• The first ship to depart Ukraine under a deal to resume grain exports from the country two weeks ago docked in the Syrian port city of Tartous on Tuesday, August 16, 2022, according to a shipping source and satellite data.
• The Sierra Leone-flagged Razoni set sail from Ukraine's Odesa port on Aug. 1 under a hard-won grain deal but did not unload in Lebanon as planned. Its location had not been clear in recent days as it has kept its transponder off.
• The cargo of 26,000 tonnes of corn had originally been destined for Lebanon, which has been suffering an economic crisis that has plunged about half of its population into food insecurity.
• However, the original buyer refused the delivery over quality concerns and the ship sailed to Turkey, docking in Mersin on Aug. 11 and unloading part of the cargo there.
• Ukraine has previously accused Syria of importing at least 150,000 tonnes of grain it said was plundered from Ukrainian warehouses after Russia's invasion in February. Russia has denied stealing Ukrainian grain.
• It is important to note that Ukraine's ministry of transport said at the weekend that it was "not responsible for vessel and cargo after it has left Ukraine, moreover after the vessel departed from (a) foreign port".

(Source: Reuters)

• President Joe Biden on Tuesday, August 16, 2022, signed into law a $430 billion bill that is seen as the biggest climate package in U.S. history, designed to cut domestic greenhouse gas emissions as well as lower prescription drug prices.
• At a White House event, Biden was joined by Democratic leaders including Senator Joe Manchin of West Virginia, whose support was crucial to the passage of the Inflation Reduction Act along party lines after he had initially opposed a similar measure.
• The legislation to fight climate change and lower prescription drug prices aim to cut domestic greenhouse gas emissions. It will also allow Medicare to negotiate lower drug prices for the elderly and ensure that corporations and the wealthy pay the taxes they owe. Democrats say it will help combat inflation by reducing the federal deficit.

(Source: Reuters)

• FOSRICH Company Limited reported a net profit of J$297.97Mn (EPS$0.60) for the 6 months ended June 30, 2022, which represents a 160.2% improvement over the net profit of J$114.52Mn in H1 2021.
• Revenue for the 6 months was $1.80Bn, a 64.6% increase driven by higher business activity pushing sales in ten of their eleven Product Groups, with Panels being the only product group that registered a decrease over the prior year. Revenue growth outpaced the 56.3% increase in the cost of sales evidenced by gross margins moving from 39.8% to 42.9%. 
• Administrative expenses rose by 36.7%. The changes were driven primarily by increased staff-related costs for salary adjustments, higher sales commission, greater occupancy, increased selling, marketing and electricity cost; higher legal and professional fees; increased depreciation due to increases in the carrying values of property plant and equipment and increased security expense.
• Near-term profitability will be supported by continued efforts to manage the shipping challenges and revenues from recently acquired subsidiary O’N’S’ Mini Mart & Electrical Supplies. determining optimal inventory levels and cost of sales. The company continues to proactively manage inventory balances in light of supply-chain challenges, to ensure optimal inventory balances, relative to the pace of sales, to avoid both overstocking and stock-outs.
• FOSRICH’s stock price has decreased by 61.4% since the start of the calendar year largely due to a 10:1 stock split executed on July 26. The stock closed Tuesday’s trading session at $3.49 and currently trades at a P/E of 45.3x which is above the Junior Market Distribution Sector Average of 23.6x.

(Sources: JSE and NCBCM Research)

• Prime Minister, the Most. Hon. Andrew Holness says the National Housing Trust (NHT) is on track to make affordable homeownership a reality for more Jamaicans.
• “The plan was to distribute about 10,000 units [islandwide] by the end of 2022, but our schedule has been impacted by COVID-19. Even though, between the NHT, the Housing Agency of Jamaica (HAJ), the New Social Housing Programme and other programmes the government has undertaken, I am still confident we can get to that mark,” the Prime Minister pointed out.
• The government has been providing an average of about 6,000 units each year, three times the amount it once did, the PM said, and there is room for more private sector involvement.
• The NHT’s current goal is to provide 43,000 houses in the next five years. Notably, this will stretch them and the resources, which makes the onboarding of more private contractors important. However, while the demand for housing is good, and the facilities for mortgages available, the minister has noted that there are not enough contractors currently. “It’s not just having the contractors, but it is having the contractors that can deliver the quality of work,” he further added.
• The aforementioned therefore presents opportunities for the private sector and the construction sector.

(Source: JSE)

• The Central Bank of the Dominican Republic (BCRD) reports that the consumer price index (CPI) for July registered a variation of 0.50%, less than the 0.64% recorded in June.
• Notably, the year-on-year inflation continues to gradually yield, reaching 9.43% as of July 2022. This is equivalent to a reduction of 0.21pp relative to the maximum rate registered this year, which was 9.64% in April.
• The BCRD indicated that the positive evolution of foreign exchange-generating activities has favoured the exchange rate’s relative stability, which has partially helped offset the impact of the imported component on prices.
• However, measures implemented by the Government, particularly the fuel subsidy in the local market and the reversal of the increase in the electricity rate scheduled for the July-September 2022 quarter, have mitigated the rate of price growth and contributed to the lower inflation in July.
• Furthermore, given the global economic environment, the Central Bank has adopted measures to contribute to the convergence of headline inflation to the target range of 4.0% to 1.0% throughout the policy horizon. In this regard, the monetary policy interest rate was raised by 50 basis points at the end of July 2022, from 7.25% to 7.75% per year.

(Source: Dominican Today)

• Despite taking a US$11.6Mn loan from the IDB back in 2018 to strengthen the nation’s governance framework for the oil sector, several objectives were either not achieved, or, in cases where they were, are no longer being utilised by the current administration.
• According to an IDB report on the performance of the loan, a key goal for the bank was the creation of a development plan for Guyana’s oil and gas sector, given Guyana’s inexperience in handling such a massive and highly technical sector.
• According to the financial institution, Guyana is on track to build a strategy based on the experiences of nations that have developed an effective institutional architecture for the control of their energy resources, including Brazil, Colombia, Norway, and, most recently, Mexico.
• Importantly, the bank contended that Guyana must have a development plan for the sector as it would outline what mechanisms are to be implemented and over what period for the State to sustainably administer its resources, manage risks and opportunities, and incorporate oil revenues into the development and diversification of certain sectors.

(Source: Kaieteur News)

• Ukraine's overseas creditors have backed its request for a two-year freeze on payments on almost $20Bn in international bonds, a regulatory filing showed on Wednesday, a move that will allow the war-ravaged country to avoid a messy debt default.
• With no sign of peace or a ceasefire on the horizon nearly six months after Russia's invasion began, holders of around 75% of the outstanding total agreed to Kyiv's proposal, documents showed.
• "Ukraine will save almost $6Bn on payments," said Prime Minister Denys Shmyhal in a statement. "These funds will help us maintain macro-financial stability, strengthen the sustainability of the Ukrainian economy, and improve the power of our army."
• With a monthly fiscal shortfall of $5Bn, Ukraine is heavily reliant on foreign financing from Western allies and multilateral lenders including International Monetary Fund (IMF) and the World Bank. It has so far received $12.7Bn in loans and grants, Finance Ministry data show.
• The United States said this week it would provide an additional $4.5Bn to Ukraine's government, bringing its total budgetary support since Moscow began what it calls a "special military operation" to $8.5Bn.
• Ukraine also aims to agree to a $15Bn-$2Bn IMF programme to help shore up its economy, its central bank governor said, and the government expects to receive this assistance before the year-end.

(Source: Reuters)

• Investor hopes that global inflation is finally on the wane or that central banks can relax were thrown a curve ball by Britain on Wednesday even as oil prices continued to ebb. With markets awaiting minutes from last month's U.S. Federal Reserve meeting on Wednesday, double-digit UK inflation readings for July cut across the global 'peak inflation' narrative and suggest central banks may have to do more to control it.
• UK consumer price rises topped 10% for the first time since 1982 - well ahead of forecasts, before fresh energy price hikes domestically and adding pressure for bigger Bank of England interest rate rises. While UK inflation had already been forecast to rise to 13% later this year, the strength of the price moves last month was jarring.
• The fresh angst sent 2-year UK government bond yields to their highest in 14 years and spurred interest rate markets around the world, even in the United States. New Zealand's central bank also announced its fourth consecutive half-point interest rate rise on Wednesday, with a promise of more rate rises to come there.
• The British surprise adds to a series of conflicting signals on global inflation and growth - especially from the United States. Tuesday's U.S. soundings included dire housebuilding data for July but rapid growth in manufacturing and upbeat earnings readouts from retailers such as Walmart, whose stock jumped 4% as it upped its outlook while flagging deep discounting to clear inventories.

(Source: Reuters)

• For July, the All-Jamaica Consumer Price Index (CPI) increased by 0.7%, relative to the 0.8% increase witnessed in June.  The point-to-point inflation was 10.2% in the 12 months to July 2022, decreasing from the 10.9% reported in June 2022. This keeps inflation outside the BOJ’s target range of 4% to 6%, for the 12th consecutive month.
• For July, the increase in inflation was largely driven by the 1.4% increase in the index for the heavily weighted ‘Food and Non-Alcoholic Beverages’ division. All classes within the ‘Food and Non-Alcoholic Beverages’ division recorded increases with the classes: ‘Vegetables, tubers, plantains, cooking bananas and pulses’ (3.0%), ‘Cereals and cereal products’ (1.7%), ‘Meat and other parts of slaughtered land animals’ (0.8%) and ‘Fish and Seafood’ (0.7%), having the strongest overall impact on the division.
• Also contributing to the upward movement in the CPI for July was an increase of 0.3% in the index for the division ‘Housing, Water, Electricity, Gas and Other Fuels’. This was mainly a result of increased water and sewage rates.
• Other notable divisional increases were recorded in the index for the ‘Transport’ division (0.4%), influenced mainly by higher petrol prices and increased toll rates for the East-West leg of Highway 2000; and in the index for the ‘Personal Care, Social Protection and Miscellaneous Goods and Services’ division (0.8%), due primarily to higher prices for personal care products and services.
• The 12 month point-to-point inflation rate of 10.2% was influenced mainly by the point-to-point price changes for the divisions: ‘Food and Non-Alcoholic Beverages’ (12.6%), ‘Transport’ (15.2%) and ‘Restaurant and Accommodation Services’ (19.1%).
• The current breach in the inflation range is in keeping with expectations, as the BOJ noted in May 2022, that inflation was projected to successively breach the target over the next two years, and is projected to peak within the range of 12.0% and 15.0% by June 2022. Rates will likely remain elevated in the short term despite a steady decline in global food and oil prices.
• Although global commodity and shipping prices are softening, the BOJ will likely administer a further policy rate increase at its next monetary policy meeting on August 18th, 2022 to contain inflation, given that inflation is still widely outside of the target range. The policy rate currently stands at 5.5%.

 (Sources: STATIN and NCBCM Research)

• Seprod Limited reported a net profit of J$1.58Bn for the 6 months ended June 30, 2022, which represents a 30.8% improvement over H1 2021.
• Revenue for the period was 40.2% higher than the $19.83Bn reported last year. The revenue growth was driven by the contribution of the recently acquired Bryden Group for the month of June 2022, robust export growth, improved product mix, improved production of fresh milk at the dairy farms, the launch of a new snack line and price increases.
• The percentage growth in net profit is less than that of the revenue growth as the company continues to absorb some of the cost increases, rather than passing the full extent of these cost increases to consumers. Total operating expenses rose 30.2% and direct expenses jumped 44.4% causing the cost of sales margin to increase to 74.7% of revenues relative to 72.5% in H1 2021.
• Overall, the global market remains volatile but management believes that the company may be at, or close to, peak prices on certain key raw materials which creates the potential for some cost retreat by Q4. This should support continued growth in the company’s profits in the following quarters. The acquisition of T&T-based AS Bryden Group is also expected to continue driving revenues and profits.
• Seprod’s stock price has increased by 6.8% since the start of the calendar year. The stock closed Monday’s trading session at $69.17 and currently trades at a P/E of 20.9x which is above the Main Market Distribution & Manufacturing Average of 16.6x.

(Sources: JSE and NCBCM Research)