• For the 6 months ending March 2021, QWI reported a net profit of $170.72Mn (EPS: $0.13) relative to a net loss of -$576.41Mn (EPS: -$0.42) in the prior year. The improvement reflects unrealized and realized gains on its local and overseas investments, which resulted in a total gain from investments of $259.28Mn, as well as dividend income, which grew by 13.8% to $17.54Mn.
• Improved performance in both the local and U.S stock markets over the last six months when compared to the COVID-19 induced sell-off that took placed in March 2020 would have accounted for the gains on its investments.
• Net asset value per share rose by 12.0% over its half-year period, faster than the pace of growth in the JSE combined index, which grew 4.7%. Nevertheless, its performance lags its benchmark index (MSCI ACWI), which returned 19.1% from September to March 2021.
• The Jamaican stock market (74.0% of QWI’s portfolio) is expected to fare better in 2021, given the projected recovery in economic activity in H2 2021, which should result in higher corporate earnings, improved investor sentiment, and a recovery in the stock market. The U.S stock market performance should also be bolstered by the accelerated pace of economic recovery owing to its successful vaccination program and government stimulus.
• The stock has appreciated by 32.6% since the start of the year and currently trades at $1.00 per share, which is 32.0% below the company’s net asset value per share (NAPS) of $1.32 as of April 30, 2020.  

(Source: Company Financials)

• Fitch Solutions expects Trinidad & Tobago’s (T&T) fiscal deficit will narrow sharply in 2021, supported by higher energy prices. The agency forecasts that T&T will run a fiscal deficit of 5.7% of GDP in 2021 after the COVID-19 pandemic pushed the deficit to an estimated 11.6% of GDP in 2020. 
• A continued commitment to expenditure reduction will also help to narrow the fiscal deficit. The ruling People’s National Movement (PNM) government has sharply reduced expenditures in recent years to stem public debt growth. 
• Public debt levels will continue to rise in 2021 despite the sharp deficit reduction. T&T’s high debt levels and limited growth have underpinned fiscal consolidation over the past decade.
• That said, Fitch Solutions expects this trend will continue over the coming years, where it expects public debt will peak in 2021 at 68.1% of GDP before gradually declining to 64.9% of GDP by 2025.
• Despite the large financing requirement, T&T’s sovereign wealth fund will keep financing risks contained over the coming years. Additionally, a stronger medium-term energy price outlook and contained expenditure growth will limit T&T’s financing needs.

(Source: Fitch Solutions)

• Fitch Solutions expects that the Banco Central do Brasil will hike its benchmark Selic target interest rate to 5.00% by the end of 2021, an upward revision from its previous forecast of 4.50%.
• Headline inflation is likely to exceed the central bank's 5.25% y-o-y upper target through end-2021 due to higher food and fuel costs as well as unfavorable base effects.
• Risks to the agency’s forecasts are to the upside, as the central bank's goal to enact a modest hiking cycle may conflict with market expectations for more aggressive hikes and lead to market volatility.

(Source: Fitch Solutions)

• The Bank of England said Britain's economy would grow by the most since World War Two this year and slowed the pace of its trillion-dollar bond-purchasing program, but stressed it was not reversing its stimulus.
• Governor Andrew Bailey welcomed the prospect of a stronger recovery than previously forecast as the country races ahead with its coronavirus vaccinations, with much lower unemployment. But he also said there was still a big gap compared with how big the economy would have been without the pandemic.
• The BoE raised its forecast for British economic growth in 2021 to 7.25% from February's estimate of 5.0%. That would be the fastest annual growth since 1941 when Britain was rearming. But it comes after output plunged by 9.8% in 2020, the biggest drop in more than 300 years.
• With the economy on course for recovery, the BoE said it would reduce the number of bonds it buys each week to 3.4 billion pounds ($4.7 billion), down from 4.4 billion pounds now. "This operational decision should not be interpreted as a change in the stance of monetary policy,"

(Source: Reuters)

• US economists expect to see job creation in each of the next several months of over 1 million, as more Americans are vaccinated and the economy booms. According to Dow Jones, economists expect 1 million jobs were added in April, and the unemployment rate fell to 5.8% from 6% in March.
• April is the first month of the second quarter, which is expected to be the peak in terms of growth. The gross domestic product is expected to grow by 10% or greater. Mass vaccinations and the easing of business restrictions likely supported rapid job growth in virus-sensitive industries, including leisure and hospitality, retail, and education (public and private),” noted economists at Goldman Sachs.
• The April employment report is also being widely watched in markets because of the Fed’s pledge to keep its zero rates policy and other easing measures in place until it believes the job market has healed and inflation is picking up. But with increasing concerns about rising inflation, some investors believe a very strong job market could be a catalyst for the Fed.

(Source: CNBC News)

• Eppley Caribbean Property Fund Limited SCC-Value Fund (“ECPF”) wishes to announce that it has acquired two buildings located at 155-157 Tragarete Road, Port of Spain, and 52 Valsayn Branch Road, Curepe in Trinidad and Tobago
• The Fund Manager indicated that the acquisition of these two fully-tenanted office properties in Trinidad is directly in line with the Fund’s strategy to scale and diversify by geography and asset type.
• ECPF has now acquired 10 properties totaling in excess of 500,000 square feet since Eppley assumed management three years ago, and it continues to pursue opportunities throughout the region to add to its growing portfolio of industrial, retail, and commercial office assets. With the above-mentioned acquisitions, ECPF now owns 16 buildings in Jamaica, Barbados, and Trinidad and Tobago comprising over 775,000 square feet.
• The acquisitions not only increase ECPF’s regional footprint but also enhance the Fund’s resilience through added diversification. They will also serve to increase ECPF’s net rental income, given that they are fully tenanted, fair value gains through property value appreciation, and improve the net asset value per share.
• ECPF’s stock price has declined by 17.7% since the start of the year and currently trades at $40.26 per share. This is 19.5% below the last reported net asset value per share (NAVPS) of J$50.00 (BDS$0.70) at the end of December 2020.

(Source: JSE & NCBCM Research)

• Minister of Housing, Urban Renewal, Environment and Climate Change, Hon. Pearnel Charles Jr., says Jamaica will begin testing its climate predictive system in June.
• He said that Jamaica is the first country in the world to begin the process of developing a predictive and climate-risk assessment planning tool for major infrastructure, under the global private-sector-led Coalition for Climate Resilient Investment (CCRI) initiative.
• Considering Jamaica’s vulnerability to the effects of climate change and natural disasters, this tool will enable decision-makers to assess climate risk to Jamaica’s infrastructure networks to visualize hot spots of high levels of economic and social value at risk, in relevant time horizons.
• This will allow the GOJ to be proactive in making the necessary improvements to infrastructure and implementing protective measures to limit the impact of natural disasters on the most vulnerable areas of the country. This is expected to lower the impact of climate change on the island’s infrastructure and the post-disaster recovery period.

(Source: JIS & NCBCM Research)

• Fitch Solutions believes that the change in administration in Suriname has increased the likelihood of reforms to address structural fiscal and external imbalances. As a result, the agency has revised Suriname's score, in its Short-Term Political Risk Index, to 52.9 out of 100, from 50.8.
• Financing from the IMF and other multilateral lenders will likely reduce some near-term fiscal constraints on the government and support the implementation of reforms.
• However, reforms to reduce the fiscal deficit and allow a flexible exchange rate will likely weigh on the economic recovery, potentially triggering a backlash that could undermine the government's commitments.

(Source: Fitch Solutions)

• Fitch Solutions expects a growing goods trade surplus will widen Ecuador’s current account surplus to 3.1% of GDP in 2021, up from 2.5% in 2020. The agency has revised its forecast up from a surplus of 2.7% previously, to reflect its expectation that higher oil prices will boost goods exports.
• Higher global oil prices will underpin a surge in exports, while labor market weakness and subdued household incomes will weigh on import demand.
• Risks to external accounts stability have waned due to an improving oil price outlook, Guillermo Lasso’s victory in the run-off presidential election, and the passage of critical reforms that bring Ecuador in compliance with its IMF agreement.

(Source: Fitch Solutions)

• Strained relations between China and Australia took a turn for the worse Thursday after Beijing said it has “indefinitely” suspended all activity under a high-level economic dialogue with one of its largest sources of imports.
• It was not immediately clear what impact the announcement would have on trade between the two countries, which has already fallen amid retaliatory pressure from Beijing.
• The Australian dollar weakened against the U.S. dollar following the news, falling close to breaking 77 cents after trading near 77.47 cents Wednesday. Beijing’s economic planning agency, the National Reform and Development Commission, said in an English-language statement Thursday that some Australian officials recently launched unspecified measures “out of a Cold War mindset” to disrupt cooperation with China.
• The commission said that based on this attitude, it has decided to “indefinitely suspend all activities under the framework of the China-Australia Strategic Economic Dialogue.”

(Source: CNBC)