• Antigua’s redeveloped Deep Water Harbour port will help Antigua and Barbuda achieve its goal of becoming an Eastern Caribbean transhipment hub. Prime Minister Gaston Browne stated that the facility is the sole container terminal port in the OECS, allowing it to provide services to neighbouring nations.
• The Chinese construction giant China Civil Engineering Construction Corporation redeveloped the port for $90Mn. The work began in 2018 but was plagued by delays due to the COVID epidemic.
• Of note, with the holiday season in full swing, port officials have implemented several measures to accommodate the typical increase in traffic. “So far, we have seen the ability to prepare the cargo and get it ready, which has advanced availability and increased our ability to deliver,” Telemaque noted.
• The port currently features a brand-new cruise berth, cargo and logistics facilities, and more amenities. Additionally, offices have been constructed to house Customs and Excise, the Plant Protection Unit, Immigration, and other services to prevent consumers from having to travel to and from St. John’s.

(Source: Caribbean News Now)

• The Federal Reserve raised interest rates by half a percentage point on Wednesday and projected at least an additional 75 basis points of increases in borrowing costs by the end of 2023 as well as a rise in unemployment and a near stalling of economic growth.
• The Fed's latest quarterly summary of economic projections shows U.S. central bankers see the policy rate, now in the 4.25%-4.5% range after Wednesday's 50-basis-point increase, at 5.1% by the end of next year, according to the median estimate of all 19 Fed policymakers.
• The Federal Reserve will deliver more interest rate hikes next year even as the economy slips towards a possible recession, Fed Chair Jerome Powell said on Wednesday, arguing that a higher cost would be paid if the U.S. central bank does not get a firmer grip on inflation.
• Policymakers expect their interest-rate hikes to push the unemployment rate, now at 3.7%, to 4.6% in the final quarter of 2023 and stay there through 2024.
• Further, Fed policymakers have become more pessimistic about the outlook for economic growth, with a median projection for GDP growth next year of 0.5%, versus September's expectation of 1.2%.

(Source: Reuters)

• Britain’s economy returned to growth in October as activity bounced back from the impact of the additional bank holiday for the Queen’s funeral, however, a long recession is still expected. The Office for National Statistics said gross domestic product (GDP) rose by 0.5% in the month, after a decline of 0.6% in September when many businesses closed their doors during the national mourning period.
• However, GDP shrank by 0.3% in the three months to October, reflecting concerns over the strength of the economy as consumers and businesses tightened their belts amid the highest rates of inflation for 41 years.
• The Bank of England said last month the economy was probably already in a recession that could last until the end of 2023 after GDP fell by 0.2% in the three months to September. Despite a recovery in October, a return to contraction in November and December could spell a second consecutive quarter of decline – the technical definition of a recession.
• With inflation above 11% during Russia’s war in Ukraine driving up energy costs, the Bank of England is widely expected to further raise interest rates on Thursday for the ninth time in a row. However, the rate-setting monetary policy committee is expected to be split, with a minority of its nine members likely to push for a slower pace of rate increases amid the risk of a lengthy recession.
• Jeremy Hunt, the chancellor, said high inflation was slowing economic growth across the world, and the International Monetary Fund had forecast a third of the world economy will be in recession this year or next.

(Source: The Guardian

• Jamaica Broilers Group (JBG) reported a net profit of $1.91Bn for its six months ended October 29, 2022, representing a 119.3% increase relative to last year. This performance was mainly attributed to strong revenue growth, though losses from discontinued operations tempered bottom-line growth. Net profit from continuing operations for H1 amounted to $3.02Bn, 220.0% higher than the corresponding period of 2021.
• Over the six months, JBG revenues increased by $10.76Bn or 30.7% to $45.84Mn. This revenue growth was primarily driven by increased production and sale of poultry, as well as the increased sale of baby chicks to small farmers. The reopening of the Jamaican economy, particularly the tourism industry, also contributed to the increased demand that drove sales.
• However, the company’s cost of sales has increased by 24.9% to $34.75Mn, which weighed on its gross profit margin, declining from 79.3% in H1 2021 to 75.8% in H1 2022. However, its operating profit margin improved to 9.7% from 4.9%, highlighting increased operating cost efficiency.
• Going forward, the company is expected to see both revenue and net profit growth for the coming quarters, as it benefits from the Christmas season demand and increased tourist arrivals influencing demand for its products.
• JBG’s stock price has decreased by 0.15% since the start of the calendar year. The stock closed Monday’s trading session at $28.99 and currently trades at a P/E of 8.3x, which is below the Main Market Distribution & Manufacturing Average of 15.4x.

(Sources: JSE and NCBCM Research)

• Fitch Solutions has revised its 2022 fiscal deficit forecast for the Dominican Republic to 3.4% of GDP, from 3.1% previously, as expenditures surprised to the upside in mid-2022. In response to inflationary pressures from the Russian invasion of Ukraine, the government increased public sector wages by 18.6% y-o-y and subsidies by 160.6% in the year through October – which represent 25.7% and 12.6% of current expenditures, respectively – while revenue growth has remained stable.
• In 2023, the fiscal deficit is expected to narrow to 3.2% of GDP, primarily due to subdued expenditures, which will fall from 19.6% of GDP in 2022 to 19.1% in 2023. Fitch expects that the government will prioritize fiscal consolidation in the year ahead, as a global rate-tightening cycle has raised the cost of borrowing.
• Current expenditure is expected to decline significantly from 17.7% of GDP in 2022 to 16.8% in 2023, as the government attempts to temper subsidies – particularly on fuels and transportation – and public sector wage spending. Despite the overall reduction in government spending in per cent of GDP terms, it will remain above 2021 levels, but much less than the pre-pandemic average.
• Government revenues will remain stable, falling only slightly from 15.9% of GDP in 2022 to 15.8% in 2023. Fitch expects that growth in 2023 will ease from 4.6% in 2022 to 4.2%, as softer goods and tourism demand from the US dampens DR export growth.
• Fitch forecast that the government debt burden will continue to grow from 47.5% of GDP in 2022 to 47.7% in 2023. Additionally, elevated global interest rates have raised borrowing costs, which will also pressure the Abinader administration to cut its debt load. Consequently, total government debt is expected to fall to 47.2% by 2026.

(Source: Fitch Solutions)

• On Dec. 12, 2022, S&P Global Ratings revised the outlook on its long-term ratings on Peru to negative from stable and affirmed the 'BBB' long-term foreign currency and 'BBB+' long-term local currency sovereign credit ratings, as well as the 'A-2' short-term foreign and local currency sovereign credit ratings.
• The negative outlook reflects the risk to the sovereign's creditworthiness from the enduring political standstill and challenging relationship between the country's executive and legislative branches of government. Former President Pedro Castillo's recent attempt to dissolve Congress and his subsequent ouster from office is the latest development of Peru's long-standing political impasse, which threatens to weaken the government's capacity to implement timely policies to support robust private investment and economic growth.
• S&P could lower the ratings by one notch if a prolonged political impasse or further adverse developments reduce the predictability of policymaking or worsen institutional stability, auguring badly for economic policy outcomes.
• On the other hand, the rating agency could revise the outlook to stable over the next two years if Peru makes progress on reducing the heightened political uncertainty and maintaining continuity in key economic--including fiscal and monetary--policies. A timely reduction of the uncertainties created by recent developments, along with prospects of greater stability in governance and solid economic policies, could sustain the current sovereign credit rating.

(Source: S&P Capital IQ

• Global public and private debt saw its biggest drop in 70 years in 2021 after reaching record highs because of the impacts of COVID-19, but overall remained well above pre-pandemic levels, the International Monetary Fund said on Monday, Dec. 12.
• In a blog released with its inaugural Global Debt Monitor, the IMF said total public and private debt decreased by 10 percentage points to 247% of the global gross domestic product in 2021 from its peak of 257% in 2020. That compares to around 195% of GDP in 2007, before the global financial crisis.
• The unusually large swings in debt ratios - or "global debt rollercoaster" - were caused by the economic rebound from COVID-19 and the ensuring swift rise in inflation, the IMF said.
• There are growing concerns about the ability of low- and middle-income countries to repay their debts, with an estimated 25% of emerging market countries and over 60% of low-income countries either in or near debt distress.
• High inflation levels continued to help reduce debt ratios in 2022, but spending will increase if inflation becomes persistent, which could lead to higher premiums. The IMF said governments should pursue fiscal policies that help reduce inflationary pressures now and debt vulnerabilities over the long term while continuing to support the most vulnerable.

(Source: Reuters

• The November U.S. budget deficit jumped by $57Bn or 30% from a year earlier to $249Bn, a record for the month, as revenues fell and outlay for education, healthcare and interest on the public debt rose sharply, the U.S. Treasury said on Monday.
• Receipts for November fell 10% or $29Bn from a year earlier to $252Bn, while outlays rose 6% or $28Bn to $501Bn, also a November record.
• Driving the revenue decline was a 4% drop in individual withheld tax receipts, a 64% increase in individual tax refunds and a 98% decline in Federal Reserve earnings.
• The outlays were driven by a $14Bn, or 18% increase in Medicare costs, and an $11Bn, or 94% increase in education costs due to changes in direct student loan programs and public service loan forgiveness, a Treasury official said.
• The Treasury's interest costs on U.S. public debt grew 53% or $19Bn during November, but this was largely offset by a $17Bn decline in tax credits for children and low-income workers. For the first two months of fiscal 2023, the Treasury's interest payments are up $48Bn, or 87%.
• The Treasury's deficit for the first two months of fiscal 2023 was down 6%, or $20Bn, to $336Bn, with outlays down 2% and revenues up 1% compared to the year-earlier period.

(Source: Reuters)

• Massy Holdings Ltd has advised that on November 28th, 2022, its Board of Directors approved the acquisition of Air Liquide, Trinidad and Tobago Limited by Massy Gas Products Holdings Ltd. (MGPHL), a subsidiary of the Company.
• MGPHL entered into a Share Purchase Agreement with Air Liquide International S.A. to purchase 100% of the share capital of Air Liquide for between US$51.5 Million and US$58 Million; with the higher-end range related to an earnout that is payable annually based on additional value considerations being met. Completion of the transaction remains subject to regulatory approval by the Trinidad and Tobago Fair Trading Commission.
• The acquisition of Air Liquide, a manufacturer and supplier of industrial gases (oxygen, nitrogen and argon), is aligned with MGPHL’s strategy to grow its core business.
• The acquisition will represent an 11.4% increase in the Massy Group’s assets and will contribute to an approximate 3% increase in the Group’s profit. For the Gas Produ­cts Portfolio, the acquisition is expected to increase its profit before tax by about 14%.

(Source: JSE)

• The Dutch Caribbean Securities Exchange (DCSX) and the Jamaica Stock Exchange (JSE) have signed a Memorandum of Understanding to partner on several market initiatives to grow the financial services industry in their respective jurisdictions.
• Both stock exchanges will partner in areas such as digitization, market education, cross-listing and accessing the European markets. The JSE is seeking to continue forging this partnership with DCSX as it pursues its 2025 vision to expand its borders for growth and sustainability.
• de Graaff, DCSX’s Managing Director, highlighted that partnering with other stock exchanges will allow the regional markets to evolve. “The Jamaica Stock Exchange has proven to be very successful in developing a liquid local market. A true example for us in Curacao”, he added.

(Source: JSE)