• After cutting its benchmark policy rate by 150 bps in March 2020 in response to the economic impact of the COVID-19 pandemic, the Central Bank of Trinidad and Tobago (CBTT) has decided to hold its benchmark monetary policy rate at 3.50% through end-2021 in an effort to support Trinidad and Tobago’s economic recovery. 
• At its June 25 monetary policy meeting, the CBTT cited the modest economic recovery and weak credit growth for continuing its accommodative stance. Although Fitch forecasts real GDP growth of 4.4% in 2021, the economy will remain 12.1% lower than its peak in 2015. 
• Fitch Solutions forecasts that inflation will remain sluggish in the quarters ahead, averaging 1.4% in 2021 and 2.1% in 2022, as weak economic activity limits price pressures. 
• Subdued domestic inflation and accommodative policies by global central banks will allow the CBTT to gradually tighten monetary, hiking to 3.75% by end-2022.

(Source: Fitch Solutions)

• Mexico and the United States made progress in bilateral cooperation on Tuesday after talks that were intended to focus on stemming illegal immigration and reopening their shared border, Mexican Foreign Minister Marcelo Ebrard said. 
• During their call, the United States agreed to send Mexico 3.5 million doses of drugmaker Moderna Inc's COVID-19 vaccine and up to 5 million doses of the AstraZeneca vaccine, Ebrard said, noting that the vaccines would likely arrive in August. 
• While there is an expectation that the land border will reopen, Ebrard added that he did not expect it to reopen by Aug. 21, and that more time would be needed to resume transit for so-called nonessential trips, including for those who cross the border to work or attend school.

(Source: Reuters News)

• China’s central bank fanned expectations of further monetary policy easing, saying in its latest quarterly report that inflation pressures are “controllable,” while highlighting risks to the economic growth outlook. 
• The People’s Bank of China largely reiterated its stance of stable policy, pledging to make it more forward-looking and effective, while maintaining ample liquidity. The surge in producer inflation in the first half was likely temporary, and the domestic recovery is not yet solid, it said. 
• The fast-spreading delta virus variant is restricting travel and spending in parts of China, prompting some economists to downgrade their growth forecasts for the world’s second-largest economy. Many of them are predicting another reduction in the reserve requirement ratio for banks after July’s surprise cut, while a few are forecasting lower interest rates as well.

(Source: Bloomberg)

• Hiring rose in July at its fastest pace in nearly a year despite fears over COVID-19′s delta variant and as companies struggled with a tight labour supply, the Labour Department reported Friday. Nonfarm payrolls increased by 943,000 for the month, while the unemployment rate dropped to 5.4%, according to the department’s Bureau of Labour Statistics (BLS). The payroll increase was the best since August 2020. 
• Average hourly earnings also increased more than expected, rising 0.4% for the month and are up 4% from the same period a year ago, at a time when concerns are increasing about persistent inflationary pressures. 
• “The data for recent months suggest that the rising demand for labour associated with the recovery from the pandemic may have put upward pressure on wages,” the BLS said in the report, though it cautioned that the Covid impact is still skewing data and wage gains are uneven across industries. 
• The drop in the headline unemployment rate looked even stronger considering that the labour force participation rate ticked up to 61.7%, tied for the highest level since the pandemic hit in March 2020.

(Source: CNBC)

• Caribbean Cement Company Limited (CCC) has advised that it has decided to embark on an expansion project during the second half of 2022 to achieve a 30.0% increase in its production capacity. Currently, CCC produces and supplies over 1.0Mn Metric Tonnes of cement to the local market annually.
• This capacity upgrade also involves the implementation of new technologies, which will introduce novel grinding additives to the manufacturing process to reduce the clinker content in the cement produced by CCC. In addition, this upgrade is intended to minimize the company’s carbon footprint in Jamaica by optimizing the heat consumption involved in the cement production process.
• The total investment for this capacity upgrade is estimated at US$30.00Mn. This project is consistent with the Company’s overall growth plan and is intended to strengthen its ability to respond to local and export demand over the medium term.
• The company has continued to produce strong results in spite of the pandemic, with net profits doubling during the first half of its 2021 financial year, on the back of a 32.0% increase in revenues. The company attributed the higher revenues to strong domestic demand, and its capacity to supply the local market. As CCC increases its production capacity we anticipate that it will be able to continue to meet the growing domestic demand in the construction industry and could finally begin to sustainably execute on its plans to export cement to the region.  We anticipate that when it achieves its new production capacity this should support top and bottom-line growth and bringing greater value to the shareholders.
• CCC’s price has appreciated by 50.4% year to date to $94.43 as at August 9^th. At this price the stock trades at a P/E of 15.2x which is below the main market manufacturing sector average of 17.7x.

Source: (JSE & NCBCM Research)

• Owing to increases in rental and other income, as well as a reduction in finance costs, Kingston Properties Limited reported net profit of US$0.93Mn (EPS: $0.20) for the first half of its financial year to June 2021 from the net loss of US$0.34Mn recorded during the same period in 2020.
• Rental income improved by 59.1% aided by the acquisition of two properties in H2 2020 and one in Q1 2021. A recovery in occupancy at some of the company’s properties in the United States and Cayman Islands, that were affected in 2020 by early lockdown measures in those countries, also contributed to the rebound in rental income.
• A $0.26Mn increase in other income due primarily to fair value gain of $0.20Mn from the Group’s investment in a real estate fund, a drop in net finance costs (US$0.47Mn) due to translation gains on cash balances and higher fee income also supported bottom-line growth.
• The company plans to continue to acquire high yielding assets to grow revenues and returns to shareholders. It will continue the divestment of the Florida condo portfolio and shift into multi-family properties to reduce valuation volatility and generate higher yields. It recently acquired 40% interest in a 155-unit multi-family property in Atlanta, Georgia and is in various stages of completion on three value-added and greenfield transactions in the Cayman Islands and Jamaica. While the pandemic persists, management believes that more distressed assets will become available and the company expects to be in a position to take advantage of those opportunities, especially as interest rates remain fairly low keeping funding costs attractive.
• KPREIT’s stock price has appreciated by 30.2% since the start of the year and closed Monday’s trading session at a price of $9.44 per share. At this price, the stock trades at a P/B ratio of 1.5x earnings, which is above the Main Market Real Estate sector average of 1.0x.

Source: (KPREIT Financials)

• The Costa Rican Legislative Assembly’s approval of a three-year, US$1.8Bn IMF arrangement will bolster public finances and ease political risks in the coming quarters. 
• Fitch Solutions gave Costa Rica a score of 63.8 out of 100 in its Short-Term Political Risk. It ranks fifth out of 17 markets in Latin America. 
• However, as the country’s largest political parties begin campaigning for the February 2022 general election, political risks will likely increase and policymaking will be more difficult as opposition parties distance themselves from President Carlos Alvarado and his centre-left Partido Acción Ciudadana (PAC).

(Source: Fitch Solutions)

• Fitch Solutions has revised down its 2021 growth forecast for Saint Kitts and Nevis (SKN) to 0.5%, from 2.7% previously, as a recent uptick in COVID-19 cases will limit near-term economic activity.
• However, increased vaccination rates in developed markets will help drive inbound tourism to SKN in the quarters ahead, and as a result the agency has revised up its 2022 forecast to 6.0%, from 0.6% previously.
• The continued global spread of COVID-19 poses downside risks to SKN’s recovery as a resurgence of cases would likely slow tourism demand.

(Source: Fitch Solutions)

• In August 2021, Fitch Solutions decided to keep its 2021 global growth forecast unchanged at 5.7%. Real GDP data revealed that growth momentum remained strong in Q2 2021 in large part owing to the significant easing of restrictions in recent months, which led to a significant pickup in activity throughout the first half of the year.
• Despite the acceleration in activity over the second quarter, Fitch continues to monitor two key areas, which could pose downside risks to its global outlook. First, there has been a sharp pick up in the number of infections globally, particularly of the Delta variant, and second, high frequency data are easing already.
• Rising caseloads of the Delta variant pose a downside risk to growth, particularly for countries with low vaccination rates. Initial data suggest that despite a sharp rise in the number of cases, fatality rate remains low in regions such as North America and Europe, where vaccination rates are higher than their emerging market counterparts.
• High frequency data suggest that momentum is starting to ease. It seems that the global PMI (Purchasing Managers Index) may have peaked already, which suggests that incoming data are no longer beating expectations to the degree that they were several weeks ago. While slower growth is to be expected over the coming months as base effects wear off, Fitch notes that shortages and supply chain challenges are also factors behind the weakening of momentum.

(Source: Fitch Solutions)

• U.S. consumers’ expectations for inflation over the medium term rose to an eight-year high in July, according to a Federal Reserve Bank of New York survey. The median survey respondent anticipated an inflation rate of 3.7% in three years’ time, the highest since August 2013 and up from 3.6% in June, the New York Fed said Monday. Expectations for inflation over the next year rose to a record 4.8%.
• Consumers polled by the New York Fed said they expected rents to increase 9.8% in the coming year, the highest reading since the survey began in 2013. Expected changes in medical care costs over the next 12 months ticked up to 9.5%, while the expected change in gas prices moderated to 8.1%.
• Forecasters polled by Bloomberg expect the Labour Department’s monthly report on consumer prices, to be published Wednesday, will show that the annual inflation rate moderated slightly in July after rising to a 13-year high of 5.4% in June.

(Source: Bloomberg)