• Knutsford Express Services Limited (KEX) Limited recorded a net profit of $68.3Mn for the third quarter that ended February 28, 2023. This represents a 75.9% increase in profitability when compared to the $38.8Mn recorded over a similar period in 2022.
• Given the Q3 results, coupled with the strong performance in the first half of the financial year, net profit totalled $211.4Mn for the nine months ended February 2023, up 304.5% (or $159.1Mn) year-over-year.
• Revenue for the quarter was up by 55.3% y-o-y to $467.9Mn. Similarly, the YTD showed a 65.4% (or $506.5Mn) increase in company revenues to $1.3Bn. This was driven by reduced mobility restrictions, increased local and international travel, as well as its strategic efforts to diversify its revenue streams as seen by the significant investments made towards its courier and rental services.
• However, administrative and general expenses were 41.4% (or $293.8Mn) higher in the nine months relative to the same period last year. Despite higher expenses, operating profit grew by 325.7% (or $212.7Mn) as strong revenue growth outpaced increased costs which translated into a 13.3 percentage point (pp) increase in the operating margin to 21.7% in 2023.
• Going forward, as tourism continues to rebound and as the company continues to expand its courier and rental services, it is expected to generate additional diversified revenue, making it more resilient to downturns in the economy thereby aiding long-term growth.
• KEX’s stock price has increased by 32.4% since the start of the calendar year. The stock closed Monday’s trading session at $11.74 and currently trades at a P/E of 21.3x which is above the Junior Market Others Average of 21.1x. This higher P/E ratio is likely reflective of its expected growth trajectory.

(Sources: JSE & NCBCM Research)

• Brazil's Planning Ministry announced on Friday, April 14, a zero primary deficit target for 2024; but stated that 172 billion reais (US$35.03Bn) in government spending depends on the approval of a proposed new fiscal framework.
• The new fiscal rules aim to balance limits on spending growth with the government's vow to boost social programmes and public investment. The rules would allow public spending to grow between 0.6% and 2.5% per year above inflation and limit spending growth to 70% of revenue growth in the prior 12 months.
• In a statement about the 2024 budget bill sent to Congress, the ministry said the new fiscal rules "will enable the re-composition and execution of priority public policies for the country," as well as government functioning.
• The much-awaited framework, presented by the government of President Luiz Inacio Lula da Silva in late March, is expected to be sent to Congress this week. It has alleviated concerns over the uncontrolled growth of public debt under the administration, resulting in a boost in local markets and a strengthening of the real currency against the U.S. dollar.
• As it awaits congressional approval, the government has crafted a budget proposal that adheres to the still-effective spending cap, which has limited expenditure growth to the previous year's inflation since 2017 but has been breached multiple times.
• Lula's new rules combine a more lenient expenditure cap with primary budget targets with flexible bands. In line with this approach, the budget bill has defined that the primary budget balance target may vary by 28.8 billion reais up or down next year.

(Source: Reuters)

• Peru's gross domestic product (GDP) shrunk 0.63% in February compared with the same month last year, the government's National Institute of Statistics and Information (INEI) statistics agency said on Saturday, April 15, beating expectations for a 0.90% decline in the GDP by analysts who forecast a bigger decline.
• It was a second successive month of decline after the economy began to contract in January following 22 months of growth, hurt by nationwide anti-government protests. Peru's finance ministry is confident that growth should return soon.
• Economic activity in February was hit by "continuity of social conflicts, which resulted in work stoppages, road blockades, market closures, among other issues, which occurred in some areas of the country," INEI said in a statement.
• Economic activity in the world's number 2 copper producer was dented by a decline in several sectors, including construction, telecommunications, as well as finance and insurance.
• Peru's finance ministry said in a statement on Saturday that it expects "the economy to register positive rates again as of March, in line with the behaviour of the leading indicators of economic activity", helped by a decline in social unrest.

(Source: Reuters)

• Major central banks may be deep into their drive to raise interest rates in hopes of killing inflation, but the endgame remains far from clear as price increases prove harder to slow than expected, and analysts caution that financial markets could still break along the way.
• The U.S. Federal Reserve, the European Central Bank and the Bank of England are all still raising rates, and policymakers are open about the massive uncertainty surrounding their projections and the risk they may have to do more than expected.
• However, it is felt that all are closing in on a peak interest rate for this round of monetary policy tightening while holding fast to projections that inflation will slow steadily over the next year or two without a major blow to economic activity.
• That view has received a sceptical response from top global policymakers and analysts who see a world where persistent shortages of labour, cleavages in global supply, and wobbly financial markets may force a choice between higher and longer-lasting inflation, or a deep recession to fix it.
• The prospect of inflation falling alongside a gradual return to the pre-pandemic state of affairs is implicit in how central banks are framing the path forward. Among the Fed, ECB and BoE, only the British central bank projects a recession will be needed to slow inflation - only a mild one at that. The ECB expects to win its inflation battle with no change in the unemployment rate. The U.S. central bank officials have split the difference, projecting a modest one-percentage-point rise in the unemployment rate this year from its near-historic low of 3.5%, and slow, but continued, economic growth.
• Against that outlook, Fed policymakers last month indicated that one more quarter-percentage-point rate increase at their May 2-3 meeting, which would raise the policy rate to the 5.00%-5.25% range, could be the last of this tightening cycle.

(Source: Reuters)

• Wall Street's main indices showed little change on Monday as investors awaited more bank earnings and views from Federal Reserve policymakers that could provide cues on when the central bank will pause its monetary tightening.
• Wall Street closed lower on Friday after mixed economic data appeared to affirm another Fed rate hike in May, dampening investor enthusiasm after a series of big U.S. bank earnings launched the first-quarter reporting season.
• While banking heavyweights including JP Morgan Chase & Co windfalls from higher interest payments, the focus will be on smaller banks that were at the centre of last month's banking turmoil and forecasts from companies amid recession worries.
• Other major U.S. banks including Goldman Sachs Group Inc, Bank of America Corp and Morgan Stanley will report through the week. "Regional bank earnings will come in slightly positive, while bigger banks will probably post surprisingly positive results," said Sam Stovall, chief investment strategist at CFRA Research.
• Analysts expect profits at S&P 500 companies to have declined 4.8% in the first quarter of 2023 from the year-earlier period, according to Refinitiv data, a slight improvement from last week’s forecast of a 5.2% decline.
• “Inflation fire has really been put out, but we’re going to continue to pour water over it until we feel confident that it is so,” Stovall said, adding that people were bracing for a deep recession that just might not come.

(Source: Reuters)

• Express Catering Limited has recorded a net profit of US$1.15Mn for the third quarter of the financial year ending February 28, 2023. This represents an 853.7% yoy increase. For the nine months, profit was up 428.5%.
• Revenue for the quarter increased by 73.5% yoy to US$6.04Mn, the best quarterly performance, since the company’s inception. This was bolstered by an improved passenger count of 639,274 for the quarter up from 423,169 in the previous corresponding quarter. The spend-per-passenger of US$9.44 also grew when compared to the previous corresponding period (US$8.05). Revenues for the nine months were up 57.7% to US$15.15Mn due to a 2.6% increase in passenger totals over 2019 levels and a 9.2% increase in spend-per-passenger.
• Cost of sales for the quarter was up 62.8% yoy to US$2.01Mn and was mainly attributable to an increase in raw materials. However, revenue growth outpaced the increase in the cost of sales, thereby resulting in an improvement in the gross margin from 64.5% in FY 2022 to 66.7% in FY 2023.
• ECL’s stock price has increased by 13.6% since the start of the calendar year. The stock closed Thursday’s trading session at $5.84 and currently trades at a P/E of 23.3x which is above the Junior Market Other Sector Average of 17.0x.
• Expectations for the tourism industry remain high, with projections of generating record earnings. For ECL, the completion of its food court continues at a brisk pace. The company recently opened its Guitar Bar which will serve as the centrepiece for the new food court and it also continues to work on the Bob Marley One Love experience. This expansion project is expected to contribute positively to ECL’s bottom line, thereby driving shareholder value, once completed.

(Sources: JSE and NCBCM Research)

• VISA, a world leader in digital payments, and Trinidad and Tobago International Financial Centre (TTIFC), which the Ministry of Finance tasked with increasing the use of cashless technology in T&T, are collaborating to develop financial inclusion in the country.
• As part of the strategy, Visa is working alongside TTIFC as well as other partners from the banking and FinTech sectors to provide access to financial tools whilst encouraging and accelerating the adoption of digital payments across the public sector with a roadmap focused on digitally empowering a massive number of people and businesses in the country.
• The digital transformation will enable the Government to accept digital payments, develop the infrastructure for local Fin-Tech providers to build and rapidly scale solutions, and create the conditions to position Trinidad and Tobago as a regional FinTech hub, a statement from TTIFC said.
• 'This endeavour seeks to bring the significant benefits of a truly inclusive and prosperous digital economy to Trinidad and Tobago's consumers, businesses, and the public sector,' the statement said.
• These strategies will effectively assist the twin-island republic in reaching its target goal of laying a foundation for a world-class digital finance platform to support and enable the FinTech sector by accelerating the digitalization of payments across the government and business sectors.

(Source: CariCRIS)

• Brazil's central bank governor Roberto Campos Neto stated last Wednesday that while inflation has decreased, persistent pressures remain, following recent data that has buoyed the market and fueled bets of earlier monetary easing.
• Consumer prices in the 12 months to March reached their lowest point since January 2021, at 4.65%, according to data released on Tuesday, which led to a significant rise in the Brazilian stock exchange and a strengthening of the currency against the dollar.
• In a presentation to investors organized by XP Investimentos in Washington and released by the central bank, Campos Neto also highlighted that the demand-driven component of inflation in the country remains "relatively strong."
• This assessment contrasts with that of President Luiz Inacio Lula da Silva and his political allies, who have argued that the country is not experiencing demand-driven inflation, fueled by consumption, and therefore the restrictive monetary policy of the central bank is not justified.
• Policymakers have kept the interest rate unchanged at a six-year high of 13.75% since September, despite frequent criticism from Lula. Campos Neto further noted that long-term inflation expectations were anchored towards official targets in 2022, but there has been a deterioration process since November, which led markets to start pricing rate hikes on a six-month horizon.

(Source: Reuters)

• British lenders expect to rein in the supply of new mortgages in the coming quarter but there was scant sign of a wider credit crunch following recent stress in the global banking system, a Bank of England survey showed on Thursday.
• Officials have been watching out for any tightening in British credit conditions in light of the failures of Signature Bank and Silicon Valley Bank last month. "Despite all the monetary tightening and the turmoil of March, there is not too much evidence of banks pulling back," said Liz Martins, an economist at HSBC - though she noted that the survey ran from Feb. 27 to March 17, so some responses would have predated the bank collapses.
• Nonetheless, Thursday's credit conditions survey is likely to diminish worries that a widespread seize-up of credit markets poses a big risk to Britain's economy, which has shown little momentum of late.
• Lenders signalled that loan spreads - the additional interest that banks charge to borrowers over and above the market rate - were likely to narrow in the second quarter. Spreads on mortgages had widened sharply due to the financial market turmoil unleashed in September during former prime minister Liz Truss's short-lived premiership.
• The BoE said lenders plan to restrict the supply of secured lending to households in the second quarter, with mortgage approvals data already showing signs of a sharp slowdown. While that may weaken housing market activity in the months ahead, the survey showed lenders expect to increase the supply of consumer credit and maintain existing levels of corporate lending in the coming months.

(Source: Reuters)

• Bond prices and the global stock market gauge rose on Thursday after tamed producer prices and a jump in weekly jobless claims bolstered bets that the Federal Reserve may soon pause its hiking of interest rates to tame high inflation.
• Gold zoomed to a 13-month high and the dollar weakened after the data lowered expectations that the Fed will again raise rates in May. This brought relief to investors worried that tight monetary policy could provoke a U.S. recession. The Labour Department's producer price index for final demand dropped 0.5% in March, the most since April 2020, after being unchanged in February, while the number of Americans filing new claims for unemployment benefits rose to a three-month high last week.
• Meanwhile, the consumer price index rose 0.1% in March on a month-over-month basis. Economists expected an increase of 0.2%, according to Dow Jones. Year-over-year, the CPI rose 5% while economists had forecast a 5.1% advance. That year-over-year figure is also lower than the 6% jump seen in February. Core CPI, which strips out food and energy prices, rose 0.4% month over month.

(Source: Reuters)