• The Government has committed up to $31.2Bn to build out the public health infrastructure over the next three years, according to the Minister of Health and Wellness, Dr. the Hon. Christopher Tufton. He noted that this level of investment is the most significant for hospital upgrading since independence in 1962. The plan includes the construction and rehabilitation of 13 facilities, comprising ten health centres and three hospitals under the Health Systems Strengthening Programme. 
• Existing structures, built decades ago, cannot meet present demands, and the current environment demands a modern and technologically advanced infrastructure as well as the appropriate human and technical resources. 
• This will ensure that the Jamaican healthcare system has the capacity to respond to a rapidly changing health environment, an ageing population, and high levels of non-communicable diseases (NCDs). NCDs are responsible for over 70.0% of all deaths in Jamaica. 
• The work will be undertaken through funding arrangements with local and international partners such as the National Health Fund (NHF), the European Union (EU), and the Inter-American Development Bank (IDB). 
• This development will position the health sector to more adequately meet the needs of those who require health care services, especially in light of the ongoing COVID-19 pandemic, and, expectations from the World Health Organization that the world is at increased risk of the spread of infectious diseases going forward. It will also help Jamaica advance on its health related vision 2030 plans and should also support continued growth in the construction sector.

(Source: JIS News & NCBCM Research)

• Caribbean Development Bank (CDB) Borrowing Member Countries (BMCs) are being encouraged to institute strong monitoring, compliance, and accountability frameworks to ensure that corruption does not restrict access to climate finance, and to facilitate timely implementation of climate change interventions for the benefit of the region’s citizens. 
• President of the organisation, Dr. Hyginus ‘Gene’ Leon, in making the call, noted that the sizeable financing often required by countries to address infrastructural and economic vulnerabilities and recover from shocks, present opportunities for corruption to surface. Therefore, at all costs, access to affordable climate financing must be protected from maladministration and corruption. 
• He pointed out that, the need for climate finance and favourable access is a “matter of life and death” for most Small Island Developing States (SIDS), including Caribbean countries. The International Anti-Corruption Resource Centre emphasises that corruption is threatening the attainment of global climate change goals. The centre has advocated for the development of appropriate and effective anti-corruption tools and strategies to ensure that climate finance is optimised for impact and success. 
• The matter of corruption is of specific concern to the CDB and is at the forefront of the drive to access affordable climate finance for BMCs. Without adequate and internationally-recognised standards on procurement and other governance mechanisms, the CDB’s ability to mobilise the much-needed private investments will fall short. 
• Instituting suitable systems for accountability and compliance are necessary for building investor confidence and attracting investment to achieve sustainable development.

(Source: JIS News)

• The Bahamas has been urged by the International Monetary Fund (IMF) to “pre-empt” global tax pressures by imposing a corporate income tax designed to suit its own purposes. 
• The Fund, in a report that has generated much political controversy, asserted that “the balance firmly tilts” in favour of The Bahamas getting out ahead of the G-20 and Organisation for Economic Co-Operation and Development (OECD) push for a 15% minimum global corporate tax rate. 
• Suggesting that The Bahamas “impose that same level of taxation” for itself, the IMF said that while this would impact the domestic economy, it would also ensure all corporate income tax revenues go to the Government there rather than their counterparts abroad. 
• The Fund warned that delaying or “abstaining”, from a corporate income tax could “pose reputational risks that can jeopardise the economy”. While Tribune Business has seen documents that back this finding, well-placed sources aware of the IMF report yesterday revealed that it also recommended imposing a personal income tax on so-called “high earners”. 
• This was urged on the basis that Bahamian companies could seek to avoid/evade a corporate income tax by switching their profits to salaries paid to shareholders, senior executives and upper management, thus requiring that both company and personal income be taxed.

(Source: International Finance Corporation)

• The Inter-American Development Bank (IDB) has approved a $100 million loan to support sustainable development in Barbados. The program is the second in a series of three policy-based loans. 
• The program will support maintaining a stable macroeconomic environment and deepen the reforms initiated under the first operation, an $80 million loan approved in March 2020. It provides budget support to strengthen and consolidate public policies focused on improving sustainability in three thematic areas. 
• The first area of policy reform is the regulatory framework for spatial planning, managing the impacts of development activity, and water resource management. Among other initiatives, this covers the development of regulations and plans for the Planning and Development (Amendment) Act of 2020, and progress in regulating Rainwater Harvesting, Water Reuse, and Ground Water Zoning and Protection. 
• It will also foster further development of the regulatory framework for natural asset management, including the approval of the updated Integrated Coastal Zone Management Plan, the Guidelines and Protocols for the Operation of Solid Waste Management Facilities, and the approval of an Integrated Blue Economy Policy Framework and Strategic Action Plan.

(Source: IDB)

• Global supply chain disruptions may continue until the second half of next year, trade credit insurer Euler Hermes said in a report published on December 9. Measures to contain Covid-19 can and have affected manufacturing and shipping operations, exacerbating the supply chain crisis. 
• Production shortfalls are behind 75% of the current contraction in global trade volume, while logistic bottlenecks are the cause of the remaining 25%, Euler Hermes economists wrote. 
• But this supply chain chaos is likely to ease in the second half of 2022 for three reasons. Firstly, consumer demand has peaked, and they are likely to continue buying goods at higher levels. Secondly, inventories are back to pre-Covid levels; after falling off in early 2020, manufacturers rushed to restock to cope with the unprecedented rebound in demand. Lastly, shipping congestion should also be less acute in the second half of 2022 because shipping capacity is increasing. 
• However, there are risks. The cost of shipping may remain elevated next year, but capacity is set to increase as global orders for new container ships hit record highs, amounting to 6.4% of the existing fleet. Furthermore, analysts have previously warned that the new variant, omicron, could deal another blow to supply chains.

(Source: CNBC)

• U.S. household wealth rose to a record $144.7 trillion at the end of the third quarter, a report from the Federal Reserve showed on Thursday, though the $2.4 trillion gain over the period was the smallest since the rebound from the coronavirus pandemic began. 
• Real estate values added around $1.4 trillion to overall wealth, according to the U.S. central bank's latest quarterly report on household, business and government financial accounts. The value of equities held by households and nonprofits fell by $300 billion. 
• The slower growth in U.S. household wealth suggests the boost from an unprecedented period of easy monetary policy and a fiscal firehose of aid initiated by former President Donald Trump and extended under President Joe Biden has begun to wane.

(Source: Reuters)

• Buoyed by stronger sales, Jetcon Corporation Ltd. reported a 108.5% increase in net profit to $11.59Mn (EPS: $2.00) for the Nine Months ended September 31, 2021. 
• The company was able to grow revenues by 29.9% YTD due to stronger sales relative to the same period last year. This recovery in earnings was accompanied by a decline in finance cost of 49.7%. 
• The performance was, however, tempered by an increase in total expenses of 6.5%. This was the result of an increase in costs related to sales & marketing and admin & other expenses of 4.3% and 16.5%, respectively. Sales cost also grew 33.0% ($129.16Mn). 
• With increasing vaccination rates, and decreasing COVID case rates, management hopes that restrictions will continue to ease, thus helping to fuel its recovery. Jetcon is also depending on smart marketing and pricing strategies to drive sales. Revenues for Q4 are expected to be higher than that of Q3 as sales are already exceeding that reported for the third quarter. Already, units sold in November are at Jetcon’s regular pre-pandemic levels. If this upward swing continues into December, and with increased bookings to date, the directors are hopefully of a strong fourth quarter. 
• Jetcon’s stock price has appreciated by 39.2% since the start of the year and closed Wednesday’s trading session at $1.10 per share. At this price, the stock currently trades at a P/E of 1.1x below the junior market distribution sector average of 16.0x.

(Source: Jetcon’s Financials)

•  Prime Minister, the Most Hon. Andrew Holness, welcomed the $3.7Bn investment in the One Belmont corporate building in Kingston as a further testament to the growing investor confidence in the country. 
• The project, being executed through a partnership between Sygnus Real Estate Finance and Audere Holdings Limited, will deliver 79,000 square feet of Class A corporate office space, supported by four parking levels. Prime Minister Holness said that the development is in keeping with the Government’s focus on positioning Kingston as the premier city in the English-speaking Caribbean, wanting it to be the centre of trade, commerce, finance and to be the place of choice. 
• The building will include hurricane-impact-resistant glass in addition to post-pandemic features. It’s been designed with a suite of technological features, such as touchless elevators, touchless doors, touchless Kohler bathroom fixtures, and an automated infrared camera system for non-intrusive camera checks. It will also include rooftop entertainment for corporate events, LED lighting surrounding the building, as well as a host of other unique features. 
• Financing for the project includes a $2.5Bn billion construction facility from the National Commercial Bank (NCB) and a further $650 million in preference shares on top of the equity via Audere Holdings Limited. The construction is slated to be completed by April 2023. This investment speaks to the recovery in local investment and business confidence. It also forecasts support for continued growth in the construction sector and construction-related companies.

(Source: JIS News)

• On December 6, Mexican state-owned oil company Petróleos Mexicanos (Pemex) announced that it would use a USD3.5Bn cash injection from the Mexican Government to pay down some of its outstanding debt. Pemex will offer cash and new notes in an exchange with holders of 12 bonds maturing between 2024 and 2030, while paying in cash for six bonds maturing between 2046 and 2060. The Mexican Government has already pledged to cover bonds maturing in 2022 or 2023.
• This aligns with Fitch’s view that Mexican President Andrés Manuel López Obrador (AMLO)’s Government will continue to provide Pemex with financial support as part of his broader goal of effectively re-nationalising Mexico’s oil sector. The cash injection continues the Government’s robust support for Pemex, which has included reductions in Pemex’s profit-sharing duty (DUC) as well as capital injections to help the company manage its USD113.0Bn in outstanding debt. 
• Markets reacted positively to the news, as the spread of Pemex’s 5-year credit default swap (CDS) over the Mexican Government’s narrowed to 211.3 basis points as of early on December 7, from 272.6 on December 3. While the Mexican Government has never explicitly guaranteed Pemex’s debts, the narrowing spread suggests that markets are pricing in robust sovereign support given the company’s essential role in the Mexican economy and AMLO’s supportive stance.

(Source: Fitch Solutions)

• Colombia’s Banco de la República (BanRep) will hike its policy interest rate over the coming months to help contain inflationary pressures and anchor inflation expectations amid a strong economic rebound, according to Fitch Solutions.  
• The BanRep is forecast to raise its policy interest rate to 3.00% by end-2021, from 2.50% currently, and hike to 4.50% by end-2022. Inflation will end 2021 at 5.2% y-o-y, for an annual average of 3.4%, and average 4.3% in 2022. 
• Risks to the agency’s interest rate forecasts are weighted to the upside, particularly if Colombian inflation remains above target for longer than Fitch anticipates, or if the US Federal Reserve tightens monetary policy more aggressively than expected.

(Source: Fitch Solutions)