• FESCO and FTNA have reported strong net profit for this earnings season. FESCO reported net profit growth of 189.3% to $281.08Mn for its six months ended September 30, 2022, while FTNA reported an increase of 43.3% to $87.58Mn for its first quarter ended September 30, 2022.
• FESCO’s profitability was supported by the broader economic reopening, which positively affected the transportation sector and higher prices for its products. Additionally, the company continues to benefit from the opening of additional service stations. Meanwhile, seasonality trends such as back-to-school sales would have contributed positively to Fontana’s strong first quarter.
• On another note, both FESCO and FTNA’s cost of sales would have increased by 209.7% and 21.8%, respectively; however, both companies’ margins would remain fairly unchanged. FESCO saw its gross profit margin remain at 3.0%, while FTNA’s declined slightly to 64.2% from 66.2%.
• Going forward, both companies are expected to perform well in the coming quarters. FESCO will continue to invest in real assets and equipment to support the growth of its service station network and its promised entry into the LPG industry. Additionally, Fontana will benefit from seasonality trends, especially as we approach the Christmas season.
• FESCO’s stock price has increased the most since the start of the year, with a price appreciation of 72.66%, while FTNA’s increased by 14.19%. At the current P/E multiplies, both stocks trade above the Junior Market Distribution Sector Average of 15.9x, with FESCO trading at 27.5x, and FTNA trading at 16.7x. 

(Sources: Company Financials & NCBCM Research)

• Colombia's economic growth is likely to have slowed in the third quarter of the year due to more moderate domestic consumption amid rising interest rates and rampant inflation. According to the median of 15 analysts' estimates, Latin America's fourth-largest economy expanded by 6.7% between July and September.
• Despite the slowing, the median forecast was slightly higher than projections by the country's central bank, which estimated third-quarter economic growth at 6.4%. "Although the economy still shows symptoms of powerful aggregate demand, there is slowing as consumers become more cautious as inflation continues to put pressure on their wallets, and entrepreneurs assume higher financing costs," said Wilson Tovar, chief economist for brokerage Acciones y Valores.
• Colombia's central bank has hiked its benchmark interest rate to 11%, the highest level in 21 years, in a bid to slow inflation. The Andean country saw 12-month inflation hit 12.22% in October, the highest level since 1999.
• Median estimates suggest Colombia's economy could grow by 7.70% this year before slowing to 1.60% in 2023, as central banks raise rates around the world to cool inflation. The Central Bank is expected to continue hiking rates at least until the first quarter of 2023 and right up to levels close to 12.5% or 13% as there are no signs of inflation slowing in the economy.

(Source: Reuters)

• The Caribbean Export Development Agency (Caribbean Export) has signed a Memorandum of Understanding (MOU) with the World Trade Center Miami (WTCM) and Canning House agreeing on a framework to sustain trade and investment promotion efforts in the Caribbean.
• This presents an opportunity to deepen the economic trade and investment relationships between the UK and Latin America. This means that Caribbean Investment Forum (CARIFORUM) businesses, workers, and producers will need to collaborate and work smarter to successfully compete globally and enter new markets for trade and the attraction of investment. 
• Most significantly, Florida, for many reasons, including its logistic positioning, large Caribbean diaspora, is an important gateway for Caribbean investment and trade and home to the WTCM.
• Further, president Ivan Barrios said that the Caribbean was very important to the South Florida community and that the signing of the MOU was timely given a new series of seminars being planned for the Caribbean titled 'How to export your products to the United States using Miami as platform'.
• The Caribbean Investment Forum placed strategic focus on sectors such as the digital economy, renewable energy, agriculture technology (AgTech) and logistics and transportation; all sectors deemed critical for the sustainable development of Caribbean economies.

(Source: Trinidad Express Newspaper)

• Federal Reserve Governor Christopher Waller said Wednesday he’s open to reducing the level of interest rate increases soon, so long as the economic data cooperates.
• The rate-setting Federal Open Market Committee is set to meet Dec. 13-14. Market expectations are running high that policymakers will approve another rate hike, but this time opting for a 0.5 percentage point, or 50 basis point, move. That would come after approving four consecutive 0.75 percentage point increases.
• “Looking toward the FOMC’s December meeting, the data of the past few weeks have made me more comfortable considering stepping down to a 50-basis-point hike,” Waller said in prepared remarks for an event in Phoenix. “But I won’t be making a judgment about that until I see more data, including the next PCE inflation report and the next jobs report.” A basis point equals 0.01 percentage point.
• Investors have grown optimistic that a lower-than-expected increase in October’s consumer price index reading is indicative that inflation is cooling. Headline CPI increased 0.4% for the month and 7.7% from a year ago, while the core reading excluding food and energy rose 0.3% and 6.3%, respectively. All the readings were lower than market estimates.

(Source: CNBC)

• The number of Americans filing new claims for unemployment benefits fell last week, showing widespread layoffs remain low despite a surge in technology-sector job cuts that has raised fears of an imminent recession.
• The weekly jobless claims report from the Labor Department on Thursday, the most timely data on the economy's health, suggested the labor market remained tight. That, together with solid consumer spending, keeps the Federal Reserve on track to continue raising interest rates, though at a slower pace amid signs inflation was starting to subside.
• Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 222,000 for the week ended Nov. 12. Economists polled by Reuters had forecast 225,000 claims for the latest week.
• There has been an increase in layoffs in the technology sector, with Twitter, Amazon (AMZN.O) and Meta (META.O), the parent of Facebook, announcing thousands of job cuts this month. Companies in interest-rate sensitive sectors like housing and finance are also letting workers go.
• The layoffs have so far not been evident in official data. Unadjusted claims dropped 6,101 to 199,603 last week. Economists say businesses outside the technology and housing sectors are hoarding workers after difficulties finding labor in the aftermath of the COVID-19 pandemic. With 1.9 job openings for every unemployed person in September, some of the workers being laid off are probably finding new employment quickly.

(Source: Reuters)

• For October 2022, the All-Jamaica Consumer Price Index (CPI) increased by 1.5%, the second-highest increase for 2022. This contributed to a point-to-point inflation rate of 9.9% for October, a slight jump relative to September’s point-to-point inflation figure of 9.3%.
• For October, the rise in monthly inflation was largely driven by an increase in the ‘Housing, Water, Electricity, Gas and Other Fuels’ (+3.4%) and Food and Non-Alcoholic Beverages’ (+2.0 %) divisions. These increases were due mainly to higher rates for electricity, water, and sewage, as well as higher costs for agricultural products.
• Though there was an uptick in the point-to-point outturn in October, the current rate of 9.9% is keeping with expectations, as the BOJ noted that inflation was projected to stabilize in the range of 9.0% to 11.0% for the remainder of 2022. 
• On November 18, 2022, the BOJ will host its monetary policy meeting in which it is expected to sustain its hawkish stance.  Given the increase in inflation for October and the recent 75bps Fed Fund rate hike it is expected that the BOJ will raise rates by another 50 bps. This increase would bring the policy rate to 7.00%, which would be consistent with Fitch’s forecast.

(Source: Statin and NCBCM Research)

• The Government of Jamaica (GOJ) will be increasing its budgetary spending by approximately $60Bn during the current 2022/23 fiscal year.
• Clarke explained that the Supplementary Budget reflects amounts provided to cushion the impact of the ongoing Ukraine-Russia conflict on vulnerable Jamaicans. The increase resulted in a proposed revised budget of $972.0Bn up from the previously approved budget of $912Bn for the 2022/23 fiscal year.
• Certain ministries are slated to receive additional allocation as a result of the increased budget. This includes $5.1Bn to the Ministry of Economic Growth and Job Creation; $3.6Bn to the Ministry of Health and Wellness to support the payment of arrears for goods and services and procurement of drugs and medical supplies; and $6Bn to the Ministry of National Security, with $1.5Bn for the Jamaica Defence Force (JDF), $3.3Bn for the Jamaica Constabulary Force (JCF), and $862Mn for the Department of Correctional Services (DCS).
• The $60Bn in additional expenditure will be financed primarily through an expected $65.5-Bn increase in revenue flows. At the end of September 2022, total revenues were $40.4Bn above budget, including $35Bn from tax revenue.
• Clarke said this improved performance has been factored into the current economic forecast, which now anticipates total revenue flows of $815.5Bn for the current 2022/23 fiscal year.

 (Source: JIS News)

• Peru's economy expanded by 1.66% in September a slight dip from an increase of 1.68% in August.
• The national statistics institute (INEI) said growth in the world's No. 2 copper producer was driven by most sectors of the economy in September, pointing to gains in construction, transportation, hotels and restaurants, commerce, agriculture, power utilities and other services.
• By contrast, mining, finance, telecommunications, manufacturing and fishing were among the sectors where activity slipped, resulting in a marginal decline. The latest figures meant that during the first nine months of this year, the Peruvian economy expanded by 2.90%, the institute said.

(Source: Reuters)

• Economic activity in Brazil resumed expansion in September, though below expectations, still ending the quarter with positive data, according to information provided by the Central Bank.
• The Brazil IBC-Br economic activity index, a leading indicator of gross domestic product, rose a seasonally adjusted 0.05% in September from the month before, less than the 0.20% increase expected in a Reuters poll with economists. Nevertheless, the rise was enough to guarantee a seasonally adjusted 1.36% expansion for the economy in the third quarter, according to central bank figures.
• This would be an increase from the estimated 1.2% in Q2 2022. However, economists were expecting a slowdown in Latin America's largest economy from the second half, owing to the central bank's aggressive monetary policy cycle to tame inflation.
• Still, the government's official expectation is for the economy to rise by 2.7% this year, driven by higher private investment, resilient service activity and an improved job market.

(Source: Reuters)

• China's economy suffered a broad slowdown in October as factory output grew more slowly than expected and retail sales fell for the first time in five months, underscoring faltering demand at home and abroad.
• The world's second-largest economy is facing a series of headwinds including protracted COVID-19 curbs, global recession risks and a property downturn. In a sign of persistent weakness in the sector, data on Tuesday also showed property investment falling at its fastest pace since early 2020 in October.
• The downbeat data poses a challenge for Chinese policymakers as they steer the $17 trillion dollar economy through choppy waters, following recent moves to ease some COVID curbs and give financial support to the struggling property sector.
• "October activity growth broadly slowed and missed market expectations, pointing to a weak start to Q4 as a worsening COVID situation, prolonged property downturn and slower export growth more than offset continued policy stimulus," analysts at Goldman Sachs said in a note.
• Industrial output rose 5.0% in October from a year earlier, missing expectations for a 5.2% gain in a Reuters poll and slowing from the 6.3% growth seen in September, data from the National Bureau of Statistics (NBS) showed on Tuesday.
• Retail sales, a gauge of consumption, fell for the first time since May, when Shanghai was under a city-wide lockdown. Sales dropped 0.5%, against expectations for a 1.0% rise and compared with a 2.5% gain in September.
• COVID outbreaks widened across the country in October, disrupting the pandemic-sensitive services sector, including the restaurant industry.
• In response to the weak data, investment bank JPMorgan revised down its year-on-year GDP forecast for China in the fourth quarter to 2.7% from a prior 3.4%, while Citi also trimmed to 3.7% from 4.6% previously.

(Source: Reuters)