• Chairman of the Barbados Hotel and Tourism Association (BHTA) Renee Coppin is pinning hopes for improvement in low hotel occupancy levels on Barbados’ ability to attract more airlifts into the island.
• Coppin noted that relative to 2019, the island had experienced a near 60% decrease in airlift for the current summer period, with the resulting decline in tourism arrivals and hotel occupancy.
• Consequently, the organization is of the view that there must be a laser-focused approach to the question of airlift supply for the island, given that the numbers point to being 58.3% down on 2019 levels for the comparable period of June to October 2022. According to Coppin for the summer period airlift is down by almost 60%.
• This was a “particularly critical” issue the BHTA chairman said, “given that many of our sister destinations across the region are not reporting similar levels of decline.

(Source: Nation News)

• Turkey's central bank shocked markets on Thursday, August 18, 2022, by cutting its main interest rate by 100 basis points to 13%, saying it needed to keep driving economic growth despite inflation hitting nearly 80% and a monetary tightening trend among its peers worldwide.
• The lira dropped as much as 1.2% as the bank took its latest step down the unorthodox policy path advocated by President Tayyip Erdogan that aims to provide targeted cheap credit to help boost Turkish exports.
• There had been virtually no signal that another rate cut was in the works and no economist polled by Reuters had predicted one, given that inflation has soared to 24-year highs, eating deeply into Turks' earnings and savings.
• The bank had held its main rate at 14% for the past seven months after cutting it by 500 basis points towards the end of last year. That policy easing sparked a currency crisis in December that sent inflation soaring.
• The rate cuts long urged by Erdogan - who holds sway over the bank after ousting several of its governors in recent years - have left real interest rates in deeply negative territory and have accelerated a cost-of-living crisis for Turkish households. However, the central bank's policy-setting committee said it needed to act because leading indicators pointed to a loss of economic momentum in the third quarter.

(Source: Reuters)

• The U.S. existing home sales fell to a fresh two-year low in July, further evidence that the Federal Reserve's aggressive monetary policy tightening campaign was dampening demand for housing, although home price levels remain high.
• Existing home sales dropped 5.9% to a seasonally adjusted annual rate of 4.81Mn units last month, the lowest level since May 2020 when sales hit their low point during the COVID-19 lockdowns, the National Association of Realtors said on Thursday. Outside the pandemic, sales were the slowest since November 2015. It was the sixth straight monthly sales decline.
• Home resales, which account for the bulk of U.S. home sales, plunged 20.2% on a year-on-year basis. The report came on the heels of data this week showing single-family housing starts, which account for the biggest share of homebuilding, tumbled to a two-year low in July. The National Association of Home Builders/Wells Fargo Housing Market sentiment index fell below the break-even level of 50 in August for the first time since May 2020.
• Mortgage rates, which move in tandem with U.S. Treasury yields, have soared even higher. The 30-year fixed-rate mortgage is hovering around an average of 5.22%, up from 3.22% at the start of the year, according to data from mortgage finance agency Freddie Mac.

(Source: Reuters)

• Junior market companies ICREATE Limited (ICREATE) and Edufocal Limited (LEARN) which operate in the education space, both reported higher net profits in their most recent six months. ICREATE reported a net profit of J$16.50Mn (EPS$0.09) for the period ended June 30, 2022, a 271.8% improvement over 2021. LEARN recorded a net profit of J$11.58Mn (EPS $0.02) for its six months ending June 2022 versus a deficit of J$5.25Mn in 2021.
• Both ICREATE (239.1%) and LEARN (163.9%) saw vast improvements in revenues as business activity increased. ICREATE’s performance was positively impacted by a mix of new business clients as well as existing opportunities from their pipeline which were closed in Q2. LEARN saw an increase in its Edufocal Academy division as schools reopened, and from the business division due to the onboarding of new corporate customers.
• While ICREATE recorded a 680.3% increase in its cost of sales, both companies saw a 108.4% (ICREATE) and 88.9% (LEARN) rise in their administration and general expenses. Although this weighed on profitability, owing to strong revenues ICREATE’s net profit margin rose from 18.6% to 20.4%, while LEARN saw a turnaround from -10.4% to 8.7%.
• There has been a noticeable increase in the demand for digital creative and design training, especially among large institutions which ICREATE intends to capitalize on by aggressively pushing business growth across its divisions including digital marketing and advertising. Management is also actively working on several M&A and other Joint Venture collaborations. This should support continued strong revenue growth while the company looks closely at managing cost efficiencies.
• The acquisition of Clever School Teacher (CST), a software as a service (SaaS) business in March 2022 allowed EduFocal to forge a pathway into the American edtech marketplace. The large database of content which was acquired should also enhance its ability to reach other territories and attract new customers. The company is currently in conversations to leverage the content for B2B opportunities in both the United States and Jamaica, which is expected to support revenue growth in the coming quarters.
• ICREATE’s stock price has increased by 443.2% since the start of the calendar year while LEARN increased by 178.0% since listing on March 15, 2022 ICREATE and LEARN closed Wednesday’s trading session at $4.22 and $2.78, respectively. LEARN currently trades above the Junior Market Others Average with a P/E of 61.8x. ICREATE currently trades at a P/B of 49.9x which is above the Junior Market Other P/B average of 10.2x.

(Sources: JSE & NCBCM Research)

• For the period January to April 2022, Jamaica’s total spending on imports was valued at US$2,341.6Mn, while earnings from exports were valued at US$511.1Mn, as reported by the Statistical Institute of Jamaica (STATIN).
• There was a 34.4% year-over-year increase in imports due to increased spending on all sub-categories of imported goods.
• Total exports for the review period only increased by 1.3% compared to the US$504.4Mn earned in the period last year. The increase in exports was due primarily to a 52.9% increase in the value of export of “Mineral Fuels”.
• Domestic exports for the review period increased by 1.4% to a value of US$438.9Mn; accounting for 85.9% of total exports. This increase was due mainly to a 43.3% rise in export from the Manufacture industry.
• The five main trading partners for the period were the United States of America (USA), China, Brazil, Trinidad and Tobago and Ecuador accounting for 62.3% of total imports valued at US$1,458.0 million, an increase of 40.5%. This was largely due to higher imports of fuel from the USA and Ecuador.
• The top five destinations for Jamaica’s exports were the USA, Canada, Puerto Rico, the Russian Federation and the United Kingdom. Exports to these countries increased by 35.5% to US$424.2Mn. This was attributed to higher exports of fuels to the USA.
• The country continues to run a trade deficit which weighs on the country’s GDP, despite growing by 6.4% in the first quarter. The higher level of imports to exports also indicates a greater dependence on foreign economies which makes Jamaica more susceptible to imported inflation.

(Source: STATIN)

• The latest monthly report on Guyana’s Natural Resource Fund (NRF) shows that the account earned GY$10.646 billion in royalties and GY$50.127 billion in oil profits. This totals approximately GY$60.773 billion (US$291.477 million).
• The Bank of Guyana report states that net outflows for the month totalled $41.7 billion. This was the second withdrawal ever made by the government from the Fund, to support the 2022 budget. The withdrawal was approved earlier this year by the National Assembly. This left the balance of the fund at GY$176.3 billion (US$845.608 million).
• For the full quarter ended June 30, 2022, the account recorded a profit of GY$266.04 million (US$1.28 million) solely due to interest earned on deposits.
• Inflows to the Fund at that time as well amounted to GY$48.4 billion (US$232.16 million) comprising oil profit – GY$44.01 billion (US$211.11 million) and royalties – GY$4.39 billion (US$21.06 million).
• The Natural Resource Fund was formed by the enactment of the Natural Resource Fund Act 2019 which was passed in the National Assembly on January 3, 2019, and assented to by the President on January 23, 2019. The Act gives the Bank of Guyana the responsibility for the operational management of the Fund. To date, there has been no investment mandate for the Fund and all petroleum revenues are held as cash deposits in the account.

(Source: Guyana Chronicles)

• The first ship to depart Ukraine under a deal to resume grain exports from the country two weeks ago docked in the Syrian port city of Tartous on Tuesday, August 16, 2022, according to a shipping source and satellite data.
• The Sierra Leone-flagged Razoni set sail from Ukraine's Odesa port on Aug. 1 under a hard-won grain deal but did not unload in Lebanon as planned. Its location had not been clear in recent days as it has kept its transponder off.
• The cargo of 26,000 tonnes of corn had originally been destined for Lebanon, which has been suffering an economic crisis that has plunged about half of its population into food insecurity.
• However, the original buyer refused the delivery over quality concerns and the ship sailed to Turkey, docking in Mersin on Aug. 11 and unloading part of the cargo there.
• Ukraine has previously accused Syria of importing at least 150,000 tonnes of grain it said was plundered from Ukrainian warehouses after Russia's invasion in February. Russia has denied stealing Ukrainian grain.
• It is important to note that Ukraine's ministry of transport said at the weekend that it was "not responsible for vessel and cargo after it has left Ukraine, moreover after the vessel departed from (a) foreign port".

(Source: Reuters)

• President Joe Biden on Tuesday, August 16, 2022, signed into law a $430 billion bill that is seen as the biggest climate package in U.S. history, designed to cut domestic greenhouse gas emissions as well as lower prescription drug prices.
• At a White House event, Biden was joined by Democratic leaders including Senator Joe Manchin of West Virginia, whose support was crucial to the passage of the Inflation Reduction Act along party lines after he had initially opposed a similar measure.
• The legislation to fight climate change and lower prescription drug prices aim to cut domestic greenhouse gas emissions. It will also allow Medicare to negotiate lower drug prices for the elderly and ensure that corporations and the wealthy pay the taxes they owe. Democrats say it will help combat inflation by reducing the federal deficit.

(Source: Reuters)

• FOSRICH Company Limited reported a net profit of J$297.97Mn (EPS$0.60) for the 6 months ended June 30, 2022, which represents a 160.2% improvement over the net profit of J$114.52Mn in H1 2021.
• Revenue for the 6 months was $1.80Bn, a 64.6% increase driven by higher business activity pushing sales in ten of their eleven Product Groups, with Panels being the only product group that registered a decrease over the prior year. Revenue growth outpaced the 56.3% increase in the cost of sales evidenced by gross margins moving from 39.8% to 42.9%. 
• Administrative expenses rose by 36.7%. The changes were driven primarily by increased staff-related costs for salary adjustments, higher sales commission, greater occupancy, increased selling, marketing and electricity cost; higher legal and professional fees; increased depreciation due to increases in the carrying values of property plant and equipment and increased security expense.
• Near-term profitability will be supported by continued efforts to manage the shipping challenges and revenues from recently acquired subsidiary O’N’S’ Mini Mart & Electrical Supplies. determining optimal inventory levels and cost of sales. The company continues to proactively manage inventory balances in light of supply-chain challenges, to ensure optimal inventory balances, relative to the pace of sales, to avoid both overstocking and stock-outs.
• FOSRICH’s stock price has decreased by 61.4% since the start of the calendar year largely due to a 10:1 stock split executed on July 26. The stock closed Tuesday’s trading session at $3.49 and currently trades at a P/E of 45.3x which is above the Junior Market Distribution Sector Average of 23.6x.

(Sources: JSE and NCBCM Research)

• Prime Minister, the Most. Hon. Andrew Holness says the National Housing Trust (NHT) is on track to make affordable homeownership a reality for more Jamaicans.
• “The plan was to distribute about 10,000 units [islandwide] by the end of 2022, but our schedule has been impacted by COVID-19. Even though, between the NHT, the Housing Agency of Jamaica (HAJ), the New Social Housing Programme and other programmes the government has undertaken, I am still confident we can get to that mark,” the Prime Minister pointed out.
• The government has been providing an average of about 6,000 units each year, three times the amount it once did, the PM said, and there is room for more private sector involvement.
• The NHT’s current goal is to provide 43,000 houses in the next five years. Notably, this will stretch them and the resources, which makes the onboarding of more private contractors important. However, while the demand for housing is good, and the facilities for mortgages available, the minister has noted that there are not enough contractors currently. “It’s not just having the contractors, but it is having the contractors that can deliver the quality of work,” he further added.
• The aforementioned therefore presents opportunities for the private sector and the construction sector.

(Source: JSE)