• Canada’s budget deficit will be structurally wider over the coming quarters as Prime Minister Justin Trudeau’s government increases public spending on social programs and investment over the next three years to support economic recovery.
• Fitch Solutions forecast a budget deficit of 8.7% of GDP in the fiscal year 2021/2022 and 8.5% in FY2022/2023, from an estimated 16.0% shortfall in FY2020/2021.
• While significantly larger deficits will push up public debt to 53.9% of GDP in 2021 and 57.6% in 2022, the country’s debt load will remain smaller than many other developed market economies, helping to keep borrowing costs low.

(Source: Fitch Solutions)

• Fully vaccinated people can safely engage in outdoor activities like walking and hiking without wearing masks but should continue to use face-coverings in public spaces where they are required, U.S. health regulators and President Joe Biden said on Tuesday while urging those who have not to get the shot.
• The updated health advice comes as just over 29% of the U.S. population is fully vaccinated, the CDC reported, and 43% have had one dose of the two-shot vaccines.
• "We’ve made stunning progress because of all of you," Biden said, adding that COVID-19 cases are "down dramatically." Deaths among senior citizens have dropped by 80% as vaccinations have increased, he said.
• The CDC called the new guidelines a "first step" in helping fully vaccinated Americans to resume activities they had stopped because of the pandemic.
• The White House is trying to overcome vaccine hesitancy, and Biden offered the new mask guidelines as another reason to get inoculated.

(Source: Reuters)

• The Tobacco Industry Regulations (Validation and Indemnity) (Repeal) Act 2021, was passed in the Senate on April 23. The legislation provides for the validation and confirmation of all acts in relation to the winding-up of the Tobacco Industry Control Authority, including the divestment of assets, entering into contracts, and the payment of redundancies to officers and servants.
• The decision by the Cabinet is aligned to the Government’s public sector Master Rationalization Plan, which proposes a reduction of the over 190 public bodies, comprising companies, agencies, and statutory bodies, as a critical feature of transforming the public sector.
• The ongoing effort to streamline and rationalize the public sector is guided by the policy on the categorization and rationalization of public bodies which requires a leaner, more efficient, and coherent grouping of public bodies. Under the policy, public bodies have been identified for the merger, outsourcing, and integration into parent ministries, privatization, divestment, and closure.
• This transformation is expected to make the public sector more capable, effective, and economical for the government. This will help to enhance Jamaica’s competitiveness and allow the GOJ to divert current expenditure to capital expenditure to support economic growth.

(Source: JIS & NCBCM Research)

• The St. Thomas Tourism Destination Development and Management Plan has been completed and will be unveiled in the 2021/2022 fiscal year. Minister Bartlett stated that the plan has identified 51 projects for implementation over the decade to 2030, of which 40 will be led by the Ministry of Tourism.
• “The destination assessment of St. Thomas identified that the parish has numerous attractions and places suitable for the development of tourist accommodation of various types, which should appeal to a wide cross-section of prospective visitors,” said the Minister.
• The close proximity of the parish to Kingston, especially to the Norman Manley International Airport, suggests that “considerable tourism development is possible there. The development of St. Thomas as a new tourist destination will serve as a catalyst for the wider social and economic development of the parish. This augurs well for the continued efforts by the government to diversify the existing tourism products and the economy.

(Source: JIS)

• The aggressive rollout of COVID-19 vaccines in Barbados and the return of tourism activity will reinforce the popularity of Prime Minister Mia Mottley. As of April 23, 25.0% of the Barbadian population had been vaccinated, a leading position among Caribbean countries.
• The government also has agreements in place to fully vaccinate 42.4% of the population. Given the pace of the vaccination program, Fitch Solutions expects economic activity to normalize relatively quickly following strict lockdown measures enforced in February and March 2021. 
• In the near term, the Mottley administration will focus on fostering economic activity through continued spending and a pledge to not raise taxes in FY2021/22 (April 2021 to March 2022).    
• However, Barbados’ fiscal outlook poses downside risks to Mottley’s re-election prospects as unpopular fiscal consolidation measures will likely be implemented in the run-up to the May 2023 parliamentary elections.

(Source: Fitch Solutions)

• The Democratic Party will continue efforts to resolve Puerto Rico’s territorial status in the coming months, while the party retains control of the US Congress and the presidency.
• Representatives have introduced two separate bills that would resolve the issue, though the bills have created divisions within the party that reflect divisions on the issue in Puerto Rico.
• If passed, Puerto Ricans would have equal voting rights and access to more resources which could improve their quality of life.
• However, given a lack of unified support behind a single bill and staunch opposition from the Republican Party, Fitch Solutions maintains its view that Puerto Rico is unlikely to be admitted as a US state in the near term.

(Source: Fitch Solutions & NCBCM Research)

• The European Central Bank should not dial back its aggressive stimulus measures until the eurozone economy achieves its growth potential and inflation is back at 2%, ECB board member Fabio Panetta said on Monday.
• The ECB, which kept its policy unchanged last week, is set to decide in June the future of its emergency bond purchases, the key plank of its response to the coronavirus pandemic, which crippled the eurozone economy.
• Panetta said the ECB could and should keep credit cheap for a long time, even if borrowing costs around the world rise as a result of a booming U.S. economy.
• "This evidence suggests that we should avoid withdrawing policy support – either deliberately or by tolerating adverse spillovers – until the output gap is closed and we see inflation sustainably back at 2%," Panetta said in a speech at a central banking conference. "For the ECB, this implies that we will have to maintain very favourable financing conditions well beyond the end of the pandemic period," he added.
• Panetta, Italy's representative on the ECB's board, said that failing to bring inflation back to 2% would make the debt burden heavier for the private sector as well as governments, and hurt the poorest segments of society.

(Source: Reuters)

• The German government has raised its growth forecast for this year to 3.5%, compared with the 3% growth it was expecting back in January, a source said, adding that the upward revision was justified by a stronger-than-expected fourth quarter.
• The source added that the government expected Europe's largest economy to expand by 3.6% in 2022. The economy ministry declined to comment on the figures. The government is due to present its 2021 economic growth forecast on Tuesday.
• Germany's leading economic institutes said earlier this month they expected the gross domestic product to grow by 3.7% this year and 3.9% in 2022.
• German business morale improved only slightly in April as the third wave of COVID-19 infections and a semiconductor shortage in the motor vehicle sector slowed recovery in Europe's largest economy, a survey showed on Monday.
• Export-oriented manufacturers are currently benefiting from higher demand from China and the United States, whereas domestically-focused services are suffering under extended restrictions to contain the third wave of COVID-19 infections.

(Source: Reuters)

• For the 6 month period ending March 2021, Barita Investments reported a net profit of $2.06Bn (EPS: $1.90), which was 103.7% (or $1.05Bn) higher than the outturn for the same period in the prior year.
• The growth was largely influenced by a $1.03Bn (or 965.3%) increase in FX trading and translation gains, as well as a 79.3% (or $603.07Mn) and 37.1% (or $200.58Mn) increase in fee & commission and net interest income, respectively.
• An expansion of the scale of its foreign exchange trading operations through a combination of greater customer engagement and increased transactional activity drove the increase in FX trading and translation Meanwhile, fee & commission income grew due to an increase in fees generated by its investment banking and asset management business lines relative to the prior year.
• During the second quarter of its financial year, the company completed several capital market deals, including the Derrimon Trading Company Limited APO, which was oversubscribed, attracting more than $7.00Bn in subscriptions.
• A rise in staff ($247.36Mn) and administrative ($260.490Mn) costs as the company continued to invest in critical pillars of its transformational growth strategy including the acquisition and retention of human capital, and customer acquisition initiatives partially tempered the overall impact of higher operating revenues on its bottom-line.
• Barita’s stock price has appreciated by 5.0% since the start of the year and currently trades at a P/E of 21.6x earnings when compared to the Main Market Financial Sector average of 19.8x earnings. 

(Source: Barita’s Financials)

• For its first quarter ending March 2021, Supreme Ventures Limited earned $592.26Mn (EPS: $0.22) in net profit attributable to shareholders, which translates to a 19.8% (or $146.11Mn) contraction when compared to the comparative period last year.
• Although total gaming income rose 5.7% (or $580.54Mn) due to a significant rise in sports betting, this was outweighed by the 11% (or $859.58Mn) increase in direct costs owing to efforts to expand the business in preparation for the economic recovery.
• Management also attributed the outturn to several external factors including government-imposed restrictions to contain the spread of COVID-19, higher lottery liabilities during the quarter when compared to Q1 2020, and the introduction of competition. 
• Nevertheless, the company states that it will continue to roll out its channel diversification strategy, giving its customers the option to game at their fingertips in the next few months. This growth in its mobile channels across all gaming segments through the increased acquisition of customers will be key to the company’s ability to continue growing revenue. It also aims to grow revenues through its new loan product, Evolve, which will strengthen its relationship with retailers and allow them access to low-cost funding to grow their businesses.
• Supreme Ventures stock price has depreciated by 9.1% since the start of the year and currently trades at a P/E of 18.9x earnings, which is below the Main Market average of 31.8x earnings.

(Source: SVL’s Financials)