• MFS Capital Partners Limited (MFS) has announced that it has signed a Memorandum of Understanding (MOU) with the shareholders of Micro Financing Solutions Limited to acquire 100% of its shares.
• Micro Financing Solutions Limited is a Kingston-based private company licensed by the Bank of Jamaica. The company began operations in 2014 as a microlender and licensed cambio, and since then, has expanded its operations into other areas including remittances, bill payment services and large credit. It has also gone on to take equity positions in several other entities. The company is a sub-agent of Lasco Moneygram and Western Union.
• This acquisition is a part of MFS’s strategy to target companies involved in money services, investment banking and real estate that show robust growth potential. This transaction would be the first major deal executed under the new management team of MFS. Completion of the deal is subject to regulatory approval.
• Given the approval, MFS will have a foothold in both micro-financing and cambio services which are two key areas that have the potential to boost company revenue.

(Source: JSE)

• Fitch Solutions maintained its forecast that Costa Rica will grow by 3.7% in 2022. As expected, headline inflation peaked at a historic high of 12.1% y-o-y in August, the highest since 2009, which has caused household consumption and economic activity growth to slow significantly in the third quarter.
• In 2023, growth is expected to ease to 2.9%, below the 2015-19 average of 3.4%, as net export growth will weaken from a 0.8pp contribution to GDP in 2022 to 0.4pp in 2023, as a slowdown in tourism growth will overshadow easing consumer goods imports.
• However, mounting headwinds, such as elevated inflationary pressures and interest rates, will yield weaker activity primarily in the US, the Netherlands and Central America (which together receive roughly 60.0% of Costa Rican goods exports) in 2023. This will dampen these markets’ demand for goods exports as well as tourism.
• Private consumption growth is expected to stagnate from a 1.9pp contribution to GDP in 2022 to 1.8pp in 2023. The primary driver of weak household consumption in the year ahead will be persistent inflationary pressures. Inflation is expected to come down from an average of 8.7% y-o-y in 2022 to 6.3% in 2023, which would be the second-highest level since 2009, eating into households’ purchasing power and weakening spending in real terms.
• Further, the Banco Central de Costa Rica (BCCR) is expected to raise its policy rate to 9.25% by end-2022 – with risks skewed to the upside – and will keep it elevated through H1 2023, which will increase the cost of borrowing, exerting downward pressure on investment for businesses. Investment will decline from 0.4pp contribution to headline growth in 2022 to 0.3pp in 2023, primarily due to tighter monetary policy.
• A less-severe slowdown in US growth poses an upside risk to Fitch’s growth forecast. If the US economy’s slowdown is less pronounced than Fitch’s forecast, particularly if inflationary pressures continue to ease or if the US Federal Reserve undertakes a less aggressive rate-hiking approach, Costa Rican export growth would see a less severe slowdown than currently forecast.

(Source: Fitch Solutions)

• The Bahamas has finally beaten pre-COVID tourism volumes as higher-spending stopover visitor arrivals for September exceeded 2019 numbers by almost 26%.
• Aided by the removal of COVID-related restrictions that impacted 2021’s performance, and continued pent-up travel demand in the US, the Central Bank said: “Tourism sector output remained buoyant, bolstered by healthy growth in the high value-added air segment and recovered sea traffic given the relaxed pandemic restrictions and pent-up demand for travel in the key source market.”
• With COVID restrictions now lifted, total visitor arrivals were said to be up 403% year-over-year largely due to the cruise industry’s resumption. That sector was completely shut down until June-July 2021 and, as a result, 2022 sea arrivals to The Bahamas for the nine months to end-September were some 1,033.2% up on last year. Air arrivals are 73.4% ahead. Meanwhile, visitor departures for the first nine months of 2022 were some 83.7% ahead of the prior year. Those to the US were up 69.3%, while departures to other destinations rose 301.6%.
• Meanwhile, acknowledging that The Bahamas remains caught in an inflationary spiral. “Average domestic consumer price inflation - as measured by the All Bahamas Retail Price Index - increased to 5.1% during the 12 months to September from 2% in the same period of 2021,” it said.

(Source: The Tribune)

• Citigroup on Wednesday, November 30, forecasted global growth to slow to below 2% next year, echoing similar projections by major financial institutions such as Goldman Sachs, Barclays, and J.P. Morgan.
• Strategists at the brokerage cited continued challenges from the COVID-19 pandemic and the Russia-Ukraine war — which skyrocketed inflation to decades-high levels and triggered aggressive policy tightening — as reasons behind the outlook.
• "We see global performance as likely being plagued by 'rolling' country-level recessions through the year ahead," said Citi strategists, led by Nathan Sheets.
• While the Wall Street investment bank expects the US economy to grow by 1.9% this year, it is seen more than halving to 0.7% in 2023.
• It expects, year-on-year, US inflation at 4.8% next year, with the U.S. Federal Reserve's terminal rate seen between 5.25% and 5.5%.

(Source: Reuters)

• The OPEC+ decision to hold its Dec. 4 meeting virtually signals little likelihood of a policy change, sources told Reuters on Wednesday, Nov. 30, as the group assesses the impact of the looming Russian oil-price cap on the market.
• A virtual meeting puts the focus on the pending European Union deal over the price cap on Russian oil, as well as a Dec. 5 deadline imposed by the bloc for a full embargo on purchases of Moscow's seaborne crude.
• "OPEC+ would rather sit on the bench at this time and assess the outcome of what happens on Monday," one source with direct knowledge of the matter told Reuters on Wednesday.
• The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, also meet as China's COVID-19 lockdowns weigh on demand and prices. Still, oil on Wednesday gained support from hopes of a Chinese demand recovery.
• OPEC+ had been expected to convene in Vienna for only the second time since the pandemic.

(Source: Reuters)

• Prime Minister, the Most Hon. Andrew Holness, and Tourism Minister, Hon. Edmund Bartlett, on Friday (November 25), broke ground for a multimillion US dollar boutique resort development in Lilliput, St. James.
• The adults-only, all-inclusive hotel will provide approximately 451 additional rooms, including over-the-water bungalow accommodations aimed at attracting thousands more new tourists to Jamaica.
• Additionally, the Spanish resort’s construction will see the employment of over 1,000 local skilled labourers, locally, and create more than 600 new permanent jobs in the tourism sector.
• The project is the first of a series of programmed developments for owners, the RCD Hotels and AIC Hotel Group that will also be partnering with the Government to provide housing solutions for their workers. “If we are truly interested in building an excellent [tourism] product, then we must not only build rooms for visitors, but we also have to build rooms for the workers, and the Government has a key role to play in ensuring that we have houses; homes for the people who work in the industry,” the Prime Minister outlined.

(Source: JIS)

• The United States (US) Government will increase its investment in Jamaica with some US$34Mn committed to violence reduction, combatting human trafficking, cybersecurity, energy security, and initiatives to boost the economy.
• Details were provided by Secretary of State for Political Affairs, Ambassador Victoria Nuland, at the US-Jamaica Strategic Dialogue held recently at the Ministry of Foreign Affairs and Foreign Trade, downtown Kingston.
• The US has also dedicated US$3.5Mn to strengthen Jamaica’s cybersecurity capacity and position the country to be a leader in the region, while through the United States Agency for International Development (USAID), US$20mMn will be invested to boost the economy and drive local economic growth to ensure young Jamaicans have better opportunities.
• This increased investment to reduce crime and violence and other social factors could positively impact Jamaica’s Long-term Political Risk Index score which currently stands at 63.9 out of 100 below the Caribbean average of 64.5.

(Source: JIS)

• BP Plc, a British multinational oil and gas company, will market Guyana's share of crude oil produced over the next year from two offshore production platforms, the South American country's Ministry of Natural Resources has indicated.
• Guyana is home to one of the largest oil discoveries in the last decade, with about 11 billion barrels found to date. A consortium that controls the country's crude output expects to pump 1.2 million barrels per day (bpd) by 2027, up from an expected 380,000 bpd at year-end.
• The London-based oil company agreed to market the state's share produced from the Liza Destiny and Liza Unity platforms at no charge per barrel, according to a ministry statement on Thursday, November 24. It replaces a Saudi Aramco trading unit, which previously held the contract.
• The government also recently said it would auction 14 offshore blocks to increase output by adding more oil producers. Guyana has not yet disclosed a timetable but indicated it could hold the auction by May.
• BP will market crude to refiners, provide benchmark and performance comparisons, and help the government understand the behaviour and yields of the Liza blend, the ministry said.

(Source: Reuters)

• Fitch Solutions expects real GDP growth of 6.9% in Panama in 2022, slowing to 4.4% in 2023. While the 2022 forecast is down modestly from 7.0% previously, due to slightly disappointing Q2 2022 data, Fitch maintains its view that copper mining and Panama Canal-related services will boost GDP, along with strong private consumption.
• However, going into 2023 growth is expected to slow moderately, as external demand for Panamanian services eases due to a global slowdown, and private consumption growth falls somewhat as base effects fade.
• Private consumption’s contribution to overall GDP will fall from 3.7 percentage points (pp) in 2022 to 2.1pp in 2023, mostly due to base effects. Despite this slowdown, the outlook for private consumption remains upbeat, with government food subsidies still in place and moderate inflation (at only 1.6% y-o-y in October), which will support household purchasing power.
• Net exports will also be a major driver of growth in 2023, contributing 0.4pp to the headline figure, from -0.4pp in 2022, as goods and services export remain strong and imports moderate. Service exports have driven headline growth in recent months, with the tourism sector rebounding almost to pre-COVID levels by mid-2022, while Panama Canal services have also been robust.
• Risks to growth are weighted to the downside. Panama experienced large-scale protests over the cost of living in the summer of 2022. Notably, the protests involved roadblocks and closures, disrupting commercial activity. As such Fitch sees a high risk of further protests in early 2023 if the government does not address remaining concerns about wages and food costs, which would impact output and potentially investor confidence. 
• Another major risk is that the economic downturns in the US and other key tourism markets are more severe than Fitch anticipated. Similarly, goods exports – especially copper – depend heavily on demand from Mainland China, and could disappoint if China rebounds more slowly than expected.

(Source: Fitch Solutions)

• Britain will change its rulebook to allow banks to take more risks to help to keep the City of London's status as a leading global financial centre, a government minister said on Tuesday, November 29.
• The City of London was largely cut off from the European Union by Brexit and faces greater competition from centres like Paris and Frankfurt, as well as longstanding rivals like New York and Singapore.
• The EU will next week set out a new law to force banks in the bloc to shift some of their euro derivatives clearing from London to Frankfurt.
• City minister Andrew Griffith said a new financial services bill now being approved in parliament will bring financial rule books up to date, make regulators nimbler, and cut insurance capital buffers while maintaining high standards.
• "The overall thrust of things is to allow more risk. You get a reward from taking risks, you shouldn't be risk off, we just need to manage that in an appropriate way," Griffith told a Financial Times event.

(Source: Reuters)