• For the nine months ending July 31, 2021, Indies Pharma Jamaica Ltd. reported a 34.8% year over year decline in net profit to $103.58Mn (EPS: $0.08) due to an increase in direct, indirect and finance costs. 
• While revenues grew by 11.9%, this was outweighed by a 38.4%, and 2.0% rise in cost of sales, admin and other expenses, respectively, and a 56.5% drop in foreign exchange gains. The challenges related to the COVID-19 pandemic, such as increased logistics cost and currency depreciation, continue to be unavoidable and have adversely impacted Indies Pharma’s bottom-line. 
• Following the acquisition of a loan to make strategic investments to improve its future profitability and shareholder value, the company recorded finance cost of $51.66Mn during period, which also eroded its bottom-line. 
• The stock closed Tuesday’s trading session at a price of $3.26 per share, up 23.4% since the start of this year. At this price, Indies Pharma trades at a P/E ratio of 27.2x earnings, which is above the junior market distribution sector average of 17.5x.

(Source: Indies Pharma Financials)

• The Executive Board of the International Monetary Fund (IMF) completed its fourth review of Honduras’ performance under its economic program supported by a Stand-By Arrangement (SBA) and an arrangement under the Standby Credit Facility (SCF), approved an augmentation of access by SDR 149.9Mn (US$215.8Mn), and extended the duration of the SBA and SCF by two months until January 14, 2022. 
• The two-year arrangements under the SBA and SCF were approved on July 15, 2019. Including the augmentations approved on September 13, 2021 and on June 1, 2020, the two-year arrangement provides access to about SDR 537.1Mn (about US$773Mn). 
• Honduras’ worse than expected economic contraction in 2020 will only be partly reversed in 2021.The ongoing health emergency and significant reconstruction needs from tropical storms Eta and Iota warrant a temporarily looser fiscal stance. However, the authorities remain steadfastly committed to macroeconomic stability, fiscal responsibility, and structural reforms. 
• That being said, the completion of the review allows for immediate disbursements of SDR 87.4Mn (about US$125.8Mn) to help Honduras meet its balance of payments and fiscal financing needs, which have been exacerbated by the ongoing pandemic and the tropical storms.

(Source: IMF)

• Fitch Solutions forecasts that Colombia’s budget deficit will be 8.2% of GDP in 2021, a multi-decade high, due to ongoing fiscal stimulus measures to counteract the economic impact of the COVID-19 pandemic. 
• The deficit will narrow to 6.8% in 2022 and continue to shrink in the years thereafter as economic growth revenue-positive reform measures support government revenues. 
• That being said, the potential for an ideological shift following Colombia’s 2022 elections will increase uncertainty for the country’s medium-to-long term fiscal outlook, particularly if leftist candidate Gustavo Petro wins the presidency.

(Source: Fitch Solutions)

• Activity figures released over the past month were mixed, strengthening Fitch Solutions’ view that the Emerging Market (EM) recovery peaked in the middle of 2021. Q221 GDP figures released over the past month painted a mixed picture of the state of EMs' recovery. 
• In EM Europe, the news was mostly positive; however, the news was less upbeat in Latin America. Growth slowed sharply in Chile (3.4% to 1.0% q-o-q) and output fell by 0.1% q-o-q in Brazil. While the pace of contraction eased in the Philippines (-4.2% to -1.3%), Malaysia's economy contracted by 2.0% q-o-q, a much worse result than Fitch Solutions had expected.
• Activity data for Q321 are patchy, but the available data mostly suggest that the recovery in EMs continued to lose momentum. This strengthens the belief that the EM recovery peaked in the middle of 2021, and will now slow as a result of reduced stimulus, fading base effects, accelerating inflation and lingering COVID-19 worries.

(Source: Fitch Solutions)

• Global debt loads surged during the second quarter as households seized on low mortgage rates and governments continued borrowing heavily to revive pandemic-battered economies. 
• The amount of the world’s outstanding debt swelled during the three months by about $4.8 trillion to a record $296 trillion, according to a report by the Institute of International Finance. 
• The increase was led by households that added $1.5 trillion of debt during the first half of the year, driven by the U.S., China and Brazil, with home buyers tapping into low interest rates and stepping up spending as countries emerged from lockdowns. Meantime, government and corporate debts increased by $1.3 trillion and $1.2 trillion, respectively, over the six-month period. 
• At the same time, the amount of debt relative to the size of the global economy declined for the first time since the onset of the pandemic as growth rebounded. The total debt load stood at about 353% of the world’s annual economic output, a nine-percentage-point drop from the peak during the first three months of 2021.

(Source: Bloomberg)

• Kingston Properties Limited (KPREIT) entered into an agreement to acquire 3 of four 4 pre-construction units in a mixed-use industrial development in the Cayman Islands called Gum Tree 5. 
• The units are slated for completion in October 2022 and are being acquired for a consideration of approximately US$3.13Mn. KPREIT has an option to acquire the fourth unit at the completion date. 
• Once completed and acquired, this will likely add to the company’s book value per share which was US$0.046 (J$6.86) at the end of June 2021. 
• The stock has appreciated by 18.0% since the start of 2021 and currently trades at approximately 25% above its book value at $8.56.

(Source: JSE & NCBCM Research)

• July economic activity prints for Brazil, Colombia and Peru set to be released over the course of this week will give an early indication of the region's economic rebound in Q321. Nearly every market in the region outperformed Fitch Solution’s initial expectations in H121, proving increasingly resilient to COVID-19 disruptions and leading to a round of upward forecast revisions. 
• However, in many markets there are growing signs of slowdowns as headwinds to activity mount. In particular, inflation has also surprised significantly to the upside as a result of rebounding demand, high commodity prices and supply chain disruptions, among others. That is triggering increasingly aggressive interest rate hikes from central banks across the region. 
• Elevated inflation and rising interest rates pose a number of risks to the near-term growth outlook. Inflation erodes household purchasing power, potentially slowing the consumption-driven rebound across the region, and raises risks to social stability as citizens demand greater government support. 
• The political environment across the region is already volatile as nearly every market faces idiosyncratic risks including recent unrest against reforms and upcoming elections. That, in turn, suggests governments are unlikely to take significant steps to rein in spending that surged in response to the pandemic, even as rising interest rates increase debt servicing costs. As a result, investors should closely watch activity prints for signs of a greater slowdown.

(Source: Fitch Solutions)

• New data shows that while international visitor arrival numbers in Mexico were down compared to pre-pandemic levels, those who did enter the country in July spent more money than they did in 2019. 
• According to Mexico News Daily, Mexico’s national statistics agency Inegi announced that an estimated 3.38 million international visitors came to Mexico in July 2021, a 19% decline from the 4.16 million foreign arrivals reported during July 2019. 
• While the overall number of tourists arriving in Mexico was down compared to pre-pandemic levels, the amount spent by travelers totaled $2.12Bn in July, which was a 6.5% increase compared to the $1.99Bn spent by international arrivals during the same month in 2019. 
• Inegi officials said the average spending per tourist was $1,150, a 15% increase over July 2019. In total, the Mexican government revealed international tourist numbers were up 143% and combined expenditure increased 389% in July 2021 compared to July 2020. 
• This will help to support government revenues and if sustained contribute to the country’s economic recovery. The IMF expects Mexico to grow by 6.3% in 2021 from -8.2% in 2020.

(Source: Travel Pulse & NCBCM Research)

• Although Fitch Solutions maintains a relatively bullish outlook on global growth, it believes that as the global economic recovery matures, several important adjustments will occur. 
• First, as base effects wear off and economies converge back to pre-crisis growth rates, global growth momentum will lose some steam. 
• High frequency indicators such as purchasing managers’ indices (PMIs), trade data, retail trade and confidence surveys point to a deceleration in economic activity from the elevated and unsustainable levels seen earlier in 2021, with some incoming data even surprising (slightly) to the downside. 
• Second, there is increasing evidence of a transition towards tighter monetary and fiscal policy as central banks start responding to higher inflation and as governments roll back their income support schemes while looking at tax increases. Emerging markets (EMs) have been the quickest to act in recent months, but a few developed markets (DMs) have increasingly been sending more hawkish policy messages.

(Source: Fitch Solutions)

• Oil prices rose to six-week highs on Monday as U.S. output remains slow to return two weeks after Hurricane Ida slammed into the Gulf Coast and due to concerns that another storm could affect output in Texas this week. 
• Brent Futures rose 59 cents, or 0.8%, to settle at $73.51 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 73 cents, or 1.1%, to settle at $70.45. 
• Those price gains came even though the Organization of the Petroleum Exporting Countries (OPEC) trimmed its world oil demand forecast for the last quarter of 2021 due to the Delta coronavirus variant. 
• Hurricane Ida’s impact is lasting more than the market expected and as some oil production capacity remains shut this week, prices are rising on supply not being restored and therefore not reaching refineries.

(Source: Reuters)