• The Government of Dominica is implementing measures to keep fuel prices under control as the global price of oil continues to rise. Taking into account the current global market prices, the Government has decided to subsidize the cost of petroleum to reduce the impact on residents and avert a possible slow-down in economic growth prospects. 
• Due to the proposed sharp increase in prices, Cabinet has taken a decision to remove the customs service charge on gasoline and diesel with immediate effect. In addition, Cabinet is granting subsidies equivalent to 60 cents per gallon on the importation of gasoline and 21 cents per gallon on the importation of diesel until the retail price of each product returns to below $15.00 per gallon. 
• The implementation of the measures will result in revenue loss to the state. However, the Government of Dominica remains committed to actions, which will protect consumers from escalating world fuel prices, despite the adverse effects of the COVID-19 pandemic on the government’s revenue.
• Consumers are urged to embrace lifestyle changes to better adapt as global oil prices continue to rise. Taxi operators and bus drivers are encouraged to use established procedures in dealing with the impact of the escalating prices on their businesses, and not levy increases in fares on commuters without the approval of the appropriate authority.

(Source: Dominica News Online)

• Prime Minister Dr. Ralph Gonsalves says St. Vincent and the Grenadines has obtained permission from Venezuela to “borrow back” US$9.00Mn paid on loans owed to theALBA Bank. 
• The money had been held in an escrow account at the Eastern Caribbean Central Bank(ECCB), as sanctions imposed on Venezuela by the United States prevented its transfer to Caracas. The Prime minister noted that the money was paid there to reduce the issue of any challenges arising with the sanctions. 
• Two proposals were put forward to the Alba Bank which have been accepted, one of which was to utilise US$4.00Mn to procure vessels for St Vincent’s fishing industry. This arrangement would be made with particular fishers to train them. These are bigger vessels at a higher level requiring other kinds of training and building a fleet. The other US$5.00Mn is being earmarked for the repair of Little Tokyo, the bus terminal in Kingstown that services the east of the country. 
• Notably, Venezuela cancelled Kingstown’s debt under the PetroCaribe oil initiative and agreed to cancel 50% of the debt owed by the other members of the Organisation of Eastern Caribbean States. This would in turn provide an improvement in the sovereign’s balance sheet.

(Sources: Caribbean News Weekly & NCBCM)

• The Federal Reserve on Wednesday raised its benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years, and the U.S. central bank's chief made a direct appeal to Americans struggling with high inflation to hang tough while officials take the hard measures to bring it under control. 
• In a widely expected move, the Fed set its target federal funds rate to a range between 0.75% and 1% in a unanimous decision, with further rises in borrowing costs of perhaps similar magnitude likely to follow. Fed Chair Jerome Powell, however, told reporters that a rate increase of as much as three-quarters of a percentage point is not something officials are "actively considering." 
• The Fed also said starting next month, it would reduce the roughly $9 trillion stash of assets accumulated during the coronavirus pandemic in another lever to bring inflation under control. 
• Powell, speaking in a news conference after the end of the Fed's latest two-day policy meeting, said he and his colleagues were determined to restore price stability but that doing so would entail higher borrowing costs, including for things like mortgages and car loans. 
• Nonetheless, the Fed said the economy is continuing to perform well, and Powell said it is well-positioned to withstand the coming rate hikes, which are likely to be of a magnitude more like the one announced on Wednesday. 
• Despite a drop in GDP over the first three months of this year, "household spending and business fixed investment remain strong. Job gains have been robust," the central bank's Federal Open Market Committee said in its policy statement.

(Source: CNBC News)

•  The European Union proposed its toughest sanctions yet against Russia on Wednesday, including a phased oil embargo, as Moscow pressed an offensive in eastern Ukraine and close Russian ally, Belarus announced large-scale army drills. 
• Nearly 10 weeks into a war that has killed thousands of people and flattened Ukrainian cities, Russia was intensifying its assault, Ukraine's defence ministry said, with attacks reported on railway stations used to transport Western arms. 
• A new convoy of buses began evacuating more civilians from the ravaged southeastern port city of Mariupol, which has seen the heaviest fighting of the war so far. Moscow pledged to halt some military operations this week to allow more evacuations. 
• Piling pressure on Russia's already battered $1.8 trillion economy, Brussels proposed phasing out imports of Russian crude oil within six months and refined products by the end of this year. 
• The plan, if agreed by all 27 EU governments, would follow U.S. and British oil bans and be a watershed for the world's largest trading bloc, which remains dependent on Russian energy and must find alternative supplies.

(Source: Reuters)

• The Jamaica Stock Exchange (JSE) has entered into a partnership with the Ghana Stock Exchange (GSE), which will see the capital markets of Jamaica and Ghana expanding their products and services to investors in both countries. 
• This is being facilitated under a Memorandum of Understanding (MOU) of Mutual Recognition, which was signed by representatives of both entities during a special Bell Ringing ceremony on Monday (May 2) at the JSE’s Harbour Street office in Kingston.
• This partnership is beneficial to both parties as it will strengthen linkages between both countries, provide investors with more options for diversification, and it will also strengthen investor participation among both exchanges. 
• Managing Director of the JSE, Dr. Marlene Street Forrest highlighted that there are certain commonalities that make the alliance with Ghana ideal, pointing out, for example, that like Jamaica, Ghana has a growing, young, educated middle-class population that has a high demand for goods and services. 
• Additionally, she expects that over the next several years’ companies globally will set up industries and companies in Africa and the Caribbean, and as such the stock exchange will be perfectly poised to benefit from such an expansion.

(Sources: JIS News and NCBCM)

• Jamaica Teas Limited reported a net profit attributable to shareholders of $171.15Mn for its six months ending March 31, 2022, which represents a 13.7% decline relative to the prior year. 
• The local manufacturing sales segment grew by 22.8%, despite the shortage of inventory items that resulted in lower sales for several products, particularly peppermint products which are in high demand. 
• However, there was an overall decline in the Group’s operating revenues primarily because of the gain from apartment sales recorded during the same period in 2021, which did not occur this year. The decline in revenues was also influenced by a drop in export sales (3.1%) as higher freight costs diminished demand for some types of products, and an inability to fill orders because of delays in the arrival of imported raw materials. If the gain on the apartment sales is stripped out, the company realized a 5.8% growth in revenues in 2022. 
• Additionally, though its subsidiary’s (QWI’s) investment portfolio outperformed the local stock market, total gains for the second quarter were 12% below the prior period which would have harmed the Group’s overall earnings. 
• Despite challenges faced in the first half of the year, there are signs that some of the issues may be abating. In April, export shipments were 39% higher than in Apr 2021 and export shipments for the 7 months to April now exceed the comparable period for last year. 
• The recovery in the local tourism sector, increasing employment and the reopening of the economy will contribute positively to the company’s performance. However, elevated shipping costs could continue to affect activities. 
• Jamaica Tea’s stock price has decreased by 1.4% since the start of the calendar year. The stock closed Tuesday’s trading session at $3.76 and currently trades at a P/E of 20.9x. which is marginally above the Junior Market Manufacturing Sector Average of 20.1x

(Sources: Company’s Financials and NCBCM)

• Natural Resources Minister Vickram Bharrat stated that Guyana has started discussions with Exxon Mobil Corp (XOM.N)to build a more than 120-mile (190-km) natural gas offshore pipeline. 
• Guyana is trying to build infrastructure, including a gas-fueled power plant, to develop its economy after U.S. oil major Exxon discovered one of the world's largest oil reserves in the last decade. 
• Of note, power demand in Guyana is forecast to triple in the next five years along with a fast-growing economy. Additionally, investment in the country is also poised to grow exponentially in the coming years following over 30 discoveries by a consortium led by Exxon, which this month has pushed up the country's recoverable resources to 11bn barrels of oil and gas. 
• However, while the Exxon-led group currently pumps all of the South American country's output since production started in 2019, Guyana is leaning toward offering oil exploration areas outside of Exxon's blocks in a competitive bid, rather than creating a national oil company with partners.

(Source: Reuters)

• The Director of the Western Hemisphere Department at the International Monetary Fund (IMF), Ilan Goldfajn, says the Washington DC-based financial institution is paying close attention to the sovereign debt exposure of regional banks, especially where recent external shocks have significantly stretched public sector balance sheets. 
• He explains that 'Banks with highly concentrated exposures, mainly where these are systemically important institutions, can complicate recovery efforts if sovereign debt sustainability risks materialize.' Therefore, the risks associated with sovereign debt linkages are best mitigated by governments pursuing sustainable fiscal policies and making use of the available concessional financing opportunities. 
• Goldfain also noted that it is essential that financial supervisors promptly identify pockets of excessive risk exposures, enforce and/or tighten exposure concentration limits where warranted, and ensure banks' and other financial institutions' loss-absorbing buffers are commensurate to the risks taken. 
• The Caribbean Community (CARICOM) Secretary-General, Dr. Carla Barnett, said the operationalisation of an integrated country risk management framework, robust enough to strengthen social safety nets, with the capacity to adapt to shocks, will allow the region to 'build back better' following the various 'challenges', including the coronavirus pandemic. 
• Consequently, the newly established Resilience and Sustainability Trust (RST), combined with the additional financing will help catalyse and support countries in building resilience to external shocks, including climate change and pandemic preparedness, and ensuring sustainable growth.

(Source: Trinidad Express Newspapers)

• Employment openings exceeded the level of available workers by 5.6Mn in March while a record number of people quit their jobs, the Labour Department reported Tuesday. The level of job postings hit 11.55Mn for the month, also a fresh record for data that goes back to December 2000, according to the Job Openings and Labour Turnover Survey. That was up 205,000 from February and representative of a job market still historically tight. 
• At the same time, quits totaled 4.54Mn, an increase of 152,000 from the previous month as the so-called Great Resignation continued. The Covid pandemic era has seen opportunities for workers who feel confident enough to leave their current situations for better employment elsewhere. 
• The report adds to an inflationary picture that is expected to push the Federal Reserve into a series of aggressive rate hikes, starting with a half-percentage point move Wednesday. 
• A shortage of labour supply during the pandemic has caused a surge in wages, with average hourly earnings up 5.6% from a year ago in March. Still, that hasn’t kept up with inflation, which has run at an 8.5% pace over the same time period. Supply failed to keep up with demand in March, with the level of new hires declining slightly to 6.74Mn despite the increase in openings. Total separations rose to 6.32Mn, a rise of nearly 4% from February.

(Source: CNBC News)

• The price of a major U.S. junk bond exchange traded fund (ETF) fell to its lowest in over two years this week, as concerns over the impact of a hawkish Federal Reserve on the economy led investors to pull out of riskier assets. BlackRock’s iShares iBoxx $ High Yield Corporate Bond ETF (HYG.P) fell 0.4% to trade $78.23 a share on Monday, Refinitiv data showed - the lowest price since April 2020. 
• Meanwhile the yield spread on the ICE BofA U.S. High Yield Index, a commonly used benchmark for the junk bond market, rose to 405 basis points on Monday from 393 bps last week, widening to its highest since March 15, when the spread hit a 15-month peak at 421 bp. A widening of the spread of junk bond yields over Treasuries is an indication of risk aversion in financial markets. 
• U.S. credit markets saw some respite in March, but the relief proved to be short-lived as uncertainty around the U.S. central bank's ability to engineer a soft landing for the economy continues to weigh on risky assets. 
• The Fed is expected to announce a 50-basis point rate hike this week as well as the launch of quantitative tightening (QT) - the reversal of a bond-buying program aimed at supporting the economy during the pandemic. 
• Concerns over its tightening monetary policies have led to a sell-off in U.S. Treasuries this year which has also weighed on riskier assets such as U.S. corporate bonds.

(Source: Reuters)