• As anticipated, the Banco Central de Reserva del Perù (BCRP - Central Bank of Peru) cut its policy interest rate from 6.75% to 6.50% on January 11.
• Headline inflation came down strongly once more to 3.2% y-o-y in December from 3.6% in November, with end-2023 data outpacing expectations.  Additionally, 12-month inflation expectations - which are closely tracked by the BCRP board - also eased from 3.2% in December to 2.8%, which is well within the target range and supports Fitch’s view for more cuts in Q1 2024.
• As inflation continues coming down strongly, another 25bps cut is expected in February.
• Fitch continues to expect that with real rates remaining very high and inflation expectations falling near the Banco Central de la Republica de Peru’s (BCRP) 3.0% target, the central bank will continue cutting through 2024, with the policy rate ending the year at 4.50%.

 (Source: Fitch Solutions)

• Eurozone consumers have slashed their inflation expectations, a European Central Bank survey showed on Tuesday, in comforting news for the ECB's efforts to contain prices.
• The Consumer Expectations Survey (CES) is used by policymakers to gauge whether households have faith in the ECB's ability to hit its 2% inflation goal, which may affect their wage demands and attitude towards saving and spending.
• The latest round of the poll carried out in November showed the median household expected prices to grow by 3.2% in the following 12 months, down from 4.0% a month earlier.
• Expectations for inflation three years ahead also came down to 2.2% from 2.5%. This is likely to mirror a sharp fall in inflation in November as well as a contraction in lending as a result of the ECB's steep increases in interest rates.

(Source: Reuters)

• The annual inflation rate in Canada for December met predictions, increasing to 3.4% from the previous month's 3.1%. This data indicated a persistent upward trend in prices.
• Key indicators of underlying inflation, such as CPI-trim and CPI-median, showed acceleration. The three-month annualised rate for these measures rose to 3.6%, up from the prior month's revised 2.9%. This suggested that inflationary pressures were not merely transient but had a more lasting impact.
• With the rise in inflation, hopes for an early shift in the central bank's stance towards rate cuts were disappointed. Royce Mendes of Desjardins Group expressed disappointment, emphasising the "stickiness" in core inflation measures, which suggested that conditions were not conducive to opening the door for rate cuts.
• The Bank of Canada (BoC) had previously raised its key policy rate to 5.0% between March 2022 and July 2023 to combat inflation. However, the latest data has altered market expectations. While the chance of rate cuts in March decreased after the release, there is still a significant expectation of a 25-basis-point reduction in April.
• The surge in headline inflation was attributed to higher gasoline prices, airfares, fuel oil, passenger vehicles, and rent. Notably, food purchases from stores rose by 4.7%. Andrew Kelvin of TD Securities highlighted that the acceleration in core inflation underscored the need for the BoC to exercise caution before considering any loosening of monetary policy.
• The Bank of Canada had initially forecasted inflation to reach its target by the end of 2025; however, Governor Tiff Macklem indicated a more optimistic outlook, expecting it to be closer to the target by the end of the current year.

(Source: Reuters)

• The average price paid for goods and services by Jamaican consumers rose in December, as reflected by a 0.5% increase in the All-Jamaica Consumer Price Index (CPI). The upward movements in the index for the ‘Housing, Water, Electricity, Gas and Other Fuels’ division (2.5%), as a result of higher prices for rent, electricity, water and sewage rates, was the main driver of the increase.
• Increases in the index for the classes ‘Ready-made food and other products n.e.c’ (4.2%) and ‘Fruit and nuts’ (1.8%) resulted in an increase of 0.3% in the index for the ‘Food and Non-Alcoholic Beverages’ division, which also contributed to higher inflation during the month.
• However, the overall inflation rate for December 2023 was tempered by a fall of 0.4% in the index for the ‘Transport’ division, given lower fuel prices.
• The point-to-point inflation rate (December 2022 – December 2023) was 6.9%. This was influenced mainly by the point-to-point inflation rate for the divisions: ‘Food and Non-Alcoholic Beverages’ (8.7%), ‘Transport’ (10.6%), and ‘Restaurants and Accommodation services’ (9.4%). For the fiscal year-to-date, the inflation rate was 7.3%, while the Calendar year–to-date in December 2023 was 7.5%.
• At its December 20, 2023 meeting, the BOJ kept the monetary policy at 7.00% as it continued to monitor the pass-through effects of previous adjustments on deposit and loan rates. The next policy decision will be on the 20^th of February, where it is expected that BOJ will maintain its policy rate at 7.00%.
• Despite the recent spikes in the inflation figure over the last two months, we expect that inflation will find a stable downward trend over the next few months as its key drivers, such as international commodity prices and shipping costs, continue to decline.

(Source: STATIN)

• Ciboney Group is undergoing a transformation that will see the former resort business being repositioned and renamed Innovative Energy Group Limited as it transitions into the energy sector.
• The renaming follows the takeover of Ciboney by the Wiltshire Group and is a prelude to the company tapping the financial market for at least US$20Mn in the first instance to execute capital-intensive energy-sector projects.
• It is still to be determined whether the new Innovative Energy Group will eventually take over the assets of the connected company Innovative Energy Company or it will become a subsidiary.
• A bid for the Jamaican government's latest 100MW renewable energy project is one of IEG's strategic ambitions. If successful, this could represent a $40Mn investment opportunity.
• The move signals IEG’s commitment to renewable energy and its readiness to play a significant role in the broader energy sector. Further, its strong track record demonstrates its clear intent to aggressively execute projects and significantly impact the alternative energy landscape in Jamaica and the Caribbean.
• Ciboney Group was formerly a major investor in the Ciboney Hotels and Villas in Ocho Rios, St. Ann. However, the financial meltdown in the 1990s saw Ciboney's properties being sold off by FINSAC, which was the majority shareholder in the distressed financial companies.

 (Source: BNN Breaking)

• Despite Prime Minister Roosevelt Skerrit's position that governments should not play a significant role in the management of any airline, he announced that countries within the sub-regional Organisation of Eastern Caribbean States (OECS) are discussing efforts to establish a new regional airline.
• Dominica, along with Antigua and Barbuda, Barbados, and St Vincent and the Grenadines, were the major shareholders of the previous regional airline, LIAT (1974) Ltd, which went bankrupt and is expected to wind up its operations in its current form on January 24.
• In a letter to staff outlining the latest position regarding the Antigua-based LIAT (1974) Ltd, the court-appointed administrator, Cleveland Seaforth, noted that after careful consideration, the decision was taken to permanently cease all commercial flying operations on January 24, 2024. 
• LIAT, before entering into administration, had been servicing several regional destinations and has since scaled down its operations and is now servicing Anguilla, Antigua, Barbados, Dominica, Guyana, Grenada, Guadeloupe, Martinique, San Juan Puerto Rico, St Kitts, St Lucia and St Maarten.
• During the presentation of his country's national budget last month, Browne said his government had embraced the responsibility to restructure and resurrect LIAT with a ‘vision of returning the airline to the regional skies'.
• Furthermore, Dominica and Barbados have also shown their interest in assisting with the building of a new regional airport; however, discussions are still underway.

(Source: Trinidad Express Newspapers)

• The settlement period for local stocks and mutual funds will be reduced from three business days to two business days as a result of an amendment to the Trinidad and Tobago Stock Exchange Ltd (TTSE) Rules, the stock exchange has stated. This change is scheduled to take effect from April 15, 2024.
• According to the TTSE, the reason for implementing a T+2 settlement period is primarily because it is more in line with international best practices and standards.
• The TTSE said the change would improve liquidity, shorten the ex-condition trading period, and improve investor confidence.
• 'A shorter settlement period allows for quicker availability of funds/cash and securities, which can promote liquidity in the market. Increased liquidity can attract more investors/trading activity and potentially lead to better price discovery,' the TTSE stated

(Source: Trinidad Express Newspapers)

• The London financial sector experienced a significant downturn in job opportunities, with a notable decrease of nearly 40% in available positions in 2023 compared to the previous year, while the number of job seekers also declined by 16%.
• In the fourth quarter of 2023, the decline intensified, reaching 42% compared to the same period in 2022. This marked the most substantial quarterly drop since the 2008 global financial crisis, indicating a challenging period for the industry.
• Despite robust profits in the banking sector, margin pressure and a deal making slump influenced a more cautious approach by employers. Factors such as market turbulence, high inflation, and geopolitical turmoil contributed to employers tightening their budgets, leading to a reduction in job openings.
• "After a year of strong pay growth and over-hiring, driven by a tight labour market, signs of a cooling market emerged as we approached the end of a challenging year," said Hakan Enver, managing director of Morgan McKinley UK.
• "We saw a decrease in job seekers, candidate supply, and the number of jobs available. Employer confidence receded amid the sustained economic slowdown and conflict in the Middle East, prompting spending and hiring to be reined in." However, Enver noted that the number of jobs available last year was broadly on par with 2019, prior to a significant post-pandemic hiring boom.

(Source: Reuters)

• Oil prices lost more than 1% last Monday as the Middle East conflict's limited impact on crude output prompted profit taking after oil benchmarks gained 2% last week.
• Several tanker owners steered clear of the Red Sea, and multiple tankers changed course on Friday after the U.S. and Britain launched strikes against Houthi targets in Yemen. The strikes started after the Iran-backed group's attacks on shipping in response to Israel's war against Hamas in Gaza. The conflict has also held up at least four liquefied natural gas tankers travelling in the area.
• "The realization that oil supply has not been adversely impacted is leading last week's bulls to take profit, with the move down somewhat exacerbated by a slightly stronger dollar," said Tamas Varga of oil broker PVM.
• On Sunday, the Houthi militia threatened a "strong and effective response" after the United States carried out another strike overnight. The U.S. later said it shot down a missile fired at one of its ships from Yemen. The chief negotiator for Yemen's Houthis on Monday warned that attacks on ships headed towards Israel will continue.
• "As the Middle East conflict is currently not affecting oil production, the geopolitical risk premium priced in oil prices now appears modest based on the implied volatility of options," Goldman Sachs analysts said in a note.
• There have been no oil supply losses so far, but the shipping disruption is indirectly tightening the market by keeping 35Mn barrels at sea. This is owed to longer journeys shippers have to take to avoid the Red Sea, Citi analysts wrote. In Libya, people protesting against perceived corruption threatened to shut down two more oil and gas facilities after shutting the 300,000 barrel per day in the Sharara field on January 7.

(Source: Reuters)

• Massy Holdings Ltd has appointed Wendy Kerry, its former Senior Vice President, Corporate Governance & Corporate Secretary division, as the acting general counsel effective January 8, 2024. This decision follows the December 27^th resignation of Angelique Parisot-Potter, the Executive Vice President of Business Integrity and Group General Counsel.
• Mrs. Parisot-Potter was placed on paid administrative leave on December 20, pending the completion of an internal investigation related to claims she made during the company’s annual general meeting on December 18. She alleged that Massy was “spending scarce foreign exchange on an executive management programme in Fort Myers, Florida”.
• Massy has since denied these allegations and has initiated an independent process to investigate the claims made by the Group’s former General Counsel.
• Despite the incident and subsequent press releases, there were no significant movements in Massy’s stock price. The stock price closed at $89.07 on January 11, 2024. At this price, it trades at a P/E of 9.98x earnings, which is below the Main Market Conglomerate Sector Average of 10.20x.

(Sources: JSE, MASSY & NCBCM Research)