• Yet another milestone has been reached to bring the vision of a single electronic identification card for all government and business transactions to reality, as a US$35.4 million contract was signed between Germany-based company, Veridos and the Government of Guyana on Friday, March 10.
• The implementation of the single electronic identification card allows for the issuance of work permits and resident identification through a more coordinated approach that will see holders of the registration numbers using that single identification for all transactions, President Dr Irfaan Ali said during a simple signing ceremony at State House.
• He stated that the enhancement is necessary due to the immediate need to implement a robust national identity management system that focuses on the integration of identification services across government agencies, security, ease of use, and acquisition of IDs.
• The government embarked on this process in October 2021; and sought the support of the United Arab Emirates. Since then, two companies submitted prototypes which were assessed by technical teams from Guyana’s National Data Management Authority (NDMA) and the Office of the National Information and Communications Technology (ICT).
• In the Head of State’s view, the card will enhance the ease of transactions and be one of the most technologically advanced systems. The President explained that the new electronic identification system would revolutionize how business is done in Guyana and, with its advanced security system, will eliminate the need for certain documents.
• As an example, the banking sector would now have fingerprint verification and validation of its clients, thereby eliminating the need for proof of address and all other audit documentation.
• The cost of doing business, effectiveness, competitiveness, and efficiency is all set to improve as a result of this technology through the introduction of e-health, e-education, e-security, e-agriculture, electronic permit, and license processing, among other areas.

(Source: CariCris)

• The Bahamas Petroleum Dealers Association has requested the government to authorize a marginal increase in fuel prices for retailers, who have been advocating for an increase in their profit margins on fuel, but Economy Minister Michael Halkitis rejected those claims.
• Fuel retailers have called on Halkitis to have “a change of heart” and are also threatening to take action to prompt the authorities to react, arguing that the increase in costs has made the current margin regime unsustainable. The Association said that retailers “don’t want to strike,” but the local media reported that last week they discussed possible actions to call the government’s attention.
• Currently, the government collects some $1.70 per gallon of fuel sold in the Bahamas (customs duty plus VAT plus special fuel contribution). Retailers get a $0.54 per gallon margin. That margin was last adjusted in 2011 when it was at $0.44 per gallon. Wholesalers receive $0.34 per gallon.
• Halkitis stated that while the Davis administration is “sympathetic” to the issues raised by the retailers’ association, the government is not willing to endorse any measure that would lead to immediate increases in fuel prices at the pump.
• Last year, Halkitis acknowledged that the government had discussions with retailers about shifting from a fixed contribution regime to an ad-valorem tax based on a percentage of base fuel price. The Association has indicated that it is open to those conversations. If there is no progress in the negotiations, a strike cannot be ruled out.
• The potential of a strike could morph into broader social unrest, due to the effect of it possibly lowering output due to fuel shortages causing a decrease in business deliveries.

(Source: Oppenheimer & Co. Inc.)

• Bank stocks around the world plunged on Monday even as President Joe Biden vowed to take whatever action was needed to ensure the safety of the U.S. banking system after the sudden collapse of Silicon Valley Bank (SIVB.O) and Signature Bank (SBNY.O).
• Biden's efforts to reassure markets and depositors came after emergency measures by the United States to guarantee deposits at both banks failed to dispel investor worries about potential contagion to other lenders worldwide. Major U.S. banks lost more than $70 billion in stock market value on Monday, bringing their total loss over the past three days to about $170 billion.
• SVB's customers will have access to all their deposits from Monday and regulators set up a new facility to give banks access to emergency funds that the Federal Reserve made it easier for banks to borrow from it in emergencies.
• SVB Financial Group (SIVB.O) and two top executives were sued on Monday by shareholders, who accused them of concealing how rising interest rates would leave its Silicon Valley Bank unit "particularly susceptible" to a bank run. The proposed class action against SVB, Chief Executive Greg Becker, and Chief Financial Officer Daniel Beck was filed in the San Jose, California, federal court.
• A furious race to re-price interest rate expectations also sent waves through markets as investors bet the Fed will be reluctant to hike next week. Traders currently see a 50% chance of no rate hike at that meeting, with rate cuts priced in for the second half of the year. Early last week a 25 basis point hike was fully priced in, with a 70% chance seen of 50 basis points.

(Source: Reuters)

• HSBC (HSBA.L) bought the UK arm of Silicon Valley Bank for a symbolic one pound on Monday, rescuing a key lender for technology start-ups in Britain, as the biggest bank collapse since the financial crash continued to roil markets.
• The deal, which sees one of the world's biggest banks, with $2.9 trillion of assets, take the doomed British arm of the tech lender under its wing, brought to an end frantic weekend talks between the government, regulators, and prospective buyers. It came after U.S. authorities moved on Sunday to shore up deposits and try to stem any wider contagion from the sudden collapse of its parent Silicon Valley Bank (SIVB.O).
• However, a global rout in stocks continued on Monday, with European banks (.SX7P) shedding as much as 6% on the day. That left them on track for their worst two-day drop since the Ukraine war began in February 2022. HSBC shares were down 3.8%.
• "HSBC is Europe's largest bank, and SVB UK customers should feel reassured by the strength, safety, and security that brings them," Britain's finance minister Jeremy Hunt said.
• The Bank of England said it had organised the sale to underpin confidence in the financial system and minimise any fallout for British technology firms. It said deposits at the bank were safe as a result of the sale and that the wider banking system was safe.

(Source: Reuters)

• Jamaica Producer Group Limited (JP) has recorded a 24.6% yoy increase in net profit attributable to shareholders of $2.30Bn for the financial year ending December 31, 2022.
• Revenue for the year was up by 15.9% yoy to $29.00Bn and is largely attributed to increases in revenues from the Food and Drink division (F&D division). The F&D division revenues experienced a 15.6% yoy increase, while revenues from the Logistics and Infrastructure Division (L&I division) increased by 16.3%.
• This was, however, tempered by a 25.2% increase in ‘selling, administration, and other operating expenses’ compared to the $3.45Bn recorded in FY 2021 and was mainly driven by a 23.0% increase in staff costs to $1.79Bn.
• In November 2022, JP entered into an agreement with PanJam Investment Limited that will see JP transferring its core operating businesses to PanJam in exchange for a 34.5% interest in PanJam. The combined strength of the two enterprises operating as one will enhance shareholder returns through further diversification and a stronger platform for organic and acquisition-led growth.
• Together, PanJam and Jamaica Producers will be a true conglomerate with investments in agriculture, financial services, hospitality, logistics, real estate, shipping, specialty food and drink, and tourist attractions located in the Caribbean, Central, and North America, and Europe.
• JP’s stock price has increased by 2.9% since the start of the calendar year. The stock closed Wednesday’s trading session at $22.59 and currently trades at a P/E of 11.0x, above the Main Market Conglomerate Sector Average of 10.6x.

(Sources: JSE & NCBCM Research)

• The amount of cargo passing through the Panama Canal is expected to shrink this fiscal year, the canal's top authority said on Wednesday, with experts warning lower volumes could hurt Panama's economy.
• Canal Administrator Ricaurte Vasquez said the institution forecasts just 500 million tonnes of goods passing through the 50-mile (80-km) trans-oceanic waterway in the 2023 fiscal year, some 10.3 million less than the previous forecast.
• Vasquez blamed the slowdown in part on Russia's war in Ukraine, fears of a global recession and lower commercial activity in China.
• The canal is losing out on traffic from ships that once carried fuel and gas from the U.S. to Asia, but now go to Europe and bypass the Panama Canal, Vasquez said at a conference.
• "We are losing approximately two daily transits of the liquefied natural gas (LNG) vessels. We have partially compensated for this drop with higher prices," Vasquez said.
• The number of tonnes passing through the canal reached 518 million in 2022 and 516 million in 2021, according to official data.
• Nicolas Vukelja, former president of Panama's maritime chamber, told Reuters the cargo will decrease around 4% compared to the entity's best years, which is "worrying" for the canal's income.
• "This is going to affect the economy of our country," Edgar Urrutia, president of the Logistics Business Council, told Reuters, adding the canal's additions to government coffers will decrease.

(Source: Reuters)

• Climate change could cost Latin America nearly a fifth of its gross domestic product (GDP) by the end of the century without new policies to curb its impact, according to a Moody's Analytics report published Monday.
• The analysis examined three possible scenarios for the region, accounting for the costs of climate change's physical toll (infrastructure damage, poorer health) as well as the costs of policy interventions aimed at reducing climate change.
• Latin America's economic output sustained losses under all three scenarios analyzed, namely, immediate policy actions targeting zero emissions by 2050, policies delayed until 2030 but then picking up pace, and no new policies to curb climate change.
• If no new policy action is taken, Moody's foresees a steady deterioration in GDP, estimating a loss of 10% by 2075 of the regions GDP, and ending the century with an economic decline of 16% as the region loses production capacity starting this year, and losses mount at increasing rates. Under a late policy scenario, Moody's sees output sinking more than 6% lower before recovering to a loss of 5% by 2080.
• "Latin American countries that would be more affected by climate change are the main fossil fuel producers and consumers: Venezuela, Colombia, Brazil, and Mexico," the report said. This is primarily due to the fact that emissions from fossil fuels are said to be the dominant cause of global warming. As a result, the move to cleaner energy will take a huge toll on these producers.
• Early policy implementation presented the best-performing scenario as it reported the lowest losses. It is therefore suggested that countries push towards early climate control implementation policies to reduce future economic output losses and lower inflation from less intensive prices and tariffs.

(Source: Reuters)

• The Bank of Canada on Wednesday left its key overnight rate on hold at 4.50%, as expected, becoming the first major central bank to suspend its monetary tightening campaign in the face of an anticipated easing of high inflation.
• Over the past year, the Canadian central bank raised rates eight times in a row by a total of 425 basis points to tame inflation, which peaked at an annualized rate of 8.1% last year and slowed to 5.9% in January, still almost three times the Bank of Canada's 2% target.
• "Overall, the latest data remains in line with the Bank's expectation that CPI inflation will come down to around 3% in the middle of the year," it said in a statement.
• While some economic data have been particularly strong since the last policy meeting, including a blockbuster January jobs report, gross domestic product stalled in the fourth quarter - far weaker than the 1.3% annualized growth forecast by the BoC.
• The central bank acknowledged that fourth-quarter growth came in below its expectations and dropped language saying the economy was in "excess demand". "Restrictive monetary policy continues to weigh on household spending," the statement said. "With weak economic growth for the next couple of quarters, pressures in product and labour markets are expected to ease."
• The central bank said core inflation measures and short-term inflation expectations still needed to fall in order to return inflation to target. The BoC expects near-zero growth for the first three quarters of 2023.

(Source: Reuters)

• The eurozone failed to register any growth quarter-on-quarter in the final three months of 2022, the European statistics agency said on Tuesday, slightly revising down both its GDP and employment growth numbers, although the latter remained strong.
• Eurozone economic growth was 0.0% in the fourth quarter compared with the third and 1.8% from a year earlier, Eurostat said in a statement. That compared with flash estimates of 0.1% and 1.9% published on February 14.
• The revisions still confirmed that the eurozone narrowly avoided the technical recession that had previously been expected.
• Eurostat also revised down the figure for employment growth in the eurozone to 0.3% quarter-on-quarter from a previously reported 0.4%. The year-on-year number was 1.5%, in line with earlier estimates. This pushed the total number of people with jobs to 165 million, 3.6 million more than at the end of 2019, just before the COVID-19 pandemic struck.
• Strong employment growth highlights how tight the labour market is and signals a problem for the ECB in its fight to bring inflation back to 2% from the double-digit territory last autumn.
• A recession had been expected to boost the jobless rate, cooling the labour market and keeping a lid on wages. But firms, which struggled to rehire workers after the pandemic, appear to be hanging onto staff even through a slowdown.

(Source: Reuters)

• Fitch Ratings has revised the Rating Outlook on Jamaica's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to Positive from Stable and affirmed the IDRs at 'B+'.
• The revision of the outlook reflects Jamaica's significant progress with debt reduction, despite the pandemic shock, its stability-oriented institutional framework and favourable financing conditions, reinforced by the new IMF facilities. Public debt has resumed its declining trajectory following the temporary increase in 2020, to an estimated 85% of GDP at the end of 2022, below its pre-pandemic level, although still much higher than the current 'B' median of 57% of GDP.
• Jamaica's 'B+' rating is also supported by World Bank Governance Indicators that are substantially stronger than the 'B' median. The ratings, however, remain constrained by deep structural weaknesses, including a high crime rate and low productivity reflected in subdued underlying growth potential, estimated between 1-2%.
• Fitch forecasts general government debt-to-GDP will decline to 80% by the end of 2023 and to around 70% in 2026; however, meeting the government's 60% debt target by 2028 looks challenging. Nevertheless, sizeable primary budget surpluses are expected to be the key driver of the debt decline.
• Jamaica has a strong, stability-oriented economic policy framework that is built on two key pillars: the Bank of Jamaica (BOJ) inflation-targeting monetary policy regime and fiscal policy anchored on debt reduction targets. The policy framework proved flexible enough to cope with the double shocks of the pandemic and more recently the exogenous energy and commodity price shocks. The government has built a track record of fiscal prudence that has gained credibility over recent years and it will be further institutionalized by the new independent fiscal commission which will judge the compliance of the draft annual budgets with the fiscal rule.
• A negative rating action could result from a sizeable fiscal deterioration, a marked increase in debt service costs and/or a sizeable external shock that weakens growth and/or external finances, such as a natural disaster or sharp fall in tourism. On the contrary, a positive rating action would result from a sustained decline in the government debt-to-GDP ratio over the medium term and/or enhanced resilience of economic growth without the emergence of macro imbalances and shocks to external finances.

(Source: Fitch Ratings)