• Scotia Group Jamaica Limited recorded a net profit attributable to shareholders of $17.23Bn for its financial year ended October 30, 2023, representing a 66.9% YoY increase in profitability. This was driven by strong performance in all its business lines as well as the efficient management of its operations.
• Total revenues, excluding expected credit losses for the year ended October 31, 2023, grew by $12.33Bn to $55.46Bn, reflecting an increase of 28.6% over the previous year. This was primarily driven by an increase in net interest income of $8.8Bn stemming from the strong growth in its loan portfolio, higher insurance revenue, higher gains on foreign currency activities, and higher fee and commission income earned, given the significant increase in transaction volumes.
• Operating expenses continue to be anchored by the Group’s expense management initiatives and totaled $27.63Bn for the year ended October 2023, an increase of $2.9Bn or 11.8% driven by higher technical support fees arising from the higher transaction volumes.
• Expected credit losses for the period showed a reduction of $661.54Mn or 21.6% compared to full year 2022. The Group’s credit quality remains strong and the company is well provisioned for both its performing and non-performing loans, ensuring adequate coverage for possible future non-performing loans.
• SGJ's stock price has increased by 0.9% since the start of the calendar year. The stock closed Tuesday’s trading session at $34.53 and currently trades at a P/E of 6.2x which is below the Main Market Financial Sector Average of 11.9x.
• As part of its strategic move to target more businesses in the middle to upper-income band, the company recently partnered with American Express to issue Jamaica’s first metal AmEx platinum card. This partnership augurs well for the company as the embedded benefit may increase card usage, allowing more revenues to be generated from credit card interest and merchant fees.

 (Source:  JSE)

• The Government’s prior year performance gives confidence that it remains on track to eliminate the fiscal deficit even if 2023-2024 “slides” from its original targets, a governance reformer said last night.
• Hubert Edwards, the Organisation for Responsible Governance’s (ORG) economic development committee head, told Tribune Business that while reaching a fiscal surplus “may take a bit longer” than the Government’s 2024-2025 goal this would not be “fatal” for its plans or The Bahamas generally.
• Additionally, with the International Monetary Fund (IMF) projecting that the Government will run a near-$379m deficit for the 2023-2024 fiscal year, he argued the Davis administration’s first goal “almost instantly becomes” beating that benchmark.
• Mr Edwards told this newspaper that while the Government’s $131.1Mn deficit target for the year is “aggressive”, given that this number is just one-third of the IMF’s forecast, there is likely “some wiggle room” provided the ultimate 2023-2024 outcome moves in the right direction.
• “There’s enough for us to be confident, even if 2023-2024 slides a bit further than expected, we will still be on target to eliminate the deficit and move into a surplus,” Mr Edwards told Tribune Business. “That may take a little bit longer, but I don’t think it’s a fatal circumstance.”
• The Government is projecting that it will achieve a $109Mn surplus, where its revenues exceed spending, in the 2024-2025 fiscal year. However, the IMF is still forecasting that The Bahamas will incur a deficit equal to 2% of gross domestic product (GDP) or nearly $290Mn that year, so it remains to be seen who is right.

(Source: The Tribune)

• Strengthening investment, private consumption, and government consumption will fuel Saint Kitts and Nevis' economy to grow by 2.9% in 2023 from an estimated 6.9% expansion in 2022, according to Fitch Solutions.
• Investments are expected to rise by 2.5% in 2023 from an estimated 7.5% expansion in 2022. Government consumption will grow by 0.7% while private consumption will increase by 0.4%, compared to estimated growth of 4.3% and 3.7% in 2022, respectively. Net exports will contract by 3.0% after contracting by 5.3% in 2022.
• Further to this, Saint Kitts and Nevis' real GDP will rise by 2.5% in 2024 as investment, private consumption, and government consumption bolster domestic demand. Investment will increase by 1.7% in 2024, below its 3.3% average growth since 2013. Private consumption will grow by 0.3%, while government consumption will grow by 0.2%. Net exports will contract by 3.1% in 2024.
• That being said, its economy will grow slower than the Caribbean's average of 6.3% over the next decade. Investments will drive the economy's 0.5% average expansion over the next decade.
• Fitch expects investment, which accounted for 28.3% of GDP in 2022, will average 1.2% over the next decade. This will offset contractions in government consumption, private consumption and net exports.

 (Source: Fitch Solutions)

• Consumer prices in the U.S. rose unexpectedly in November, driven by increases in rents, healthcare, and motor vehicle insurance. The decline in gasoline prices was offset by other factors, contributing to a 0.1% increase in the Consumer Price Index (CPI).
• Prices for used cars and trucks rebounded, boosting underlying inflation. The report also highlighted a rise in healthcare costs and services inflation, indicating persistent inflationary pressures. Despite a decline in apparel prices, overall inflation remains above the Federal Reserve's 2% target.
• The unexpected inflation readings, coupled with positive job market data, suggest that the Federal Reserve is unlikely to consider early interest rate cuts in the near future. The Fed is expected to maintain its current policy tightening stance, with rates raised by 525 basis points since March 2022.
• While some economic indicators show a continuation of inflation, there are signs that inflation expectations among consumers are softening. Economists expect cooler inflation readings next year; however, uncertainties remain, impacting market expectations and potential challenges for President Joe Biden's approval ratings and reelection prospects in 2024.

(Source: Reuters)

• Over 100 countries at COP28 in Dubai agreed to triple renewable energy capacity by 2030, a crucial step in meeting the Paris Agreement's climate goals. The target aims to achieve a global renewable energy capacity of at least 11,000 gigawatts in six years, exceeding current projections by over 20%.
• The industry faces obstacles such as permitting, leases, and grid connections, which concerns raised about the feasibility of rapidly increasing solar and wind power deployments.
• Shortages in supplies and labour, rising project costs, and local opposition to large energy projects contribute to the strain in the renewables sector.
• To achieve the 2030 target, a sustained growth rate of 17% annually is required, necessitating more than doubling the annual investment in renewables to over $1.2 trillion by 2030.
• Infrastructure investors have reduced funding due to higher interest rates, highlighting the importance of continued government support and discussions on overcoming barriers in permitting, grid development, and auctions after COP28.

(Source: Reuters)

• JMMB Group Limited is looking into a partnership with the private sector financing arm of the Inter-American Development Bank, IDB Invest.
• In a release, the financial group says the funding partnership being considered could provide financing of up to US$100Mn. This would be used to support JMMB's funding pipeline for micro, small and medium sized enterprises, including women-led initiatives.
• JMMB is also looking to use the money to develop and grow a green loan portfolio in Jamaica. The funding would also support its digitalisation strategy.
• Notably, the actual completion of the transaction is contingent upon various factors, including but not limited to market conditions, authorisations and approvals, and the satisfaction of customary closing conditions.

 (Source: RJR News)

• iCreate Limited (“iCreate”) has announced that a Meeting of the Board of Directors for consideration of the Spin-Off of iCreate’s shares in Visual Vibe.Com Limited (“Visual Vibe”) is scheduled for Tuesday, December 19, 2023, at 11:00 a.m.
• Upon consideration and approval by the Board of Directors, an Extraordinary General Meeting (“EGM”) will be convened for the shareholders to consider and if thought fit, pass the resolution approving the issue or transfer of iCreate’s shares in Visual Vibe to be held by the shareholders of iCreate, pro rata to their existing shareholdings.

(Source: JSE)

• Venezuela's President Nicolas Maduro will meet with Guyana President Mohamed Irfaan Ali on Thursday, December 14, 2023, amid a territorial dispute between the two countries, according to a letter from the prime minister of Saint Vincent and the Grenadines.
• The announcement of the bilateral meeting came after Maduro spoke with Ralph Gonsalves, the prime minister of Saint Vincent and the Grenadines, who also serves as president pro tempore of the Community of Latin American and Caribbean States (CELAC), and U.N. Secretary-General Antonio Guterres on Saturday.
• Tensions have been mounting between Venezuela and Guyana in recent weeks due to a long-running border dispute over Esequibo, an area in Guyana where massive discoveries of offshore oil and gas have been made.
• Venezuela's government said the meeting "is in order to preserve our aspiration to maintain Latin America and the Caribbean as a zone of peace."
• The Office of the President of Guyana confirmed Ali had agreed to the meeting but added, "Guyana's land boundary is not up for discussion."

(Source: Reuters)

• Recent data underscores the strength of the labour market, with a 4% annual increase in wages. Despite a slower pace of pay growth, the rate remains above the 3% threshold considered consistent with the Federal Reserve's 2% inflation target.
• The growth in labour supply, marked by half a million more individuals engaged in employment or job-seeking, plays a crucial role in supporting economic expansion. Additionally, improvements in worker productivity and a decrease in average working hours have led to a decline in labour costs per unit of output.
• The Federal Reserve faces a delicate balancing act, hoping for a "soft landing" where inflation slows without triggering a recession. Despite concerns about high interest rates impacting consumer borrowing, ongoing job creation and rising wages contribute to increased consumer spending.
• However, there are expectations of a potential slowdown in spending in 2024 as pandemic savings diminish. The Fed remains vigilant about the sustainability of these positive economic dynamics in the face of changing conditions.

(Source: Reuters)

• New research from the Chicago Federal Reserve highlights a significant disconnect between the performance of the U.S. economy and public attitudes, emerging in the spring of 2020 due to the onset of the COVID-19 pandemic.
• In the post-pandemic years, there has been a notable decrease in the average level of optimism regarding economic outcomes. Traditional correlations between indicators like consumer and small business sentiment, tied to measures such as unemployment rates and income, have weakened, impacting the economy and politics.
• The link between economic conditions and sentiment appears to have been severed after the pandemic recession. Potential reasons include the persistence of higher price levels, the normalisation of lower unemployment rates, and the impact of the pandemic's shock on public expectations about the economy.
• The American Psychological Association (APA) identifies a "collective trauma" affecting the nation, rooted in the COVID-19 pandemic, global conflicts, racism, racial injustice, inflation, and climate-related disasters. Survey responses reveal health, money, and the economy as significant stressors, with a notable increase in concerns about the economy since 2019, particularly among younger age groups.
• Despite recent improvements in sentiment, challenges persist. Younger demographics, critical for the economy and elections, express heightened economic concerns. Policymakers and politicians face the task of positively shifting the economic mood in the coming months, especially if inflation continues to fall alongside weaker wage and job growth.

(Source: Reuters)