• The top five Western oil and gas firms, including BP, Chevron, Exxon Mobil, Shell, and TotalEnergies, returned over $111Bn to shareholders in 2023 through dividends and share repurchases, slightly exceeding the $110Bn returned in 2022.
• The oil and gas firms experienced a significant drop in net profits in 2023 to $123Bn, compared to the record $196Bn in 2022 when energy prices surged following geopolitical events. Despite the decrease, companies aim to reassure investors amid uncertain prospects for fossil fuels.
• Amid geopolitical turmoil and economic uncertainty, Chevron CEO Mike Wirth emphasized the commitment to delivering higher returns and lower carbon, seeking to maintain confidence among investors, including pension funds traditionally attracted to the sector for steady dividends.
• The energy sector's influence on the S&P 500 has diminished, accounting for 4.4% of the index by January 2024, down from around 14% in the last decade. Factors such as the tech sector's rise, oil majors' performance issues, and increasing environmental concerns contribute to the reduced interest in the energy sector.

(Source: Reuters)

• Derrimon Trading Company Limited (DTL) has successfully secured a landmark financing partnership of up to US$13.00Mn with IDB Invest, the private sector arm of the Inter-American Development Bank (IDB). The funds are expected to support Derrimon in achieving key initiatives focused on trade financing, brand building, employment generation, and green energy implementation.
• The financing comprises three tranches: Tranche I: A committed senior financing of up to US$3.00Mn to finance the implementation of solar panels, and modernization of the company's warehouse and distribution center in Jamaica. Tranche II: A committed revolving credit line of up to US$5.00Mn to purchase goods from eligible suppliers in various jurisdictions, including Guyana, Suriname, and Norway. Tranche III: An uncommitted senior financing of up to US$5.00Mn to finance capital expenditure and/or working capital needs in Jamaica.
• The proceeds will be used to support capital and capacity building, reusable green energy and the modernization and enhanced efficiency of the company’s warehouse and distribution channels. The usage of the proceeds aligns with Derrimon's commitment to sustainable practices and the development of local infrastructure.
• The company’s stock price has increased by 4.17% since the start of 2024. It closed Tuesday’s trading session at $2.00 and currently trades at a P/E of 25.64x, which is above the Junior Market Distribution Sector Average of 16.12x. With planned investments with funds from this new partnership, we expect to see some improvement in Derrimon’s performance over the near to medium term.
• DTL engages in the retail and wholesale distribution of consumer goods in Jamaica.

(Sources: JSE & NCBCM Research)

• QWI Investments Limited (QWI) reported a net profit of $17.99Mn for its Q1 ending December 2023, which is a significant turnaround from the $64.92Mn net loss recorded in Q1 last year. The results reflected a slowdown in the pace of decline in the local stock market, but strong performance in its overseas portfolios.
• QWI overseas portfolio appreciated 13.9% during the quarter and produced unrealized gains of $71.69Mn. Market conditions in Jamaica remained unfavourable resulting in unrealised losses of $30.76Mn and realized losses of $3.92Mn.
• QWI's investment portfolio has high exposure to Jamaica equities (70% of its total portfolio). Throughout the December quarter, the Jamaican stock market declined as reflected in the -0.7% movement in the JSE Combined index. Although there were standouts, there was a general decline in stock prices due to the high interest rate environment and tight market liquidity, and this negatively impacted the growth in the company’s topline.
• In contrast US stocks defied expectations and posted a strong increase in share prices as buoyed by easing inflation, a resilient economy and the prospect of lower interest rates, especially in the last two months of the year. As such, QWI reported a $37.66Mn gain from its US investments portfolio compared to the $76.71Mn loss recorded in Q1 of the prior year.
• Earnings were tempered by the rise in administrative and selling expenses for the quarter, which amounted to $5.51Mn or 40.19% more than the $13.70Mn reported in the corresponding period of 2023. Admin costs were also higher largely due to higher accruals for investment management costs.
• QWI’s stock price has declined by 4.92% since the start of the calendar year to $0.58 on February 6, 2024, and it currently trades at a 53.6% discount to its net asset value (NAV). The most recent NAV per share was $ 1.25 as at December 2023.

(Sources: QWI Financials & NCBCM Research)

• On January 19, 2024, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with The Bahamas and endorsed the staff appraisal without a meeting on a lapse-of-time basis.
• The Bahamas’ economy continues to rebound vigorously, driven by large tourism inflows. Real GDP growth is estimated to have reached 4.3% in 2023 (from 14.4% in 2022), while the unemployment rate fell below 9%.
• Inflation has been on a downward path since mid-2022. Backed by a strong recovery of tourism, the current account deficit is projected to have narrowed to 6.2% of GDP in 2023 (from 8.2% in 2022).
• Furthermore, the report noted that a strong cyclical recovery in revenues and a wind-down of pandemic-related spending improved the fiscal balance of the Bahamas. The fiscal deficit narrowed to 3.9% of GDP in 2022/23, while central government debt fell to 84% of GDP. Under current policies, the IMF staff projects a deficit of 2.6% of GDP in 2023/24 with debt falling to 78% of GDP by 2027/28.
• The economic outlook is favourable, albeit with downside risks. Tourist arrivals and real average spending, which surpassed pre-pandemic levels in 2023, should continue to rise in the near term, boosting real GDP and helping to narrow external and fiscal imbalances. Risks to the outlook include an economic slowdown in tourism source markets and the potential for costly natural disasters. Furthermore, raising potential growth beyond 1.5% is conditional on addressing bottlenecks in the energy sector and labour markets.
• That said, building fiscal buffers and investing in renewable energy infrastructure will help address downside risks stemming from natural disasters, global economic uncertainty, and climate change.

(Source: International Monetary Fund)

• Barbados says it expects its tourism sector to receive a boost of 25,000 seats for the 2024/2025 winter season after Delta Air Lines announced it was returning to the island with scheduled flights out of Hartsfield-Jackson Atlanta International and John F Kennedy (JFK) International Airports.
• Barbados' Tourism and International Transport Minister Ian Gooding- Edghill told a news conference that over the past few months, the Barbados Tourism Marketing Inc. (BTMI) had been engaged in a consistent and aggressive strategy of increasing and improving airline connections with the rest of the world.
• He said as a result, the government has finalised an agreement resulting in the return of Delta Air Lines from November this year.
• Effective November 23, 2024, Delta will provide a seven-day-a-week service from Atlanta, Georgia, and provide once-weekly services on Saturdays from New York, commencing December 21 of this year.
• Overall real GDP is largely being driven by the revival of the international tourism sector amidst the lingering effects of domestic inflation. Continued demand for Barbados’ tourism products, supported by intensified marketing campaigns in key source markets, increased airlift, sporting events, and a full return to Crop-Over Festivities; are expected to continue to provide tailwinds to Barbadian economic growth in 2024 (forecast: 3.4%).

(Source: CariCris)

• Elevated shipping costs as a result of ongoing tensions in the Red Sea could impede the global fight against inflation, the Organization for Economic Co-operation and Development (OECD) said Monday.
• The Paris-based group estimates that the recent 100% rise in seaborne freight rates could increase import price inflation across its 38 member countries by nearly 5 percentage points if they persist. This could add 0.4% to overall price rises after a year, they added.
• In late 2023, major shipping firms began diverting their vessels away from Egypt’s Suez Canal, the quickest trade route between Europe and Asia, due to a spate of attacks by Iran-backed Houthi militants based in Yemen. Tensions remain high, with the navies of countries, including the United States, involved in the conflict.
• Ships are taking the longer Cape of Good Hope route around the southern coast of Africa, which increases journey times by between 30% and 50%, taking capacity out of the global market.
• However, the OECD also notes that the shipping industry had excess capacity last year, a result of new container ships being ordered, which should moderate cost pressures.
• Clare Lombardelli, chief economist at the OECD, told CNBC on Monday that a sustained increase in inflation as a result of the latest crisis is a risk, but not the group’s base case.

(Source: CNBC)

• Australia's central bank held interest rates steady on Tuesday but cautioned that a further increase could not be ruled out given inflation was still too high, a strong signal that it isn't in a hurry to start easing policy anytime soon.
• The relatively hawkish tone of the central bank's statement boosted the Australian dollar and saw futures push out the likely timing of a first easing to September from August. Wrapping up its first policy meeting of the year, the Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35% but left the door open to another rise if needed.
• Markets had wagered heavily on a steady outcome given inflation had eased by more than expected in the fourth quarter, but the RBA statement indicated it was still not confident that inflation was on a sustainable path towards its 2%-3% target.
• "While recent data indicate that inflation is easing, it remains high... The Board needs to be confident that inflation is moving sustainably towards the target range," said the RBA Board in a statement.
• The central bank did trim its forecasts for inflation and economic growth but emphasised demand was still running ahead of supply, suggesting it would be in no rush to cut rates.

(Source: Reuters)

• Listed Junior Market company iCreate Limited says it will be taking legal action against Sagicor Investments. The company says it is challenging the decision made by Sagicor Investments to place the digital and creative firm into receivership.
• CEO and founder of iCreate Tyrone Wilson said the decision was made after careful discussion with his legal team. The news comes less than 48 hours after it was made public that iCreate paid off the outstanding funds on the $24Mn bond from Sagicor Investments.
• "Once we got notice of the purported receivership, we immediately sought legal representation and engaged the services of Henlin Gibson Henlin led by King's Counsel Georgia Gibson Henlin. iCreate contends that Sagicor Investments Jamaica Limited Appointment of Receivership is invalid - a stance clearly communicated to Sagicor by our legal team throughout the last six weeks."
• He further stated that contrary to public perception, iCreate has continued to manage its operations independently since the notice of appointment of receivership.
• In response to iCreate's decision, Sagicor Investments said it wishes to reassure its stakeholders that it is confident in the propriety and legality of its actions relating to the receivership. Sagicor Investments said it is prepared to vigorously defend any litigation that may be filed against it in this matter.

(Source: RJR)

• In its latest meeting on January 31, the Banco Central do Brasil (BCB) cut the benchmark rate by 50 basis points to 11.25%; as inflation continues towards the target range (3%), and signalled further rate cuts to come.
• The decision made unanimously, marked a cumulative reduction of 250bps since the beginning of the easing cycle in August 2023. The central bank took this step as inflation continued easing, with the latest headline inflation reading coming in at 4.6% y-o-y for December.
• While this is above the BCB’s inflation target of 3.0%, it is on track to fall into the target band (1.5-4.5%) in the months ahead.
• For the upcoming March 31 meeting, Fitch expects a further 50bps reduction to 10.75%, driven by moderate inflation and slowing growth, though stable US rates will preclude a larger cut.
• Fitch sees a further 200bps reduction to a 9.25% benchmark rate by end-2024. Though this is slightly above consensus, Fitch does expect the bank will keep easing amid a further slowdown in inflation and growth.
• Risks to the outlook are balanced. The primary upside risk involves inflation potentially remaining high due to Brazil’s robust labour market, external pressures from Middle East tensions and fiscal policies. On the downside, a more aggressive Federal Reserve policy shift, with cuts being either deeper or sooner than anticipated, could potentially allow the BCB to reduce rates more rapidly.
• Unlike their US and European counterparts, Latin America’s central banks led the monetary policy tightening wave, as inflation spiked in the post-pandemic recovery. They are now leading the reversal of the interest rate cycle, with central banks in Brazil, Peru, Mexico, Colombia, and Chile already cutting their benchmark rates.
• These sovereigns have noted declining inflation levels, all of which have been tending to their respective targets and have begun cutting rates to shore up their economies as growth has slowed or turned negative. Consequently, for Latin American central banks, the question over the next few months will be how fast and by how much they will cut interest rates as they balance the risks to inflation and navigating a soft landing. 

 (Source: Fitch Solutions and NCBCM Research)

• After a thorough five-hour budget presentation, two weeks of policy debates and scrutiny from the political opposition, the National Assembly, on February 2, 2024, approved the historic $1.146Tn budget to deliver accelerated improvement to the lives of Guyanese and development.
• Following the wrap-up of the consideration of the budget estimates, the Senior Minister in the Office of the President with Responsibility for Finance, Dr Ashni Singh, reported to the National Assembly that the estimates were thoroughly considered in the Committee of Supply.
• Budget 2024, the country’s largest to date, is the fifth budget to have been presented by the People’s Progressive Party/Civic (PPP/C) administration, since being elected to office in August 2020.
• This year’s budget is the largest ever, and despite being 46.0% bigger than Budget 2023, and is entirely financed by no new taxes.

(Source: CariCris)