06132022 BUSINESS

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MONDAY, JUNE 13, 2022

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Bahamas ‘stands out like sore thumb’ over COVID entry testing

Doctors: $50m COVID test boost set for ease

• BHTA chief: ‘Can’t be the last man standing’ • Nation urged to ‘mirror’ US relaxation move • Tourism hopes pandemic ‘in rear view mirror’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net TOURISM executives are warning The Bahamas “stands out like a sore thumb” over its continued COVID entry testing measures after the US eliminated such restrictions with effect from midnight yesterday.

Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, told Tribune Business the country “cannot be the last man standing” by still demanding that all visitors produce a negative COVID test taken within 72 hours of travel when multiple Caribbean rivals have eradicated all such restrictions.

ROBERT SANDS He and other resort executives, speaking after the US move, said The Bahamas’ continued testing mandate threatens the competitiveness of its major industry and the post-COVID “recovery momentum” at a time when

SEE PAGE 5

DOCTORS Hospital yesterday confirmed it will adjust its COVID testing workforce to “match” the anticipated demand falloff after generating “north of $50m” in revenues from 1.3m such screenings over the past two years.

Dennis Deveaux, the BISX-listed healthcare provider’s chief financial officer, told Tribune Business that apart from its Winton site, which was dismantled and removed within 24 hours last week, it intends to maintain all other COVID-related infrastructure despite the US eliminating the requirement for all international travellers to present a negative test upon entry.

Medical industry sources over the weekend

DOCTORS HOSPITAL ENTRANCE

• Provider to ‘flex’ workforce after US decision • ‘Several hundred jobs’ likely to go sector-wide • Testing sites shuttered, lay-offs already begun

estimated that “several hundred jobs” will be eliminated by the US move, which means that returning American tourists as well as Bahamians heading north will no longer need to test within 24 hours of departure. Testing staff at other providers received notice their services are no longer required with effect from Friday, with the sector shrinking almost as rapidly as it emerged two years ago.

Mr Deveaux, though, said Doctors Hospital had already been realigning its COVID testing staff in anticipation of the US move. He explained that none of the healthcare provider’s full-time staff will be impacted as the testing workforce featured mainly contract employees, and the impact on them would likely be minimised

SEE PAGE 6

COVID entry testing end ‘back on table’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A CABINET minister yesterday said eliminating The Bahamas’ COVID entry testing requirements will “come back on the table” for discussion this week in the wake of the US decision to eliminate such a mandate.

Dr Michael Darville, minister of health and wellness, told Tribune Business that while the Government wanted to “do away with” all COVID-related travel restrictions and impediments - including the Health Travel Visa - it will

DR MICHAEL DARVILLE only do so “in a responsible and phased manner”.

The Davis administration, he added, is especially concerned to avoid Jamaica’s

SEE PAGE 6

Subsidies jump despite $31.5m Bahamasair fall

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net SUBSIDIES to loss-making state-owned enterprises (SOEs) increased by more than $25m during the nine months to end-March 2022 despite an even greater drop in taxpayer support for Bahamasair.

The Government’s increased outlay, which accounted for 90 percent of the total sum provided for in the 2021-2022 Budget with three months of the fiscal year still left, came even though the national flag carrier consumed $31.5m less due to its return to a more normal flying schedule post-COVID.

The Ministry of Finance’s nine-month report, indicating that SOE subsidies will again exceed their Budget allocation, said: “Government subsidies, which include transfers to government-owned and/ or controlled enterprises that provide commercial goods and services to the public, widened by $21.3m (6.5 percent) to $351.3m, which equalled 90 percent of the Budget.

“Subsidies to public non-financial corporations were higher by $25.3m (8.1 percent) at $335.9m. Additional transfers of $36.1m were disbursed to the Public Hospital Authority (PHA) as the country further

SEE PAGE 4

PAGE 2, Monday, June 13, 2022

THE TRIBUNE

OVER 35% OF GOV’T LOCAL DEBT COMES DUE IN YEAR

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net MORE than one-third of the Government’s domestic debt holdings, equivalent to around $2.3bn, is due

to mature within the next year as it moves to eliminate “spikes” in principal redemption that place undue strain on its finances.

The Ministry of Finance, in its public sector debt bulletin for the nine months to

end-March 2022, said of its debt portfolio: “The average time to maturity (ATM) was 6.8 years at end-March 2022. An average 23 percent of the portfolio was coming due in one year, given the impact of the

short-term nature of Treasury bills and notes which extended the percentage of the domestic debt maturing in one year to a high of 35.5 percent.

“By comparison, only 7.7 percent of the external

debt is due to mature within one year.” The report shows that some $1.281bn in Bahamian dollar-denominated debt is due to mature, or come due for repayment, between April and June 2022, with a further $1bn set to be repaid next year.

The Government has given no indication that it will struggle to meet these obligations, and they will likely be refinanced or rolled over with existing creditors. “The distribution of public debt forecasted redemptions through 2032 continue to be shaped by the dominant portfolio of domestic bonds,” the Ministry of Finance report added.

“These bonds are primarily held by commercial banks, public corporations and institutional investors, and private individuals, who tend to maintain these investments amid the lack of readily available alternatives. The debt redemption profile featured a spike in domestic debt in 2023 and in external repayments in 2024 and again between 2027 and 2032, reflecting the scheduled maturity of various international bond issues.

“The Government intends to smooth out these

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spikes through appropriate liability management initiatives.” Once past 2023, the Government’s domestic debt repayment obligations ease considerably. Still, the combined sum set to mature in 2022 and 2023 is greater than the $1.877bn that will come due for repayment over the decades between 2033 and 2065.

“At end-March 2022, domestic debt stood at $5.8bn or 55.1 percent of the central Government’s total exposure for a net decline of $174m from the preceding quarter,” the report said. “The stock comprised net repayments of internal foreign currency debt to commercial banks ($63.5m), Central Bank advances ($60m), local currency commercial loans ($29.2m) and Treasury notes ($36.1m), plus a net bond issuance ($14.9m).

“Commercial banks were the largest domestic creditors, with loans and holdings of government securities aggregating $2.449bn or 42.2 percent of the total at end-March 2022. Credit sourced from the private sector via investments in government securities amounted to $2.298bn (39.6 percent), and debt held by the public corporations of $521.7m represented 9 percent of the total.

“Reflecting a quarterly net reduction of $87.3m, the Central Bank‘s credit position of $529.7m equated to 9.1 percent of the total domestic debt - down from 10.3 percent at end-December 2021. The interest rate pattern of domestic debt continued to reflect the Government’s strategic shift to fixed rate liabilities, in an effort to better manage interest rate risk.

“In this context, the fixed rate component of the domestic debt increased slightly to 59.4 percent at end-March 2022, with an equivalent decline in the variable rate component to 40.6 percent.”

THE TRIBUNE

Monday, June 13, 2022, PAGE 3

Gas stations: ‘No business can survive on 7% margins’

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net BAHAMIAN gas stations say “no business operates” on the unsustainable 7 percent gross margins they are enduring amid warnings the sector may have to cut jobs and operating hours to survive.

George Cartwright, owner/operator of the Esso station at the junction of Wulff Road and Montrose Avenue, told Tribune

Business: “I think you might have a reduction in employees due to the low turnover we’re having. That could happen. We might end up going to reduced hours, and we might end up going to reduced shop business hours also.

“There is no business that operates on 7 percent gross.

There is no way we can survive with that 7 percent gross margin because, out of that, we have to pay taxes and our staff.” Mr Cartwright’s blunt assessment

came as petroleum retailers continue to feel the pinch caused by a combination of high fuel prices and the industry’s price controlled, fixed-margin structure.

Raymond Jones, the Bahamas Petroleum Dealers Association’s (BPDA) president, affirmed that jobs are at risk if the Government does not reverse its stance that there be no margin increase in the short to medium-term.

He explained: “When you look at the high cost of

doing business and credit card fees, which are running at about 18 cents a gallon, and you’re looking at the cost of a gallon of gas and the 3 percent discount rate that the banks charge.

“You add to that the cost of depositing and the cost of labour, no one is looking to really fire staff, but we could see the point where we get to reducing the hours significantly to try to cut costs at least until we get to the point where the government sits down with

us and gives us an opportunity to negotiate a change in the mechanism by which our profit margin is actually calculated.”

Gas station operators have been urging the Government to increase their margins by 50 percent, which would raise them from the present 54 cents per gallon of gasoline to 81 cents, and change the basis upon which they are calculated to a percentage as opposed to a fixed mark-up. As of Friday, fuel

prices in Nassau were $6.13 at Rubis, $6.35 at Shell and $7.39 at Esso.

The last time petroleum dealers enjoyed a margin increase was in 2011, when the Hubert Ingraham-led Free National Movement (FNM) government granted a 10 cent increase per gallon of gasoline to take it from 44 cents to 54 cents. A 15 cent increase per gallon of diesel was also allowed.

However, Michael Halkitis, minister of economic

SEE PAGE FOUR

Investors ‘oversubscribe’ Bahamas $385m bond THE BAHAMAS last week shrugged off unfavourable capital markets conditions through a $385m bond offering that was “oversubscribed” by investors and minimises debt servicing payments for taxpayers.

The Ministry of Finance, in a statement, said the $200m guarantee provided by the Inter-American Development Bank (IDB) had kept the “all-in” yield or interest cost associated with the two bond series “substantially inside The Bahamas’ secondary market curve”.

This means that The Bahamas, and its taxpayers, would have had to pay much higher interest payments on this debt - likely in the double digits - if it had not been for the security provided to investors by the IDB guarantee which was arranged, and left behind, by the former Minnis administration.

The $385m bond is divided into two series Series A and Series B. The IDB guarantee secures the repayment of principal and interest for holders of the $135m Series A bond,

which carries a 3.85 percent interest coupon. The unsecured $250m Series B tranche, which carries a higher 9 percent interest rate to reflect the increased risk, will only benefit from the guarantee if “a residual portion equal to or greater than $2m” is left once the Series A notes have been repaid.

The two bond tranches carry different maturities, with the unsecured Series B set for principal repayment in June 2029, and the guaranteed (underwritten) $135m due to be redeemed seven years later in June 2036. The latest bond offering, together with the previous $206.5m Goldman Sachs repurchase agreement, which carries a 2.4 percent coupon, shows how eager the Government is to minimise debt servicing (interest) costs in a tough capital markets climate.

The Ministry of Finance said the $385m placement “marks the return of The Bahamas to the international debt capital markets” following the $225m it obtained in early December 2020, when it re-opened its earlier 8.950 percent issue

and obtained a better 8 percent interest coupon on that portion.

Noting that market conditions post-COVID have moved against this nation, it said: “In recent times, market conditions have not been favourable for emerging market countries like The Bahamas. The combination of increasing US Treasury rates, widening emerging market credit spreads, uncertainty regarding the outlook of inflation globally, rising commodity prices, among other considerations, have materially reduced market access for non-investment grade rated issuers globally.”

“The [IDB] guarantee, alongside the international market’s recognition of the ongoing recovery in the Bahamian economy and the Commonwealth’s commitment to responsible fiscal and debt management strategies, helped to catalyse investor demand for the dual-tranche offering, which was driven primarily by investors located in the US and continental Europe.”

Michael Halkitis, minister of economic affairs, said

in a statement: “The $385m offering demonstrates The Bahamas’ continued access to the international debt markets at a competitive all-in cost of funding, despite the challenging backdrop observed in the global capital markets. In meeting our budgetary financing requirements, the proceeds raised will also extend the average life of The Bahamas’ existing debt stock.

“During the marketing process of the bond offering, we had the opportunity to reach over 80 investors globally, and to discuss the ongoing recovery of the Bahamian economy following the challenges posed

by Hurricane Dorian and COVID-19.

“We also shared with them the key growth and employment promoting initiatives that the Government has implemented for the tourism and financial services sectors, and our commitment to attaining the medium-term fiscal consolidation targets articulated in the Fiscal Responsibility Act of 2018 and our medium-term fiscal and debt projections.”

Taxi drivers to push for 25% fare raise

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE Bahamas Taxi Cab Union’s (BTCU) president says it is seeking a 25 percent fare hike to ease the burden of higher gas prices and soaring inflation.

Wesley Ferguson, its president, told Tribune Business that he informed Keith Bell, minister of labour and Immigration, that the union will formally request a fare rise this week. The notification was given when Mr Ferguson and other union leaders in the Bahamas National Alliance Trade Union Congress

(BNATUC) met with the minister last week.

Mr Ferguson said: “We met with the labour minister and that was on the agenda, but that is not a labour matter. The BTCU negotiates directly with the minister for transport [Jobeth Coleby-Davis]; we don’t have industrial agreements. We don’t have contracts or anything like that. We just go into the minister and say what we want directly like that.

We’re not under labour because we don’t represent labourers; we represent self-employed people.”

There is a “tentative” meeting scheduled for this Wednesday, Mr Ferguson confirmed, adding that

a fare rise can no longer be delayed as gasoline topped $7 per gallon last week.

The BTCU previously held-off on a fare increase to see when gasoline prices would peak, but Mr Ferguson said he and his members cannot wait any longer and will seek relief from the Ministry of Transport now in the hope that there are no further surges in global oil prices.

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To access the IDB guarantee, The Bahamas has committed to promoting a healthier and more productive ocean. These include reforms and actions to foster business recovery for micro, small and mediumsized enterprises (MSMEs) in the Blue Economy and the pursuit of investment projects suitable for future Blue Bond financing.

The bond offering proceeds will be used for the refinancing, repurchase or retirement of existing government debt, and to finance general development in The Bahamas. Goldman Sachs acted as sole global co-ordinator and bookrunner for the Series A bond, and served as joint bookrunner for Series B with Oppenheimer & Company.

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PAGE 4, Monday, June 13, 2022

THE TRIBUNE

AML to invest further $500k in Exuma acquisition B

ISX-listed AML Foods plans to invest a further $500,000 in renovating the Exuma Markets that it purchased one year ago.

Gavin Watchorn, AML Foods’ president and chief executive, speaking at the inaugural anniversary, said the planned investment is in addition to the $300,000 spent on remodelling the business since its acquisition from the Minns family.

The Georgetown store was purchased from its owners of more than three decades in May 2021.

Speaking at the official grand opening, Mr Watchorn said: “Exuma Markets has been iconic to this community for decades, and we wanted to retain the tradition of the location’s name and the direct link to the island.

“Later in the year, we will begin to replace the dairy cooler and install 24 feet of new refrigerated doors, increasing the capacity and variety in the dairy department. In all, we expect to invest close to $500,000 in renovations”.

John Pinder, parliamentary secretary in the Ministry of Tourism, Investments & Aviation, and Central and South Abaco MP, was in attendance to cut the ribbon and mark the occasion.

Exuma Markets has already enjoyed significant upgrades since the ownership change. Over the past 12 months, AML Foods has invested $300,000 to remodel the store, putting in a new point of sales system, registers and front end, installing new flooring and lights, upgrading the air

conditioning, and increasing the capacity of the warehouse to accommodate greater storage.

The store operates under AML Foods’ Solomon’s neighbourhood format but its name has not changed. Exuma Markets has also seen increased arrivals of fresh produce and dairy products to the island, and added over 2,000 new items to its inventory.

Customers can also order from Fresh Market and Cost Right in New Providence, and have items delivered for pick-up

or delivery. Customers on Exuma can also sign-up for My Solomon’s Smart Rewards, and earn and redeem points when shopping at Exuma Markets as well as any Solomon’s or Solomon’s Fresh Market location in New Providence or Grand Bahama.

Mr. Watchorn said AML Foods has donated $25,000 to local groups and charities on Exuma since entering the market. He added that Exuma Markets will serve as the platform to launch e-commerce on the island later in 2022, and said: “We

look forward to continuing to grow in the Exumas, introducing new services for the island and working with key stakeholders to ensure that we become and remain a true corporate partner.”

Dino Duncombe, a long-time Exuma resident, and with experience in food retail, was unveiled as the new store manager.

Mr Watchorn said: “It’s the company’s intent to ensure the local team is well trained and ready to assume any role with increased responsibilities.”

BTC strengthens client ties with cultural events THE Bahamas Telecommunications Company (BTC) has hailed the return of cultural events, such as the Long Island Regatta and Cat Island Rake and Scrape Festival, for enabling it to reinforce customer ties post-COVID. Carole Barnett, BTC’s senior manager for events and sponsorships, said: “We are happy to be back in the Family Islands building stronger bonds within the communities. The Long Island Regatta is an event that BTC has supported for many years, and we were happy to support them again.

“Our sponsorships of these cultural events mean so much to us because we are intrinsically tied with the communities. We don’t just provide services; we have stores managed and

serviced by natives from each island. BTC remains the only telecommunications provider to service the entire Bahamas with a complete suite of landline, Internet, mobile and television services.

“We will continue to have a strong presence at our cultural events including the regattas, homecomings and the Goombay Summer Festival. These events allow our teams to move throughout the islands and connect with residential and business customers. For us, it’s much more than just closing a sale, but establishing long-term relationships,” she added.

“Leading up to the regatta, our small and medium-sized business team held a special mix and mingle for the business community. We discussed

their concerns and shared our smart solutions, which include super-fast speeds, mobile and a fully-customised website inclusive of an online store and cloud storage.”

BTC had several offers including its home Internet package, which provides two months free for a limited time. Mobile offers were also available for existing and porting mobile customers.

In addition to the Long Island Regatta, BTC also supported the Fraternal Love Festival at Botanical Gardens and the Cat Island Rake and Scrape Festival held last week. The carrier also recently supported the National Family Island Regatta in Exuma and the Bahamas Masqueraders at the recent Carnival Road March.

LONG ISLAND REGATTA. PEGGY WATKINS BTC RETAIL

Gas stations: ‘No business can survive on 7% margins’ FROM PAGE THREE affairs, has already ruled out an increase in industry margins on the basis that this will further hurt consumers already struggling with soaring inflation.

However, higher oil prices mean that petroleum retailers are increasingly having to use overdraft and credit facilities to pay their suppliers - Rubis, Esso and Shell - for the fuel they sell to consumers. And, as a result, they are incurring increasing fees for using these facilities.

“The retailers are getting to the point where the cost of purchasing fuel and the overdraft fees are to the point where they can’t afford it, and volumes are

down,” Mr Jones added, warning that fuel supply shortages may result. “It will be a shortage. There may be less operators in the business because they can’t maintain the power bills and everything else to stay open.

“Every time the price of gas goes up, the Government’s revenues increase and that’s the mechanism.

All we want to do is experience the same adjustment based on the cost of doing business as opposed to being stuck with a fixed margin.”

Petroleum retailers in the Family Islands, while feeling the burden of higher prices, are not as anxious to reduce hours or staff to cut costs. Susan Hanna, owner/

operator of Griffin’s Service Station in Governor’s Harbour, Eleuthera, said: “We have minimal staff here.

So I guess we’re in a different position, because I only have two pump attendants, so I need them.

“We’re also a service station that provides tire repairs and all that stuff.

I’m not sure how the service stations operate in Nassau with stuff like that, but we have other areas of our business that we can subsidise with the fuel.”

It is not a “dire situation” for dealers in Eleuthera either, despite operators also wanting to see margins increase. “I’m just hoping prices will soon come back down,” Ms Hanna added.

Subsidies jump despite $31.5m Bahamasair fall FROM PAGE ONE further contests the coronavirus pandemic; $14.2m to Water and Sewerage; $8.2m to National Health Insurance. Albeit, notable reductions during the period occurred for Bahamasair ($31.5m).

“Subsidies to private enterprises and other sectors fell by $4m (20.7 percent) to $15.4m. Transfers narrowed by $4.7m for salary grants for independent schools owing to COVID-19 support and $1.6m for small business support.”

The $408.749m in direct subsidies allocated in the 2022-2023 Budget are equivalent to 13.6 percent of the Government’s total planned $2.997bn recurrent expenditure for the 12 months to end-June 30 next year, providing further insight into how loss-making SOEs continue to bleed Bahamian taxpayers at a time when every $1 spent must generate value for money.

Together with the $588.988m allocated for debt service payments (interest) in the upcoming 2022-2023 fiscal year, total SOE subsidies of $457.183m equal $1.046bn. This is equivalent to almost 35 percent, or more than $1 out of every $3, in the government recurrent spending.

Tribune Business reported previously how the Government has temporarily shelved plans to slash subsidies to SOEs as it seeks Parliamentary approval to

borrow $251.4m for clearing unpaid bills prior to the 2021-2022 fiscal year-end.

Simon Wilson, the Ministry of Finance’s financial secretary, said then that cutting annual subsidies to the likes of Bahamasair and the Water & Sewerage Corporation “remains a priority” even though this collective sum is set to increase by almost $31m year-over-year in the upcoming 2022-2023 Budget year.

The Davis administration’s Fiscal Strategy Report, released just four months prior in January 2022, had committed the Government to pursuing plans left in place by its predecessor that were targeting a $100m cut in these subsidies “over the medium-term horizon”.

However, with the Government unveiling its second “supplementary Budget” in just eight-anda-half months since it took office on September 16, Mr Wilson said it had no choice but to address the “huge overhang” of unfunded liabilities generated by the likes of the Water & Sewerage Corporation.

Prime Minister Philip Davis QC, unveiling the 2022-2023 Budget in the House of Assembly, said an additional $251.4m in borrowing will raise the 2021-2022 fiscal deficit to $758.6m - a sum equivalent to 6 percent of Bahamian gross domestic product (GDP).

When this is added to the $564m deficit forecast for the upcoming 2022-2023

fiscal year, and those incurred during the two years covered by Hurricane Dorian and the COVID-19 pandemic, The Bahamas will have added $3.47bn to its national debt in just four years. That latter sum represents almost 30 percent of the Government’s projected $11.609bn direct debt at June 30,2013.

Loss-making SOEs have been one factor driving this annual debt decrease, and the Davis administration is increasing total taxpayer subsidies to them in the upcoming 2022-2023 fiscal year by 7 percent to $457.183m compared to the $426.202m forecast for the current Budget cycle.

Of the latter figure, some $398.251m had already been advanced as at end-March 2022.

Taxpayer funding is thus going in the opposite direction to the cost savings drive pledged in the Fiscal Strategy Report. Most of the increase is directed to three agencies: The Public Hospitals Authority ($9m to $232.456m); the Bahamas Public Parks and Beaches Authority ($8.8m to $24m); and the Water & Sewerage Corporation ($8m to $32m).

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Jason Russell, owner/ operator of Favor’s Service Station, Cat Island, added: “On the island here we don’t complain. If we have to do it then we have to do it. We don’t complain about it like city folks. But so far it’s going good; gasoline is at $8.65 a gallon now.

Despite the high price, Mr Russell is not thinking about cutting staff yet. “I

know they are saying that the price of fuel is about to go up again in Nassau, but on the island we have no other way of getting around. We don’t have jitneys and unless people can car pool everybody more or less needs their car,” Mr Russell said.

“If they aren’t going to give us the margin increase, then I wish the Government

would do something with the business license because they charge us based on our turnover. I know with the gas stations we have very high turnover, but low profits. And the Government makes more than us.

In VAT alone they are getting over 80 cents a gallon, so they need to look into that.”

THE TRIBUNE

Monday, June 13, 2022, PAGE 5

Choppy waters

By CHRIS ILLING Business Developer ActivTrades

D

owntown Nassau and its cruise port have seen some signs of life during recent months. The berths are full, and the tourists were roaming the streets and supporting the local economy once more.

Prior to 2020, no other market in the travel sector had grown as fast as cruises.

Year after year, the industry reported increasing passenger numbers. Between 2009 and 2019 alone, the annual number of travellers shot up from 17.8m to 30m. But then COVID-19 came.

Virtually overnight, the pandemic and the travel restrictions brought the global cruise market to a standstill.

We still remember downtown Nassau just a few months ago with all the closed shops and not a tourist in sight. Now, however, the industry is bursting with

hope. During the ongoing vaccination campaigns, the containment of COVID-19 seems to be gradually getting closer. Accordingly, the cruise lines are reporting an enormous increase in bookings for the 2021 second half, and especially for the whole of 2022.

But demand for vacations could weaken. High rates of inflation, the still ongoing pandemic and a slowing economy are impacting consumer purchasing decisions. Royal Caribbean, Norwegian Cruise Line and Carnival all saw lower sequential ticket prices from May through June, according to new data from Bank of America Global Research. Price decreases ranged from 1 percent to 3 percent compared to

May, with Carnival seeing the largest decrease (2.6 percent).

Price softness is likely to extend into 2023 and 2024, as ticket prices for the three cruise lines fell an average of 2.6 percent in the most recent survey for 2024. This is more specific to the cruise industry than a larger read from leisure consumers given more COVID strains (testing still needed), ever-increasing cruise capacity and, perhaps, some difficulty in attracting ‘newbies to cruises’ among consumers.

Bank of America has neutral ratings for Carnival and Norwegian stocks, and a low-performance rating for Royal Caribbean. And cruise vacations should also get more expensive

CHOPPY WATERS as companies try to outpace their own inflation in areas such as labour and fuel for travellers. Based on this data, the share prices of the major cruise lines took a big hit late last week.

Norwegian Cruise Line’s share price is currently down 2.94 percent.

It is down $0.40 from the previous day’s closing price, and now costs just $13.35 as at Friday, 10 June. Despite the loss, Norwegian Cruise Line (NCLH) shares are

still a long way from their all-time low. On March 18, 2020, the stock closed at $7.03, down approximately 50 percent from the current price.

Carnival Cruise Lines (CCL) share price dropped almost 18 percent during the previous week and is trading at $11.20. The same with Royal Caribbean Cruises (RCCL), whose shares went down to $46.60 or a drop of

18.30 percent during the last five trading days.

The three major cruise line stocks are down 30 percent since the start of the year. Traders are sceptical about the industry’s recovery from the pandemic. The savvy investor must decide now if this is a good entry point for cruise industry shares or if the travel industry still has some choppy waters in front of the its keel.

BAHAMAS ‘STANDS OUT LIKE SORE THUMB’ OVER COVID ENTRY TESTING FROM PAGE ONE

Americans - who account for around 90 percent of the country’s visitors - are finding it increasingly more difficult and expensive to obtain the necessary tests to travel to this nation.

With some hotel operators interpreting the Biden administration’s relaxation of border testing measures as a sign that “COVID is in the rear view mirror”, the pressure has intensified on the Davis administration to follow suit. Dr Michael Darville, minister of health and wellness, yesterday said the elimination of Bahamian entry testing measures is now “back on the table”, but added that remaining COVID measures will be removed via a “phased and responsible approach” (see other article on Page 1B).

Describing the longanticipated US move as “welcome news” for the tourism industry, Mr Sands said the decision by the Centres for Disease Control and Prevention (CDC) was “an indisputably clear indication that testing requirements are falling away on a global scale” and urged the Government to follow suit.

“The Bahamas cannot be the last man standing in this regard,” he said. “Therefore we strongly urge our Government to make a swift and decisive move to eradicate our own testing requirements for Bahamians and visitors wanting to enter The Bahamas.

“Not only will this achieve bilateral parity with our US counterparts; this will immediately put us in line with regional competitors such as Jamaica, Aruba, Bonaire, St.Lucia, Turks and Caicos, Grenada, US Virgin Islands,

Mexico and Costa Rica who have already removed the majority of testing requirements to enter their tourism destination.”

Asked how critical it was for The Bahamas to now respond to the US move, Mr Sands told Tribune Business: “It is extremely important because we do not need to put in place impediments to travel, and also impediments that give our competitors a distinct competitive advantage over us.

“The bigger issue, certainly from a US perspective, is that trying to find a COVID test to come to Nassau in many of our source markets is becoming increasingly difficult and, more importantly, increasingly more expensive. As an example, I was in Philadelphia last week travelling back to Nassau, and a rapid antigen test cost me $121.

Before it was less than $50.

“The cost has more than doubled, and for a family of four that’s a significant additional expense....The Bahamas should not be the last man standing in this area, and as long as people can show they are fully vaccinated that should be the major credential presented at the check-in-counter and allow them to travel.”

Mr Sands, who is also Baha Mar’s senior vicepresident of government and external affairs, added that the proportion of COVID-vaccinated guests at the Cable Beach mega resort now stands in the “high 90” percent range.

“The fact that I’ve listed a significant amount of our competitors, who have removed completely or to a large degree, the testing requirements for entry, we stand out like a sore thumb,” he told this

newspaper. “And if we want to continue to see upward momentum in the tourism business, and visitor satisfaction rates rise, this is one area to consider. The Government should give close attention to it.”

The US decision to eliminate the need for international travellers, including returning US citizens, to present a negative COVID test taken within 24 hours of travel removes an expense and inconvenience for Bahamians as well as the majority of this country’s visitor base.

While it may not spark a huge surge in visitor numbers, Mr Sands said he also hopes it will lead to the US and its CDC “moving away” from the country rating system that has The Bahamas at ‘Level 3’ or a ‘“high” number of COVID infections.

“What it will do is ensure that the satisfaction level of the vacation experience remains at a high level, and that word of mouth of a good experience in the destination and not having to go through these things will pay dividends in the longterm for the destination of The Bahamas,” the BHTA chief said.

“I think this will help to continue to improve the value of the vacation experience by that cost going away. That money spent

on testing could be used to spend on other things and enhance the vacation experience. This is another issue eliminated that takes away from the total enjoyment of the vacation in coming to Nassau. The time spent on identifying the testing location, making the appointment, creates a slight damper.

“While The Bahamas was well positioned to accommodate the CDC’s requirement to test to enter the US, given the myriad of testing sites on and off hotel properties throughout the archipelago, the fact the CDC has determined testing to enter/re-enter the US is “no longer necessary” is of paramount importance to our tourism sector. This effectively eradicates a significant friction point for travelers returning or travelling to or through the US,” Mr Sands continued./ “The US, our number one source market, has now joined the ranks of countries such as Canada, once recognised as having some of the strictest border entry requirements, and a number of Caribbean, European and South American countries who no longer require fullyvaccinated visitors to test to enter their jurisdiction.”

Other hotel operators were equally bullish on the

US move. Benjamin Simmons, proprietor of The Other Side and Ocean View properties on Harbour Island and Eleuthera, told Tribune Business: “I think it’s just another obstacle removed. I think it’s great.

COVID is in the rear view mirror and we’re getting back to normal. It’s one less expense that visitors have to worry about.

“It’s just a hurdle that’s not going to feature any more with the cost of the test, the sourcing of the test. If you were flying on Monday, and needed a test on Sunday, in the Out Islands that’s kind of hard to do. All that makes travel easier, and hopefully that’s going to create a bit of a bump for us over the summer months as we wind down.

“We’re starting to wind down [from the tourism season peak]. We’re at 60-70 percent occupancy right now. It’s down from 80-90 percent or higher in the busy season. I have noticed just recently there was a bit of an uptick in last minute bookings. I’m not sure what’s driving that.

COVID numbers are up in the US, so I don’t know if people want to escape the cities. I don’t know what it is, but hopefully this news adds to it.”

Mr Simmons also voiced optimism that the US

elimination of COVID entry test requirements would encourage Europeans, who typically fly to The Bahamas via the US, to start travelling that route in greater numbers once again. They represent The Bahamas’ higher spending, higher yielding visitors who typically stay in the destination longer.

And he expressed hope that “the tourism powers that be kind of read the writing on the wall” when it comes to The Bahamas’ COVID entry testing protocols, a sentiment shared by Magnus Alnebeck, the Pelican Bay’s general manager.

The Grand Bahamabased hotelier, branding the US decision as “fantastic” and “amazing”, said: “I hope The Bahamas will quickly follow suit and drop it for incoming visitors as well. I think it will be a good thing if we mirror it.

I’m not sure if it will put pressure on or not, but it will be a good thing if we actually mirror it.

“There are several destinations in the Caribbean that have already dropped it, so I think it will be great if The Bahamas drops it as well. It will be great if we can say to our US visitors that you don’t need a test to come in or go back to the US, and you can go back and forth test free.”

PAGE 6, Monday, June 13, 2022

THE TRIBUNE

DOCTORS: $50M COVID TEST BOOST SET FOR EASE FROM PAGE ONE

because they work other jobs or are full-time nursing and medical students.

The financial chief added that while some of its COVID testing infrastructure, such as the separate sites at Baha Mar’s three hotels, may be “consolidated” due to the US decision, it will not be completely eliminated because the need for such screening will remain locally due to continued infections and workplace testing.

While declining to provide a precise figure because Doctors Hospital’s latest full-year financial results have yet to be disclosed, Mr Deveaux told this newspaper: “I could say fairly confidently that our COVID testing business would have done north of 1.3m tests, rapid antigen and PCR. And we’d have done revenues north of $50m over the two years.

“It’s been an important capacity for the country.

The 1.3m tests is not an insignificant number. It’s more than three times’ the population of The Bahamas, and a large chunk of that - probably north of 50 percent - has been tourists

trying to home or Bahamians travelling abroad.

“We look at it as a critical part of why the Bahamian economy successfully reopened, and it was a service we were happy to provide in addition to the local laboratories that supported us in providing capacity.

I think overwhelmingly Bahamians have expressed great satisfaction with the service, and we also have price leadership.”

Mr Deveaux said Doctors Hospital had “clearly anticipated there was likely to be a decline” in COVID testing demand from both Bahamians and tourists, given that the US was always going to eventually relax its entrance protocols,but “with the exception of the changes we have made at Winton we expect to keep all of our remaining infrastructure for the most part”.

“We will clearly match our resources in terms of staffing with the level of activity from the public,” he added. “We don’t expect to idle away any of our other operations. Our biggest operations are at Baha Mar. We are consolidating our infrastructure.

Traditionally we have had three sites

at Baha Mar, one for each hotel, and we’ll be discussing with management how we go about that.”

However, given that COVID remains a threat both in The Bahamas and globally, with 46 new cases recorded in this nation on Friday and some 28 persons “moderately ill” in hospital, Mr Deveaux argued that when it came to testing for the virus “we don’t expect it to go away”.

During peak COVID-19 infection surges, when test numbers hit 100,000 per month, Doctors Hospital had more than 270 persons employed to collect samples and analyse the results.

He confirmed that Doctors Hospital will “flex our contract workforce to match that demand”, which will involve not renewing contracts as they expire, given the reduction in testing need due to the Biden administration’s long-anticipated move.

Pointing out that Doctors Hospital’s Meldon Plaza site in Palmdale was accommodating the testing demand previously catered to by Winton, Mr Deveaux said all other test sites will remain open. He added that persons could

use them for services other than COVID-19 tests, including urine and blood tests, laboratory work and picking up and paying for prescriptions. “That’s a good projection of our capacity,” the chief financial officer said.

The US move, though, has been felt already by staff at other medical providers offering COVID tests.

One impacted employee, speaking on condition of anonymity, said they had been informed as early as Friday that their role had been made redundant. They had been told to lock-up the testing site, ensure all items and records were preserved, and hand in the keys.

Tribune Business sources said COVID testing stations at Jet Aviation and Odyssey Aviation, Nassau’s private aviation fixed base operators (FBOs), have been closed as well as a site at Sandals Royal Bahamian. A testing provider, speaking on condition of anonymity, said around 30 employees had been impacted and they were

scaling back to just one COVID testing location to assess how it will perform this week.

With COVID testing revenues effectively falling off a cliff, and slashed drastically, due to the Biden administration’s move, the provider added: “The numbers add up pretty quickly. I would definitely say it’s several hundred people whose jobs have definitely been affected. There’s no doubt about it. It’s not only the tests; it’s the administrators as well.

“Some people were set up to do COVID testing.

That’s all they do. Their entire operation is completely based around the COVID model of testing.

This was to be expected.

I saw the writing on the wall and we were preparing ourselves for what we need to do. I was reducing testing inventory, in the last month buying only what we needed as opposed to prebulk. Recognising what was coming up, I only ordered what was needed.”

The source said that, at the peak of COVID surges,

they were conducting some 500 tests per week. Meanwhile, Bonnie Culmer, chief executive/laboratory administrator at Bonaventure Medical Laboratory, told Tribune Business that while the reduction in test demand would impact her business and all other laboratories, staffing levels would not be impacted as the workers involved are all integrated into other areas of the business.

“It is going to impact the labs if the test is not required, as that is going to put us out of a lot of revenue we’d get from the rapid antigen test,” she said. “It’s a good thing if this means that COVID19 is starting to slow down, but from where we sit we have a lot more positive cases in-country. We are seeing more positive cases in-country, but there is no more antigen test to fly.”

Ms Culmer urged Bahamians to “keep your guard up”, as COVID-19 has not gone away, and added that the need for testing would remain locally.

COVID entry testing end ‘back on table’ FROM PAGE ONE recent experience where it eliminated the COVID mask mandate only to have to reinstate it due to a rise in infections. Asserting that The Bahamas had made “the right decision” at that time to keep its own mask mandate, Dr Darville said the reduction in local infections over the past week - as well as the US ending its own COVID entry test protocols - will bring further local easing to the forefront.

Affirming that the Government is seeking to “open up completely”, he credited lobbying from the Caribbean as well as from the US aviation industry and other tourism sectors for persuading the Biden administration to eliminate the requirement that all international travellers present a negative COVID test taken within 24 hours of their arrival.

Speaking after the Government delegation, of which he was part, had just returned from the Summit of the Americas in Los

Angeles, Dr Darville said: “The dropping of that requirement had a lot to do with the lobby from the Caribbean belt. That helps our tourism, when you remove that requirement to enter the US....”

He acknowledged that the US action “steers us back” towards the question of when The Bahamas will follow suit and eliminate the requirement for all visitors to produce a COVID test taken within 72 hours of arriving in this nation, and added: “That’s something that we’re going to be looking at from a technical perspective.”

While The Bahamas recorded some 46 new COVID-19 cases on Friday, with another 28 persons in hospital “moderately ill” with the virus, Dr Darville said he had been monitoring how the infection rate and numbers had started to ease over the past week.

“The numbers are moving in the opposite direction, which is a positive indicator for us given this fifth wave that we are in. We’re faring quite well, so the numbers are moving in the opposite direction,” he added.

“We’re back looking at the mask mandate as well as the testing to come in.

We’ve been doing some internal polling, and with the results of it, if you look at it, a lot of Bahamians feel it’s a bit too early to remove the mask mandate. When the EOC (government committee that monitors COVID) meets this Wednesday, the testing to come in will come back on the table.......

“All of these things we have to do away with, but I don’t want to get rid of something and have to put it back; it confuses people.

We’re looking to open up completely. We’re looking to do it responsibly and in a phased approach.”

The Government’s 20222023 Budget also indicates that it is planning to do away with the Health Travel Visa, initiated by the former Minnis administration as a check to ensure visitors were complying with COVID testing protocols, early in the new fiscal year.

Just $8m in spending has been allocated in the Ministry of Tourism’s budget for health travel visa-related spending for 2022-2023, compared to $37m for the current fiscal year. Similarly, the Government is forecasting that it will earn just $8m, in revenues from the scheme in the upcoming fiscal year compared

to $40m for the current 12-month period.

Based on the percentages, it would thus appear that the Davis administration is planning to eliminate the Health Travel Visa - which it much criticised while in Opposition - by September/October 2022.

Dr Darville told Tribune Business that the end “may even be before that”, adding that: “I cannot say exactly when we’re going to do it.”

But, while confirming the Davis administration’s desire to eliminate the Health Travel Visa, he admitted that he had been “juggling” with several critical aspects of the scheme. Besides the revenue it generates, he also acknowledged the value of the insurance component in helping to finance the care/evacuation of sick visitors such that they do not become a financial burden to the Government and Bahamian taxpayer.

Dr Darville also confirmed that the Government will continue to provide free COVID testing. However, one medical provider, speaking on condition of anonymity, questioned if the Davis administration has given thought to how it will continue to make COVID testing accessible and affordable to all Bahamians and residents nationwide with the private sector set to reduce its capacity following the US policy move.

Pointing out that the Government does not have the capacity to provide this resource by itself, they said: “To me, the real question is: People are still getting COVID. It hasn’t gone away. Yes, the US said they’re not going to require testing, but the reality is that COVID is still here.

What is the Government of the Bahamas going to do to ensure accessibility for testing for people who need to be tested, and that’s a significant number of people?

“What is going to be the plan, and how are they going to make it affordable? As the volume of tests decreases, costs are going to increase. We’ve had conversations with the providers of test kits, and they’ve made very clear as the demand decreases the cost of the kits will increase.

Who’s going to bear the added cost associated with that? Is it going to be the Bahamian people, is that going to be the provider?

Who’s going to be responsible for the added cost of testing?”

CALL 502-2394 TO ADVERTISE TODAY!

THE TRIBUNE

Monday, June 13, 2022, PAGE 7

INDIA, CHINA GROWING MARKETS FOR SHUNNED RUSSIAN OIL

By KRUTIKA PATHI AND ELAINE KURTENBACH Associated Press

INDIA and other Asian nations are becoming an increasingly vital source of oil revenues for Moscow despite strong pressure from the U.S. not to increase their purchases, as the European Union and other allies cut off energy imports from Russia in line with sanctions over its war on Ukraine.

Such sales are boosting Russian export revenues at a time when Washington and allies are trying to limit financial flows supporting Moscow's war effort.

India, an oil-hungry country of 1.4 billion people, has guzzled nearly 60 million barrels of Russian oil in 2022 so far, compared with 12 million barrels in all of 2021, according to commodity data firm Kpler.

Shipments to other Asian countries, like China, have also increased in recent months but to a lesser extent.

In an interview with The Associated Press, Sri Lanka's prime minister said he may be compelled to buy more oil from Russia as he hunts desperately for fuel to keep the country running amid a dire economic crisis.

Prime Minister Ranil Wickremesinghe said Saturday said he would first look to other sources, but would be open to buying more crude from Moscow. In late May, Sri Lanka bought a 90,000-metric-ton (99,000ton) shipment of Russian crude to restart its only refinery.

Since Russia's invasion in late February, global oil prices have soared, giving refiners in India and other

countries an added incentive to tap oil Moscow is offering them at steep discounts of $30 to $35, compared with Brent crude and other international oil now trading at about $120 per barrel.

Their importance to Russia rose after the 27-nation European Union, the main market for fossil fuels that supply most of Moscow's foreign income, agreed to stop most oil purchases by the end of this year.

"It seems a distinct trend is becoming ingrained now," said Matt Smith, lead analyst at Kpler tracking Russian oil flows. As shipments of Urals oil to much of Europe are cut, crude is instead flowing to Asia, where India has become the top buyer, followed by China. Ship tracking reports show Turkey is another key destination.

"People are realizing that India is such a refining hub, taking it at such a cheap price, refining it and sending it out as clean products because they can make such strong margins on that," Smith said.

In May, some 30 Russian tankers loaded with crude made their way to Indian shores, unloading about 430,000 barrels per day.

An average of just 60,000 barrels per day arrived in January-March, according to the Helsinki, Finlandbased Centre for Research on Energy and Clean Air, an independent think tank.

Chinese state-owned and independent refiners also have stepped up purchases. In 2021, China was the largest single buyer of Russian oil, taking 1.6 million barrels per day on average, equally divided

PUBLIC NOTICE

INTENT TO CHANGE NAME BY DEED POLL The Public is hereby advised that I, SHENAIKA CHARLES TELME of Season Street off Prince Charles, Nassau, Bahamas, intend to change my name to SHENAIKA TALME. If there are any objections to this change of name by Deed Poll, you may write such objections to the Chief Passport Officer, P.O.Box N-742, Nassau, Bahamas no later than thirty (30) days after the date of publication of this notice.

NOTICE

NOTICE is hereby given that ROJAY CLINTON REID of Eastwood Estate, New Providence, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 13th day of June, 2022 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

between pipeline and seaborne routes, according to the International Energy Agency.

While India's imports are still only about a quarter of that, the sharp increase since the war began is a potential source of friction between Washington and New Delhi.

The U.S. recognizes India's need for affordable energy, but "we're looking to allies and partners not to increase their purchases of Russian energy," Secretary of State Antony Blinken said after a meeting of U.S. and Indian foreign and defense ministers in April.

AN EMPLOYEE of a Bharat petroleum fuel station fills petrol in a vehicle in Mumbai, India, Saturday, June 11, 2022. India and other Asian nations are becoming an increasingly vital source of oil revenues for Moscow as the U.S. and other Western countries cut their energy imports from Russia in line with sanctions over its war on Ukraine.

Photo:Rajanish kakade/AP Meanwhile, the U.S. and its European allies are engaged in "extremely active" discussions on coordinating measures, perhaps forming a cartel, to try to set a price cap on Russian oil, Treasury Secretary Janet Yellen told a Senate Finance Committee meeting on Tuesday.

The aim would be to keep Russian oil flowing into the global market to prevent crude oil prices, already up

60% this year, from surging still higher, she said.

"Absolutely, the objective is to limit the revenue going to Russia," Yellen said, indicating the exact strategy had not yet been decided on.

While Europe could find alternative sources for its purchases of about 60% of Russia's crude exports, Russia also has options.

India's foreign minister, Subrahmanyam Jaishankar,

has emphasized his country's intention to do what is in its best interests, bristling at criticism over its imports of Russian oil.

"If India funding Russian oil is funding the war … tell me, then buying Russian gas is not funding the war? Let's be a little evenhanded," he said at a recent forum in Slovakia, referring to Europe's imports of Russian gas.

LEGAL NOTICE

LEGAL NOTICE

NOTICE

NOTICE

RCD Business Investment Ltd.

Blue Point Holding Enterprises Ltd.

In Voluntary Liquidation

In Voluntary Liquidation

Notice is hereby given that in accordance with Section 138(4) of the International Business Companies Act. 2000, RCD Business Investment Ltd. is in dissolution as of June 9th, 2022.

Notice is hereby given that in accordance with Section 138(4) of the International Business Companies Act. 2000, Blue Point Holding Enterprises Ltd. is in dissolution as of April 28th, 2022.

International Liquidator Services Limited, situated at 3rd Floor Withfield Tower, 4792 Coney Drive, Belize City, Belize is the Liquidator.

International Liquidator Services Limited, situated at 3rd Floor Withfield Tower, 4792 Coney Drive, Belize City, Belize is the Liquidator.

LIQUIDATOR ______________________

LIQUIDATOR ______________________

MARKET REPORT www.bisxbahamas.com

FRIDAY, 10 JUNE 2022

BISX ALL SHARE INDEX: BISX LISTED & TRADED SECURITIES 52WK HI 6.70 53.00 2.05 2.61 2.60 6.10 10.05 3.56 9.02 3.10 8.00 16.60 2.65 10.28 11.25 10.85 15.20 4.00 11.00 16.50

52WK LOW 4.75 32.12 1.49 2.20 1.30 5.75 6.96 2.82 4.25 2.27 5.95 9.75 1.99 7.05 10.02 9.55 13.10 3.50 8.19 15.50

SECURITY AML Foods Limited APD Limited Benchmark Bahamas First Holdings Limited Bank of Bahamas Bahamas Property Fund Bahamas Waste Cable Bahamas Commonwealth Brewery Commonwealth Bank Colina Holdings CIBC FirstCaribbean Bank Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank (Bahamas) Limited Focol Finco J. S. Johnson

PREFERENCE SHARES 1.00

1.00

1000.00 1000.00

1000.00 1000.00

1.00 10.00 1.00

1.00 10.00 1.00

Bahamas First Holdings Preference Cable Bahamas Series 6 Cable Bahamas Series 9 Colina Holdings Class A Fidelity Bank Bahamas Class A Focol Class B

CORPORATE DEBT - (percentage pricing) 52WK HI 100.00 100.00

52WK LOW 100.00 100.00

SECURITY Fidelity Bank (Note 22 Series B+) Bahamas First Holdings Limited

CLOSE

CHANGE

%CHANGE

YTD

YTD%

2432.13

-0.35

-0.01

203.89

9.15

SYMBOL AML APD BBL BFH BOB BPF BWL CAB CBB CBL CHL CIB CWCB DHS EMAB FAM FBB FCL FIN JSJ BFHP CAB6 CAB9 CHLA FBBA FCLB SYMBOL FBB22 BFHB

BAHAMAS GOVERNMENT STOCK - (percentage pricing) 115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.66 100.71 100.53 100.43 100.34 100.23 100.00 100.00 100.98 100.00

104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.98 100.26 100.28 100.43 100.04 100.00 89.62 89.00 90.24 90.73

MUTUAL FUNDS 52WK HI 2.52 4.69 2.22 207.86 212.41 1.73 1.83 1.82 1.05 9.37 11.83 7.54 16.64 12.84 10.77 10.00 10.43 14.89

52WK LOW 2.11 3.30 1.68 164.74 116.70 1.68 1.73 1.75 0.99 6.41 7.62 5.66 8.65 10.54 9.57 9.88 8.45 11.20

Bahamas Note 6.95 (2029) BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-7Y BGRS FL BGRS71023 BGRS FL BGRS68023 BGRS FL BGRS70022 BGRS FL BGRS75022 BGRS FL BGRS81037 BGRS FL BGRS88028 BGRS FX BGR129249 BGRS FX BGR131249 BGRS FX BGR132249 BGRS FX BGR136150

BAH29 BG0107 BG0207 BG0130 BG0230 BG0307 BG0330 BG0407 BSBGRS710237 BSBGRS680232 BSBGRS700220 BSBGRS750225 BSBGRS810375 BSBGRS880287 BSBGR1292493 BSBGR1312499 BSBGR1322498 BSBGR1361504

LAST CLOSE 5.35 39.95 2.04 2.35 2.47 6.10 9.75 3.56 8.15 2.82 8.00 16.00 2.87 10.26 11.93 10.85 15.20 3.98 10.00 15.50 1.00 1000.00 1000.00 1.00 10.00 1.00 LAST SALE 100.00 100.00 107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.98 100.26 100.53 100.54 100.34 100.00 89.62 100.00 100.00 100.00

CLOSE 5.35 39.95 2.04 2.35 2.47 6.10 9.75 3.54 8.15 2.82 8.00 16.00 2.90 10.26 11.91 10.85 15.20 3.98 10.00 15.50 1.00 1000.00 1000.00 1.00 10.00 1.00

BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings

VOLUME

10,000 33,950

500

0.00 0.00 0.00 0.00 0.00 0.00

CLOSE 100.00 100.00

CHANGE 0.00 0.00

107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.98 100.26 100.53 100.54 100.34 100.00 89.62 100.00 100.00 100.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund Leno Financial Conservative Fund Leno Financial Aggressive Fund Leno Financial Balanced Fund Leno Financial Global Bond Fund RF Bahamas Opportunities Fund - Secured Balanced Fund RF Bahamas Opportunities Fund - Targeted Equity Fund RF Bahamas Opportunities Fund - Prime Income Fund RF Bahamas International Investment Fund Limited - Equities Sub Fund RF Bahamas International Investment Fund Limited - High Yield Income Fund RF Bahamas International Investment Fund Limited - Alternative Strategies Fund Colonial Bahamas Fund Class D Colonial Bahamas Fund Class E Colonial Bahamas Fund Class F

MARKET TERMS

CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (0.02) 0.00 0.00 0.00 0.00 0.03 0.00 (0.02) 0.00 0.00 0.00 0.00 0.00

(242) 323‐2330 (242) 323‐2320 EPS$ 0.239 0.932 0.000 0.140 0.070 1.760 0.369 -0.438 0.140 0.184 0.449 0.722 0.102 0.467 0.646 0.728 0.816 0.203 0.939 0.631 0.000 0.000 0.000 0.000 0.000 0.000

VOLUME

DIV$ 0.170 1.260 0.020 0.080 0.000 0.000 0.260 0.000 0.000 0.120 0.220 0.720 0.434 0.060 0.328 0.240 0.540 0.120 0.200 0.610 0.000 0.000 0.000 0.000 0.000 0.000

INTEREST Prime + 1.75% 6.25% 6.95% 4.50% 4.50% 6.25% 6.25% 4.50% 6.25% 4.25% 4.53% 4.62% 4.50% 4.43% 4.87% 4.33% 5.55% 5.60% 5.65% 5.69%

NAV 2.52 4.69 2.21 197.44 202.39 1.73 1.82 1.82 0.99 9.37 11.79 7.54 15.94 12.47 10.74 N/A 10.43 14.89

YTD% 12 MTH% 0.99% 4.22% 0.36% 5.78% 0.67% 2.74% -2.97% -2.35% -4.72% 6.04% 0.83% 2.82% -0.18% 3.72% 0.76% 3.55% -3.55% -3.85% -0.02% 10.36% -0.33% 18.23% 0.22% 3.05% -3.89% 14.76% -1.04% -2.57% 0.81% 4.20% N/A N/A 3.00% 25.60% 7.90% 48.70%

P/E 22.4 42.9 N/M 16.8 N/M N/M 26.4 -8.1 58.2 15.3 17.8 22.2 28.4 22.0 18.4 14.9 18.6 19.6 10.6 24.6 0.000 0.000 0.000 0.000 0.000 0.000

YIELD 3.18% 3.15% 0.98% 3.40% 0.00% 0.00% 2.67% 0.00% 0.00% 4.26% 2.75% 4.50% 14.97% 0.58% 2.75% 2.21% 3.55% 3.02% 2.00% 3.94% 0.00% 0.00% 0.00% 6.25% 7.00% 6.50%

MATURITY 19-Oct-2022 30-Sep-2025 20-Nov-2029 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2022 26-Jun-2045 15-Oct-2022 22-Oct-2023 21-Jul-2023 29-Jul-2022 7-Sep-2022 26-Jul-2037 26-Jul-2028 15-Apr-2049 15-Jul-2049 15-Oct-2049 21-Apr-2050

NAV Date 31-Mar-2022 31-Mar-2022 25-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Mar-2021 31-Mar-2021 31-Mar-2021

YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful

TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | CORALISLE 242-502-7525 | LENO 242-396-3225 | BENCHMARK 242-326-7333

PAGE 8, Monday, June 13, 2022

THE TRIBUNE

Many baby formula plants weren’t inspected because of COVID

By MATTHEW PERRONE AP Writer U.S. regulators have historically inspected baby formula plants at least once a year, but they did not inspect any of the three biggest manufacturers in 2020, according to federal records reviewed by The Associated Press.

When they finally did get inside an Abbott Nutrition formula plant in Michigan after a two-year gap, they found standing water and lax sanitation procedures.

But inspectors offered only voluntary suggestions for fixing the problems, and issued no formal warning.

Inspectors would return five months later after four infants who consumed powdered formula from the plant suffered bacterial infections. They found bacterial contamination inside the factory, leading to a four-month shutdown and turning a festering supply shortage into a full-blown crisis that sent parents scrambling to find formula and forced the U.S. to airlift products from overseas.

The gap in baby formula plant inspections, brought on by the COVID-19 pandemic, is getting new

scrutiny from Congress and government watchdogs investigating the series of missteps that led to the crisis. A recent bill would require the Food and Drug Administration to inspect infant formula facilities every six months. And the government's inspector general for health has launched an inquiry into the FDA's handling of Abbott's facility, the largest in the U.S. Abbott resumed production at the plant early this month under a legally binding agreement with the FDA, but the shutdown and nationwide shortage exposed how concentrated the industry has become in the U.S., with a handful of companies accounting for roughly 90% of the market.

As COVID-19 swept across the U.S. in early 2020, the FDA pulled most of its safety inspectors from the field, skipping thousands of routine plant inspections.

The FDA did conduct more than 800 "mission critical" inspections during the first year of the pandemic, the agency said in a statement. Regulators selected facilities for inspections based on whether they

BABY formula is displayed on the shelves of a grocery store in Carmel, Ind. on May 10, 2022. A bill introduced early June, 2022, would require the Food and Drug Administration to inspect infant formula facilities every six months. U.S. regulators have historically inspected baby formula plants at least once a year, but they did not inspect any of the three biggest manufacturers in 2020.

Photo:Michael Conroy/AP carried a specific safety risk or were needed to produce an important medical therapy.

Only three of the nation's 23 facilities that make, package or distribute formula made the cut. The

FDA resumed routine inspections in July 2021.

The inspection records reviewed by the AP show gaps as large as 2 1/2 years between FDA's 2019 inspections and when regulators returned to plants owned by the three

leading formula manufacturers: Abbott, Reckitt and Gerber.

In fact, the FDA still has yet to return to one key plant owned by Reckitt and two owned by Gerber, according to agency records. All those facilities

ASIAN SHARES SINK AFTER INFLATION-DRIVEN RETREAT ON WALL ST

By ELAINE KURTENBACH AP Business Writer SHARES sank in Asia on Monday after a report that U.S. inflation worsened last month sent stocks reeling on Wall Street.

Major regional markets dropped more than 2% in early trading Monday, while U.S. futures slipped more than 1%. On Friday, the S&P 500 sank 2.9%, locking in its ninth losing week in the last 10.

Investors had hoped the highly anticipated consumer price report would show the worst inflation in generations had slowed a touch last month, passing its peak. Instead, the U.S. government said inflation accelerated to 8.6% in May from 8.3% the month before.

Investors took Friday's report to suggest the Federal Reserve will persist in raising interest rates and making other moves in order to slow the economy, to try to force forcing down inflation.

Tokyo's Nikkei 225 index lost 2.6% to 27,088.86 and the Hang Seng in Hong Kong also gave up 2.6%, to 21,245.99. In South Korea, the Kospi declined

A MAN wearing a protective mask rides a bicycle in front of an electronic stock board showing Japan’s Nikkei 225 and New York Dow indexes at a securities firm Monday, June 13, 2022, in Tokyo.

Shares sank in Asia on Monday after a report that U.S. inflation worsened last month sent stocks reeling on Wall Street.

Photo:Eugene Hoshiko/AP 2.8% to 2,524.52, while the Shanghai Composite index dropped 1% to 3,252.58.

Markets in Australia were closed for a holiday.

On Friday, the S&P 500 sank 2.9% to lock in its ninth losing week in the last 10, and tumbling bond prices sent Treasury yields to their highest levels in

WTO HOLDS BIG MEETING TO TACKLE VACCINES, FOOD SHORTAGES

By JAMEY KEATEN Associated Press THE head of the World Trade Organization predicted a "bumpy and rocky" road as it opened its highestlevel meeting in 4-1/2 years on Sunday, with issues like pandemic preparedness, food insecurity and overfishing of the world's seas on the agenda.

At a time when some question WTO's relevance, Director-General Ngozi Okonjo-Iweala hopes the meeting involving more than 120 ministers from the group's 164 member countries yields progress toward reducing inequality and ensuring fair and free trade.

Okonjo-Iweala acknowledged the Geneva-based trade body needs reform but said she was cautiously optimistic that a deal might be reached on at least one of the meeting's main ambitions like fisheries or COVID vaccines.

"The road will be bumpy and rocky. There may be a few landmines on the way," Okonjo-Iweala said. "We'll have to navigate those landmines and see how we can successfully land one or two deliverables."

In her opening address, she said a "trust deficit" had emerged over the years following the failure of negotiations known as the Doha

Round more than a decade ago.

"The negativism is compounded by the negative advocacy of some think tanks and civil society groups here in Geneva and elsewhere who believe the WTO is not working for people," she said. "This is, of course, not true, although we've not been able to clearly demonstrate it."

She cited an array of crises facing the world such as the COVID-19 pandemic; environmental crises like droughts, floods and heat waves; and inflationary pressures that have been compounded by food shortages and higher fuel costs linked to Russia's war in Ukraine. She noted higher prices are"hitting poor people the hardest."

"With history looming over us, with that multilateral system seemingly fragile, this is the time to invest in it, not to retreat from it," OkonjoIweala said. "This is the time to summon the much-needed political will to show that the WTO can be part of the solution to the multiple crises, the global commons that we face."

The WTO chief insisted that trade has lifted 1 billion people out of poverty, but poorer countries – and poor people in richer ones – are often left behind.

years. The Dow Jones Industrial Average lost 2.7%, and the Nasdaq composite dropped 3.5%.

The growing expectation is for the Fed to raise its key short-term interest rate by half a percentage point at each of its next three meetings, beginning next week. That third one

in September had been up for debate among investors in recent weeks. Only once since 2000 has the Fed raised rates by that much, last month.

Surging prices and expectations about Fed policy have sent the two-year Treasury yield to its highest level since 2008 and the

S&P 500 down 18.7% from its record set in early January. The worst pain has hit high-growth technology stocks, cryptocurrencies and other big winners of the pandemic's earlier days. Now the damage is broadening as retailers and others warn about upcoming profits.

Since early in the pandemic, record-low interest rates engineered by the Fed and other central banks have helped keep investment prices high. Now the "easy mode" for investors is being switched off. Since higher interest rates make borrowing more expensive, dragging on spending and investments by households and companies, there also is a risk the Fed could push the economy into a recession.

Investors worry food and fuel costs may keep surging, regardless of how aggressively the Fed moves, partly because of the crisis in Ukraine, which is a major breadbasket for the world.

Another report Friday showed consumer sentiment worsening more than economists expected.

Much of the souring in the University of Michigan's preliminary reading

are operating around the clock to boost U.S. formula production.

"The FDA would have had more chances to catch these issues if they'd been inspecting during the pandemic," said Sarah Sorscher, a food safety specialist with the Center for Science in the Public Interest. She acknowledged the difficult trade-off the FDA faced in pulling its inspectors to reduce their exposure to COVID-19.

"Certainly there was a price to pay for protecting their workers during that time."

Baby formula manufacturers were "consistently identified as a high priority during the pandemic," and there is currently no backlog of inspections, the agency told the AP in response to inquiries about the gaps. The agency said it skipped about 15,000 U.S. inspections due to COVID, but it has already made up about 5,000 of those, exceeding its own goals.

Under current law, the FDA is only required to inspect formula facilities every three to five years, but the agency has consistently inspected facilities annually — until the pandemic. was due to higher gasoline prices.

On Saturday, the national average for a gallon of regular gas surpassed $5, by a fraction of a penny, according to the AAA auto club.

That adds to several recent profit warnings from retailers indicating U.S. shoppers are slowing or at least changing their spending because of inflation.

Such spending is the heart of the U.S. economy.

The two-year Treasury yield zoomed to 3.05% following the inflation report from 2.83% late Thursday, a big move for the bond market.

The 10-year yield was also up, but not quite as dramatically as the twoyear yield. It rose to 3.19% as of early Monday, up from 3.15% Friday and 3.04% on Thursday. That's its highest level since 2018.

The narrowing gap between those two yields is a signal that investors in the bond market are more concerned about economic growth. Usually, the gap is wide, with 10-year yields higher because they require investors lock away their dollars for longer.

A two-year yield higher than the 10-year yield would be a signal to some investors that a recession may hit in a year or two.

PAGE 14, Monday, June 13, 2022

THE TRIBUNE

US INFLATION AT NEW 40-YEAR HIGH AS PRICE INCREASES SPREAD

By CHRISTOPHER RUGABER AP Economics Writer THE prices of gas, food and most other goods and services jumped in May, raising inflation to a new four-decade high and giving American households no respite from rising costs.

Consumer prices surged 8.6% last month from a year earlier, faster than April's year-over-year increase of 8.3%, the Labor Department said Friday. The new inflation figure, the highest since 1981, will heighten pressure on the Federal Reserve to continue raising interest rates aggressively.

On a month-to-month basis, prices jumped 1% from April to May, much faster than the 0.3% increase from March to April. Contributing to that surge were much higher prices for everything from airline tickets to restaurant meals to new and used cars.

Those price spikes also elevated so-called "core" inflation, a measure that excludes volatile food and energy prices. In May, core prices jumped a sharp 0.6% for a second straight month.

They're now 6% above where they were a year ago.

Friday's report underscored fears that inflation is spreading well beyond

energy and goods whose prices are being driven up by clogged supply chains and Russia's invasion of Ukraine. It also sent stock prices tumbling. The increased pressure on the Fed to raises rates even faster — which means higher-cost loans for consumers and businesses — will raise the risk of a recession, too.

"Virtually every sector has higher-than-normal inflation," said Ethan Harris, head of global economic research at Bank of America. "It's made its way into every nook and cranny of the economy.

That's the thing that makes

it concerning, because it means it's likely to persist."

Gas prices rose 4% just in May and have soared nearly 50% in one year.

The national average price at the pump reached $4.99 Friday, according to AAA, edging closer to an inflation-adjusted record high of $5.40.

The cost of groceries surged nearly 12% last month from a year earlier, the biggest such increase since 1979. Rising prices for grain and fertilizer after Russia's war against Ukraine, is intensifying that rise. Restaurant prices jumped 7.4% in the past year, the largest 12-month

gain since 1981, reflecting higher costs for food and workers.

Employers face immense pressure to raise pay in a job market that remains robust, with low unemployment, few layoffs and near-record job openings.

But while average wages are rising at their fastest pace in decades, they aren't increasing fast enough for most workers to keep pace with inflation. Many households accumulated savings from government stimulus aid during the pandemic and are now having to draw on those savings to pay bills.

THE WEATHER REPORT

5-Day Forecast

TODAY

ORLANDO

High: 93° F/34° C Low: 75° F/24° C

TAMPA

WEDNESDAY

THURSDAY

FRIDAY

Partly sunny with a thunderstorm

Warm with a moonlit sky

Mostly sunny and pleasant

Mostly sunny and nice

Mostly cloudy and comfortable

Turning cloudy

High: 87°

Low: 78°

High: 86° Low: 77°

High: 87° Low: 78°

High: 88° Low: 78°

High: 88° Low: 77°

AccuWeather RealFeel

AccuWeather RealFeel

AccuWeather RealFeel

AccuWeather RealFeel

AccuWeather RealFeel

AccuWeather RealFeel

97° F

86° F

96°-84° F

97°-85° F

97°-86° F

99°-85° F

The exclusive AccuWeather RealFeel Temperature® is an index that combines the effects of temperature, wind, humidity, sunshine intensity, cloudiness, precipitation, pressure and elevation on the human body—everything that affects how warm or cold a person feels. Temperatures reflect the high and the low for the day.

almanac

E

W

ABACO

S

N

High: 85° F/29° C Low: 79° F/26° C

7-14 knots

S

High: 89° F/32° C Low: 78° F/26° C

7-14 knots

FT. LAUDERDALE

FREEPORT

High: 89° F/32° C Low: 79° F/26° C

E S

E

W

WEST PALM BEACH

W

uV inDex toDay

TUESDAY

N

N

| Go to AccuWeather.com

TONIGHT

High: 92° F/33° C Low: 79° F/26° C

High: 87° F/31° C Low: 77° F/25° C

MIAMI

High: 90° F/32° C Low: 79° F/26° C

6-12 knots

KEY WEST

High: 88° F/31° C Low: 81° F/27° C

ELEUTHERA

NASSAU

High: 87° F/31° C Low: 78° F/26° C

Forecasts and graphics provided by AccuWeather, Inc. ©2022

N

The higher the AccuWeather UV IndexTM number, the greater the need for eye and skin protection.

tiDes For nassau High

Ht.(ft.)

Low

Ht.(ft.)

Today

7:13 a.m.

7:49 p.m.

2.5 3.5

1:27 a.m. -0.2 1:21 p.m. -0.7

Tuesday

8:08 a.m.

8:42 p.m.

2.6 3.6

2:21 a.m. -0.4 2:13 p.m. -0.8

Wednesday 9:02 a.m.

9:36 p.m.

2.6 3.7

3:15 a.m. -0.4 3:07 p.m. -0.7

Thursday

9:58 a.m.

10:30 p.m.

2.7 3.6

4:08 a.m. -0.4 4:03 p.m. -0.6

Friday

10:55 a.m.

11:25 p.m.

2.7 3.4

5:03 a.m. -0.4 5:00 p.m. -0.4

Saturday

11:55 a.m.

-----

2.6 -----

5:58 a.m. -0.3 6:00 p.m. -0.1

Sunday

12:21 a.m.

12:56 p.m.

3.2 2.6

6:54 a.m. -0.1 7:03 p.m. 0.1

sun anD moon Sunrise Sunset

6:20 a.m. Moonrise 8:00 p.m. Moonset

7:28 p.m.

5:16 a.m.

Full

Last

New

First

Jun. 14

Jun. 20

Jun. 28

Jul. 6

CAT ISLAND

E

W

High: 86° F/30° C Low: 78° F/26° C

N

S

E

W

7-14 knots

S

8-16 knots Shown is today’s weather. Temperatures are today’s highs and tonight’s lows.

Statistics are for Nassau through 2 p.m. yesterday Temperature High ................................................... 86° F/30° C Low .................................................... 81° F/27° C Normal high ....................................... 87° F/30° C Normal low ........................................ 74° F/23° C Last year’s high ................................. 92° F/33° C Last year’s low ................................... 72° F/22° C Precipitation As of 2 p.m. yesterday ................................. 0.31” Year to date ............................................... 25.72” Normal year to date ................................... 10.68”

High: 86° F/30° C Low: 78° F/26° C

Housing costs are still climbing.

The government's shelter index, which includes rents, hotel rates and a measure of what it costs to own a home, increased 5.5% in the past year, the most since 1991.

Airline fares are up nearly 38% in the past year, the sharpest such rise since 1980.

Rampant inflation is imposing severe pressures on families. Lower-income and Black and Hispanic Americans, in particular, are struggling because, on average, a larger proportion of their income is consumed by necessities.

ANDROS

SAN SALVADOR

GREAT EXUMA

High: 86° F/30° C Low: 78° F/26° C

High: 86° F/30° C Low: 79° F/26° C

N

High: 85° F/29° C Low: 78° F/26° C

E

W S

LONG ISLAND

tracking map

High: 86° F/30° C Low: 79° F/26° C

8-16 knots

MAYAGUANA High: 87° F/31° C Low: 81° F/27° C

Shown is today’s weather. Temperatures

CROOKED ISLAND / ACKLINS

are today’s highs and tonight’s lows.

RAGGED ISLAND High: 86° F/30° C Low: 80° F/27° C

High: 86° F/30° C Low: 79° F/26° C

GREAT INAGUA High: 89° F/32° C Low: 80° F/27° C

N

E

W

E

W

N

S

S

8-16 knots

10-20 knots

marine Forecast ABACO ANDROS CAT ISLAND CROOKED ISLAND ELEUTHERA FREEPORT GREAT EXUMA GREAT INAGUA LONG ISLAND MAYAGUANA NASSAU RAGGED ISLAND SAN SALVADOR

Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday: Today: Tuesday:

WINDS SE at 7-14 Knots SE at 6-12 Knots SE at 7-14 Knots ESE at 7-14 Knots ESE at 8-16 Knots E at 8-16 Knots ESE at 12-25 Knots E at 10-20 Knots SE at 8-16 Knots E at 8-16 Knots SSE at 4-8 Knots SE at 4-8 Knots SE at 8-16 Knots E at 8-16 Knots SE at 10-20 Knots E at 10-20 Knots ESE at 10-20 Knots E at 10-20 Knots ESE at 10-20 Knots E at 8-16 Knots ESE at 8-16 Knots ESE at 8-16 Knots E at 8-16 Knots E at 10-20 Knots SE at 8-16 Knots E at 8-16 Knots

WAVES 2-4 Feet 1-3 Feet 1-2 Feet 1-2 Feet 2-4 Feet 2-4 Feet 3-5 Feet 2-4 Feet 2-4 Feet 2-4 Feet 1-2 Feet 0-1 Feet 1-2 Feet 1-2 Feet 2-4 Feet 2-4 Feet 2-4 Feet 2-4 Feet 3-6 Feet 3-5 Feet 1-3 Feet 1-2 Feet 2-4 Feet 2-4 Feet 1-3 Feet 1-3 Feet

VISIBILITY 10 Miles 10 Miles 7 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 7 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles 10 Miles

WATER TEMPS. 82° F 82° F 86° F 86° F 83° F 83° F 83° F 83° F 84° F 84° F 84° F 85° F 85° F 86° F 83° F 83° F 83° F 83° F 82° F 82° F 84° F 84° F 83° F 83° F 83° F 84° F

THE TRIBUNE

Monday, June 13, 2022, PAGE 15

SEVERAL FACTORS ARE CONVERGING TO PUSH GAS PRICES HIGHER

By DAVID KOENIG AP Business Writer THERE is little evidence that gasoline prices, which hit a record $5 a gallon on Saturday, will drop anytime soon.

Rising prices at the pump are a key driver in the highest inflation that Americans have seen in 40 years.

Everyone seems to have a favorite villain for the high cost of filling up.

Some blame President Joe Biden. Others say it's because Russian President Vladimir Putin recklessly invaded Ukraine. It's not hard to find people, including Democrats in Congress, who accuse the oil companies of price gouging.

As with many things in life, the answer is complicated.

WHAT IS HAPPENING? Gasoline prices have been surging since April 2020, when the initial shock of the pandemic drove prices under $1.80 a gallon, according to government figures. They hit $3 in May 2021 and cruised past $4 this March.

On Saturday, the nationwide average for a gallon ticked just above $5, a record, according to auto club AAA, which has tracked prices for years.

The average price jumped 18 cents in the previous week, and was $1.92 higher than this time last year.

State averages ranged from $6.43 a gallon in California to $4.52 in Mississippi.

WHY IS THIS HAPPENING? Several factors are coming together to push gasoline prices higher.

Global oil prices have been rising — unevenly, but sharply overall — since December. The price of international crude has roughly doubled in that time, with the U.S. benchmark rising nearly as much, closing Friday at more than $120 a barrel.

Russia's invasion of Ukraine and the resulting sanctions by the United States and its allies have contributed to the rise.

Russia is a leading oil producer.

The United States is the world's largest oil producer, but U.S. capacity to turn oil into gasoline is down 900,000 barrels of oil per day since the end of 2019, according to the Energy Department.

Tighter oil and gasoline supplies are hitting as energy consumption rises because of the economic recovery.

Finally, Americans typically drive more starting around Memorial Day, adding to the demand for gasoline.

WHAT CAN BE DONE TO GET MORE OIL? Analysts say there are no quick fixes; it's a matter of supply and demand, and supply can't be ramped up overnight.

If anything, the global oil supply will grow tighter as sanctions against Russia take hold. European Union leaders have vowed to ban most Russian oil by the end of this year.

The U.S. has already imposed a ban even as Biden acknowledged it would affect American consumers. He said the ban was necessary so that the U.S. does not subsidize Russia's war in Ukraine. "Defending freedom is going to cost," he declared.

The U.S. could ask Saudi Arabia, Venezuela or Iran to help pick up the slack for the expected drop in Russian oil production, but each of those options carries its own moral and political calculations.

Republicans have called on Biden to help increase domestic oil production — for example, by allowing drilling on more

federal lands and offshore, or reversing his decision to revoke a permit for a pipeline that could carry Canadian oil to Gulf Coast refineries.

However, many Democrats and environmentalists would howl if Biden took those steps, which they say would undercut efforts to limit climate change. Even if Biden ignored a big faction of his own party, it would be months or years before those measures could lead to more gasoline at U.S. service stations.

At the end of March, Biden announced another tapping of the nation's Strategic Petroleum Reserve to bring down gasoline prices.

The average price per gallon has jumped 77 cents since then, which analysts say is partly because of a refining squeeze.

WHY IS U.S. REFINING DOWN? Some refineries that produce gasoline, jet fuel, diesel and other petroleum products shut down during the first year of the pandemic, when demand collapsed. While a few are expected to boost capacity in the next year or so, others are reluctant to invest in new facilities because the transition to electric vehicles will reduce demand for gasoline over the long run.

The owner of one of the nation's largest refineries, in Houston, announced in April that it will close the facility by the end of next year.

WHO IS HURTING? Higher energy prices hit lower-income families the hardest. Workers in retail and the fast-food industry can't work from home — they must commute by car or public transportation.

The National Energy Assistance Directors Association estimates that the 20% of families with the lowest income could be spending 38% of their income on energy including gasoline this year, up from 27% in 2020.

WHEN WILL IT END? It could be up to motorists themselves — by driving less, they would reduce demand and put downward pressure on prices.

"There has got to be some point where people start cutting back, I just don't know what the magic point is," said Patrick De Haan, an analyst for the gas-shopping app GasBuddy. "Is it going to be $5? Is it going to be $6, or $7? That's the million-dollar question that nobody knows."

HOW ARE DRIVERS COPING? On Saturday morning at a BP station in Brooklyn, New York, computer worker Nick Schaffzin blamed Putin for the $5.45 per gallon he was shelling out and said he will make sacrifices to pay the price.

"You just cut back on some other things — vacations, discretionary stuff, stuff that's nice to have but you don't need," he said.

"Gas you need."

At the same station, George Chen said he will have to raise the prices he charges his customers for film production to cover the gas he burns driving around New York City. He acknowledged that others aren't so fortunate.

"It's going to be painful for people who don't get pay increases right away," he said. "I can only imagine the families who can't afford it."

CALL 502-2394 TO ADVERTISE IN THE TRIBUNE TODAY!

GASOLINE prices are shown at a gas station Thursday, June 9, 2022, in Salt Lake City.

Photo:Rick Bowmer/AP

PAGE 16, Monday, June 13, 2022

THE TRIBUNE

STOCKS DIVE TO ANOTHER LOSING WEEK AS INFLATION WORSENS

By STAN CHOE AND DAMIAN J. TROISE AP Business Writers WALL Street’s shuddering realization that inflation got worse last month, not better as hoped, sent markets reeling on Friday.

The S&P 500 sank 2.9% to lock in its ninth losing week in the last 10, and tumbling bond prices sent Treasury yields to their highest levels in years.

The Dow Jones Industrial Average lost 2.7%, and the Nasdaq composite dropped 3.5%.

Wall Street came into Friday hoping a highly anticipated report would show the worst inflation in generations slowed a touch last month and passed its peak. Instead, the U.S. government said inflation accelerated to 8.6% in May from 8.3% a month before.

The Federal Reserve has already begun raising interest rates and making other moves in order to slow the economy, in hopes of forcing down inflation. Wall Street took Friday’s reading to mean the Fed’s foot will remain firmly on the brake for the economy, dashing hopes that it may ease up later this year.

“Inflation is hot, hot, hot,” said Brian Jacobsen, senior investment

strategist at Allspring Global Investments. “Basically, everything was up.”

The growing expectation is for the Fed to raise its key short-term interest rate by half a percentage point at each of its next three meetings, beginning next week. That third one in September had been up for debate among investors in recent weeks. Only once since 2000 has the Fed raised rates by that much, last month.

“No relief is in sight, but a lot can change between now and September,” Jacobsen said. “Nobody knows what the Fed will do in a few months including the Fed.” The nation’s high inflation, plus the expectations for an aggressive Fed, have sent the two-year Treasury yield to its highest level since 2008 and the S&P 500 down 18.7% from its record set in early January.

The worst pain has hit highgrowth technology stocks, cryptocurrencies and other particularly big winners of the pandemic’s earlier days.

But the damage is broadening out as retailers and others are warning about upcoming profits.

The S&P 500 fell 116.96 points to 3,900.86. Combined with its losses from Thursday, when investors

IN this photo provided by the New York Stock Exchange, traders Orel Partush, left, and Robert Charmak work on the floor, Friday, June 10, 2022. Stocks on Wall Street fell sharply Friday after getting hammered by data showing inflation is getting worse, not better, as investors had been hoping.

Photo:David L. Nemec/AP

were rushing to lock in final trades before the inflation report, it was the worst twoday stretch for Wall Street’s benchmark in nearly two years.

The Dow lost 880.00 points to 31,392.79, and the Nasdaq tumbled 414.20 to 11,340.02.

Stock prices rise and fall on two things, essentially: how much cash a company produces and how much

an investor is willing to pay for it. The Fed’s moves on interest rates heavily influence that second part.

Since early in the pandemic, record-low interest rates engineered by the Fed and other central banks helped keep investment prices high. Now “easy mode” for investors is abruptly and forcefully getting switched off.

Not only that, too-aggressive rate hikes by the Fed could ultimately force the economy into a recession.

Higher interest rates make borrowing more expensive, which drags on spending and investments by households and companies.

One of the fears among investors is that food and fuel costs may keep surging, regardless of how aggressively the Fed moves.

“The fact is that the Fed has very little ability to control food prices,” Rick Rieder, BlackRock’s chief investment officer of global fixed income said in a statement. He pointed instead to mismatches in supplies and demand, higher costs for energy and wages and the crisis in Ukraine, which is a major breadbasket for the world.