• For the first quarter ending March 2021, Sagicor Group Jamaica reported $2.91Bn (EPS: $0.75) in net profit attributable to shareholders,  a 54.5% over Q1 2020 when the Group took a hit from the impact of the COVID-19 pandemic on asset prices and its operations.
• The outturn reflects a 3.9% (or $151.68Mn) increase in profit before associates and joint ventures and the absence of impairment charges on investment in associates and goodwill and loss from associates that was registered in the same period last year.
• Last year Sagicor incurred significant impairment charges of over $1.00Bn on goodwill and investment in associate. With the disposal of its holdings in its associate (Playa), it did not have to contend with these charges in 2021.
• The increase in profit before associates and joint ventures was primarily due to a 37.7% increase in total revenues aided by realized and unrealized capital gains of $1.20Bn, relative to losses of -$5.06Bn incurred in the prior year during the COVID-19 induced sell-off that weighed heavily on asset prices. However, this was largely offset by a $6.17Bn increase in total benefits and expenses to $19.07Bn.
• Economic conditions in its operating environment have begun to improve, albeit slowly and with a lot of uncertainty as the pandemic persists. However, the anticipated recovery augurs well for an improvement in revenues, lower credit losses, and the performance of joint ventures and associates.
• Since the start of the year, Sagicor’s stock price has depreciated by 1.1% and currently trades at $49.11 per share implying a P/E multiple of 12.9x earnings. This is below the main market financial sector average of 19.3x earnings.

(Source: Sagicor Financials)

• Minister of Housing, Urban Renewal, Environment and Climate Change, Hon. Pearnel Charles Jr., has hailed the construction industry for being a pillar in Jamaica during the last 12 months. While countries in the world continue to experience downturns with some of their sectors during the COVID-19 pandemic, the construction sector in Jamaica has remained resilient.
• During his contribution to the 2021/22 Sectoral Debate in the House on Tuesday (May 4), Mr.  Charles Jr. said the Jamaica Mortgage Bank (JMB) and the Housing Agency of Jamaica Limited (HAJ) have contributed significantly to this success.
• The JMB is driven to mobilize financial resources for on-lending to private and public-sector developers and financial institutions. It is also tasked with developing an active secondary mortgage market and providing mortgage indemnity insurance in support of the national settlement goal.
• In the 2020/2021 financial year, the JMB surpassed its budgeted pre-tax profits by 11.0%. This was due to the Bank’s balance sheet remaining strong and boasting year-on-year growth in its construction loan portfolio of more than 50.0%.
• With regard to the HAJ, it has accomplished a number of successful projects through joint venture agreements with private partners. 
• Both JMB and HAJ will continue to be instrumental in driving construction activity by supporting the development of residential and commercial buildings/projects.

(Source: JIS News)

• Fitch Solutions maintained its Panamanian growth forecast of 12.2% in 2021, as looser economic restrictions support a rebound in economic activity.
• The agency expects base effects will drive the rebound after a 17.9% contraction amid extensive restrictions on economic activities in 2020, though it also expects significant mining sector growth as major projects ramp up production.
• Growth should strengthen in the coming months as the slower spread of COVID-19, looser restrictions, and improving business confidence boost activity. In particular, the sectors most impacted by the initial lockdown in Q2 2020 and Q3 2020 will post sharp rebounds in economic activity. Manufacturing and commercial activity contracted over 35.0% in Q2 2020 and Q3 2020, and construction fell 79.6% y-o-y.
• Vaccine distribution will also aid in economic normalization. Through May 5, Panama had administered 16.4 doses per 100 people, the second-highest rate in Central America.
• That being said, the economy is not expected to recover to pre-pandemic levels until 2023 amid weak household incomes and high unemployment. Despite the 12.2% y-o-y real GDP growth, Fitch Solutions forecasts the economy will remain 7.9% below 2019 levels in 2021, restricting household incomes and consumption. In February, economic activity grew 3.6% m-o-m, but remained 9.7% lower in annual terms, indicating the limitations of gradual increases in demand.
• Public spending will also provide limited support to aggregate demand as the government looks to rein in its elevated deficit. Panama’s fiscal deficit is forecasted to measure 8.0% of GDP in 2021 as economic activity and revenues lag behind their pre-COVID-19 levels.

(Source: Fitch Solutions)

• The April volcanic eruptions will set back the economy of St. Vincent and the Grenadines by years because it has wiped out much of its agricultural production and the tourism sector continues to struggle due to COVID-19.
• Fitch Solutions estimates real GDP will contract 20.4% in 2021, with risks to the downside given significant data uncertainty.
• Rebuilding is likely to take years given the government's strained finances and significant demands on global donors.

(Source: Fitch Solutions)

• U.S inflation expectations have surged to the highest in a decade as the economy reopens from COVID-19-related shutdowns, putting investors at odds with the Federal Reserve, which sees price pressures still far from its target.
• Inflation expectations as measured by breakevens on Treasury Inflation-Protected Securities (TIPS) over the coming five years jumped to a 10-year high of 2.73% on Monday.
• The jump comes at the same time that Fed policymakers talk down inflation expectations, saying near-term inflation will be transitory and that there are challenges in reaching their average target of 2% on an ongoing basis.
• Prices of commodities, houses and other goods and services are jumping as the government increases fiscal spending while the Fed also maintains low rates and unprecedented bond purchases. As the economy reopens, investors are also pondering whether the Fed will be too slow in reacting to price increases, or if the market has gotten ahead of itself in pricing them in.

(Source: Reuters)

• Renewable power generation grew at the fastest rate in two decades last year, and that growth is set to continue in the aftermath of the pandemic, according to a new report from the International Energy Agency.
• IEA said policy decisions in China and the U.S., among other things, fueled the growth, counteracting the impact of supply chain disruptions from the coronavirus.
• Renewable electricity added last year jumped 45% to 280 gigawatts (GW), marking the largest year-over-year increase since 1999.
• The Paris-based agency envisions this rate of growth becoming the “new normal.” IEA sees 270 GW added in 2021, followed by 280 GW in 2022. These estimates are 25% higher than the agency’s prior forecasts established last November.
• “Wind and solar power are giving us more reasons to be optimistic about our climate goals as they break record after record,” said Fatih Birol, IEA’s executive director. “Last year, the increase in renewable capacity accounted for 90% of the entire global power sector’s expansion.
• In its annual World Energy Outlook report released in November, IEA said solar is poised to become the new king of electricity as falling prices make solar cheaper than new coal and gas-fired plants.

(Source: CNBC News)

• 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)