• The sustainable use of Guyana’s forest resources has generated great returns over the years, especially in the area of timber production and exportation, which is projected to remain lucrative this year, with estimated returns of US$28Mn. 
• As outlined by the country’s 2022 Budget, timber output grew from 344,179 cubic meters in 2020 to 383,189 cubic meters in 2021, reflecting an expansion in construction activity. 
• Guyana has one of the highest percentages of forest cover in the world and presents immense opportunities to investors, who are interested in sustainably utilising and developing forest resources. Already, persons have capitalised on those opportunities, and this is evidenced by returns from the exportation of timber in 2021, which amounted to US$26.5Mn. 
• The growth that Guyana has experienced from its forestry sector will present an opportunity for increased export earnings, job creation and economic growth on a whole for the nation.

 (Source: The Tribune)

• Chilean authorities have reported that unemployment nationwide had fallen in 2021 to 7.2% while in the same period of 2020 it had hit 10.3%. In the middle of the social uprisings of 2019, it had been recorded at 7.1%. 
• This is the eighth consecutive annual decrease in the unemployment rate, with the unemployment rate for women at 7.4%, and for men at 7.1%. Jobs were boosted by construction (22.2%), commerce (8.5%) and hotels and restaurants (30.9%). 
• If the country continues at this rate, then it is possible to recover all the jobs that were lost in the worst moment of the pandemic. However, Leonardo González of the National Institute of Statistics (INE), warned, that “we have been consistently seeing these rates rise, but we are not yet seeing pre-pandemic levels.” 
• The recent unemployment figures are a good indication of the recovery of the Chilean economy. This will positively impact the economic outlook, as there is an acceleration in the labour market and growth.

(Source: ANSA)

• Oil prices rose on Monday as tensions between Russia and the West ratcheted up, adding to supply concerns that have kept oil prices near $100 a barrel. Brent crude futures jumped $1.23, or 1.3%, to $94.77 a barrel by 1300 GMT. U.S. West Texas Intermediate (WTI) crude futures rose $1.13, or 1.2%, to $92.20 a barrel. 
• Russian forces killed a group of five saboteurs who breached the country's southwest border from Ukraine on Monday, news agencies quoted the military as saying, an accusation that Ukraine called fake news. 
• Ministers of Arab oil-producing countries said on Sunday that OPEC+ should stick to its current agreement to add 400,000 barrels per day (BPD) of oil output each month, rejecting calls to pump more to ease pressure on prices. 
• Price gains have been limited by the possibility of more than 1 million BPD of Iranian crude returning to the market. Analysts said the market remained tight and any addition of oil would help, but prices would remain volatile in the near term because Iranian crude was unlikely to return until later this year. 
• Commonwealth Bank analyst Vivek Dhar has said that if a Russian invasion takes place, as the U.S. and UK have warned in recent days, Brent futures could spike above $100/bbl, even if an Iranian deal is reached.

(Source: Reuters)

• A senior Bank of England official has said that requiring regulators to keep the financial sector globally competitive following Brexit must not bring back the damaging booms and busts of the past. 
• Britain's finance ministry has said it will add a formal objective for the central bank and the Financial Conduct Authority to support financial sector competitiveness and long-term economic growth, without damaging their ability to keep firms and markets safe or protect consumers. 
• The financial sector specialists say London will remain a global financial centre after it was largely cut off from the European Union following Britain's departure. Critics warn of a return to the 'light touch' regime that ended with taxpayers bailing out banks in the financial crisis over a decade ago. 
• The BoE will consult around mid-year on implementing changes once the government has set out its plans. The new competitiveness objective could also influence other reforms such as implementing new global bank capital rules and making Britain's wholesale capital market more attractive to global investors.

(Source: Reuters)

• Jamaica’s economy grew by an estimated 6% year over year for the October to December 2021 quarter on the back of a 7.8% and 0.4% increase in the Services and Goods Producing Industries, respectively, the Planning Institute of Jamaica (PIOJ) reported. 
• The outturn also represents the third consecutive quarter of growth recorded, indicating that Jamaica’s recovery from the economic fallout from the COVID-19 pandemic, is well under way. 
• The growth largely reflected the continued relaxation of COVID-19 containment measures globally and locally, which facilitated increased domestic and external demand, resulting in a general uptick in economic activities. 
• All five services industry subsectors recorded growth, led by the Hotels and Restaurants sector, with an estimated 76.2% increase. The sector’s performance was largely spurred by a 186.3% increase in stopover visitor arrivals and 32,719 cruise passengers relative to none in the corresponding period of 2020.
• Real GDP is projected to grow within the range of 5.0% to 7.0% during January– March 2022 supported by continued positive effects of the easing of previously implemented COVID-19 containment measures in the domestic economy. Demand for tourism services is also expected to improve as citizens in key source markets expend pent-up demand as the effects of the omicron variant dissipates, thereby supporting growth. Additionally, higher employment levels should result in increased domestic demand auguring well for economic activity. 
• The main downside risks to this outlook includes: plant down-time due to relatively aged plant equipment in major industries; adverse weather conditions; slower than anticipated growth in the global economy due in part to the impact of the Coronavirus on trade; and rising geopolitical tensions between Russia and the Ukraine.

(Source: PIOJ)

• The reopening of the Bahamas tourism market accounted for 13% of the nation’s pre COVID-19 visitor base. Canada’s decision to drop its advisory against “non-essential” travel and ease border restrictions, which takes effect at the end of February, will pave the way for The Bahamas’ second largest source market to properly visit this country once again. 
• The move by Canada, which comes days after the United Kingdom (UK) removed its own COVID-related restrictions on overseas travel by its citizens, immediately gives The Bahamas access to its two most important source markets after the US, following a near two-year period of travel bans and general disruption. 
• President of the Bahamas Hotel and Tourism Association’s (BHTA), Robert Sands, elucidated that these “may be the first of many dominos that are going to be falling in source markets to improve tourist inflows to the island”. 
• Additionally, with the Omicron-induced case surge continuing to dissipate, this is a strong justification for the US health authorities to upgrade The Bahamas from a ‘Level 4’ “avoid travel” advisory to as high as ‘Level 2’ “moderate risk”. 
• Given that the tourism sector is a main contributor to export earnings, employment and economic growth in Bahamas, the resumption of travelers to The Bahamas, will aid in the country’s economic recovery. The country is expected to grow by 8.0% in 2022 (IMF).

(Source: The Tribune)

• Oil prices fell about 2.0% on Thursday as talks to resurrect a nuclear deal with Iran entered their final stages and could unlock more crude supplies, but losses were limited by tension between top energy exporter Russia and the West over Ukraine. 
• Brent futures fell $1.84, or 1.9%, to settle at $92.97 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.90, or 2.0%, to settle at $91.76. Both benchmarks rose to their highest levels since September 2014 earlier in the week and both continue to face extreme backwardation in coming months. Backwardation is a market structure where prompt contracts are more expensive than those for later dates, indicating supply tightness. 
• Craig Erlam, market analyst at OANDA has said that the price could already be in triple-figure territory if not for the nuclear talks between the U.S. and Iran, noting that a deal could mean around 1.3Mn barrels per day (bpd) of crude quickly re-entering the market.

(Source: Reuters)

• Declines in bonds and stocks are sending investors into defensive products such as credit swaps, convertibles and even cash as they seek refuge from the market’s recent gyrations. 
• BlackRock Inc's iShares iBoxx $ Investment Grade Corporate Bond ETF has fallen by nearly 7% year-to-date to its lowest level since April 2020, as expectations of higher interest rates and persistent inflation dim the allure of bonds across the fixed-income spectrum. That is in line with losses across major stock indexes, which have also been hit by worries of tighter Fed policy. The S&P 500 has dropped 7.3% year-to-date and the Nasdaq Composite is down by about 11%. 
• The side-by-side tumbles have dealt another blow to a decades-old strategy that relied on a mix of bonds and stocks to take the sting out of equity declines, with bond prices ideally moving higher during periods of stock market volatility. 
• The search for defensive products comes amid worries of more volatility across asset markets, as an expected 150-175 basis points in rate increases over the next year threatens to further buoy bond yields and weigh on stock valuations. 
• For some investors, anticipation of more wild swings in asset prices has heightened the appeal of credit swaps, which are used to insure against the risk of corporate defaults.

(Source: Reuters)

• Jamaica earned US$1.24Bn from exports between January and September 2021. This was 22.9% higher than the US$1.01Bn for the corresponding period in 2020. Statin highlighted that the outturn was largely due to a 96.8% increase in the value of exports in the category ‘Mineral Fuels’, which totaled US$400.7Mn. 
• The value of domestic exports climbed by 14.5% to just over US$1.13Bn and accounted for 89.3% of total outflows. The rise was mainly due to higher outturns from the manufacturing and agriculture industries, up 30.5% and 8.1%, respectively. At US$1.13Bn, total domestic exports for the first nine months of 2021 was 74.5% of its full 2019 value. 
• The top-five destinations for Jamaican exports were the United States of America (USA), the Netherlands, Canada, the United Kingdom, and the Russian Federation. Exports to these countries increased by 10.7% to US$912.7Mn, largely resulting from increased shipments of bunker ‘C’ fuel to the USA and alumina to the Netherlands. 
• As the global economy continues to recover in 2022, Jamaica’s total exports is also expected to increase with strong support from higher demand for local manufactured and agriculture goods.

(Source: JIS and Statin)

• For the 3 months ending December 31, 2021, BIL reported a net profit of $1.07Bn which is a 4.9% or $49.79Mn increase relative to the prior period. The bottom-line was supported by growth in revenue lines such as net interest income, fees and commission income and foreign exchange trading gains. 
• The company reported a significant fall in gains on investment activities which fell by 55.1% ($368.58Mn) over the period. The company attributed this decline to the impact of higher central bank interest rates which led to increased market volatility. However, despite this decrease, the company’s operating revenue increased by 3.9% due to a 28.7%, 8.6% and 61.5% expansion in net interest income, fees and commission income, and foreign exchange gains, respectively. 
• The overall improvement in operating revenues helped to offset the increase in operating expenses, particularly staff (11.4%) and administrative (11.3%) costs. This increase in costs is in line with the group’s continuous investment into people and processes to ensure greater efficiency and competency. 
• In 2022, we expect macroeconomic variables such as higher inflation and interest rate hikes to have an adverse impact on some business lines and positive impact on others. BIL could realise an increase in net interest income from its credit portfolios. However, the rising interest environment will likely limit gains on fixed income securities, possibly lowering trading gains. However, further economic recovery especially in the local market, is expected to support demand for financial services and products which will help to temper the challenges from the rising interest rate environment. 
• BIL’s stock price has declined by 7.3% since the start of 2022. The stock closed Wednesday’s trading session at $90.98 and currently trades at a P/E of 27.7x earnings which is above the Main Market Financial Sector Average of 15.2x

(Source: Company Financials and NCBCM Research)