• Mayberry Jamaican Equities (MJE) concluded its financial year ending December 2023 with a substantial net loss of US$15.89Mn, a significant decline of US$49.09Mn (or 147.9%) compared to FY 2022.
• Net unrealised losses on investments in associates of US$14.53Mn (-142.5%) was the primary driver of the falloff in earnings.
• The persistent high-interest rate environment caused by elevated inflation levels continued to negatively impact the stock market throughout the financial year and the stock prices of its associates.
• Notably, total operating expenses decreased by US$1.73Mn or 55.4% to US$1.39Mn, which tempered the impact of weaker revenues on the bottom line. With the losses incurred on the funds under management, there was a reduction in the incentive fees paid to the Investment Manager, and this accounted for the reduction in expenses.
• Net Interest Expense also increased by more than doubled (+152.3%) to US$4.19Mn due to increased borrowings through margin loans from its parent company, Mayberry Investments Limited, for new investments.
• MJE’s stock price has increased by 9.5% since the start of the calendar year. The stock closed Wednesday’s trading session at $10.89 and trades at a P/B of 0.8x, which is below the Main Market Financial Sector Average of 1.4x.

(Sources: Company Financials & NCBCM Research)

• The Bank of Jamaica (BOJ) has confirmed that it has stopped issuing old banknotes as part of its ongoing transition to polymer notes. During the BOJ’s Quarterly Monetary Policy Press Conference, Deputy Governor Natalie Haynes emphasised the institution’s commitment to adhering to the two-year timeline for the complete demonetisation of the outdated currency.
• Haynes outlined the steps required for the full withdrawal of the old notes from circulation. Currently, these notes account for 40.0% of the total currency in circulation. The cessation of issuing “old notes” commenced in November 2023, marking a significant milestone in the transition.
• Despite the ambitious timeline set by the BOJ, challenges persist in ensuring a smooth transition. Haynes acknowledged ongoing issues with some Automated Teller Machines (ATMs) and highlighted the banks’ progress in accepting and dispensing the new polymer notes, with an impressive 99% ATM acceptance rate.
• She further emphasised the necessity for comprehensive ATM coverage before announcing the date of demonetization. The old notes, collected by the central bank, will be destroyed after the date of de-monetization.

(Sources: BOJ & Caribbean National Weekly)

• Trinidad and Tobago's natural gas reserves fell by 8.0% between 2020 and 2022, according to the latest gas audit.
• The Express Business has confirmed that according to the audit done by DeGolyer & MacNaughton, the country's proven, probable, and possible reserves fell from 23.265 trillion cubic feet (tcf) of gas in 2020 to 21.953 in 2021 to a low of 21.409 in 2022.
• According to BP's statistical guidelines, proven reserves are “those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions.”
• Probable reserves are estimated to have a better than 50.0% chance of being technically and economically producible, and possible reserves are volumes which, at present, cannot be regarded as “probable”, but are estimated to have a significant (albeit less than 50%) chance of being produced.
• The country uses just over one tcf per day of proven reserves, and therefore, if no more gas moves into the proven column, the country could run out of gas in the next ten years.  
• “Gas production decline has been taking place since 2012, and unfortunately, nothing was done during the period of 2010 to 2015 to secure better revenue for our gas, nor was a single gas supply contract negotiated and executed for the upstream supply of gas. This poorly managed period negatively affected our gas sector, revenue, and gas production”, the Energy Minister said.
• Overall, Trinidad’s declining reserves and mature fields have led to a lower GDP outturn for the country in recent years. For 2023, real GDP growth for the country is estimated at 1.4%, down from the 1.5% recorded in 2022, with contributions from the non-energy sector being 2.6% and -1.3% from the energy sector.

(Sources: Trinidad Express Newspaper & NCBCM Research)

• Guyana and Canada on Sunday finalised an agreement for a CAD$120Mn sovereign loan to further boost support for vulnerable groups. The agreement was signed by Guyana’s Senior Minister within the Office of the President with Responsibility for Finance and the Public Service, Dr. Ashni Singh, and Canada’s Minister of International Development, Ahmed Hussen, at the Canadian High Commissioner’s residence.
• Hussen, who is visiting this country for the first time, in his address, said the two countries are strengthening bilateral ties with the loan agreement that has been tailored to the needs of Guyana.
• He said, “Our goal is to support Guyana in generating beneficial social, economic, and environmental outcomes for the good of all your citizens, particularly the most vulnerable.”
• Hussen emphasised the importance of cooperation between Guyana and Canada to achieve sustainable development goals, addressing issues such as gender-based violence, empowerment of people living with disabilities, and support for victims of human trafficking.
• The loan programme also features a climate-resilient debt clause to access funds in the event that Guyana experiences a climate incident, a natural disaster, a pandemic, or an epidemic.

(Source: Guyana Chronicle)

• Desperate property developers in China have resorted to gifts like new cars, free parking spaces, phones, and other consumer goods to attract homebuyers and boost flagging sales. These incentives are just the tip of the iceberg in a crisis involving hundreds of billions of dollars in home builder debt, trillions in local government debt, and at least a billion empty apartments.
• However, this wasn’t always the case. Since China’s economic liberalization in the 1970s and housing reforms in the late 1980s, locals have flocked to properties as the investment vehicle of choice over alternatives such as the stock market.
• The property and construction boom helped fuel China’s – and the world’s – economic growth for 30 years. By some estimates, property in China was worth US$60T at its peak, making it the biggest asset class in the world. Developers like Evergrandeand Country Garden got extremely rich in the process.
• China’s president, Xi Jinping, was against the fact that China’s real estate market was seen more as a place for speculation than for living. Government Policy began to change surrounding real estate. Namely, the “Three Red Lines” policy came into effect in 2020. This allowed the government to effectively cap the amount of debt property developers could borrow.
• Major market movers like Evergrande and Country Garden did not meet the criteria and thus stopped getting additional funding to finish constructions that were in progress. Additionally, urbanization began to dwindle and the demand for these properties fell as China’s youth population was facing a job crisis, and once the pandemic hit China, it exacerbated conditions. This pushed the housing cost-to-income ratio to historical highs and named it one of the worst in the world. As a result, supply massively overshot demand as affordability was at a low, causing the property bubble to deflate.

(Source: CNBC)

• Total mortgage application volume fell by 5.6% last week, impacting both current homeowners and potential buyers, attributed to higher mortgage rates.
• The average contract interest rate for 30-year fixed-rate mortgages decreased slightly to 7.04%, with points increasing slightly, but still a quarter percentage point higher than the previous year.
• Higher rates led to a 7.0% decrease in applications for home loan refinancing compared to the previous week and a 1.0% drop compared to the same period last year.
• Mortgage demand for purchasing homes also dropped by 5.0% for the week and was 12.0% lower than the same week in the previous year, with Chief Economist of the Mortgage Bankers Association, Mike Fratanoni, noting that the lack of existing inventory remains a primary constraint, though demand for newly built homes increased by 19.0% year over year in January.

(Source: CNBC)

• Kingston Wharves Limited intends to do further expansion work at its facility located at the Port of Kingston. It plans to invest US$120Mn on the port developments over the next two to five years. This would be on top of the current US$60Mn that the company is spending on upgrades, including the redevelopment of Berth 7, which was completed last week. 
• CEO of KWL Mark Williams says further expansion plans should optimise the use of space and will be done over the next five years. "The next phase of this terminal expansion will see us segmenting the terminal to be very well-organised and efficient."
• He noted that the expansion will also allow for the accommodation of two to three large Panamax-sized vessels simultaneously. The Panamax size is the maximum size that can transit in the Panama Canal, these tankers range in length between 200 and 250 metres (650 and 820 feet) and have capacities of 50,000 to 80,000 dwt.
• KWL’s stock price has increased by 22.9% since the start of the calendar year. The stock closed Tuesday’s trading session at $33.15 and currently trades at a P/E of 16.1x, which is below the Main Market Energy, Industrials and Materials Sector Average of 16.9x.
• There are a few downside risks to consider, including the potential impact of higher inflation and geopolitical tensions affecting global supply chains. Additionally, the volume slowdown due to the restrictions in Panama may slow its growth momentum in the short-term.
• Despite these risks, the outlook for Kingston Wharves is positive as it continues to strategically invest in both its physical and digital infrastructure. KWL is a regional leader in the industry and has the potential to reap greater and sustainable profit and long-term shareholder value through plans being executed.

(Sources: RJR & NCBCM Research)

• Вrаzіlіаn Рrеѕіdеnt Luіz Іnасіо Lulа dа Ѕіlvа іѕ uѕіng hіѕ соuntrу’ѕ G20 рrеѕіdеnсу tо аmрlіfу thе vоісе оf thе Glоbаl Ѕоuth іn іntеrnаtіоnаl dесіѕіоn-mаkіng. Ніѕ vіѕіоn іnсludеѕ rеfоrmіng glоbаl gоvеrnаnсе ѕtruсturеѕ lіkе thе Unіtеd Nаtіоnѕ аnd gіvіng dеvеlоріng nаtіоnѕ grеаtеr rерrеѕеntаtіоn іn іnѕtіtutіоnѕ lіkе thе ІМF аnd Wоrld Ваnk.
• Lula's call for reform of global governance and the updating of the eight-decades-old United Nations system was amplified at last week's meeting of G20 foreign ministers in Rio de Janeiro. Finance ministers meeting this week in Sao Paulo face further pressure as Brazil pushes for wealth redistribution to boost emerging economies.
• However, diplomats said it would be an uphill battle to expand the U.N. Security Council, where countries with veto powers may pay lip service to the idea but have long-delayed discussions that would dilute their status. Despite the potential resistance, Brazil’s G20 leadership has already brought progress. The insistence on including the African Union as a full G20 member is a significant step.
• Lulа’ѕ рrеѕіdеnсу еmрhаѕіzеѕ роvеrtу rеduсtіоn, аddrеѕѕіng сlіmаtе сhаngе, аnd рrоmоtіng еquіtаblе rерrеѕеntаtіоn іn glоbаl dесіѕіоn-mаkіng. Тhіѕ ѕhіft іn G20 dуnаmісѕ рlасеѕ dеvеlоріng nаtіоnѕ аt thе fоrеfrоnt оf сrаftіng есоnоmіс роlісіеѕ.
• Bringing more developing nations to the table adds pressure on financial institutions traditionally controlled by Europe and the United States to consider proposals such as a Brazilian one to reduce countries' debts by converting them into investments.
• At this week's G20 meeting of finance ministers and central bank governors in Sao Paulo, the Global South will lead the way in crafting the final statement, expected to mention shifting more money from advanced nations into the development of emerging economies, according to a G7 country official.

 (Sources: Reuters & Breaking Belize News)

• Peru declared a health emergency across most of the country on Monday, February 26, as a heat wave and heavy rains have led to a spike in dengue fever cases.
• The South American nation's death toll due to the virus has risen to 32 so far this year, Health Minister Cesar Vasquez. Notably, total cases also climbed to 31,300 in the first eight weeks of the year, Vasquez said, up from 24,981 in the first seven weeks.
• The Peruvian government's cabinet approved the motion to declare a health emergency on Monday, Vasquez told journalists, hours after he said a dengue outbreak was "imminent”.
• "There are 20 regions (out of 25) that will be declared in a health emergency due to dengue," Vasquez said in an earlier interview on local radio station RPP. The declaration boosts resources to health responders in the affected areas.
• Most of the cases seen so far in Peru have been in the country's north, where hospitals are already overwhelmed. Last year, 428 people in Peru died from dengue, with 269,216 infected, according to official data.

 (Source: Reuters)

• U.S. consumer confidence retreated in February after three straight monthly increases as households worried about the labour market and the domestic political environment.
• The Conference Board said on Tuesday that its consumer confidence index slipped to 106.7 this month from a downwardly revised 110.9 in January. Economists polled by Reuters had forecast the index little changed at 115.0 from the previously reported 114.8.
• "February's write-in responses revealed that while overall inflation remained the main preoccupation of consumers, they are now a bit less concerned about food and gas prices, which have eased in recent months, said Dana Peterson, chief economist at The Conference Board in Washington. “They are more concerned about the labor market situation and the U.S. political environment.
• Despite declining confidence, inflation expectations for the next 12 months fell to a nearly four-year low. Consumers' inflation expectations fell to 5.2%, the lowest level since March 2020, from 5.3% in January.

(Source: Reuters)