• Barbadians could be paying more for meat from early next year, after the island’s lone animal feed manufacturer, Pinnacle Feeds Limited, increased prices on Monday. 
• The hike came as price support from the Government to help keep costs down expired. However, Director of Roberts Manufacturing and Pinnacle Feeds Jason Sambrano said the increase would not affect meat prices this Christmas.  
• In a statement on Monday, he said the temporary support given to the livestock industry had helped delay the feed price adjustment that is required due to the continued elevated price of grains on the world market. 
• “The price adjustment will now take effect from Monday 20th December 2021, with the subsequent meat price adjustment to follow in early 2022,” Sambrano said. “We are grateful for the work done by both the Minister and the team at the Ministry of Agriculture to ensure Barbadians are spared an adjustment during the Christmas Season.” 
• Barbados is already faced with a relatively high inflation rate (5.6% point-to-point for November 2021, up from 1.3% in December 2020) due to labour shortages, the rise in gas prices, the ongoing logistics challenges and the continued pile up in some main shipping corridors, resulting in a slowdown in border crossing. These factors, along with the rise in feed and meat prices could continue to put upward pressure on inflation over the short term.

 (Source: Barbados Today & NCBCM Research Team)

• Pfizer on Wednesday received emergency use authorization for its Covid-19 pill Paxlovid to treat mild-to-moderate coronavirus disease in adults and patients of at least 12 years of age. 
• “Today’s authorization introduces the first treatment for COVID-19 that is in the form of a pill that is taken orally,  a major step forward in the fight against this global pandemic,” said Patrizia Cavazzoni, M.D., director of the FDA’s Center for Drug Evaluation and Research. 
• “This authorization provides a new tool to combat COVID-19 at a crucial time in the pandemic as new variants emerge and promises to make antiviral treatment more accessible to patients who are at high risk for progression to severe COVID-19.” 
• Paxlovid was shown to significantly reduced the risk of COVID-19 related hospitalization or death by 88% compared to placebo among patients treated within five days of symptom onset and who didn't receive COVID-19 therapeutic monoclonal antibody treatment.

(Source: Investing.com)

• The Conference Board's consumer confidence index increased to a reading of 115.8 this month from an upwardly revised 111.9 in November. Economists polled by Reuters had forecast the index rising to 110.8 from the previously reported reading of 109.5 
• U.S. consumer confidence improved further in December, suggesting the economy would continue to expand in 2022 despite a resurgence in COVID-19 infections and reduced fiscal stimulus. 
• The survey from the Conference Board on Wednesday showed more consumers planned to buy a house and big-ticket items such as motor vehicles and major household appliances as well as go on vacation over the next six months. Inflation concerns eased a bit and households remained upbeat about the labour market.

(Source: Reuters)

• Lumber Depot Ltd. reported a 62.3% increase in net profit to $107.20Mn (EPS: $0.15) for the six months ended October 31, 2021 aided by a significant expansion in “Other Income”, modest topline growth (8.6%) and a reduction in admin and other expenses (3.1%). Continued growth seen in the construction sector supported revenue growth of 8.6%. Of note, other income jumped from $0.73Mn to $9.21Mn. 
• Despite the strong performance, the company was not immune to the ongoing supply chain challenges as this resulted in an increase in the cost for construction inputs. Consequently cost of goods sold increased by 4.0%. Increases in finance cost (+10.2%) and finance income (-57.6%) also weighed on earnings. 
• That being said, revenues and profits for the three-month period ended October 31, 2021, were directly affected by the lock-down period effected during the late summer as it resulted in 17 lost sales days during the quarter. It also caused unprecedented disruptions to the construction planning and work cycle. Despite this, the earnings result was resilient. 
• Management believes that curfews, travel restrictions and new workplace rules have presented additional risks to its supply chain, strained consumer and business confidence, and have resulted in increased volatility in commodity prices, exchange rates and some borrowing costs in the short term. However, management is confident that its team has the capacity to navigate these challenges. 
• Lumber Depot’s stock price has appreciated by 108.4% since the start of the year and closed Tuesday’s trading session at $3.21 per share. At this price the stock currently trades at a P/E of 11.5x, which is below the junior market distribution sector average of 16.0x.

(Sources: Lumber Depot Financials, NCBCM Research)

• KPREIT, on December 17, 2021, completed the acquisition of an approximately 2.7-acre property on Spanish Town Road with approximately 23,000 sqft of warehouse and office space to be leased. The property was acquired for a consideration of J$215.0Mn. 
• This marks KPREIT’s second property acquisition on Spanish Town Road, a main thoroughfare for the industry and commerce in Jamaica. It also marks the Group’s fourth acquisition for 2021. The thrust remains to acquire more properties in the industrial and warehousing space, against the background of growth in the e-commerce and logistics businesses over the last few years. 
• Additionally, on December 17, the Group disposed of the last unit held in the Loft II Condominiums in Miami, Florida. During the fourth quarter of 2021, a total of three (3) condo units at the Loft II were sold for a total consideration of US$888,000. The Miami Realtors Association reported that median sales prices for condos and townhouses in Miami-Dade and Broward counties increased by 22.0% and 21.0%, respectively, year on year (YoY) as at October 2021. 
• For the nine months ended September 30, 2021, KPREIT reported a 50% YoY increase in rental revenue to US$2.2Mn, while net profit amounted to approximately US$1.4Mn in 2021 versus a profit of US$70,154 in the prior year. A continuation in this trend of acquiring new property, particularly as the company seems to be strategically repositioning its real estate portfolio from residential to industrial real estate, will support this increasing trend in revenue and earnings, especially in the face of rising demand for industrial real estate.

(Sources: JSE News & NCBCM Research)

• The president of the Dominican Republic’s Commonwealth Countries Roundtable, Fernando González Nicolás, said that in 2021 local trade with the 54 countries that make up the Commonwealth increased to US$2.108 billion. 
• González Nicolás added that the exchange increased by 11% compared to the 1,904 million dollars achieved in 2020. He stressed that bilateral trade relations with these nations were balanced and healthy for both parties because the volumes of exports were very similar to imports. In 2021, Dom Rep exported to the Commonwealth countries $1,044Mn, while it imported from a total of 1,063 million dollars from these Common Wealth countries. 
• The main destinations for exports of Dominican products to these nations were, in the first place, India with a total of $665Mn this year; followed by Great Britain, with $80Mn; Jamaica, $77Mn; Canada, with $49 Mn; and in fifth place, Trinidad and Tobago, with $34Mn.  
• González Nicolás projects that, for 2022, exports to Commonwealth countries and investments from these countries to the Dominican Republic will continue to increase.

(Source: Dominican Today)

• According to the Caribbean Community’s (CARICOM) Business News Aggregation service, the European Union (EU) has approved the allocation of €7.56 million (equivalent to G$1.8 Bn) to Guyana, as part of its Budget Support Programme. 
• Last Tuesday, a joint press conference was conducted where President Irfaan Ali clarified that the grant fund represents the “final tranche of payments under a multi-year programme” valued at €30 million. CARICOM clarified that the funding support came into being after Guyana lost Europe as one of its preferential markets for sugar. 
• During the press conference, the EU Ambassador, Fernando Ponz Cantó pointed out that the grant funds are fostered through the EU’s national treasury, and this contribution is a validation of the EU’s confidence and trust in the PPP/C government. 
• Previously, the funds from EU’s Budget Support Programme for Guyana were allocated toward housing, climate adaptation, improved infrastructure, and repairing the country’s sea defences. This was evident in a similar Budget Support Programme last year, where the EU disbursed G$ 19.8 billion for Guyana.

(Source: Kaieteur News)

• The tourism sector, one of the industries that suffered most during the pandemic, will be an increasing driver of economic recovery in 2022. 
• However, Fitch believes that the recovery will be uneven, particularly for economies that depend heavily on tourism. It is expected that most Western consumers’ willingness to travel will rise in 2022 as household balance sheets remain strong and as restrictions continue to ease. 
• But Fitch also expects that demand will be focused on short-haul destinations. This will benefit markets in the Caribbean and Southern Europe.

(Source: Fitch Solutions)

• Britain announced on Tuesday 1 billion pounds ($1.3 billion) of extra support for businesses hit hardest by the wave of Omicron variant coronavirus cases, which is hammering the country's hospitality sector and other businesses. 
• Finance minister Rishi Sunak said he was confident the measures would help hundreds of thousands of businesses. But he added that he would "respond proportionately and appropriately" if the government were to impose further restrictions to slow Omicron. 
• For now, hospitality businesses in England are not subject to any new legal restrictions despite a 60% surge in COVID-19 cases over the past week, which has taken the number of infections to around 90,000 a day. 
• Prime Minister Boris Johnson said there was not enough evidence to justify new COVID-19 restrictions in England before Christmas, but the situation remained extremely difficult and the government might need to act afterwards.

(Source: Reuters)

• The Bank of Jamaica (BOJ) increased its policy interest rate (the rate offered to deposit-taking institutions on overnight placements with BOJ) by 50 basis points to 2.50% per annum, effective 21 December 2021. 
• The decision to further reduce the level of monetary policy accommodation was made by a unanimous vote by the Bank’s Monetary Policy Committee (MPC). The move was based on the committee’s assessment that inflation for November 2021 of 7.8%, although lower than the 8.5% recorded in October, breached the upper limit of the Bank’s target range and was likely to continue to successively breach the target range over the next 8 to 10 months. 
• The risks to the inflation forecast are assessed to be skewed to the upside. Upside risks (which means that inflation could track above the forecast) include further increases in inflation expectations, stronger pass-through of international commodity and shipping prices to domestic prices, higher inflation among Jamaica’s main trading partners and the impact of adverse weather on agricultural food prices. Downside risks include lower energy-related prices and lower domestic demand. 
• The October 2021 inflation expectations survey published by the BOJ indicated that the point-to-point inflation for December 2021 is expected to be about 7.8%. This represents an upward trend in the results from 7.1% and 6.7% for September and July, respectively. In line with this, market participants had rightfully anticipated another rate hike from the BOJ. Of note, over the last 8 months, inflation expectations have been consistently above or at the upper end of the BOJ’s target range. However, since September, it has been trending higher. 
• Central Banks in developed nations are beginning to tighten monetary policy, with the Bank of England raising interest rates to 0.25% from 0.1% in response to calls to tackle surging price rises. In the US, a senior Federal Reserve official has noted that it could raise rates as early as March 2022 in the face of alarmingly high prices. As prices continue to surge we could see more central banks around the world, raising interest rates and could market the end  of one of the longest periods of low interest rates.

 (Sources: BOJ & NCBCM Research)