• Credit Suisse said on Monday (April 24, 2023) that 61 billion Swiss francs ($68 billion) in assets left the bank in the first quarter and that outflows were continuing, underscoring the challenge faced by UBS Group in rescuing its rival.
• Customer deposits declined by 67 billion francs in the quarter and the bank noted many matured time deposits had not been renewed. "These outflows have moderated but have not yet reversed as of April 24, 2023," Credit Suisse said, adding that most of the money leaving the bank was from its wealth management division and occurred across all regions. The net asset outflow followed 110.5 billion francs pulled by clients from the bank in the fourth quarter.
• The 167-year-old bank reported results for what is likely to be the last time, as its state-engineered marriage with UBS is expected to be completed soon. Much of Switzerland's reputation as a trusted global financial centre - particularly for the ultra-wealthy - will rest on whether the two globally important systemic banks can be successfully integrated.
• Credit Suisse's ability to generate revenue appeared to be so damaged that "the deal could well remain a drag on UBS operating results unless a deeper restructuring plan is announced," London-based analyst Thomas Hallett at KBW said in a note to clients.

(Source: Reuters)

• Jamaica is listed as one of the countries currently on the Financial Action Task Force’s (FATF) increased monitoring/ “grey list”. According to the FATF, when it places a jurisdiction under increased monitoring, it means the country has committed to swiftly resolving the identified strategic deficiencies within agreed timeframes.
• Jamaica has a June 2023 deadline to comply with the FATF’s recommendations or the institution will take action against the country, which could include urging all jurisdictions to apply enhanced due diligence to business relations and transactions with Jamaica.
• According to the Minister of Finance, Dr. Nigel Clarke, as at March 30, the country was “compliant or largely compliant in 33 of 40 recommendations.” A part of this compliance comes from the recent ruling by the Privy Council relating to attorney-client confidentiality. The Privy Council ruled that the requirement for attorneys to report to the authorities whether their clients’ funds were obtained by illicit means does not breach the constitutional rights of those attorneys. As such, this is a critical component in addressing the probability of financial crimes being committed.
• Now the country is at the tail end of the timeframe of its commitments, and one of the areas that were still outstanding was to ensure that the beneficial ownership regime in Jamaica is consistent with international standards.
• To this end, the Minister said amendments are being made to the Companies Act to revolutionise and strengthen Jamaica’s beneficial ownership regime. Dr. Clarke explained that the passage of these amendments will address three of the outstanding items agreed on in Jamaica’s action plan with the FATF for the anti-money laundering and combatting the financing of terrorism (AML/CFT) framework. The Minister further advised that amendments will also be made to the Trusts and Cooperative Services Act.

(Source: FATF & JIS)

• The Government is well on the way to providing the committed 70,000 solutions to the housing market. The objective is to address a housing deficit of approximately 100,000 units in the country.
• Prime Minister, the Most Hon. Andrew Holness, said that the National Housing Trust (NHT) has pledged to deliver 43,000 of the 70,000 solutions and 35,000 of these are at different stages of development.
• “This means that they have [units] in the ground, they have come out of the ground, they have completed or they have plans they have drafted, they have identified the lands or they have identified the developers to build those houses,” he said.
• Holness provided the details while delivering the keynote address at a launch ceremony for Up-Cycled Container Homes being introduced to the market by Kingston Logistics Center (KLC) Limited on Wednesday (April 19).
• He pointed out that informal settlements and communities in need of housing upgrades will need “easily deployed solutions in the housing market”. It is against the background that Prime Minister Holness has welcomed the introduction of container homes to the local housing market. Further, the pre-built units can be constructed in a shorter time at affordable rates relative to traditional houses.
• “The size of the container home market in 2021 was estimated at $56.85 billion worldwide and it is expected to grow to $87.1 billion by 2029. We see how this is possible because companies that are involved in shipping, architecture, furniture, design and development, are merging the technology to provide solutions to meet housing demand,” Mr. Holness pointed out.
• KLC is an all-inclusive logistics facility with operations in Jamaica and Panama. The company provides logistics solutions across the Caribbean, including warehousing, distribution, packaging, shipping and exporting of consumer goods.

(Source: JIS)

• Guyana, a new oil producer, is at the peak of a new era of development with over 11 billion barrels of proven oil reserves, one of the highest per capita levels in the world, with GDP growth rates and fiscal revenues rising enormously over time.
• As part of aggressive climate change promises, the government of Guyana is also implementing an ambitious transformation for domestic electricity generation as outlined in the country’s Low Carbon Development Strategy (LCDS) 2030.
• The LCDS 2030 sets out four interlinked objectives for Guyana, namely, value ecosystem services, investing in clean energy and stimulating low carbon growth; protecting against climate change and biodiversity loss; and aligning with global climate and biodiversity goals.
• One of the first strategies implemented was a partnership between its government and the government of Norway. The partnership is aimed at preserving the quality of Guyana’s forests to help the nation meet its climate objectives and in the process, be paid for performance on this target resulting in earnings of over US$220Mn. Both countries will work together to provide the world with a relevant, replicable model for how REDD+ can align the development objectives of forested countries with the world’s need to combat climate change. REDD+ is a framework created by the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP) to guide activities in the forest sector that reduces emissions from deforestation. 
• With these funds earned, a significant project on renewable energy is being implemented, the Guyana Utility-Scale Solar Photovoltaic Programme (GUYSOL), which commenced in June 2022. This programme will help the nation migrate, in about three years, to a grid that uses 19% renewable energy.
• The programme is anticipated to replace costly and environmentally damaging fossil fuels like diesel and heavy fuel oil used to generate energy and enhance Guyana’s LCDS goal of creating a cleaner and more diversified electrical generation matrix.

(Source: CariCris)

• The Bahamian international banking sector is contracting because the “retreat” of European assets is “outpacing” new growth from Latin America. That’s the proclamation from the Central Bank governor.
• John Rolle, in written replies to Tribune Business questions, acknowledged that the financial services industry has yet to regain momentum following two decades of scrutiny and regulatory pressures imposed by major world powers such as the Organisation for Economic Co-Operation and Development (OECD).
• In responding to the industry’s needs, the Central Bank has worked with industry and government to help introduce newly regulated products such as private trust companies (PTCs) and executive entities, which allow financial institutions to use additional regulated vehicles to serve their client needs. The use of these vehicles has increased over the last decade.
• “The retreat of the European business summarises the response to heightened scrutiny that international financial centres like The Bahamas have faced over at least two straight decades around anti-money laundering and tax transparency standards,” Mr Rolle stated.
• The development has continued despite The Bahamas’ removal from the Financial Action Task Force (FATF) List of Countries that have been identified as having strategic Anti-Money Laundering (AML) deficiencies back in 2020. The country was also de-listed from the European Union’s Blacklist in January 2022.
• In this regard, the Central Bank and other regulators continue to work to improve the jurisdiction’s anti-money laundering profile through national efforts to secure peer assessments that validate the effective and compliant standing of The Bahamas against the rest of the world.
• These measures include direct outreach to correspondent banks to ensure more accurate assessments of anti-money laundering risk management practices and an annual anti-money laundering research conference. These will aid banks and trust companies in maintaining solid correspondent banking relations, which are essential to the viability of their business models.

(Source: The Tribune)

• British wages rose faster than anticipated last month, in a move that economists judge may tip the Bank of England towards a further rise in interest rates next month, despite an unexpected increase in joblessness too.
• The Office for National Statistics (ONS) said the unemployment rate edged up to 3.8% - its highest since the second quarter of 2022 - rather than holding at 3.7%, as forecasted by economists in a Reuters poll.
• Annual pay growth for the three months to January was revised up to 5.9% and held at that level for the three months to February - above all forecasts in the Reuters poll, which had pointed to a drop to 5.1%. Excluding bonuses, wage growth held at 6.6%.
• Sterling strengthened and government bond yields rose to a one-month high after the data release, as financial markets saw a more than 80% chance of the Bank of England (BoE) raising interest rates to 4.5% in May to help bring down inflation, which was above 10% in February.
• High inflation meant that in real terms, average earnings in the three months to February were 4.1% lower than a year earlier, one of the biggest annual drops since ONS records started in 2001. Discontent about pay has been especially high in the public sector, leading to widespread industrial action since late last year. Junior doctors are the latest group to strike, seeking a 35% pay rise to compensate for below-inflation pay rises over more than a decade.
• "Progress in the labour market is painfully slow," said Tony Wilson, director of the Institute for Employment Studies. "Three years on from the start of the pandemic, it's clearer than ever that we are being left behind by other major economies."

(Source: Reuters)

• From China to the U.S. to the European Union, rice production is falling and driving up prices for more than 3.5 billion people across the globe, particularly in Asia-Pacific – which consumes 90% of the world’s rice.
• The global rice market is set to log its largest shortfall in two decades in 2023, according to Fitch Solutions. A deficit of this magnitude for one of the world’s most cultivated grains will hurt major importers, analysts told CNBC.
• “At the global level, the most evident impact of the global rice deficit has been, and still is, decade-high rice prices,” Fitch Solutions’ commodities analyst Charles Hart said. Rice prices are expected to remain notched around current highs until 2024, stated a report by Fitch Solutions Country Risk & Industry Research.
• The price of rice averaged $17.30 per cwt (one hundredweight) through 2023 year-to-date, and will only ease to $14.50 per cwt in 2024, according to the report.
• There’s a short supply of rice as a result of the ongoing war in Ukraine, as well as bad weather in rice-producing economies like China and Pakistan. In the second half of last year, swaths of farmland in the world’s largest rice producer China were plagued by heavy summer monsoon rains and floods. The likely impact of this is that it could put some upward pressure on food prices that have been on a downward trajectory for the past twelve months.

 (Source: CNBC)

• Fitch Solutions expects that falling inflation, stable employment, a rebounded tourism industry, and efforts to reduce crime, will improve political stability in Jamaica in 2023.
• According to the agency, inflation will average 4.5% y-o-y, from 10.4% in 2022, supporting social stability. Unemployment remains low at approximately 6.2%, and the latest tourism data suggests that arrivals are back to pre-Covid levels, which will further support earnings, and limit social unrest.
• It is anticipated that the tourism industry will stay strong through most of 2023 and that the sector will employ about 30.0% of the workforce in 2023, up from 23.0% in 2021 as arrivals continue to rebound.
• Crime rates are expected to remain low due to government measures, for example, states of emergency in several municipalities to tackle gang violence and highly visible drug seizures and arrests, which will also support social stability.
• As a result, the Short-Term Political Risk Index (STPRI) increased from 72.7 out of 100 to 73.5 and its ‘social stability’ component from 52.5 to 55.0.
• Risks to the forecast include a stronger-than-expected shock to tourism, ongoing structural problems with gang-related violence, and a potential uptick in crime which can weigh on business activity and tourism.

(Source: Fitch Solutions)

• Building tourism resilience is critical to ensuring the sector’s sustainability and its contribution to economies, says Tourism Minister, Hon. Edmund Bartlett.
• Chairing the Fifth Special Meeting of the Inter-American Committee on Tourism (CITUR), Mr. Bartlett warned that despite tourism being one of the most significant contributors to global output, providing jobs, incomes and livelihoods for millions of people, the sector remains susceptible to external shocks and crises. These include natural disasters, economic downturns, and pandemics.
• “As the sector continues its recovery, it is important that we acknowledge the importance of putting people first, investing in people and developing the right skills as crucial elements of building tourism resilience over time. It is essential to train and educate the workforce to be adaptable to changing circumstances such as new technologies and evolving customer preferences,” he said.
• It is also important that tourism also prioritises the creation of a workforce that reflects the communities it serves to deliver both an enhanced product, as well as to accrue more benefits to a broader range of stakeholders in the tourism value chain.
• He emphasised that a resilient tourism product must operate in a way that protects the environment and supports local communities, including small and medium-sized tourism enterprises, while at the same time ensuring economic viability.
• “As a region, we have to position ourselves to take advantage of emerging technologies and to better use the available science and data to inform decision-making, particularly in relation to building tourism resilience,” Mr. Bartlett added.
• Tourism accounts for about 34% of the economic output in Jamaica and 31% of employment in Jamaica. Tourism’s contribution to GDP and employment is much higher for some Caribbean neighbours and as such it is imperative that the region not only grow the product but also ensures that growth takes into consideration the economic, social and environmental issues as well. 

(Source: JIS)

• Fitch forecasts that the Dominican Republic’s real GDP growth will slow from 4.9% in 2022 to 3.5% in 2023, primarily due to a weakening US economy in H223.
• Preliminary 2022 growth statistics were strong, coming in just below Fitch’s estimate of 5.0%, as resilient US demand for DR’s goods and tourism underpinned strong overall export growth (13.7%) and domestic employment, which sustained private consumption growth (3.3%). However, DR incomes and savings were likely diminished by a 5.2% contraction in remittance inflows in 2022 (the first recorded contraction in the data going back to 2010).
• The projected slowdown in the US will pose major headwinds to DR’s export and investment growth, which by extension will affect private consumption growth.
• Since the start of 2023, fading base effects and easing private demand have led to weak growth. Headline inflation remains elevated at 5.9% y-o-y, which suggests that households’ real incomes were muted, feeding into weaker demand.
• Owing to these factors, Fitch’s core view is that the Dominican Republic’s economy, like many other Caribbean markets, will be undercut by a mild recession in the US in H223, with growth slowing in the same period. Nonetheless, economic activity will pick up slightly as peak tourism season will support income growth.

(Source: Fitch Solutions)