• A reduction in direct and operating expenses has fueled a 5.7% YoY increase in Main Event Entertainment Group Ltd.’s net profit for the nine months ended July 31, 2021, to $9.17Mn (EPS: $0.03). 
• Total revenues generated during the 3^rd quarter was the strongest performance since the quarter ended April 2020, owing to good growth in digital signage services. However, year to date, revenues are still down 37.2% relative to the same period last year. MEEG experienced only moderate shifts in business activity following the brief ease in restrictions for the entertainment industry in July, 2021, as such revenues earned from core activity continue to lag significantly behind pre-Covid levels. 
• Although revenues were down, this was outweighed by a 52.3% drop in direct expenses and 29.3% decline in admin and general expenses, which fueled the positive net profit outturn. 
• Given that restrictions to stem the effects of the pandemic will extend through to the final quarter of this financial year, and new variants of the coronavirus continue to emerge, the entertainment sector will continue to be negatively impacted. This will create uncertainty in MEEG’s business model in the near term, and revenue will likely remain depressed. 
• Main Event’s stock price has increased 31.3% since the start of the year and closed Wednesday’s trading session at a price of $4.20 per share. At this price, the stock trades at a P/B ratio of 2.3x earnings, which is below the junior market average of 2.1x.

(Source: MEEG Financials & NCBCM Research)

• Fitch Solutions is raising the end-2021 benchmark interest rate forecast for Brazil by a further 100bps to 8.00%, from the prior forecast of 7.00%, in response to persistent inflationary pressures and deteriorating investor sentiment triggered by political volatility. 
• The primary driver of the Banco Central do Brasil’s (BCB) increasingly aggressive rate hiking cycle remains persistent inflationary pressures. Higher electricity costs due to a historic drought (much of Brazil's energy is hydropower) and transport costs, due to higher oil prices, have begun filtering into rising prices across goods and services categories. 
• While the 2021 forecast is in line with consensus, Fitch’s core view for 2022 is for the Banco Central do Brasil to cut the Selic rate to 7.50% in 2022 in response to falling inflation, against consensus expectations of a hold at 8.00%. 
• Risks to the outlook are towards higher interest rates prevailing in 2022, as political volatility surrounding the approaching general election campaign will risk triggering capital outflows.

(Source: Fitch Solutions

• Mexico’s fiscal deficit forecast was revised to 2.7% of GDP in 2021, from 3.0% previously, modestly narrower than the 2.9% deficit in 2020, as revenues have surprised to the upside so far in 2021. A primary surplus of 0.2% was also forecasted compared to the previous 0.0%. 
• In 2020, Mexico’s budget deficit came in at 2.9%, substantially narrower than in most other Latin American markets, as President Andrés Manuel López Obrador (AMLO)’s government refrained from an aggressive stimulus programme during the COVID-19 pandemic. 
• In 2022, the fiscal and primary deficits are expected to widen to -3.3% and -0.3%, respectively, as revenue growth will not keep pace with increases in spending. The public sector borrowing requirement, which is the broadest measure of public finances, is expected to narrow to 3.3% in 2021, from 4.0% in 2020, before widening to 4.0% in 2022. 
• Spending on national oil company Pemex will particularly strain public finances moving forward, though Fitch expects the budget balance will narrow after 2022, stabilizing Mexico’s total debt burden.

(Source: Fitch Solutions)

• A third dose of Pfizer’s Covid vaccine six months after a second shot restores protection from infection to 95% in a real-world setting in Israel, according to data submitted by the company to the Food and Drug Administration. 
• While the effectiveness of the mRNA vaccine wanes over time, a booster shot was shown to elicit an immune response similar to the protection generated after a second dose, Pfizer said in a 52-page presentation released by the agency Wednesday. 
• The FDA released the data as the agency faces pressure from the Biden administration to authorize booster shots for the general population as early as next week. But agency staff declined to take a stance on the need for a third shot, citing the lack of verified data in a 23-page report released later Wednesday. 
• Pfizer’s report is meant to brief the FDA’s Vaccines and Related Biological Products Advisory Committee, which meets Friday to review the request by Pfizer and its coronavirus vaccine partner, BioNTech, to approve Covid booster doses for the general public.

(Source: CNBC News)

• As of September 14, global inflation came in at 4.1% y-o-y in August according to Fitch Solutions estimates, and while it edged slightly higher from July, the agency believes that most of the increase is behind us. 
• Although it remains elevated by historic standards, and well above central bank targets, they believe that inflation is closer to peaking, and expect to see price pressures abate in Q421. 
• Inflation has continued to broaden out, and has remained stickier to the upside, due to a combination of persistent supply chain issues and above-trend growth. 
• Fitch believes that inflation in Europe will continue to edge higher over the remainder of 2021 given that inflation troughed in the fourth quarter of 2020, which means that base effects will continue to flatter the numbers over the coming months. Inflation will also be supported by a continued pick-up in demand as the economic recovery in Europe broadens.

(Source: Fitch Solutions)

• 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)