• Consumers ended 2021 with record levels of debt, leading into a year in which interest rates are expected to rise substantially. Total U.S. consumer debt at the end of the year came to $15.6Tn, a year-over-year jump of $333.0Bn during the fourth quarter and just over $1.0Tn for the full year, according to data released Tuesday from the Federal Reserve’s New York district. 
• The quarterly rise was the biggest since 2007, and the annual gain was the largest ever in records going back to 2003. 
• The news comes ahead of a period in which the Fed is expected to start jacking up interest rates as it looks to tamp down inflation, which is running at its fastest pace in nearly 40 years. Markets expect the central bank to start increasing rates in March, the first of at least five bump-ups this year, totaling 1.25 percentage points. 
• Fed interest moves are directly tied to the prime rate that consumers pay for many forms of debt, including credit cards and adjustable-rate mortgages. A large chunk of the debt-load increase came from mortgages, which saw balances rise by $890.0Bn for the year and $258.0Bn in the fourth quarter, to nearly $11.0Tn. Mortgage originations for the year totaled more than $4.5Tn, a new record. Credit card balances increased by $52.0Bn in the final three months of the year, a new quarterly record that brought total debt in that category to $860.0Bn. 
• Owing to the rapid gain in prices, auto-loan balances rose by $90.0Bn, or 6.6%, to $1.46Tn. New auto prices rose 11.8% for the year while prices for used vehicles soared by 37.3%, according to Labor Department data. 
• One area that saw little increase was student loans, which edged higher by just $20.0Bn for the year and declined marginally in the fourth quarter. Forbearance programmes, though mostly expired, are still keeping balances and delinquencies in check. 
• The rising-rate environment could affect household cash flows as borrowers adjust. Those who locked in at low mortgage rates, for instance, are likely to be reluctant to go out and buy new homes with rates moving higher, while those who ran up credit card balances could be constrained as financing costs increase.

(Source: CNBC News)

• For its first quarter ending December 31, 2021, SALF reported net profit attributable to shareholders of $41.92Mn, a 219.9% ($28.82Mn) increase relative to the corresponding period last year. 
• Bottom-line growth was supported by a higher revenue outturn. Revenues increased by 27.8% or $62.99Mn for Q1 driven by strong domestic and export sales across its range of products. Though direct expenses increased by 16.9%, gross margin improved by 6.3 percentage points as revenue growth outpaced the growth in direct expenses. 
• Sales and promotional expenses increased by 32.4% as the company ramped up targeted marketing activities for key consumer groups. Additionally, the company saw a 12.7% increase in admin expenses.  Against this background, operating profit for the quarter increased by 162.1% to $43.16Mn from $16.47Mn. 
• Net finance income saw a 916.1% increase which was mainly supported by an increase in foreign exchange gains which, also contributed to the company’s bottom line. 
• SALF stock price has risen 3.81% since the start of the calendar year. The stock closed Monday’s trading session at $6.86 and currently trades at a P/E of 38.1x earnings, which is above the  Main Market Distribution & Manufacturing sector average of 19.1x.

(Sources: JSE and Company Financials)

• Fitch Solutions expects the Jamaican economy to rebound quicker in 2022 than in 2021 as the tourism sector growth is set to accelerate in H222, with real GDP projected to grow by 4.2% for 2022. As a small, open economy, the pace of Jamaica's rebound will depend on how quickly global economic activity recovers.  In particular, the rollout of vaccinations in the US and Europe, key source markets for tourism, exports, and remittances will determine how Jamaican real GDP growth rebounds in 2022. 
• Over the medium term, however, Fitch expects Jamaica to see stronger economic performance following a reform programme that will put the country on a more sustainable growth trajectory. 
• After poor economic governance led to two sovereign debt defaults since 2010, Jamaica is now closely coordinating policy with the IMF in a bid to improve its business environment, rein in government spending, diversify its economy and reduce its external vulnerabilities. 
• As a result of recent and upcoming initiatives, Fitch is forecasting that real GDP growth will average 2.4% over the next decade. This remains significantly above the average of just 0.2% over the past 10 years.

(Source: Fitch Solutions)

• The Bahamian government is giving priority to reducing its foreign currency debt to 30% of total liabilities in a bid to reduce pressure on the currency peg and external reserves. The Government will increasingly look for domestic (Bahamian dollar) borrowing opportunities to finance its annual fiscal deficit and debt rollovers as it seeks to lower a foreign currency burden that currently accounts for 44.9% of its national debt. 
• Foreign currency borrowings are targeted at financing government’s capital expenditures, refinancing the global bond issuances, and achieving policy action reforms designed to promote private sector-led growth, secure improvements in the policy, legal, and institutional framework for state-owned entities, public-private partnerships, fiscal management, the business and investment climate, and build resilience to climate change, including emergency and disaster response. 
• To achieve this goal, the Government is planning to adopt a financing/borrowing strategy that reduces the risk associated with rising interest rates, and therefore debt servicing costs, by borrowing at fixed interest rates. It also plans to extend the time at which its various debt principal issues mature. 
• An increase in the foreign currency debt has led to unwelcomed side-effects being experienced in the Bahamas. Reducing its foreign debt would lead to improvement in the country’s capacity to invest in the future of its economy, by limiting the amount of revenue that goes to servicing these loans, thereby increasing long-term economic growth.

 (Source: The Tribune)

• Guyana’s forestry sector managed to rake in export earnings of more than US$31Mn in 2021, according to figures provided by the Minister of Natural Resources, Vickram Bharrat. The exported products included logs, lumber, and round wood, derived from 377,838 cubic metres of production. The production numbers represent a 16% increase when compared to the previous year. 
• Although securing notable revenues, the forestry sector still has much more scope for development, particularly in the area of added value. Guyana is the producer of world-class timber, yet much more can be done to boost manufacturing, particularly in the area of furniture-making. 
• Even amid a global pandemic and months of devastating and unprecedented floods, the sector is well on its way to making a drastic turnaround, especially with the governing body, the Guyana Forestry Commission (GFC) being brought back from the brink of bankruptcy, with a monthly income revenue of $90Mn, a notable increase when compared to a pre-pandemic period in 2019, when the commission’s revenue collection stood at $70Mn. 
• The Minister explains that while oil is lucrative and as a country, they stand to benefit financially from oil and gas, what creates the majority of employment is the traditional productive sectors, especially agriculture, logging, mining. 
• 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: Guyana Chronicles)

• European Central Bank President Christine Lagarde said on Monday that there is no need for big monetary policy tightening in the eurozone as inflation is set to fall back and could stabilize around 2%. 
• Pointing to mounting inflation risks, the ECB opened the door last week to an interest rate hike later in 2022 and said that a March 10 meeting will be crucial in deciding how quickly the central bank would wind down its long-running bond-buying scheme, a cornerstone of its stimulus efforts. 
• However, Lagarde appeared more cautious on Monday, arguing that high inflation is unlikely to get entrenched and warning that high energy prices, the biggest driver of inflation, are likely to be a drag on prices further out. 
• Lagarde told a European parliamentary hearing that the chances have increased that inflation will stabilize at the target, highlighting that there are no signals that inflation will be persistently and significantly above the target over the medium term, which would require measurable tightening. 
• Lagarde said that the eurozone economy was not suffering from the sort of overheating others were experiencing, noting that this increases the likelihood that the current price pressures will subside before becoming entrenched, enabling the ECB to deliver on its 2.0% target over the medium term.

(Source: Reuters)

• The last time the U.S. unemployment rate fell below 3%, as one Federal Reserve official has predicted it will this year, the Korean War was nearing its end and a recession that saw legions of workers lose their jobs was just around the corner. 
• While the circumstances were unusual, it nonetheless presented a now-familiar pattern - a falling unemployment rate eventually giving way to recession - that current Fed officials will be challenged to avoid as they try to slow the fast pace of inflation without wrecking an expansion that is delivering strong gains for workers. 
• Emblematic of the current confidence in the job market's strength, St. Louis Fed President James Bullard last week said he expects the U.S. unemployment rate to fall below 3% this year. That flashback to the 1950s in itself would be a warning for some economists. 
• Such a low unemployment rate is "a red flare" that the economy is overheating, with fast price and unavoidable wage increases and the U.S. central bank pushed to be more aggressive, said Tim Duy, a University of Oregon professor and the chief economist of SGH Macroadvisers. "I don't see where there is a good way out" that tames inflation without triggering a recession and the associated jump in unemployment. 
• It's a tradeoff - of jobs for price control - the Fed thought had become less relevant. In the decade before the onset of the coronavirus pandemic, unemployment drifted towards 3.0% without triggering inflation, and policymakers felt that showed the economy could put far more people to work than previously thought with prices remaining stable.

(Source: Reuters)

• On March 16, 2021, PIL entered into a Share Purchase Agreement with Fidelity Bank & Trust International Limited (a company incorporated in the Commonwealth of The Bahamas) to acquire the entire issued share capital (Shares) of Fidelity Bank (Cayman) Limited (FBCL), conditional on receiving approval by the Cayman Islands Monetary Authority (CIMA). 
• CIMA approved the acquisition and it was completed on February 1, 2022. The purchase price for the Shares was US$31,835,988.50 (subject to adjustment within 45 days of completion in accordance with the terms of the Share Purchase Agreement). 
• FBCL is a financial services company incorporated in the Cayman Islands and is licensed with the Cayman Islands Monetary Authority under the Bank and Trust Companies Act as a Category ‘A’ Bank to carry on banking business in the Cayman Islands. Category A Banking License – Allows a bank to operate both in the domestic and international markets and provide services to residents and non-residents of the Cayman Islands. 
• PROVEN’s further exposure in the Cayman Islands through FBCL should bode well for its bottom-line as the Cayman Islands is one of the leading financial centres in the world. Additionally, this exposure may aid the company in realizing earnings growth, which could improve its future value and/or payouts to investors.

(Source: JSE and NCBCM Research)

• The Labour Overview of Latin America and the Caribbean report states that after two years of the crisis, the region faces high unemployment and the prospect of an increase in informality. This is owing to the fact that the economic growth recorded in 2021 was insufficient to recover labour markets in the Caribbean and Latin America. 
• 'The labour outlook is uncertain, the persistence of infections due to the pandemic and the prospect of mediocre economic growth this year could prolong the employment crisis until 2023 or even 2024,' said Vinícius Pinheiro, ILO regional director for Latin America and the Caribbean. 
• Despite the strong economic recovery recorded in 2021, with growth above 6%, it was not enough to recover the jobs that were lost. Of the 49 million jobs that had been lost at the worst point of the crisis in Q2 2020, 4.5 million have not yet been recovered. 
• The average regional unemployment rate at the end of 2021 has been estimated at 9.6%, which represents an improvement from the 10.6% recorded in 2020. Nevertheless, the figures still represent a setback compared to the 8% that was recorded for 2019. 
• The ILO highlighted that the forecast of much lower economic growth in 2022, just above 2%, is a clear indication that it will take the region longer to get out of the Covid-19 crisis. Under these conditions, and considering the persistence of the pandemic, the ILO estimates that the unemployment rate this year could fall between 0.2 and 0.3 percentage points, remaining above 9%.

(Source: ILO)

• The Caribbean Development Bank (CDB) says it is moving to create a “financing ecosystem” to support the rescue, recovery and repositioning of the economies of its borrowing member countries (BMCs) to meet immediate needs and propel long-term growth and development. 
• President Dr Hyginus Leon said the institution will marshal financing for a range of innovative instruments that will enable its BMCs to reorder their economies for future growth and prosperity, even while continuing to navigate recovery amidst current challenges. 
• In order to attain the Sustainable Development Goals (SDGs) and the development needs, the region should approach their financing needs in a wholesome manner, addressing both the existing debt stock problem and flow financing for development. He further explained that “This would require a wide spectrum of financing instruments that is underpinned by a strong regulatory environment and a well-developed financial market infrastructure.” 
• Leon outlined several propositions, including contingent debt instruments to incentivise countries to undertake reforms to lower their debt risk, which will make future financing more affordable. He also recommended greater focus on fostering social resilience by leveraging digital technology to enhance health services, and to increase capacity by promoting problem solving, knowledge creation and innovation in regional education systems.

 (Source: Barbados Today)