also forecasts that the sovereign will grow by 5% in both 2023 and 2024. 
  • The growth trend of the economy will continue in the coming years, after the strong contraction of 17.9% in 2020, as a result of the restrictions imposed by the Government to contain the pandemic. The drop was partially offset in 2021, with a growth of 15.3% caused by the lifting of restrictions and increased economic activity. 
  • The Ministry of Economy and Finance of Panama estimates that this year it will be possible to recover its pre-pandemic level of gross domestic product (GDP). One of the Executive's commitments to achieve this convergence is the activation of construction through projects awarded under the turnkey model, supported by a repayment scheme of 50% halfway through the work and the remaining 50% upon completion. 
  • Panama is recovering from the crisis caused by the pandemic, as is Latin America on a whole. After a 6.9% rebound in 2021, the region's GDP is expected to grow 2.3% this year and an additional 2.2% in 2023

(Source: Newsroom Panama)

Exports Up, Further Increase Predicted Published: 12 April 2022

  • Barbados’ exports for the first three months of the year saw a double-digit increase when compared to the same period in 2021, and there is a prediction of an even bigger surge as efforts are ramped up to boost exports from small and medium-sized enterprises (SMEs). 
  • Data from Export Barbados (BIDC) showed that certified exports were valued at US$41.9 million over the January 1 to March 25 period, which is a 16.6% increase over the same period last year. This is the highest level attained since the impact of the COVID-19 pandemic and the second-highest level for the comparative period since 2016. 
  • Chief Executive Officer of Export Barbados, Mark Hill, said he was confident that the double-digit growth will not only persist over the next year but will even reach triple-digit growth as the corporation spearheads the launch and deployment of several new initiatives over the coming months. He also noted that since April 2021, Exports Barbados has undergone a process of realignment geared at slowing down the decline in exports to bring the country to a positive growth trend. 
  • The adoption of an export focus by the corporation was essential if it was to guide the country’s exporters towards achieving the Government’s aim of earning and saving foreign exchange, particularly through the export of Barbadian goods and services. Notably, the main drivers for the improvement were mining/concrete aggregate and soft drinks, neither of which was exported in the base year, 2020.

(Source: Barbados Today)

Oil Dives 4%, Below $100 On China Lockdowns, Reserves Release Plan Published: 12 April 2022

  • Oil prices fell about 4% on Monday, with Brent crude tumbling below $100 a barrel on worries that the COVID-19 pandemic will cut demand in China and as International Energy Agency (IEA) countries plan to release record volumes of oil from strategic stocks. 
  • U.S. West Texas Intermediate (WTI) closed at its lowest since Feb. 25, the day after Russian forces invaded Ukraine, an action Moscow calls a "special military operation." 
  • Brent futures fell $4.30, or 4.2%, to settle at $98.48 a barrel, while WTI crude fell $3.97, or 4.0%, to settle at $94.29. It was the lowest close for Brent since March 16. 
  • Fuel consumption in China, the world's biggest oil importer, has stalled with COVID-19 lockdowns in Shanghai. Shanghai, China's financial center, started easing lockdowns in some areas on Monday despite reporting a record of more than 25,000 new COVID-19 infections. 
  • To help offset a shortfall in Russian crude after Moscow was hit with sanctions, IEA member nations, including the United States, will release 240 million barrels of oil over the next six months. The release of Strategic Petroleum Reserve (SPR) volumes equals 1.3Mn bpd over the next six months, enough to offset a shortfall of 1.0Mn bpd of Russian oil supply.

(Source: Reuters)

 

Consumer Fears Over Inflation Hit A Record High In March, New York Fed Survey Shows Published: 12 April 2022

  • Worries are increasing over inflation, with new Federal Reserve data showing a record-high fear over surging prices. Consumers now see inflation hitting 6.6% over the next year, according to the New York Fed’s survey in March, released Monday. That’s a 10% increase in the median expectation just over the past month and the highest level in a series that dates to 2013. 
  • The survey showed that median expectations over a three-year span actually decreased by 0.1 percentage point to 3.7%, largely due to a declining outlook from those with annual household incomes below $50,000. However, uncertainty about inflation over both the one- and three-year spans showed record highs. Household spending expectations rose sharply, climbing 1.3 percentage points to 7.7%, also a new series high. 
  • The data comes a day before the release of the March consumer price index, which is expected to show prices rising at an 8.4% pace over the past 12 months, according to Dow Jones estimates. If that forecast is accurate, it would be the highest number since December 1981. 
  • To fight inflation, the Fed last month approved its first interest rate hike in more than three years. Additional increases are expected throughout the year as inflation runs well above the central bank’s longstanding target of 2%.

(Source: CNBC News)

Tourism Sector to Benefit from Increased Airlift Published: 08 April 2022

  • Jamaica’s tourism sector is set to benefit from new and increased airlift arrangements. Minister of Tourism, Hon. Edmund Bartlett, said that during a recent market blitz in North America, American Airlines executives confirmed as many as 17 non-stop flights per day on many major routes to Jamaica. 
  • Furthermore, other airlines such as Frontier Airlines are now offering non-stop service from Miami, Atlanta and Orlando, and are looking to add two to three weekly direct flights from Denver, Colorado later this year. 
  • Eurowings, Europe’s third-largest point-to-point airline, also began its inaugural trip from Frankfurt, Germany to Montego Bay’s Sangster International Airport on November 3, 2021. Germany has historically been an important market for Jamaica, with 23,000 German visitors in 2019. This figure is expected to increase significantly once Eurowings and Condor commence nonstop flights. 
  • The anticipated increase in flights to Jamaica, recent actions by the CDC to repeal its risk advisory on cruise travel, as well as its lowering of Jamaica’s travel risk level to two (moderate) bode well for the island’s tourism growth prospects. These factors should help the sector to meet or exceed its target of approximately 2.45 to 2.5 million visitor arrivals and total visitor spend of about $2.9 billion in 2022, as well as the recovery back to the pre-pandemic level.

(Source: JIS and NCBCM Research)

Mexico Annual Inflation at 21-Year High, More Rate Hikes Expected Published: 08 April 2022

  • Mexican consumer prices rose in March to levels not seen since early 2001, and economists are saying the data suggests more interest rate hikes are likely, as the central bank has noted that the risks to inflation are skewed to the upside. 
  • Citing tightening global monetary and financial conditions, as well as uncertainty and inflationary pressures linked to the war in Ukraine, the Mexican Central Bank (Banxico) raised its benchmark interest rate by 50 basis points last month, making it the seventh straight hike. 
  • The government's INEGI statistics agency reported that consumer price inflation rose 7.45% in the year through March, way more than the central bank's target of 3%, with a one-percentage-point tolerance range above and below that. Notably, the CPI was also above the median forecast of analysts surveyed by Reuters (7.36% in March, versus 7.28% in February). 
  • Consequently, most central bank committee members stated that the balance of risks for the trajectory of inflation over the forecast horizon has deteriorated again and remains biased to the upside.  Upside risks to inflation include: the persistence of core inflation at high levels, external inflationary pressures associated with the COVID-19 pandemic, increases in agricultural and livestock product prices and energy prices due to the recent geopolitical conflict, and cost-related pressures. 
  • Nikhil Sanghani, Latin America economist at Capital Economics has indicated that persistent inflation risks, alongside the more hawkish U.S. Fed, will put pressure on Banxico to continue tightening over the coming months. It is forecasted that there will be another 50-basis-point rate hike at the bank's next monetary policy meeting scheduled for May 12 and at least a further 150 basis points of tightening in this cycle to 8.50%.

(Source: Reuters)