• In February 2020, the Treasury of Social Security (TSS) in DomRep registered 2,122,037 workers, a figure that was reduced in the following months, reaching its lowest level in May of that same year, when the number stood at 1,593,310 employees, due to the stoppage of economic activities to curb the virus contagions. 
• However, as of June, the economy began to recover part of the jobs lost, and at the end of April 2021, 406,730 jobs have been recovered since then, equivalent to 77% of the total loss. This shows that to reach the February 2020 level, only 121,997 jobs need to be added. 
• On average, during the first four months of 2021, 15,941 jobs were recovered each month. Of that period, February was the best in terms of job recovery, with 25,420 jobs added that month. 
• The crisis caused by COVID-19 resulted not only in the loss of jobs but also of employers. However, a comparison of April 2020 with the same month of this year shows an increase of 38.4% in the number of employers. Improvements in both employer and employee count point to the gradual recovery on display in the country. 
• Fitch Solutions is anticipating GDP growth of 5.2% in 2021 driven by rebounds in private consumption, investment and exports. In addition, the country’s robust investment environment, free trade agreement with the US and increasing chance of ‘near shoring’ by US-based companies could lift the Dominican Republic’s long-term growth outlook.

(Source: Dominican Today)

• Canada's economy likely contracted in April, the first decline in a year, due to widespread lockdowns amid a third wave of coronavirus infections, slowing the country's march toward recovery, data showed on Tuesday. 
• In a preliminary estimate, Statistics Canada said the economy contracted 0.8% in April. By contrast, real GDP had grown 11 months in a row through March, when it grew 1.1%. Economists said the April decline was largely expected and is unlikely to change the Bank of Canada's outlook for interest rate hikes. 
• "They were talking about the output gap and inflation getting back to target by late 2022. That's still a long way from here," said Doug Porter, chief economist at BMO Capital Markets. The Bank of Canada last month signaled rates could begin to rise in 2022, noting the economy had rebounded more quickly than it had expected. 
• The Canadian economy grew 5.6% on an annualized basis in the first quarter, as restrictions were eased between the second and third waves of COVID-19, and buoyed by strong housing investment and more mortgage debt. The gain missed analyst expectations of 6.7%. Still, the economy is in a good position to hit the Bank of Canada's GDP forecast of 6.5% for the year, said economists, meaning it will likely ease some stimulus this year.

(Source: Reuters)

• China’s Vice Premier Liu He and U.S. Treasury Secretary Janet Yellen spoke Wednesday for the first time since President Joe Biden took office.
• Both the U.S. and China said the two leaders talked about the economy and cooperation, and “frankly” discussed issues of concern. Yellen discussed the Biden administration’s plans to “support a continued strong economic recovery and the importance of cooperating on areas that are in U.S. interests,” the Treasury said in a statement. 
• Liu and Yellen agreed the two countries’ economic relationship is “very important,” Chinese state media said, according to a CNBC translation. The report said the leaders held a wide-ranging discussion on the macroeconomic situation and multilateral cooperation. 
• Many economists in China are also concerned about spillover effects from massive U.S. government spending meant to support growth. Investors have been betting on a recovery, sending commodity prices surging. The rising prices have hit Chinese businesses, prompting the central Chinese government to announce additional support and clamp down on market speculation. 
• Chinese state media characterized the two leaders’ discussion Wednesday as one bearing an attitude of “mutual respect,” a phrase Beijing often uses when calling for more favorable communication with the U.S.

(Source: CNBC News)

• Jamaica has received another batch of COVID-19 vaccine manufactured by AstraZeneca. Some 55,200 doses of the COVID-19 Vaccine arrived in the island on Sunday, May 30. This batch represents another allocation from the COVAX Facility (COVID-19 Global Access). 
• The arrival of new vaccines will be added to the pool of vaccines being used in the National Vaccination Implementation programme to inoculate persons, who are due their second dose, as well as persons that have not yet been vaccinated. 
• Currently Jamaicans 50 years and older, healthcare workers, JCF, JDF, Jamaica Fire Brigade and staff members from PICA, Jamaica Customs Agency and Department of Correctional Services are eligible to be vaccinated based on the implementation plan. 
• As at Friday, May 28, 2021, approximately 155,683 Jamaicans have received the first dose of the COVID-19 Vaccine, representing 8% of the target population (1,924,759) while 22,206 persons have received their second dose. This 8% is below the vaccination rate in countries such as Bermuda (58%), Barbados (27%), Dominica Republic (30%), Guyana (24%), and Bahamas (12%). It is however above the 6.8% rate of vaccination in Trinidad and Tobago. 
• The arrival of the additional batch bodes well for the country’s trek to recovery and quest for herd immunity.

(Source: JIS)

• Lasco Distributors saw a 25.3% increase in net profit to $909.48Mn (EPS: $0.26) for FY 2020-21 reflecting higher revenues and lower operating expenses, which were tempered by the 5.8% (or $ 919.05Mn) increase in cost of sales for the period. 
• Revenues rose 4.1% (or $789.81Mn) buoyed by growth in its consumer division yoy of 5.6% (or $877.62Mn). However, its Pharmaceutical division saw a slight decline for the period of 2.3% (or -$87.80Mn) when compared to the corresponding 2020 period. 
• The company’s bottom-line also benefited from a 10.3% and 21.9% reduction in administrative and other expenses, and selling and promotion expenses, respectively, reflecting lower staff costs, advertising and promotion expenses. 
• Higher tax expenses also tempered the improvement in the bottom-line as LASD commenced paying corporate tax at 25% in October 2020, as its 10 year tax benefit under the JSE Junior Market expired. 
• In 2021, margins could also be affected by rising global commodity prices, the weaker local currency and supply chain restrictions that are driving up imported input costs. This would raise direct costs and put downward pressure on LASD’s gross margin, especially as the weak local economy limits its ability to fully pass the higher costs unto consumers. 
• Since the start of the year, Lasco Distributors’ stock price has appreciated by 25.0% and currently trades at a P/E ratio of 16.1x earnings, which is below the junior market distribution sector average of 28.2x earnings.

(Source: Company Financials)

• In the weeks ahead, Fitch Solutions will be watching how the ongoing COVID-19 pandemic affects South America as the region heads towards winter. COVID-19 tends to spread more easily during the winter months, and much of the region is still experiencing elevated case levels as a result of the February and March surge. 
• The more contagious P.1 variant of the disease, which was first identified in Brazil, is thought to be behind the persistently high levels of cases in 2021. In particular, Uruguay, Argentina and Paraguay are in the midst of a significant surge in cases, with Uruguay surpassing 4,000 cumulative deaths from COVID-19 on May 26. 
• A further surge in cases has the potential to derail the region’s economic recovery. Q1 2021 real GDP prints showed the economic rebound accelerating in Chile, Peru and Colombia. However, extended COVID-19 lockdowns in Q2, or even Q3 2021, would likely keep unemployment elevated and weigh on business confidence. 
• Extended lockdowns and associated economic hardship could further stoke the trend of anti-incumbent sentiment that has emerged over the last several quarters, particularly ahead of major elections in Peru, Chile and Argentina.

(Source: Fitch Solutions)

• The political environment in the Cayman Islands will remain broadly stable over the next decade as high standards of living bolster social stability. 
• While the April 2021 election produced a new government led by independent MPs, sweeping the centre-left People's Progressive Movement (PPM) from office, it is expected that the ruling coalition will maintain pro-business policies, with the regulatory environment supported by strong constitutional institutions. 
• Additionally, the Cayman Islands will continue to rank among the top Caribbean markets in terms of social stability, even as the COVID-19 pandemic caused a severe economic downturn in 2020. The Cayman Islands has low levels of unemployment and high income levels, which will reduce the likelihood of public unrest over the next 10 years. 
• Considering this, Fitch Solutions has maintained its Long-Term Political Risk Index score of 74.7 out of 100 for the Cayman Islands, which remains well above the Caribbean regional average and above Jamaica’s score of 63.9. At its present score of 74.7, the island is ranked 4^th in the Caribbean.

(Source: Fitch Solutions)

• Oil prices firmed on Monday, with Brent trading near $70 a barrel on growing optimism that fuel demand will grow in the next quarter, while investors looked ahead to see how producers will respond at this week's OPEC+ meeting. 
• Trading was thin as U.S. and UK markets were closed on Monday due to public holidays. Brent crude futures settled up 60 cents, or 0.9%, at $69.32 a barrel, off the a session high of $69.82. U.S. West Texas Intermediate crude rose 0.9% and last traded at $66.91 a barrel. Both contracts were set for a second monthly gain. 
• Analysts expect oil demand growth to outstrip supply despite the possible return of Iranian crude and condensate exports (A natural gas liquid with a low vapor pressure). 
• Iran has been in talks with world powers since April, working on steps that Tehran and Washington must take on sanctions and nuclear activities to return to full compliance with the 2015 nuclear pact.
• The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia will meet on Tuesday. The group known as OPEC+ is expected to stay the course on plans to gradually ease supply cuts until July.

(Source: Reuters)

• Germany's annual consumer price inflation accelerated in May, advancing further above the European Central Bank's target of close to but below 2%, the Federal Statistics Office said on Monday.
• Consumer prices, harmonized to make them comparable with inflation data from other European Union countries, rose by 2.4% in May, up from 2.1% in April. A Reuters forecast had pointed to a May reading of 2.5%.
• The ECB's chief economist, Philip Lane, said earlier this month the bank had a "lot of work to do" to raise inflation back to its 2% goal and market talk of rapidly rising prices is misplaced.
• Euro zone inflation is approaching 2%, its fastest rate in years, on the back of fiscal support and the unwinding of last year's oil price crash, prompting some commentators to predict a new era of inflation.
• But Lane pushed back on this narrative, arguing that the labour market will take years to get back to its pre-crisis level, corporate balance sheets are depleted and the economic rebound is still predicated on copious central bank and government support.

(Source: Reuters

• For the year ended March 31, 2021, Future Energy Source Company Limited (FESCO) reported unaudited net profit of J$109.06Mn, a 4.1% increase over the 2019-20 financial year.
• Direct Cost, which was 1.67% (or J$96.07Mn) lower than last year, was the major driver of the improvement. FESCO’s performance comes against the background of a decline in the transportation fuel industry. The volume of litres of fuel sold contracted by 13.5% through the period April 2020 to January 2021, while FESCO’s grew by 10.6%.
• However, the improvement in net profit was tempered by an $82.82Mn (or 1.4%) yoy decline in revenues. Several factors affect revenue with the price at which the company sources fuel being a major component. FESCO has no control over the supply price of fuel and as such is a price taker. It instead, focuses more on volumes sold and maximizing gross margins. Its financial year ended March 2021 would have captured the full brunt of the pandemic when heightened mobility restrictions, remote work and curfew orders affected demand for fuel.
• Following its successful IPO and listing on the Junior Market in April 2021, the company will start benefiting from reduced (zero rated) corporate taxes in its new financial year that will end in March 2022. Additionally, as the local economy recovers, global travel accelerates, business confidence improves and as new service stations are added on Ferry and Beechwood Avenue in the next quarter, FESCO’s profitability is expected to improve.
• The stock has appreciated by 32.5% to $1.06 since it began trading at $0.80 on April 22, 2021. It now trades at a  P/E ratio of 26.5x earnings, which is below the Junior Market Distribution sector average of 34.0x earnings.

(Source: Company Financials)