• Throughout 2023, the Dominican Republic faced challenges due to the high cost of essential products, influenced by global events beyond local control.
• The COVID-19 pandemic and the Russia-Ukraine war significantly impacted the world economy. These events increased freight costs for raw materials and fertilizers, raising food production and housing project costs in the Dominican Republic.
• Despite this, prices remained relatively stable in 2023, with maritime freight costs dropping by over 50%. Essential products like fresh chicken, eggs, oil, and rice showed price stability. Fuel prices remained almost constant throughout the year, benefiting from government subsidies.
• Additionally, the government maintained various measures to mitigate inflation’s impact. These included fuel subsidies and financial support to sectors like electricity, transportation, and food production. In 2022, the government allocated substantial funds to these sectors, positively impacting product prices in 2023.
• Finally, the Central Bank’s financial policies, such as interest rate adjustments, have been effective in curbing inflation, with expectations for the recovery of real wages for the working class.

(Source: Dominican Today)

• China will strive to expand domestic demand, ensure a speedy economic recovery, and promote stable growth, according to an interim report on China's 14th five-year plan published by parliament on Wednesday.
• According to Zheng Shanjie, head of the state economic planning body, the country will "prioritise the restoration and expansion of consumption, stabilise bulk consumption, and promote consumption of services".
• In recent months, the government has unveiled a series of measures to shore up a feeble post-pandemic economic recovery, held back by a property slump, local government debt risks, and slow global growth.
• China will deepen its market-oriented reforms to boost development. The country will also prevent and resolve risks in key areas and co-ordinate the resolution of risks in real estate, local government debt, and small and medium-sized financial institutions.
• Zheng also said China needs to step up its development of high technology to overcome a blockade on technology exports imposed by some countries. “China must accelerate breakthroughs in key core technologies, achieve a high level of scientific and technological self-reliance, and avoid technologies and industries being 'locked' in the low-end and middle-end."

(Source: Reuters)

• According to the S. Department of Energy, the United States has finalized contracts to purchase three million barrels of oil to help replenish the Strategic Petroleum Reserve (SPR) after the largest sale in history last year.
• The department said it bought the oil for delivery to a site in Big Spring, Texas, for an average of $77.31 a barrel, below the average of $95 a barrel that oil sold for in 2022.
• Of note, President Joe Biden's administration conducted sales last year, including a record one of 180Mn barrels, to help control oil prices after Russia, a large crude exporter, invaded Ukraine.
• The U.S. has now purchased about 14Mn barrels for replenishment after last year's sales. About 4Mn barrels are also coming back to the SPR by February as oil companies return oil that had been loaned to them through a swap.
• The Energy Department had already secured the cancellation of 140Mn barrels in congressionally mandated sales from the SPR scheduled from late this year through late 2026. The cancellation "has led to significant progress toward replenishment," the department has said.

(Source: Reuters)

• Thousands of public servants will no longer be required to submit statutory declarations to the Integrity Commission (IC) following parliament’s approval of an order to raise the threshold for submissions from $3.5Mn to $12Mn.
• The Integrity Commission (Total Annual Emoluments Exempt from Statutory Declaration Requirements) Order 2023 was approved following a resolution moved by Minister of Justice, Hon. Delroy Chuck, in the Lower House on December 19.
• The IC recommended the increase in September, citing the anticipated rise in declarations due to the increased salaries of workers under the public-sector compensation review.
• With the increased threshold, an estimated 10,000 public-sector workers would now be required to submit their statutory declarations instead of over 40,000 public-sector workers in December 2021.
• The IC is an anti-corruption body which functions under the Integrity Commission Act. Public servants, at a particular threshold of salary, are required to file their assets, liabilities, and income on an annual basis. This indicates to the Commission that they are not undertaking any activity as a result of their being employed to the public service that is detrimental to the service.

(Source: JIS)

• Sygnus Credit Investments Limited (SCI) has advised on the Basis of Allotment of its JMD and USD Preference Shares Offers. The Invitation closed on Friday, December 15, 2023, at 4:30 p.m. and was oversubscribed in all classes. The company received approval to upsize all classes of the shares.
• Class C shares were oversubscribed by 109.00%, totalling 16,727,200 shares, and was upsized to 16,000,000. All applicants of Class C Preference Shares will be allotted the first 250,000 shares applied for and 71.13% of amounts in excess of the 250,000 shares.
• Similarly, Class D shares were oversubscribed by 68.00% or 678,080 shares and was upsized to 1,678,080. All applicants of Class D Preference Shares will be allotted 100% of the amount applied for.
• Class E shares were oversubscribed by 136.00% (or 1,355,760 shares), totalling 2,355,760, and was upsized to 2,321,920. All applicants of Class E Preference Shares will be allotted the first 25,000 shares applied for and 66.61% of amounts in excess of the 25,000 shares.
• Overall, the dollar value of shares allotted amounted to J$1.6Bn and US$40.0Mn. Refunds to applicants should be made available to the account stipulated in their application by January 5, 2024.
• It is anticipated that the Preference Shares will be listed and begin trading on the Jamaica Stock Exchange (JSE) by January 24, 2024.

(Source: JSE)

• Britain will deploy a naval ship off Guyana later this month, its Ministry of Defence said, as the South American nation faces a border dispute with neighbour Venezuela over the oil-rich Essequibo region.
• "HMS Trent will visit regional ally and Commonwealth partner Guyana later this month as part of a series of engagements in the region during her Atlantic Patrol Task deployment," a spokesperson said.
• The deployment follows a visit by a British junior foreign minister to Guyana earlier this month, intended to offer the UK's support for the country, an ally and former British colony.
• Guyana and Venezuela agreed earlier this month to avoid any use of force and not to escalate. Venezuelan Defense Minister Vladimir Padrino said in a social media post on Sunday that his country would remain "on alert following provocations that put at risk the peace and stability of the Caribbean and our America."
• The 160,000-square-km (62,000-square-mile) Essequibo region is generally recognised as part of Guyana, but in recent years Venezuela has revived its claim to the territory and its offshore areas after major oil and gas discoveries.

 (Source: Reuters)

• The Association of Multiple Banks of the Dominican Republic (ABA) has highlighted the pivotal role of the banking sector in reducing the housing deficit and enhancing access to decent housing. This progress, driven by Law 189-11 for Mortgage and Trust Market Development, is evident in the significant increase in housing-related financing over the last decade. 
• From October 2013 to October 2023, the number of loans for home acquisition and renovation soared from 34,711 to 85,592, marking a 147% increase, or about 5,088 financings per year. In terms of the mortgage portfolio, there was impressive growth from RD$66,219Mn to RD$221,889Mn in the same period, a 235% rise. This sector's average annual growth rate of 12.9% outpaced the overall loan growth rate, with an average disbursement of approximately RD$15,567Mn annually for home purchases and renovations.
• The ABA noted improvements in financing conditions, with interest rates decreasing by 196 basis points from 12.4% to 10.5% between October 2013 and October 2023 and longer credit terms becoming increasingly available.
• These developments have positioned the banking sector as a crucial facilitator for Dominican families in acquiring and improving their homes, thereby contributing to a reduction in the housing deficit. The sector has effectively transmitted monetary policy aimed at housing solutions, leading to more loans, higher disbursement amounts, and better credit terms.
• The ABA reaffirmed its commitment to working with various entities to further reduce this deficit. Initiatives like the Happy Housing program, a public-private initiative that the banking sector support, aims to provide more accessible low-cost housing for lower-income families in the Dominican Republic. This ongoing collaboration and focus on favorable mortgage conditions continue to support an increasing number of Dominican families in achieving or improving their homeownership.

(Source: Dominican Today)

• The oil and gas industry underwent a significant $250Bn buying spree in 2023, marked by major acquisitions from Exxon Mobil, Chevron Corp, Occidental Petroleum, and ConocoPhillips. The focus was on securing lower-cost reserves, with the Permian Basin emerging as a key target, positioning these companies to control around 58% of future production in the region.
• The acquiring companies aim to collectively pump at least 1 million barrels per day from the Permian Basin, which is expected to produce 7 million barrels per day by the end of 2027. A surge in oil demand, driven by the recovery from the pandemic downturn, has fueled optimism among acquirers.
• The consolidation trend is expected to have spillover effects on oilfield service companies and pipeline operators. With fewer customers holding more pricing power, service companies may face squeezed margins as contracts are renegotiated.
• Pipeline operators are experiencing their consolidation wave, with fewer new oil and gas pipes being approved and built. However, expansions to existing lines out of the Permian Basin will provide some relief.
• Acquisitions in 2023 were largely facilitated by strong stock prices, reducing the need for significant cash outlays. Rising interest rates made stock swaps more attractive than funding new renewable energy projects.
• However, the consolidation has prompted regulatory scrutiny, with U.S. antitrust regulators seeking additional information from Exxon and Chevron. The companies express confidence in approval but acknowledge the potential tension with governments prioritizing a shift to clean energy sources.

(Source: Reuters)

• U.S. retail sales increased by 3.1% between Nov. 1 and Dec. 24, slightly below Mastercard's earlier forecast and significantly lower than the previous year's growth, with factors like higher interest rates and inflation impacting consumer spending.
• Amazon and Walmart intensified promotions in November, with discounts perceived to be less profound than last year. Shoppers, remaining price-conscious, delayed purchases until Black Friday and Cyber Monday, culminating in a final surge on Super Saturday.
• E-commerce sales grew at a slower pace (6.3%) compared to the prior year (10.6%), indicating a moderation in online shopping after the pandemic highs.
• Apparel and restaurant sales increased (2.4% and 7.8%, respectively), while electronics sales saw a slight decline (0.4%) during the holiday shopping period.

(Source: Reuters)

• The Jamaica Stock Exchange (JSE), in paving the way for more cross-border listings locally, has signed its latest memorandum of understanding (MOU) with the Nairobi Securities Exchange (NSE) in Kenya in a move to forge stronger ties with Africa.
• In welcoming the historic partnership, the managing director of the JSE, Marlene Street Forrest, said it unlocks an enormous opportunity for the cross-listing of stocks and other investments by locals in the African country and vice versa.
• The JSE, now partnering with a growing list of countries across Africa, signed an MOU with Ghana last year and remains in dialogue with other states, such as Sierra Leon, as it works to strengthen African-Caribbean relations. Banking on the tenets of commonality, a shared past, and common objectives, markets across both regions believe they can work together for the common good.
• Ugas Mohamed, chair of the Capital Markets Authority in Kenya, mentioned that the key areas targeted for collaboration under the recent MOU were capacity building through knowledge transfer, joint training programmes, and possible cross-listings.
• The JSE aims to build out its green bond portfolio in 2024 and expressed an interest in learning from the NSE’s experience in this area. Importantly, this collaboration will unlock new opportunities for Jamaica, enhance market liquidity, and provide investors with diversified and innovative product offerings.

(Source: JSE)