• “Considering the peculiar and special needs of Small-Island Developing states (SIDs) and low-lying coastal states, there needs to be more climate adaptation financing on soft terms, meaning more grants, concessionary interest rates, and long-term repayment periods”, President, Dr Irfaan Ali has said.
• He noted that “these challenges relate to their smallness of land resources and the resultant diseconomies of scale, their remoteness from larger markets, susceptibility to external shocks and market vulnerabilities, narrow revenue bases, fragile ecosystems, and their vulnerability to climate risks.”
• Owing to those threats and challenges, critical resources needed to support production often have to be diverted towards climate adaptation. Adaptation, according to the United Nations Framework Convention on Climate Change (UNFCCC), refers to adjustments in ecological, social, or economic systems in response to actual or expected climatic stimuli and their effects or impacts.
• Climate adaptation financing is essential and foundational for establishing climate-resilient agricultural sectors in small-island developing and low-lying coastal states, without it the agricultural sectors of SIDs and low-lying coastal states will be continuously prone to climate risks.

(Source: Guyana Chronicles)

• The European Commission proposed another set of emergency measures on Tuesday to tackle high energy prices but steered clear of an immediate cap on gas prices as EU countries remain split over the idea.
• The proposals, which need approval from European Union member states, are the bloc's latest effort to address the spike in energy prices and fuel supply crunch that have gripped Europe after Russia cut gas flows since invading Ukraine.
• The measures did not include an immediate gas price cap, which most EU countries say they want. But the Commission asked for EU countries' approval to draft a proposal to set a temporary "maximum dynamic price" on gas trades at the Title Transfer Facility (TTF) Dutch gas hub, which serves as a benchmark price for European gas trading.
• The Commission said the price limit would need to meet conditions, including that it would not cause Europe's gas demand to increase.

(Source: Reuters)

• New British finance minister Jeremy Hunt on Monday announced almost a complete U-turn on Prime Minister Liz Truss’ plan to boost economic growth through unfunded tax cuts, which had sent international investors bolting for the exit.
• Here are some of the policy reversals announced by Hunt, which he said would raise 32 billion pounds ($36.19 billion) for the government finances:
• INCOME TAX: Hunt announced this will stay at 20% indefinitely from the previous 19% announced. The finance ministry said this will raise around 6 billion pounds a year.
• ENERGY BILLS SUPPORT: Hunt said the government's support for household and business energy bills will only run to April next year, with a review to consider what support will be needed after that point and how it can be better targeted.
• OFF-PAYROLL WORKING REFORMS: the government is looking to cut the cost of its growth plan by around 2 billion pounds per year.
• CORPORATION TAX: Britain will now press ahead with its original plan to raise its 19% corporation tax rate - the lowest among the G7 club of rich nations - to 25% in 2023.
• DIVIDENDS TAX: Hunt reversed the plan to cut the rate of tax on dividends by 1.25 percentage points from next year, which had been valued at around 1 billion pounds a year.

(Source: Reuters)

• Kremi reported a net profit of $8.52Mn for its six months ending August 31, 2022, which represents a $52.91Mn (or 86.2%) decrease relative to the prior period. This decline in profitability was mainly attributed to higher direct and operating costs.
• Despite a 21.5% or $222.46Mn increase in revenues owing to an increase in volumes sold and prices, its direct costs increased more rapidly (34.1% or $229.87Mn) putting downward pressure on the gross profit. Large increases in raw materials were a primary contributor to the rise in direct expenses and increase in product price adjustments.
• Additionally, a 13.6% increase in operating expenses also constrained profitability.  This increase was attributed to higher costs of utilities, security, cleaning, sanitation, and transportation. Also of note, the company’s loan financing cost increased leading to a 133.4% increase in its net financial costs.
• Due to the uncertainty, and still elevated price level for raw materials and utilities, Kremi could continue to see an erosion in its bottom line for the remainder of its financial year. 
• Kremi’s stock price has decreased by 23.4% since the start of the calendar year. The stock closed Friday’s trading session at $4.06.

(Sources: Company Financials and NCBCM Research)

• Mexico's biggest non-bank lenders may need to become licensed banks, analysts said, as they manoeuvre through growing market turmoil to avoid the fate of three big peers who defaulted in the past year.
• During the pandemic, non-bank institutions grew to represent 20% of Mexico's private credit market. Also known as "shadow banks," they offer everything from unsecured credit to payroll lending to Mexico's 4-to-5 million small and medium-sized businesses.
• However, three major publicly traded players have since defaulted in a year: AlphaCredit, Credito Real and Unifin. Now banks are less willing to finance non-bank lenders. International bondholders are also reluctant after losing billions of dollars in the recent wave of defaults.
• With confidence in the sector dried up, along with an ensuing liquidity drop and rising interest rates, the remaining players face much slower growth prospects and potentially a fight to survive.
• There is one other option available to such lenders in Mexico - become a bank, likely via an acquisition. That would allow them to lend out customer deposits rather than relying on credit markets, analysts said. Gilberto Garcia, an analyst at Barclays in Mexico, agreed that nonbank lenders would struggle to grow in the current funding climate, making becoming a bank a more attractive avenue.
• Mexican fintech Covalto, previously named Credijusto, successfully went this route last year, acquiring a bank. "We specifically became a bank to prevent the pitfalls of this moment. The stability and security that we have right now, and the long-term benefit of decreasing our cost of capital, that's what we bought," said Covalto co-CEO David Poritz.
• The bank route does not resonate with everyone. Some nonbank lenders hope to stick with the existing business model, which emerged to tackle the country's reported $160 billion funding gap.

(Source: Reuters)

• The government of Guyana through the Ministry of Natural Resources on Friday issued a Request for Proposals (RFP) from interested companies to design, finance, construct and own the nation’s first refinery.
• The proposed facility will be designed to process 30,000 barrels of oil per day (b/d) and be located on land provided by the government at the mouth of the Berbice River in the vicinity of “Crab Island”. The Government’s RFP said it expects construction to start by the first quarter of 2023 with project completion no later than two years after the start date.
• Importantly, the government said it will provide several incentives to the successful company. Along with the estimated 30 acres of land to be provided, the government said it will also offer generous fiscal incentives for the project including a 10-year tax holiday, supply of feedstock (oil) from the Guyana Government’s share of profit oil at market prices; and access to the domestic market for the sale of refined products if desired.
• The addition of a refinery will help to further reduce the unemployment rate, attract investment and also retain more of the oil revenues in the country thereby fueling stronger economic growth.

(Source: Guyana Chronicles)

• OPEC+ member states lined up on Sunday to endorse the steep cut to its output target agreed this month after the White House, stepping up a war of words with Saudi Arabia, accused Riyadh of coercing some other nations into supporting the move.
• The United States last week said the cut would boost Russia's foreign earnings and suggested it had been engineered for political reasons by Saudi Arabia, which on Sunday denied it was supporting Moscow in its invasion of Ukraine.
• Saudi King Salman bin Abdulaziz said the kingdom was working hard to support stability and balance in oil markets, including establishing and maintaining an agreement of the OPEC+ alliance.
• OPEC+ comprises the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia.
• The Saudi defence minister, King Salman's son Prince Khalid bin Salman, also said the Oct. 5 decision to reduce output by 2 million barrels per day (bpd) - despite supply tightness in oil markets was unanimous and based on economic factors.

(Source: Reuters)

• New finance minister Jeremy Hunt scrapped Prime Minister Liz Truss' economic plan and scaled back her vast energy subsidy on Monday, launching one of the biggest fiscal policy U-turns in British history to stem a dramatic loss of investor confidence.
• Charged with halting a bond market rout triggered by the government's announcement on Sept. 23 of huge unfunded tax cuts, Hunt has now reversed all the policies that helped Truss become Conservative Party leader and premier less than six weeks ago.
• Her spokesman denied that Hunt was running the country after his new strategy of also cutting spending sent the pound soaring against the dollar and helped government bond prices start to recover from a three-week pounding.
• "A central responsibility for any government is to do what is necessary for economic stability," Hunt said in a televised statement, adding that he would "reverse almost all the tax measures announced in the Growth Plan three weeks ago."

(Source: Reuters)

• The National Export-Import (EXIM) Bank of Jamaica has launched a loan facility called the EXIM E-Commerce Funder which allows Micro, small and medium-sized enterprises (MSMEs) funding for e-commerce pursuits.
• The EXIM E-commerce Funder is suited for businesses seeking to upgrade or develop digital platforms to aid in increasing sales and marketing by appealing to a wider audience and accessing global markets.
• Through the EXIM E-commerce Funder, MSMEs can access from as low as $1 million up to $5 million, with maximum financing of 80% of the cost of the project with up to five years to repay. MSMEs will also benefit from an interest rate of 5% and loan commitment fees of 2.3%, which can be funded from loan proceeds.
• This initiative emerged during the height of the pandemic, as a lot of businesses pivoted to e-commerce solutions to support business operations and shore up revenues. Given that the adoption of e-commerce solutions is expected to remain a theme post-pandemic, the favourable interest rate is expected to attract MSMEs to develop their e-commerce platforms to drive sales and profitability. 

(Sources: JSE and NCBCM Research)

• CPJ reported a net profit attributable to owners of the company of US$7.51Mn for its financial year ending June 30, 2022, which represents a turnaround from the US$2.26Mn net loss realized in its last financial year. The favourable results were driven primarily by a recovery in demand from the hospitality and retail sectors.
• The company saw a US$61.78Mn or 106.2% increase in its gross operating revenue. This was supported by improvements in its IT infrastructure, the opening of CPJ Market stores, and the launching of its B2B & B2C platforms. This assisted the company in both reaching a larger client base as well as improving its customer experience.
• Going forward, the company is expected to open a new CPJ Market story in Drax Hall as well as upgrade its infrastructure including its trucking fleet. The company expects to see growth in line with tourism and as such, it is actively seeking ways to enhance its business service delivery.
• CPJ’s stock price has increased by 1.7% since the start of the calendar year. The stock closed Thursday’s trading session at $13.26 and currently trades at a P/E of 12.9x which is below the Main Market Distribution & Manufacturing Average of 15.4x.

(Source: Company Financials)