• For the first quarter ending May 2021, Kremi’s net profit doubled to $54.16Mn (EPS: $0.14). 
• This came on the back of a 27.6% (increase in revenues, which the company attributed to strong product demand, as it has taken the initiative to engage key suppliers, whose supply chains and prices are being affected by the ongoing pandemic. 
• Direct and operating expenses grew by 16.9% (or $49.37Mn) and 34.7% (or $36.28Mn), respectively. Opex grew owing to higher transportation costs due to higher consumer demand, salary increases, staff related expenditure and the full annualized cost for the new Ocho Rios depot. 
• Kremi stock price has appreciated by 36.4% since the start of the year to a price of $5.72 and currently trades at a P/E ratio of 16.8x earnings which is in line with the junior market manufacturing sector average.

(Source: Company Financials) 

• Fitch Solutions has downwardly revised its 2021 real GDP growth forecast for Cuba to 1.0%, from 2.7% previously, as the country grapples with a severe spike in COVID-19 cases and social unrest. 
• This follows an 11.0% contraction in 2020, the worst in Cuba since 1993, as the arrival of the pandemic brought the island’s tourism industry to a halt and US sanctions cut off remittance inflows, generating hard currency shortages that undermined imports and private consumption. 
• While Cuba’s rebound will gain steam in H221 and 2022 as vaccinations pick up domestically and abroad, leading to 4.2% growth in 2022, US sanctions relief is highly unlikely in the coming quarters. 
• Over the longer term, a recent economic reform push could boost Cuba’s growth trajectory if the government keeps the reforms in place post-pandemic.

(Source: Fitch Solutions)

• Minister of Health of Bahamas Renward Wells gave a recent update on the mixing of vaccines to the people. The Bahamas awaits a tranche of Pfizer doses from the World Health Organization’s (WHO) COVAX Facility and it could offer beneficiaries of AstraZeneca a second dose of the US-manufactured vaccine (Pfizer), as studies have shown that vaccine mixing offers strong immune protection. 
• In a statement, he pointed to existing studies where mixing of AstraZeneca and Pfizer were found to have been “very effective”. However, he did not definitively say whether The Bahamas would adopt the measure. Canada, Spain and South Korea have approved dose-mixing due to concerns about rare but possible blood clots linked to the AstraZeneca vaccine. 
• As per the preliminary results of the CombivacS Spanish study, the presence of antibodies in the bloodstream was between 30 & 40 times more in people who got the follow-up Pfizer shot than others in the control group, who only got one AstraZeneca dose. 
• The presence of neutralizing antibodies rose sevenfold after a Pfizer dose — more than double the effect observed when receiving a second dose of AstraZeneca. Nearly 700 volunteers between the ages of 18 and 59 participated in the state-backed study, with around 450 given a Pfizer dose. 
• Amid concerns about coronavirus variants, including the Delta strain, Wells said the vaccines have proven effective against all five variants of concern, maintaining that it is not a matter of if but when the Delta variant is confirmed in The Bahamas. 
• However, the World Health Organization’s chief scientist advised against mixing and matching COVID-19 vaccine doses on Monday, calling it a “dangerous trend” given the limited data about the long-term health impact.

(Source: West Indies and Caribbean News)

• Bank of England policymakers signaled that stimulus measures may have to be trimmed back soon to keep inflation from overheating. Recently data showed that the inflation rate in the U. K has surpassed the 2% benchmark and is at 2.5%. 
• Micheal Sanders a British economist and an external member of the Bank of England's Monetary Policy Committee indicated that the Bank of England may have to consider curtailing its stimulus program “in the next month or two” to contain inflation as the economy rebounds. 
• Saunders’ comments suggest that the Monetary Policy Committee will have to debate an early end to the 150 billion pound ($208 billion) bond purchase program, a move that would put the Bank of England in the vanguard of global central banks withdrawing stimulus. His remarks stood out against the previous position of the Bank’s policymakers led by Governor Andrew Bailey, who has described some of the surges in inflation as “temporary.” 
• Saunders’ highlighted that both the labour market and the economy have been recovering which suggests that inflation may remain well above the target in two or three years unless the Bank of England acts. 

(Source: Bloomberg)

• Based on the Institute of International Finance (IIF) report, the global issuance of sustainable debt is on track to surpass $1 trillion this year with green bonds dominating. Green bonds are used to finance climate-related or environmental projects, and they make up the lion's share of all new issuance, at 35%, led by Germany, China, and France. 
• The surge in issuance is a result of corporations and financial institutions being put under pressure from investors to increase their activity in sustainable debt. As a result, sustainable debt sales more than doubled year-on-year in the first half of 2021 to over $680 billion, closing in on the $700 billion issued during the whole of last year.  
• The main participants are sovereigns, financial institutions, and utilities, however, firms from elsewhere in the energy sphere, as well as materials and consumer discretionary sector, are quickly joining the fray. A key factor to note is that emerging markets still represent less than 15% of the sustainable debt universe and as such developing countries have some catching up to do.

(Source: Reuters)

• For its financial year ending March 2021, Medical Disposables and Supplies Limited (MDS) reported a net profit $69.61Mn (EPS: $0.26), which translates to 101.4% (or $35.06Mn) increase over the same period last year. This was primarily due to the $62.08Mn gain realized on the acquisition of Cornwall Medical and Dental Supplies Limited. MDS now owns 60.0% of the company, and will carry the operation through a newly formed subsidiary called Cornwall Enterprise Limited. 
• Gross margin rose 7% reflecting a 5.1% reduction in cost of sales, which offset the impact of a 2.4% decline in revenues earned from the sale of the company’s products.  
• However, administrative, selling and promotional, as well as finance costs all increased by 4.3%, 22.0%, and 45.6%, respectively. Consequently, the company would have realized a year over year decline in net profit of about $22Mn, if the effects of the one-off gain from business acquisition is excluded. 
• The acquisition of Cornwall Medical and Dental Supplies Limited is expected to increase the company’s market share and expand its distribution network as it will add three pharmacies in the western section of the island, and begin offering dental services. This bodes well for future revenue and bottom-line growth in terms of the new clients acquired and the ability to cross-sell dental services to existing clients. 
• MDS stock price has risen by 18.2% since the start of the year and currently trades at a P/E ratio of 19.2x earnings, which is below the junior market distribution sector average of 26.4x earnings.

(Source: Company Financials & NCBCM Research)

• For the first quarter of 2021 (January-March), Jamaica’s total spending on imports and earnings from exports declined relative to the same period in 2020. 
• Imports for the first 3 months of 2021 were valued at US$1,316.8Mn, a decline of 2.3% when compared to Q1 2020. This decline was largely attributable to lower imports of “Consumer Goods” and “Transport Equipment” which fell by 13.9% and 20.3%, respectively. 
• The top 5 import partners during the period were the USA, Brazil, China, Colombia, and Japan and they accounted for 65.1% of imports. Jamaica imported a total of US$857.3Mn worth of goods from these countries, compared to US$872.7Mn recorded for 2020. The 1.8% decline in imports from these trading partners was due largely to the reduction in the imports of kerosene type jet fuel from the USA. 
• Total exports for the review period was flat at US$354.6Mn relative to the first quarter of 2020. 
• The top 5 destinations for Jamaica’s exports were the USA, the Netherlands, Canada, Puerto Rico, and the United Kingdom. Exports to these countries increased by 10.1% to US$271.5Mn when compared to the first quarter of 2020.This was due mainly to increased exports of alumina to the Netherlands.

(Source: STATIN & NCBCM Research)

• Fitch Solutions forecasts headline real GDP growth figures to slow across Latin America in 2022. However, the lower headline figures will be due in large part to the fading impact of base effects and do not imply significant economic weakness for the region. 
• Instead, real GDP growth will continue at a more moderate pace as greater vaccine availability across the region allows for loosened public health restrictions. 
• The agency forecasts that nearly every country in Latin America will be able to vaccinate their priority populations, which it defines as those 65 and older, healthcare workers and those with underlying health conditions, by late-2022.  
• This will allow governments to ease restrictions on mobility and commercial activity, providing a bump to private consumption. Similarly, the agency expects strong global economic activity will support demand for the region’s exports. 
• Overall, Latin America’s economy is expected to return to its pre-pandemic size in late-2022. Considering this, the agency expects Latin America to continue to lag every other emerging market region, reflecting its view that years of weak investment, unfavourable demographics and political volatility will weigh on growth.  
• Moreover, there are downside risks to growth stemming from political uncertainty in 2022. Brazil and Colombia will hold presidential elections in 2022, and uncertainty could weigh on investment, dragging down growth, should those campaigns suggest the possibility of drastic changes in policy direction. 

(Source: Fitch Solutions)

• On July 14, 2021 Moody's Investors Service ("Moody's") affirmed Government of Barbados’ Caa1 issuer ratings and withdrew the Caa3 senior unsecured bond rating. The outlook remains stable. 
• The key drivers behind the rating decision are: fiscal risks have not materially increased despite the severity of the pandemic shock; there are structural reforms to support medium-term growth prospects and fiscal sustainability; and an increased level of foreign exchange reserves supports Barbados' external position. 
• The stable outlook reflects Barbados' high level of indebtedness and subdued growth performance, balanced against strong reform efforts that have reduced fiscal vulnerabilities prior to the pandemic. 
• Despite the severe economic shock, reform efforts have continued and Moody’s expects the recovery in economic activity will support a path of fiscal consolidation similar to that observed in the fiscal accounts before the pandemic, which was associated with high primary surpluses and downward debt trajectory. 
• On the other hand, the speed of the recovery of the tourism sector remains uncertain, which poses risks to Barbados’ fiscal outlook.

(Source: Moody’s Investor Service)

• S. producer prices accelerated in June leading to the largest annual increase in more than 10.5 years. Based on the producer price index (PPI), prices increased by 7.3% YoY. This increase in inflation is attributed to two main factors. Firstly, it is due to a surge in demand fueled by the U.S economy’s recovery from the COVID-19 pandemic. Secondly, there have been supply-side issues such as increases in both commodity prices and labour costs. 
• Chris Low, chief economist at FHN Financial in New York stated that "Producers are still struggling to meet robust consumer demand in the face of supply chain bottlenecks and re-staffing difficulties." Further, it was highlighted that were very low inventory levels because of supply chain issues making it easier for producers to pass on the costs to consumers. 
• The Federal Reserve Chair Jerome Powell insisted in a congressional hearing that the high inflation is transitory, and this view is shared by most economists at the White House. However, given the high increase in producer price inflation coupled with the recent announcement of an increase in consumer prices, there is skepticism that inflation is temporary in the U.S.

(Source: Reuters)