• Russia plans to sell more than 80% of its oil exports to what it calls "friendly" countries in 2023, Deputy Prime Minister Alexander Novak said on Monday, referring to countries that have not sanctioned Moscow over its invasion of Ukraine.
• He added that these countries would also receive 75% of Russia's refined oil products and that Moscow continued to look for new markets.
• Russia has stepped up discounted sales to China and India, in particular, since it was hit by Western sanctions and a G7 price cap designed to limit its ability to finance the war in Ukraine from oil revenues.
• Novak also warned of uncertainty on global oil markets, saying Western countries from the Organisation for Economic Co-operation and Development (OECD) group, which includes the United States, Canada, and Norway, could release their strategic oil reserves.

(Source: Reuters)

• Wisynco Group Limited recorded a net profit of $1.21Bn for the second quarter ending December 31, 2022, which represents a 4.6% year-over-year (yoy) increase in profitability. Additionally, the company’s bottom line for the six months increased by 18.0% to $2.51Bn when compared to the corresponding period in 2021.
• Revenues for the quarter increased by 27.7% yoy to $12.13Bn, representing the highest recorded in any quarter due to increased demand in all segments, despite having production challenges. Consequently, gross profit of $4.21Bn was 27.6% greater than the $3.30Bn of the corresponding quarter of 2021. However, the company’s gross margin of 34.7% was lower than expectations due, in part, to lower than budgeted production levels and sub-optimum mix of products manufactured resulting in a cost of sales higher than planned. The six-month reported revenue was $24.07Bn representing a 28.7% jump, when compared to the six months ending December 2021.
• For the six-month ended December 2022, SD&A expenses were up 31.0% and ended the review period at $4.44Bn. This was largely due to incremental marketing and promotional costs above the plan as well as inflationary increases in variable expenses associated with increased revenues.
• Wisynco’s stock price has declined by 0.11% since the start of the calendar year. The stock closed Thursday’s trading session at $17.65 and currently trades at a P/E of 15.0x, above the Main Market Distribution & Manufacturing Sector Average of 14.5x.
• Wisynco has major expansion plans with new equipment to arrive later this year and new buildings being constructed to boost its production capacity. This will allow the company to introduce new brands and innovate further. This represents the largest capital expansion undertaken by the company and represents a major growth driver for the company’s revenues once commissioned into service.

(Sources: JSE and NCBCM Research)

• A recent official staff mission from the IMF to the island led to a report suggesting that the economic outlook of St. Kitts and Nevis is positive. However, there is room for improvement in enhancing the labour market, encouraging economic diversification, and strengthening the financial system.
• To maintain the social assistance programs that the government offers, the IMF expressed that the government needs to increase its revenues.
• According to the IMF, external factors such as civil unrest, inflation, interest rate hikes, and other health crises could still affect growth projected at 4.5% for 2023. Additionally, despite receiving record-high CBI (Citizenship-by-Investment) revenues, the government incurred the most significant primary deficit in two decades (-2.4% of GDP).
• The IMF noted that dependence on CBI revenue is a significant source of vulnerability; thus, the report suggested that a holistic overhaul of the taxation framework would be needed to reduce dependency on CBI.
• Reforming the property tax to support the housing market and home ownership and reintroducing personal income tax could strengthen fiscal sustainability, improve fairness and equity, and achieve inclusive growth.

(Source: CariCris)

• Trade between the US and China hit a record high last year even as their diplomatic relations deteriorated. Imports and exports between the two countries totalled $690.6Bn (£572.6Bn) in 2022. The world's two biggest economies have been in a trade war since 2018 and relations between the countries have hit new lows in recent days after a Chinese balloon travelled across the US.
• The new figures show that US imports from China increased to $536.8Bn last year as American shoppers spent more on Chinese-made goods, including toys and mobile phones. In the same period, US exports to China increased to $153.8Bn. While some of the increase in trade between the two countries is a result of the rising cost of living, the figures also point to how reliant the US and China still are on each other even after years of the trade conflict between them.
• "I think it's an important indication of the difficulties of actually decoupling," Deborah Elms, the founder of the Asian Trade Centre, told the BBC. "Even if governments, firms, and consumers wanted to separate, the economics make it difficult to deliver products in a decoupled world at a price that firms and consumers are willing to pay," she added.

(Source: BBC)

• Oil rose for a third straight day on Wednesday as investors felt more comfortable with risk a day after remarks from the Federal Reserve chairman eased their worries about future interest rate hikes. Comments from U.S. Federal Reserve Chair Jerome Powell on Tuesday were seen as less hawkish than feared, boosting risk appetite and weighing on the dollar. A weaker U.S. currency makes dollar-denominated oil cheaper for buyers holding other currencies.
• "It would appear traders had become a little more defensive on the expectation of a hawkish shift, but Powell refrained from taking the leap," said Craig Erlam, senior market analyst at brokerage OANDA.
• Investors hope less aggressive U.S. interest rate increases will help the world's biggest economy dodge a sharp economic slowdown or recession that would hit oil demand. Meanwhile, China's ending of COVID-19 curbs is also expected to support demand for fuel. "A looming oil demand surge together with lacklustre global supply growth will ensure that the oil balance tightens over the coming months," said Stephen Brennock of oil broker PVM.
• Brent crude rose 82 cents, or 1%, to $84.51 a barrel by 11:07 a.m. U.S. West Texas Intermediate (WTI) crude climbed 93 cents, or 1.2%, to $78.08. Crude inventories rose by 2.4 million barrels in the week ended Feb 3 to 455.1 million barrels, compared with analysts' expectations in a Reuters poll for a 2.5 million-barrel rise.

(Source: Reuters)

• For the period January to September 2022, Jamaica’s total spending on imports were valued at US$5,829Mn, and earnings from exports at US$1,272.5Mn, reflecting YoY increases of 37.1% and 10.2% respectively.
• The increased expenditure on imports was largely attributable to higher imports of “Fuels and Lubricants”, “Raw Materials/Intermediate Goods” and “Consumer Goods” which rose by 75.9%, 30.4%, and 27.3%, respectively. Decades-high inflation impacting goods and services on the world market is a key reason for higher costs of imports.
• The increase in the revenues earned from export was due primarily to an 84.2% increase in the value of exports of “Mineral fuels”. The growth in total exports was influenced by a 137.9% increase in re-exports. However, domestic exports declined by 5.2%, mainly due to the 55.9% fall in exports from the Mining and Quarrying industry due to lower exports of Alumina. This is mainly due to the reduced production capacity (50%) at one on Jamaica’s major plants, Jamalco. The plant is expected to be back at full production capacity by September 2023.
• The five main import partners for January to September 2022 were the United States of America (USA), Trinidad and Tobago, China, Brazil and Japan. Imports from these countries increased by 47.0% to US$3,841.6Mn. This was due largely to the higher imports of fuel from the USA and Trinidad and Tobago.
• The top five destinations for Jamaica’s exports were the USA, Puerto Rico, the Russian Federation, Canada, and the United Kingdom. Exports to these countries increased by 32.7% to US$978.2 million when compared to the corresponding period in 2021. This increase was attributed to higher exports of fuel to the USA.

(Source: STATIN)

• Fitch Solutions forecasts that real GDP growth will slow to 4.9% in 2023, from an estimated 10.4% expansion in 2022, as the recovery of the tourism sector continues.
• Barbados’ economic recovery is expected to limit risks to social stability in the coming quarters. In addition, policy continuity is anticipated to persist following Prime Minister Mia Mottley's call for a snap election in Q122 and the Barbados Labour Party's sweep.
• Rebounding tourism activity in Barbados will boost government revenues, narrowing the fiscal deficit to 4.8% of GDP in FY2022/23 (April 2022 – March 2023) from 5.9% in the previous fiscal year. Barbados’ current account deficit will also narrow to 9.1% of GDP in 2023, from 9.9% in 2022, as recovering tourism activity drives services exports.
• The key risks to the outlook are decelerating global growth which is threatening to slow the country’s recovery, coupled with public pressure for increased government support as inflation remains above historical norms.

 (Source: Fitch Solutions)

• The Bank of Mexico is expected to hike its benchmark interest rate to a record 10.75% on Thursday, amid a forecast increase in January inflation and following in the footsteps of the U.S. Federal Reserve, a Reuters poll showed on Tuesday.
• Banxico, as the Mexican central bank is known, is expected to increase the key rate by 25 basis points from a current 10.50%, according to 24 of the 25 analysts and economists surveyed. One participant expects rates to be increased to 11.00%. The expected move comes after the Fed scaled back to a quarter-percentage-point rate increase last week after a year of larger hikes and said it had turned a key corner in the fight against high inflation.
• Banxico has raised its benchmark interest rate by 650 basis points during the current hiking cycle, which began in June 2021, as inflation surged past the bank's target rate of 3%, plus or minus one percentage point.
• While inflation has been easing since hitting an over-20-year high of 8.70% in August and September last year, it remains far above Banxico's target.
• The median forecast of 20 analysts surveyed in the poll expects annual headline inflation at 7.89% for January, above the 7.82% reached in December. The core index, which strips out volatile food and energy products, is forecast to have accelerated to 8.41% year-on-year.
• Mexico's national statistics agency National Institute of Statistics and Geography (INEGI) will publish January inflation data on Thursday morning and that afternoon Banxico will publish its monetary policy statement.

(Source: Reuters)

• Federal Reserve Chair Jerome Powell said Tuesday that if the U.S. job market further strengthens in the coming months or inflation readings accelerate, the Fed might have to raise its benchmark interest rate higher than it now projects.
• Powell’s remarks followed the government’s blockbuster report last week that employers added 517,000 jobs in January, nearly double December’s gain. The unemployment rate fell to its lowest level in 53 years, 3.4%.
• Though price pressures are easing and Powell said he envisions a “significant” decline in inflation this year, he cautioned that so far the central bank is seeing only “the very early stages of disinflation. It has a long way to go.”
• Even as the Fed has raised rates dramatically — by 4.5 percentage points, to a range of 4.5% to 4.75%, the fastest increase in four decades — the job market has remained surprisingly resilient. In addition, inflation, though still high, slowed to a year-over-year rate of 6.5% in December from 9.1% in June.
• The slowdown in inflation, even while the economy has stayed healthy, has raised hopes in financial markets that the Fed might be able to achieve its goal without having to raise borrowing rates so high as to cause a steep recession.
• But Powell brushed aside that notion Tuesday. “There’s been an expectation that it’ll go away quickly and painlessly,” Powell said. “I don’t think that’s at all guaranteed.” Instead, he warned that in his estimation, “it will take some time, and we’ll have to do more rate increases and then we’ll have to look around and see if we’ve done enough.”

(Source: AP News)

• Bank of Canada Governor Tiff Macklem on Tuesday said that no further rate hikes will be needed if, as expected, the economy stalls and inflation comes down.
• The central bank over the last 11 months has lifted rates at a record pace to 4.5% to tame inflation, which was 6.3% in December, still well above the bank's 2% target. Last month, it said it would hold off on further moves to let the effects of past increases sink in.
• "If new data are broadly in line with our forecast and inflation comes down as predicted, then we won't need to raise rates further," Macklem said in a speech to financial analysts in Quebec City. "Inflation is turning the corner. Monetary policy is working," Macklem said, adding that economic growth would be "close to zero" through the third quarter of this year.
• On Monday, a median of market participants surveyed by the central bank forecast that borrowing costs would come down by half a percentage point by the end of this year, and would fall further next year. When asked by reporters about the survey, Macklem reiterated that it was "really far too early to be thinking about cutting rates. ... We are pausing interest rate hikes to assess whether we've raised interest rates enough." "We need to pause rate hikes before we slow the economy and inflation too much," he said in his speech.

(Source: Reuters)