As we wind down 2021 and get ready for 2022, the Jamaica Observer Business Desk has compiled some note worthy moments that made 2021 the year it came out to be.

1) BOJ raises interest rates amid heightened inflation – The Bank of Jamaica (BOJ) raised its policy rate three times between September and December from a historic low of 0.50 per cent to 2.50 per cent as point-to-point inflation hit 7.8 per cent at the end of November. This was well above the BOJ’s range of four per cent to six per cent, with the monetary policy committee noting that raising interest rates was a necessary move amid growing expectations of higher inflation and the need to prevent it from becoming a self-fulfilling prophesy. The average yield on the six-month (180 day) treasury bill went up from 1.18 per cent in July to 4.33 per cent in December. Economists have differed on their stance regarding the BOJ’s move to tame inflation with some noting the impact to growth and others agreeing that the move was a necessary expectation.

2) Alliance Financial Services suspended by BOJ – After the principals and main owners of Alliance Financial Services Limited (AFSL) were charged by the Financial Investigations Division (FID) over affiliate companies, the BOJ suspended AFSL’s cambio and remittance license on December 3. In addition, they were revoked from the BOJ’s FinTech Regulatory Sandbox which prevented them from processing payments through their Mastercard and Epay branded cards. This has left the staff of AFSL without work for the last four weeks, resulted in their contract with the National Water Commission (NWC) being cancelled and their remittance and payment affiliates on the edge as a revenue source vanished overnight. The companies, which had co-branded Mastercard’s or had Epay cards, can no longer withdraw funds or top up their cards, but only use the remaining balance on the card. Peter and Robert Chin are set to return to court on January 10 with a stop order currently in place to prevent them from leaving the country.

3) Sagicor Investments sues Cornerstone Financial – Sagicor Investments Jamaica Limited (SIJL) has decided to sue Cornerstone Financial Holdings Limited (CFHL) for US$4.06 million ($629 million) in the Supreme Court of Barbados. In a motion filed on December 15, SIJL is seeking to have an interim injunction put in place on the directors and CFHL to prevent more shares from being issued in subsequent rights issues. CFHL has struck back and said that SIJL knew the risks of not participating in the rights issues (July 2020 and August 2020) and that they are still seeking someone to buy out their stake. CFHL owns 74.1581 per cent of publicly listed company Barita Investments Limited which received $13.5 billion and $10.78 billion in its September 2020 and September 2021 additional public offerings.

4) Cemex pushes through 4 per cent royalty fee on Carib Cement – Mexican multinational building materials company Cemex SAB de CV pushed through its proposal to be paid a four per cent fee under a master services and intellectual property agreement at Caribbean Cement Company Limited’s (CCC) December 7 annual general meeting (AGM). Though most Jamaican shareholders spoke out against the move, Cemex invoked a poll through their 79.04 per cent ownership in CCC to secure a 91 per cent majority win. The agreement is set to go into effect on January 1 and would see the fee being charged on revenue and paid to various Cemex subsidiaries. This would equate to $804.32 million being charged based on Carib Cement’s 2020’s full year revenue of $20.11 billion. This move comes ahead of CCC’s US$30 million expansion in 2022 to increase its capacity by 30 per cent to 1.4 million tonnes. The move along with a depressed third quarter has seen CCC’s stock price fall by 35 per cent during the current quarter (October – December).

5) Guardian Holding returns to the JSE – Guardian Holding Limited (GHL) relisted on the main market of the Jamaica Stock Exchange (JSE) on May 5 after a seven-year hiatus. This decision unlocked further value for its parent company NCB Financial Group Limited along with the thousands of shareholders in Trinidad and Tobago. Though the stock has remained down since its cross listing on the JSE, GHL remains up 46 per cent on its domestic Trinidad and Tobago Stock Exchange (TTSE). GHL also became the first company to list on the JSE’s private market on February 16 as it listed tranches B and D which totalled $7 billion. GHL’s cross listing was followed by an announcement that Massy Holdings Limited had decided to cross list on the JSE next month. Massy’s stock price has gone up 72 per cent year-to-date on the TTSE with the company proposing a 20 to 1 stock split for its January 21 AGM.

6) Fire at Jamalco and Facey Commodity – Even amidst the hard tides facing many companies during the year, the Jamalco alumina refinery and Facey Commodity Company Limited were ravaged by fires on August 22 and October 6, respectively. The fires caused significant damage to both facilities with the Jamalco fire costing the company US$500,000 per day in losses with an estimated $3 billion price tag to get it back to half operation while Facey Commodity saw billions in losses from the destruction of property and inventory. Though Facey has found an alternative to restart operations and limit the disruption, the Jamalco fire may impact the plans to list the entity on the JSE. Jamalco is a joint venture which is 51 per cent ownerd by The Noble Group with the Jamaican government owning the remaining 49 per cent, through an entity called the Clarendon Alumina Productions (CAP).

7) Sagicor exits Playa – Sagicor Group Jamaica Limited (SJ) decided to exit its position in Playa Hotels and Resorts in January after the leadership and board decided that the risk posed to shareholders was not warranted. This saw Sagicor Real Estate X-Fund Limited sell its 14.87 per cent stake to Sagicor Financial Corporation Limited and to the general public at US$5 per share. This saw X-Fund and in turn, SJ record a $233.09 million loss on disposal with $13.60 billion in net proceeds from the sale. This deal came 30 months after X-Fund disposed of $29.6 billion in hotel assets in June 2018 to Playa for US$100 million in cash and a 15 per cent stake in Playa through shares. Playa’s share price has somewhat recovered to US$7.73, but the business is still reeling from the pandemic.

8) BOJ frees up dividends and gains independence – After imposing a block on dividends to maintain financial stability after the economic fallout from the novel coronavirus pandemic, the BOJ decided to remove the limitation on April 6. The move prevented deposit-taking institutions and financial holding companies from paying out dividends unless it was to those who owned less than one per cent of the company and the remaining shareholders agreed to a deferral. Though Scotia Group Jamaica Limited and Sagicor Group Jamaica Limited charged through and continued paying its quarterly and semi-annual dividends respectively, many other companies decided to defer or limit the pay-outs made to shareholders or pay none at all. As a result, NCB Financial Group Limited has only paid one dividend since the pandemic started with that payment coming after the BOJ’s release on dividends. The release also meant companies like Proven Investments Limited and Panjam Investments Limited would finally get access to the capital they’d be paid from their associate companies.

The BOJ became independent on April 16 through an amended BOJ Act and creation of the monetary policy and financial regulatory committees. This resulted in the BOJ being accountable to parliament through semi-annual presentations while continuing the mandate of financial stability which included the targeting of inflation between four to six per cent.

9) IDB shake up – Therese Turner – Jones became the first major person to fall after the visit of new InterAmerican Development Bank (IDB) President Mauricio Claver-Carone. Turner-Jones was the head for Jamaica and other parts of the IDB in the region after being appointed in April 2016.

10. Lockdowns and variants diminishes hope for brighter days – Though vaccine rollouts had began to make their way to Jamaica and the rest of the world, the COVID-19 virus and its variants have stalled the recovery of the local and global economy. The rise in cases pushed the Government of Jamaica to implement lockdown days in March, April, August and September in a bid to contain the virus. The reopening of the economy has been marred with curfews, changing measures and a spike in virus related after effects. Even though Jamaica has seen more than 23 per cent of its eligible population being double vaccinated, the emergence of Delta and Omicron variants have resulted in a surge of cases and new measures put in place to stop further damage from the virus.

— David Rose