• Emerging-market investors have been pouring money into bonds and cutting back on stocks in a trend that’s set to intensify as the delta variant of the coronavirus ravages developing economies with low vaccination rates. 
• Bonds have seen net inflows for 11 straight months, the longest streak in Institute of International Finance data going back to early 2018. They surged to a net $99.2 billion in the six months through June, versus net equity withdrawals of $2.2 billion, according the data, which tallies emerging markets excluding China. 
• Equities haven’t attracted more money than bonds since November, when vaccine progress and Joe Biden’s election as U.S. president boosted optimism toward the global economy. The picture won’t change anytime soon because delta-variant risk to emerging markets hasn’t been fully priced in yet, said Paul Sandhu, head of multi-asset solutions at BNP Paribas Asset Management Asia Ltd. The money manager favours the long end of the curve in high-yield emerging markets such as Russia, Colombia and Turkey. 
• Pictet Asset Management’s Arun Sai also said he favours emerging-market bonds over stocks. Emerging-markets equities only attract sustained inflows when they offer a superior outlook to developed markets, according to Sai, who is a senior multi-asset strategist in London.

(Source: Bloomberg)

• Scientists are working on a benchmark for COVID-19 vaccine efficacy that would allow drug-makers to conduct smaller, speedier human trials to get them to market and address a huge global vaccine shortage. 
• Researchers are trying to determine just what level of COVID-19 antibodies a vaccine must produce to provide protection against the illness. Regulators already use such benchmarks - known as correlates of protection - to evaluate flu vaccines without requiring large, lengthy clinical trials. 
• Stanley Plotkin, inventor of the Rubella vaccine and an expert on correlates of protection highlighted that," Information is flowing in," he said. "By the end of this year, I think there will be enough data to convince everyone”. An established benchmark for COVID-19 would allow drug makers to conduct vaccine trials in just a few thousand people, about one-tenth the size of the studies conducted to gain authorization for currently widely-used coronavirus shots.

(Source: Reuters)

• Relaxed COVID-19 restrictions and a rebound in tourist arrivals will drive Jamaica’s economic recovery in the quarters ahead. The Jamaican economy has steadily recovered from the economic shock caused by COVID-19, which brought the tourism industry to a near-complete halt from Q220 to Q420, as restrictions on international travel have begun to loosen. 
• Real GDP grew at a seasonally adjusted rate of 0.6% q-o-q in Q121, despite a surge in COVID-19 cases in February and March that prompted the government to impose stringent restrictions on mobility and commercial activity. 
• The rebound in the tourism industry will boost service exports and investment and bolster private consumption through renewed employment growth. The return of tourism activity will boost employment, fueling private consumption growth of 4.0% in 2021. 
• The tourism industry historically accounts for approximately 30.0% of total employment in Jamaica. As a result, Fitch Solutions expects job growth to accelerate as arrivals rebound. The unemployment rate averaged 9.0% in Q121, below the 12.6% seen in Q320 but still above the average of 7.7% in 2019. 
• Unemployment is forecast to decline over the course of the year, averaging 7.8% in 2021, which will bolster household incomes and private consumption. Private consumption accounted for an average of 77.9% of GDP from 2015 to 2019. 
• This has led to the upward revision of 2021 and 2022 real GDP growth forecasts to 4.5% and 4.1% respectively, from 3.0% and 3.5% previously, as economic output in the year through July have surprised to the upside. The economy’s continued growth in Q121 suggests that it is more resilient to pandemic-related disruptions than Fitch had previously expected, underpinning its upward revision of real GDP growth forecast. 
• However, the entity’s forecast implies that the economy will not return to its pre-pandemic size until 2024. Limited fiscal support and the continued global spread of COVID-19 will slow the economic recovery.

 (Source: Fitch Solutions)

• Barbados will be going the same route as its Caribbean neighbour Antigua and Barbuda in slashing airport taxes for regional travelers by as much as 50%. 
• Minister of Tourism and International Transport, Lisa Cummins, made the disclosure on Tuesday during a meeting with tourism stakeholders at the Hilton Barbados.  
• "Cabinet has agreed that there is to be a 50% reduction in airport service charge for regional travelers. That brings us in line to what you have been hearing coming out of other markets. Particularly, one market that has already announced it is Antigua, where there is a 50% reduction. 
• Cummins also revealed a slew of initiatives, aimed at boosting Barbados' tourism product. The move to reduce the taxes came a year after Prime Minister Mia Mottley announced that it was a step her administration was examining.

(Source: Barbados Today)

• Over the coming decade, Puerto Rico is likely to see a short-term peak in economic growth, fueled by federal aid inflows and a rebound from the COVID-19 pandemic, which will fade as structural headwinds return to the fore. 
• Fitch Solutions expects that an influx of federal aid will fuel a return to growth in Puerto Rico, stimulating both private demand and the construction industry as the island continues to rebuild from hurricanes Irma and Maria, which hit in September 2017, and a series of earthquakes in early 2020. 
• After a 3.2% contraction in FY2020 (July 2019-June 2020) due to COVID-19, growth is forecast to eventually return to positive territory by FY22 as federal aid arrives and the rollout of vaccines allows domestic activity to recover. Growth of 1.8% is anticipated from FY2022 to FY2025. 
• However, as federal aid declines in the years thereafter the impact of fiscal austerity, a poor operational environment and a shrinking labour force will weigh on Puerto Rico’s economic growth. 
• Notwithstanding, the agency also notes a number of positive trends, including the likely resolution of Puerto Rico’s bankruptcy, growth in the pharmaceutical and tourism sectors and a series of economic reforms which could boost the territory’s long-term upside.

(Source: Fitch Solutions)

• With price pressures building up globally and public debt loads historically high, policymakers will seek to balance concerns about inflation against efforts to support the recovery while keeping public finances on a sustainable path. 
• Unlike in developed markets (DMs), concerns over the feed-through impact of rising inflation on staples, especially food, have prompted emerging market (EMs) monetary authorities to reverse their hitherto dovish bias and start tightening, although only gradually. Given that this will be a gradual adjustment, Fitch Solutions expects that EM interest rates will remain very low by historical standards in both 2021 and 2022. 
• The pace of policy normalization will be significantly slower in DMs. Fitch solutions expects that most central banks will only start raising interest rates between 2023 and 2024, even though risks to their view have shifted to the upside due to rising inflation, implying the possibility of hikes in 2022. 
• Developed markets’ central banks will retain an ultra-dovish bias through to 2022 to support the economic recovery as policymakers have expressed a willingness to tolerate above-target inflation for a time in order to support growth. They also believe that output will remain below pre-pandemic levels in many DMs in 2021. Among the top eight DMs by the end of 2021, only Australia and the US will be bigger than they were before COVID-19. 
• Fiscal deficits are expected to narrow in 2021 but will remain far wider than pre-crisis levels due to concerns about choking off the recovery in the event of a premature tightening of fiscal policy.

(Source: Fitch Solutions)

• In the year ahead, as more vaccines roll off the production line, more people get jabbed, and more economies gradually reopen, policymakers need to engineer a fundamental shift from saving their economies from collapse, to strengthening their economies for the future with growth-oriented reforms. 
• Enhanced debt restructuring mechanisms should help resolve unviable firms expeditiously and channel investment to new ideas and companies. Stronger active labour market policies, including job-search monitoring and support, and retraining should help workers shift to more promising jobs in dynamic parts of the economy. 
• Using this moment for some of these difficult reforms means that the monetary and fiscal stimulus still flowing will serve as a springboard to a brighter and more sustainable future rather than a crutch to a weaker version of the pre-COVID-19 economy. Seizing the opportunity could deliver years of solid post-COVID-19 growth and progress in living standards. 
• The IMF estimates that comprehensive growth-enhancing reforms cutting across product, labour, and financial markets could raise annual growth in GDP per capita by over one percentage point in emerging market and developing economies in the next decade. These countries would be able to double their speed of convergence to advanced economies’ living standards relative to the pre-pandemic years.

(Source: IMF)

• The number of jobs in the Business Process Outsourcing (BPO) sector increased by 15.0% over the past year, with 44,000 people employed in the sector as of June 30, 2021, relative to 38,400 people over the same period last year. 
• Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Senator the Hon. Aubyn Hill, who made the disclosure, said this increase in jobs happened despite the economy shrinking by over 10.0% during the same period. 
• “I am extremely pleased to tell Jamaicans that in the year to June 30, 2021, the BPO Services sector brought in US$780 million to the Jamaican economy. That’s no small sneeze during a time when our economy was shrinking,” he said, while making his contribution to the State of the Nation Debate in the Senate, on Friday (July 16). 
• Hill stressed that the Government truly appreciates the commitment of cash, management and energy that the 87 operators in the sector, including 10 Fortune500 companies, have made to Jamaica and the thousands of jobs these investors have provided for so many Jamaicans. 
• “This Ministry of Economic Growth and Job Creation will continue to do everything in our power and within the law to provide the support and ease-of-operation these investors need to run their businesses,” he said.

(Source: JIS)

• Owing to lower costs, for its financial year ending March 2021, the RJR Communications Group reported a 354.4% increase in net profit to $170.66Mn (EPS: $0.07). 
• Due to cost cutting initiatives, direct, selling and other operating expenses fell by 11.6% (or $298.98Mn), 19.2% (or $164.17Mn) and 32.7% (or $299.80Mn), respectively. During the year there was a reduction in newsprint usage, programming and salary costs, directly related to adjustments made in response to reduced revenues, and other cost containment measures pursued. Additionally, the company reduced expenditure on special events and other expenses that normally went towards boosting sales effort. 
• For the year, the company’s revenues declined by 7.2% (or $400.30Mn) to $5.19Bn, driven by reductions in sales from the audio ($32.00Mn or 4.0%) and print division ($529.00Mn or 19%). Nevertheless, there was an increase in sales from the audio/visual division which grew by $162.00Mn (or 7.0%), but it was not enough to offset the contraction from the print division. The increase in revenues from the audio/visual division was attributed to collaborations with the Ministry of Health and Education, along with the staging of general elections during the year. 
• RJR’s stock price has depreciated by 1.2% since the start of the year to $1.69, and currently trades at a P/E of 24.1x earnings which is above the main market sector average of 20.5x earnings.

(Source: Company Financials)

• The Costa Rican President, Carlos Alvarado, during a virtual act signed a law to attract investors, rentiers and pensioners that provides benefits such as incentives for import taxes and exemption of 20% of the transfer tax, among others. 
• With the legislation, whoever wishes to opt for a temporary residence as an investor must demonstrate to the Directorate of Migration and Foreigners a minimum investment of $150,000, down up from $200,000 in real estate, registrable assets, shares, securities and productive projects or projects of national interest. 
• The benefits include a duty free and all import taxes present only once, for the importation of household goods, while the amounts declared as income to become a creditor will be exempt from income tax. Beneficiaries may also import up to two land, air or sea transportation vehicles, for personal or family use, free of all import, tariff and value-added taxes. 
• According to the Minister of Tourism, Gustavo Segura, it is intended to produce a necessary revitalization of the economy and a recovery of the levels of foreign investment, which now represents 3.5% of GDP, down from 7.8% a decade ago.

(Source: The Costa Rica News)