• Given the recent increases in the price of petroleum products, the Government of Saint Lucia (GOSL) has increased its subsidy on 20lbs cylinders of cooking gas from $16.13 to $22.10 per cylinder, an increase of 37%. This has allowed a 20lb cylinder of cooking gas to be sold for just under $40, at $39.81. 
• However, users of 100lbs cylinders are unable to benefit from a similar subsidy because they are deemed to be in a higher income bracket and, therefore, more likely to afford the unadjusted market price. 
• Notably, the situation is a little different with gasoline and diesel, each attracting an excise tax of 80 cents and 88 cents per gallon respectively since the last fuel price adjustment, which took place on Monday 11th April. The total excise tax expected to be collected from the two products matches the subsidy provided for cooking gas, at just over $1 million, leaving the government with no tax revenue to collect from petroleum products. 
• With consumers buckling under the pressure of rising food prices and fuel from the current geopolitical crisis, this may be a reasonable policy to adopt for the time being. However, since tax on petroleum products is a significant revenue stream for the government, it is unlikely that this policy will be sustained for very long.

(Source: St Lucia News Online)

• The average interest rate on the most popular U.S. home loan rose to more than 5% last week, the highest level since November 2018, and homebuyers hurried to make purchases before costs rose further, the latest weekly survey from the Mortgage Bankers Association (MBA) showed on Wednesday. 
• The average contract rate on a 30-year fixed-rate mortgage increased to 5.13% in the week ended April 8 from 4.90% a week earlier. It is up more than 1.5 percentage points since the start of the year as the Federal Reserve has begun to tighten financial conditions to cool demand in the economy amid high inflation. 
• Fed policymakers now anticipate a series of swift interest rate hikes until the end of this year at least as they seek to bring down inflation, after they raised the benchmark overnight lending rate last month for the first time in three years. Investors see the Fed bringing its federal funds rate to 2.5%-2.75% by the end of 2022, up from the current target range of between 0.25% and 0.5%. 
• Officials are also expected to start culling the central bank's portfolio of $8.5 trillion of U.S. Treasuries and mortgage-backed securities as early as next month, a stash of assets that had also helped keep consumer borrowing costs - for mortgages in particular - low throughout the COVID-19 pandemic. 
• The rise in borrowing costs, which has dampened demand for mortgage applications overall since the start of the year, caused a small bump in activity last week as homebuyers rushed to lock in rates before they move even higher.

(Source: Reuters)

• Prices for wind and solar power in major global markets have climbed nearly 30% in a year as developers have struggled with chaotic supply chains and surging costs for everything from shipping parts to labour, according to a report published on Wednesday. 
• Contract prices for renewables jumped 28.5% in North America and 27.5% in Europe in the last year, according to a quarterly index by LevelTen Energy that tracks the deals, known in the industry as power purchase agreements (PPAs). LevelTen noted that in the first quarter alone, prices rose 9.7% in North America and 8.6% in Europe. 
• Economic, logistical and labour market disruptions during the coronavirus pandemic have worsened since the Russian invasion of Ukraine, reversing a decade of cost declines for the renewable energy sector. 
• There is a risk higher costs could slow demand growth at a time when the United Nations has called for clean energy to expand more rapidly to avoid the worst effects of a warming climate.

(Source: Reuters)

• The Jamaica Special Economic Zone Authority (JSEZA) is positioning Jamaica to tap into the multi-trillion-dollar Environmental, Social and Governance (ESG) investment market. ESG investing involves investment in companies, which, through their environmental performance, social impact and governance issues, are focused on balancing people, planet and profits. 
• The ESG market is becoming increasingly popular as there has been an increase in environmentally conscious investors seeking to increase their exposure to companies that are in alignment with sustainability and climate-related objectives. 
• According to the United States Sustainable and Impact Investing Trends biennial report, the ESG market was valued at $17.1 trillion in 2020, growing exponentially throughout the pandemic to about $30 trillion. 
• Jamaica is signalling its readiness to enter the market through development of the ‘Sustain-a-Livity’ concept, which was presented to global investors at the recently concluded World Expo 2020 Dubai. This concept in a nutshell includes local companies adopting ESG practices in their operations, which should allow them to experience a greater level of value creation and risk mitigation. 
• On the value creation side, companies that adopt ESG experience stronger growth, greater productivity, higher return on equity and a higher credit rating. As it relates to risk mitigation, they have lower loan and credit default rates, and reduced legal and regulatory interventions. 
• These plans to position Jamaica in the ESG space bode well for local companies as they can adopt practices that will both boost their financial performance and attract investments from environmentally conscious investors.

(Source: JIS and NCBCM Research)

• President Luis Abinader’s push for investor-friendly policies designed to bolster investment and some changes designed to promote government transparency in the coming quarters, are supported by a swift economic recovery from the COVID-19 pandemic in the Dominican Republic and broad public approval. 
• While the president’s strong position in the legislature and high public approval will help him to advance other reform measures, his push for constitutional reforms aimed at combatting corruption will likely remain on hold in the coming months, as opposition parties have been opposed to the measures proposed. 
• Notably, owing to these risks the sovereign scored 66.6 out of 100 in Fitch’s Short-Term Political Risk Index (STRPI). The country’s score is below the average score of 69.4 among the 16 Caribbean markets in the STPRI but sits above the emerging market average of 59.2. 
• In addition to these risks, elevated inflation will pose persistent risks to social stability and Abinader’s popularity in the months ahead. In the year through February, inflation averaged 8.9% y-o-y, up from 6.7% during the same period in 2021, and higher prices for crude oil and other commodities following Russia’s invasion of Ukraine will keep price growth elevated in 2022. Therefore, as citizens begin to feel the pinch of rising costs for basic goods, they may launch protests against higher prices or Abinader's agenda.

(Source: Fitch Solutions)

• A country assessment of Dominica’s geothermal resources has been handed over to the Climate Resilience Execution Agency of Dominica (CREAD). 
• The assessment focused on creating a roadmap for the utilisation of Dominica’s geothermal resources to build a resilient economic future for the country while supporting regional and global low-carbon energy transition was conducted by the Kenesjay Green Limited (KGL). 
• Dominica is a geothermal resource-rich country and as such its geothermal resources provide tremendous potential for spurring Dominica’s green industrialisation. This will support the diversification of the economy and lead to the achievement of a robust economy, which is one of the six result areas in its Climate Resilience Recovery Plan. 
• There is now significant interest around the world in green hydrogen, and Dominica has the unique opportunity to position itself to be able to supply some of that demand. Consequently, the country has targeted 2030 to have 100% power generation through renewable energy, this will result in among other things, greater energy security, and an improvement in the country’s resilience.

(Source: Dominica News Online)

• Oil prices settled higher on Tuesday as lockdowns eased in Shanghai and as Russian oil and gas condensate production fell to 2020 lows and OPEC warned it would be impossible to replace potential supply losses from Russia. 
• Brent crude futures rose $6.16, or 6.3%, to settle at $104.64 a barrel by 1:48 p.m. EDT. U.S. West Texas Intermediate rose $6.31, or 6.7%, to settle at $100.60. This increase followed a 4% decline in both benchmarks on Monday.
• Shanghai said more than 7,000 residential units had been classified as lower-risk areas after reporting no new infections for 14 days. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) warned it would be impossible to replace 7 million bpd of Russian oil and other liquids exports lost in the event of sanctions or voluntary actions. 
• Russian oil and gas condensate production fell below 10 million barrels per day (bpd) on Monday to its lowest since July 2020, two sources familiar with data said on Tuesday, as sanctions and logistical constraints hampered trade.

(Source: Reuters)

• Prices that consumers pay for everyday items surged in March to their highest levels since the early days of the Reagan administration, according to Labour Department data released Tuesday. 
• The consumer price index, which measures a wide-ranging basket of goods and services, jumped 8.5% from a year ago on an unadjusted basis, above even the already elevated Dow Jones estimate for 8.4%. 
• Excluding food and energy, so-called core CPI increased 6.5% on a 12-month basis, in line with the expectation. However, there were signs that core inflation appeared to be ebbing, as it rose just 0.3% for the month, less than the 0.5% estimate. That in turn sparked some hope that inflation overall was easing and that March might represent the peak. Markets reacted positively to the report as stocks rose and government bond yields declined. 
• To combat inflation, the Fed has begun raising interest rates and is expected to continue doing so through the remainder of the year and into 2023. The last time prices were this high, the Fed raised its benchmark rate to nearly 20%, pulling the economy into a recession that finally defeated inflation.

(Source: CNBC News)

• Express Catering Limited (ECL) reported a net profit of US$364.51k for its nine months ended February 28, 2022 which is a significant increase over the US$2.44Mn net loss recorded in the prior period. This improvement was fostered by an increase in the number of passengers accessing the departure lounge of the Sangster International Airport, which influenced a 323.3% growth in revenues. 
• In total, passenger arrivals were 1.21Mn, compared to just 318k for the similar period in the previous year. This led to increased demand for food and beverage products from ECL’s branded sports bars and restaurants. 
• The company also experienced higher input costs (ranging from ingredients to utilities) that are associated with the logistical challenges caused by the COVID-19 pandemic and the recently started war in Ukraine. Owing to this, direct costs increased by 474.8%; however, this was outweighed by the rise in revenues. 
• It is anticipated that ECL will see further recovery this year as the rebound in the tourism sector continues. Jamaica is expected to see increased visitor arrivals supported by increased flights to the island; reduced warnings on travel to Jamaica; and the execution of expansion plans by stakeholders. This will support ECL’s financial performance in the coming quarters through increased demand for its airport food services.
• ECL’s stock price has increased by 26.7% since the start of the calendar year. The stock closed Monday’s trading session at $6.48 and currently trades at a P/E of 57.5x which is above the Junior Market Average of 23.8x

(Source: Company Financials and NCBCM Research)

• The World Bank predicts that Panama will grow 6.5% this year, which represents one of the highest growth rates for the region. It is also forecasts that the sovereign will grow by 5% in both 2023 and 2024. 
• The growth trend of the economy will continue in the coming years, after the strong contraction of 17.9% in 2020, as a result of the restrictions imposed by the Government to contain the pandemic. The drop was partially offset in 2021, with a growth of 15.3% caused by the lifting of restrictions and increased economic activity. 
• The Ministry of Economy and Finance of Panama estimates that this year it will be possible to recover its pre-pandemic level of gross domestic product (GDP). One of the Executive's commitments to achieve this convergence is the activation of construction through projects awarded under the turnkey model, supported by a repayment scheme of 50% halfway through the work and the remaining 50% upon completion. 
• Panama is recovering from the crisis caused by the pandemic, as is Latin America on a whole. After a 6.9% rebound in 2021, the region's GDP is expected to grow 2.3% this year and an additional 2.2% in 2023

(Source: Newsroom Panama)