• Seprod reported a net profit from continuing operations of $2.14Bn for its 12 months ending December 31, 2021, which represents a $713.66Mn (or 25.1%) reduction relative to the corresponding period in 2020. However, the 2020 financial performance includes a one-off gain of J$762.27Mn from the sale of a property. Therefore, after stripping out this one-off gain, the unaudited full-year profit for 2021 is estimated to have grown by 2.0% year over year. 
• Seprod achieved revenues of $42.91Bn, an increase of $5.17Bn or 13.7% over the corresponding period in 2020.  However, its gross margin decreased by 2 percentage points owing to higher commodity prices which influenced a 17.0% increase in direct costs. Management noted that the company absorbed some of these higher costs which resulted in lower margins. However, the increase in direct cost would have contributed to the decline in the company’s bottom-line. 
• The company’s topline performance was commendable given the fire at Facey Merchandise’s distribution centre (Facey Commodity Company Limited is a subsidiary of the Seprod Group) on October 9, 2021, that wiped out over 86% of the finished goods inventory, which also included the Christmas stocks. This would have adversely affected the company's topline line. Though revenue grew, the fire at Facey would have resulted in lower revenue growth than expected.   
• Seprod’s stock price has declined by 4.45% since the start of the calendar year. The stock closed Wednesday’s trading session at $61.88 and currently trades at a P/E of 21.3x earnings which is below the Main Market Distribution & Manufacturing Average of 23.2x.

(Source: Company Financials)

• The Ministry of Agriculture and Fisheries has reported a major increase in agricultural production for the last quarter of 2021. Preliminary estimates for domestic crop production for the October to December quarter of 2021 show an increase of 18.2% over the corresponding quarter of 2020, moving from 161,639 tonnes to 190,990 tonnes. 
• Significant contributors to the increased production were condiments 12,755.7 tonnes (50.2%), fruits 16,123.8 tonnes (36.5%), and vegetables 67,498.5 tonnes (24.1%). Jamaica’s overall domestic crop production moved from 697,678.8 tonnes in 2020 to 770,456.2 tonnes in 2021, representing a 10.4% increase. This was reaped from 50,623.3 hectares, representing an 8.1% increase in the area reaped. 
• Giving growth projections of the sector in the short term, Minister of Agriculture and Fisheries, Pearnel Charles Jr said indications from field production remain vibrant, and barring any unforeseen extreme weather conditions, the strong growth experienced in the last quarter will continue into the first quarter of 2022. 
• Overall, an increase in food production throughout the year bodes well for players in the agricultural sector -especially those that supply hotel chain-, as demand from tourism is anticipated to return as the sector recovery gains further momentum in 2022.

(Source: JIS)                                                 

• The Bahamas is looking to save $59Mn per year via a $200Mn guarantee from the Inter-American Development Bank (IDB) to underwrite a proposed foreign currency bond issue. 
• The IDB’s $200Mn guarantee was linked to The Bahamas’ efforts to make the necessary reforms that would unleash the so-called Blue Economy as a key component of its post-COVID revival. According to the IDB, “the sovereign guarantee structure will provide important economic and financial benefits to the Government of the Bahamas.” 
• The expected savings for The Bahamas using the IDB sovereign guarantee (compared with a scenario of using a standalone non-guaranteed bond) is estimated at 96 basis points, which implies annual savings of $59Mn in net present value terms. 
• Such savings would equate to an interest coupon that would be almost one percentage point higher than without the IDB’s sovereign guarantee. The maximum guaranteed amount will be up to $200Mn to be financed from the ordinary capital resources of the IDB. 
• This financial structure could generate a superior combination of resource mobilisation, and cost reduction for the Bahamas’ Government.

(Source: The Tribune)

• U.S. investors are snapping up funds that invest in dividend-paying stocks as they search for stable income from alternatives to bond markets, which are being roiled by the prospect of rate rises. According to Refinitiv Lipper, investors bought $6.9Bn in U.S. dividend funds in January, the highest net purchases since October 2006. The Schwab US Dividend Equity ETF and SPDR S&P Dividend ETF led inflows, receiving about $1.7Bn each last month, while First Trust Rising Dividend Achievers ETF obtained $1.0Bn. 
• There has been elevated volatility in global equity markets this year on concerns over higher yields and inflation levels, which tend to squeeze corporate profit margins. Dividend funds are seen as safe and offering some stability in that scenario, as they hold well-established companies that have better pricing power and a track record of providing stable income. 
• Dividend funds' higher inflows were also due to the recent investor shift towards what is called value stocks, and away from the growth stocks, the latter referring to equities with higher potential which had outperformed during the initial rapid recovery from the coronavirus pandemic. 
• Economists predict moderate growth this year, prompting investors to look back at stocks trading at affordable levels, or value stocks, which often also offer higher dividends. Sectors such as energy and banks, which have high dividend yields, are expected to enjoy revenue growth this year, benefitting from higher interest rates and inflation levels.

(Source: Reuters)

• British households are facing the worst cost of living crisis for decades, as soaring inflation, declining real wages and an energy crisis eats into household incomes. 
• Inflation in the U.K. has soared to levels not seen for decades, with the latest reading hitting an annual 5.4% for December, the highest it has been since March 1992. 
• Welfare payments that are linked to inflation will increase by 3.1% in April, the government announced this month, in line with the Consumer Prices Index reading from September 2021. State pensions will also be increased by 3.1%. 
• The latest official data showed that average earnings, when adjusted to account for inflation, fell by around 1.0% in November from a year earlier, the first decline in wages since the height of the coronavirus pandemic. 
• Meanwhile, taxes on earned income are set to increase by 1.25 percentage points from April to help fund health and social care costs. It’s a move that Prime Minister Boris Johnson is reported to be pushing ahead with, despite pressure to U-turn from lawmakers within his party. 
• Last Thursday saw Ofgem, the regulator for the U.K. energy sector, raise its energy price cap by 54%, meaning millions of households’ annual energy bills will increase by around £700 from April. Given the U.K.’s reliance on natural gas as an energy source, the country has been hit particularly hard by a gas shortage that pushed wholesale prices up to record highs across Europe last year.

(Source: CNBC News)

• QWI Investments Limited reported a net profit of $83.04Mn (EPS $0.06) for its first quarter ending December 31, 2021, a 9.5% decline the same period last year. 
• The lower outturn was influenced by a $14.4% reduction in gains from investments. QWI's investment portfolio has high exposure to Jamaica equities (75% of its total portfolio). Throughout QWI’s first quarter the Jamaican stock market declined, which resulted in lower stock prices, and subsequently, adversely affected the company’s topline. However, looking at the company’s top five Jamaican stock holdings, which includes only main market stocks, only Caribbean Cement experienced a significant decline during the quarter. 
• Earnings were also eroded by a surge in administrative expenses surged from $10.62Mn to $32.32Mn due to increased insurance and investment management expenses. Of note that no fees were incurred in Q1 FY 2020-21 for the services of the Investment Committee.
• QWI’s stock price has declined by 1.59% since the start of the calendar year. The stock closed Tuesday’s trading session at $0.87 and currently trades at a 42% discount to its net asset value (NAV). The most recent NAV per share was $ 1.50 as of January 28, 2022.

 (Sources: Company Financials and JSE)

• Structural weaknesses in Jamaica's economy are reflected in Fitch’s Short-Term Economic Risk Index (STERI) score of 53.1. This puts Jamaica in the bottom half of the 26 Caribbean countries for which Fitch compiled STERI scores. 
• Investment policy has been poorly targeted and inefficient, presenting a headwind to economic growth, while vulnerability to external shocks, coupled with historically high levels of borrowing, has spurred two sovereign debt defaults since 2010. 
• While the government has already greatly improved the situation under International Monetary Fund guidance, further progress is needed says, Fitch. In the short term, Jamaica faces a slow rebound as the tourism industry continues to regain momentum. The downturn in the sector has weakened US dollar inflows, exerting downward pressure on the value of the Jamaican dollar.

(Source: Fitch Solutions)

• The Minister of Tourism, David Collado, revealed that in January 2022, 530,956 non-residents arrived in the country, 129% more than the previous year, of which 82% were of Dominican origin. Despite the cancellation of flights from the United States to the Dominican Republic due to snowstorms that affected the US East Coast, non-resident arrivals remained above half a million tourists. 
• Collado explained that these indicators show that the country continues to lead the arrival of tourists in the Caribbean; however, the outbreak of the omicron variant and the subsequent tightening of mobility restrictions resulted in fewer Canadian visitors for the country. Non-resident visitors from the rest of the world, excluding the United States and Canada, registered an all-time high of 245,301. 
• Amidst the pandemic, this significant tourism growth may lead to major gains in tourism sector earnings and economic growth by enhancing employment opportunities and fiscal revenues. In terms of employment, this should improve in local communities supporting growth in disposable incomes and socio-economic conditions, which could lead to an improved standard of living.

 (Source: Dominican Today)

• For the last three weeks, The Bahamas has seen a persistent downward trend in the number of Covid-19 cases and hospitalization. However, the Director of the National HIV/AIDS and Infectious Disease Programme, Dr. Nikkiah Forbes cautioned that while this is the case, the behavior of the public will determine whether the trend continues. Consequently, the course of the virus will be very dependent on what is done individually and collectively, the health system, and support for mitigating COVID. 
• Forbes explained that the trend is not cause for complacency as the behavior of the public could still impact the caseload. She pointed out that the spike in infections in early January correlated with the increased social activities and travel over the holiday season — two weeks following the season. 
• The Bahamas, like several other Caribbean countries in the region, has yet to reach a 50% vaccination rate among its population. As of Saturday, 159,839 people had been fully vaccinated in The Bahamas representing around 49% of those eligible to be vaccinated.

 (Source: Eye Witness News)

• The Commerce Department said on Tuesday that the trade deficit increased 27.0% last year to an all-time high of $859.1Bn. The deficit was at $676.7Bn in 2020. Chief economist at FWDBONDS in New York has said that the US trade picture won’t return to normal until the pandemic purchases start to slow and life returns to what it was. 
• The trade gap represented 3.7% of gross domestic product, up from 3.2% in 2020. The economy grew 5.7% in 2021, the strongest since 1984 after the government provided nearly $6.0Tn in pandemic relief, which fueled consumer spending on goods. 
• The goods deficit shot up 18.3% to a record $1.1Tn last year. Imports of goods hit an all-time high of $1.8Tn. They were driven by imports of industrial supplies and materials, which increased to their highest level since 2014. Food imports were the highest on record as were those of capital, consumer, and other goods. There were record imports from 70 countries in 2021, led by Mexico, Canada, and Germany. 
• Robust import growth overshadowed a sharp rebound in exports. Goods exports surged 23.3% to a record $1.8Tn. Exports of industrial supplies and materials, foods, consumer goods, other goods, and petroleum were the highest on record. 
• The United States logged record exports to 57 countries last year, led by led by Mexico, which increased to $276.5Bn. Shipments to China rose to $151.1Bn, while exports to South Korea increased to $65.8Bn.

(Source: CNBC News)