• British Prime Minister Boris Johnson set out plans on Tuesday to raise taxes on workers, employers and some investors to try to fix the health and social care funding crisis. The government is likely to confirm plans to go ahead with a 10 billion pound ($14 billion) tax increase.
• The move aimed at tackling the backlog in Britain's health system, which has seen millions waiting months for treatment from the state-run National Health Service, after resources were refocused to deal with COVID-19.
• The government on Monday announced an extra 5.4 billion pounds ($7.5 billion) for the NHS in England over the next six months to help bring down waiting lists and bolster the COVID-19 response.
• A 10 billion-pound boost to social care funding would require employees and employers each to pay an extra 1% in national insurance. Business groups say the extra burden could deter firms from hiring. A similar amount could be raised by adding just under 1.5 percentage points to the basic and higher rates of income tax.

(Source: Investing.com)

• U.S. shares were mixed and global equities retreated from record highs on Tuesday, as mounting worries over the slowing pace of economic recovery and the impact of the coronavirus Delta variant overtook investors' hopes that the Federal Reserve will delay tapering.
• Key U.S. equity benchmarks were down and the MSCI world equity index retreated from a record hit overnight, following seven consecutive days of gains to all-time highs. Earlier in the session, hopes of extra stimulus in Japan and strong China trade data had boosted Asia shares.
• "The combination of exorbitant expectations, nosebleed valuations and slowing macro environment make the go-forward reward/risk outlook less attractive," said Jeffrey Carbone, managing director at Cornerstone Wealth in Huntersville, North Carolina
• European stocks retraced ahead of an ECB policy meeting on Thursday. The STOXX 600 benchmark fell 0.5% but was not far from last month's lifetime peak.

(Source: Reuters)

• Bolstered largely by a reduction in selling and distribution as well as direct expenses, Wisynco Group Ltd reported a 9.6% year over year increase in net profit to $3.07Bn (EPS: $0.82) for the year ended June 30, 2021. 
• Expenses fell reflecting management’s efforts to contain expenses, resulting in an improvement in the expense to sales ratio to 23.7% from 25.3% last year. The savings from cost reduction was enough to offset the 1.1% (or $354.00Mn) decline in revenues. 
• However, low vaccination and stricter containment measures may continue to weigh on revenue generation in the near term. Although the Jamaican government has begun to vaccinate children, if it is unable to vaccinate a significant portion of the population , including children, to contain the recent spike in the infection rate, it could delay the restart of in-person teaching. This could weigh on Wisynco’s domestic revenues as sales to institutions contributes to revenues generated in the local market. However, this shortfall could be supplemented by higher export sales, as Wisynco continues its drive in the export markets, which grew 37% in FY 2020. 
• Wisynco’s stock price has fallen by 7.0% since the start of the year and closed Monday’s trading session at a price of $15.66 per share. At this price, the stock trades at a P/E ratio of 19.1x earnings, which is above the main market distribution and manufacturing sector average of 15.3x.

(Source: Wisynco Financials & NCBCM Research)

• The government is currently formulating the first 2021/22 supplementary estimates through which it will seek to address critical needs emerging in Jamaica since the approval of this year’s $830.8Bn Budget.. Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, has said that these priorities include expenditure pressures brought on by the rise in the intensity of the COVID-19 pandemic. The first supplementary budget is anticipated to be tabled by the end of September 2021. 
• This first supplementary budget will address crucial financing requirements of the health sector, which are significant, as the government continues its efforts to reduce the health impact of the pandemic on the population. It will also address more targeted support for vulnerable populations, among many other areas of acute expenditure needs at this time. 
• The decision to formulate the supplementary budget comes against the background of robust revenue outturns recorded for the first four months of the fiscal year, ending July 31. Revenues exceeded budgeted inflows by $17.3Bn. This was among the factors spurring the primary balance surplus above the budgeted $26.4 billion target over the period. 
• The robust revenue performance reflects the much higher than anticipated GDP growth in the June quarter, which the Planning Institute of Jamaica estimated was 12.9% year over year, as the economy rebounded from its 2020 lows aided by the relaxation of containment measures and recovery in our major trading partners. 
• However, the Minister pointed out that while the government’s actual spend for the period was $7.3Bn lower than programmed, an underperformance of expenditure at a point in time does not reflect a reliable source of fiscal savings, as the expenditure may simply be delayed”. 
• If fiscal performance remains inline or above projections, the GOJ could realize a fiscal and primary surplus equivalent or better than the current 0.3% and 5.6% forecasts, respectively. However, tighter COVID-19 restrictions and their adverse impact on business operating hours, corporate profits and hence income tax payments, as well as greater COVID-19 related expenditures are major downside risks to this.

(Source: JIS News & NCBCM Research)

• Mexico has begun a process of refinancing state-owned Petroleos Mexicanos’s debt, after the nation received a transfer of about $12 billion from the International Monetary Fund. 
• President Andres Manuel Lopez Obrador said Monday that refinancing had begun, and restated that he wants to use newly issued IMF reserves to pay debt, but that he couldn’t provide further details. His spokesman Jesus Ramirez confirmed to Bloomberg News that Pemex’s debt is being refinanced. 
• The government is considering whether the $12 billion in IMF reserves could be fully or partially used to pay off Pemex’s debt, according to a person with knowledge of the matter who wasn’t authorized to speak publicly about the topic. 
• AMLO, as the president is known, has prioritized aid to Pemex, seeking to reduce the company’s borrowing costs and free up cash to invest in exploration and production following a decade and a half of output declines. The company currently has $115 billion in debt. 
• If these funds are used to repay a portion of Pemex’s debt it would help to improve the company’s solvency and liquidity position. This will in turn create more room for upstream investment in exploration and production activities to replenish reserves.

(Source: Yahoo Finance & NCBCM Research)

• Surging government revenues amid a swift economic recovery in the Dominican Republic will help narrow the fiscal deficit over the coming quarters, particularly as the government reins in expansionary measures. 
• Fitch Solutions has revised its fiscal deficit forecasts to 4.5% of GDP in 2021 and 4.0% in 2022, from 6.9% and 6.0% previously, due to its more constructive outlook for real GDP growth and revenues. 
• While President Luis Abinader’s government has delayed plans to propose fiscal consolidation measures, the country’s slimmer fiscal deficits will likely allow the government additional flexibility to avoid large-scale tax increases or spending hikes in a reform package.

(Source: Fitch Solutions)

• Britain must relax its new immigration rules to allow more foreign workers and ease labour shortages caused by the coronavirus pandemic and Brexit, a leading employers group, the Confederation of British Industry, said on Monday. 
• Since COVID restrictions began to ease earlier this year companies have complained about the lack of workers especially in hospitality, food processing and logistics, which has led to gaps on supermarket shelves and restaurant closures. 
• Britain's government has been reluctant to ease its immigration rules. Last month the business ministry rejected a call from retailers and logistics firms for an exemption for truck drivers, and said the industry should improve pay and conditions instead. 
• The British Government has called on employers to train more British people to fill vacancies however, this may take up to two years and as such cause disruptions in the Labour market in the short-term.

(Source: Reuters and NCBCM Research)

• Oil prices fell on Monday after Saudi Arabia's sharp cuts to crude contract prices for Asia revived concerns over the demand outlook. 
• Brent crude futures fell 39 cents to settle at $72.22 a barrel. U.S. West Texas Intermediate crude was last down 40 cents at $68.89 a barrel. 
• State oil group Saudi Aramco notified customers in a statement on Sunday that it will cut October official selling prices (OSPs) for all crude grades sold to Asia, its biggest buying region, by at least $1 a barrel. 
• The price cuts were larger than expected, based on a Reuters poll of Asian refiners. Global oil supplies are increasing as the Organization of the Petroleum Exporting Countries and its allies, a grouping known as OPEC+, are raising output by 400,000 barrels per day (bpd) each month between August and December. This is expected to put downward pressure on oil prices for the rest of 2021.

(Source: Reuters)

• Sygnus Credit Investment Ltd reported a 154.8% year over year increase in net profit to US$5.03Mn for its financial year ending June 30, 2021, on the back of an increase in net interest income and fair value gains from financial instruments.
• The results were driven by new investment origination activity across the Caribbean at attractive yields, continued proactive credit risk management and growth in its private credit investment portfolio to US$82.80 million. Sygnus’ capital raise of US$27.1 million via additional public offering (APO) of 249,887,900 ordinary shares earlier this year provided it with additional capital to expand its credit portfolio.
• Expenses rose by 9.6% largely owing to higher management and corporate services fees related to higher assets under management, first time performance fees and some one-off expenses. Core activities resulted in an efficiency ratio of 42.0% for FYE Jun 2021, vs 32.7% for FYE Jun 2020. First-time payment of a performance fee, accounted for 5.4 percentage points of the 42.0%.
• While the pandemic continues to evolve, management indicated that it remains committed to proactively managing the risk of its private credit portfolio. It also expects to maintain a strong balance sheet with a high asset coverage ratio and low leverage; as well as deepen current partnerships and build new relationships across the Caribbean to widen its regional footprint and grow the business well beyond the duration of the COVID-19 pandemic.
• SCI’s JMD stock price has risen by 1.3% since the start of the year and closed Tuesday’s trading session at a price of $16.45 per share. At this price, the stock trades at a P/E ratio of 10.5x earnings, which is below the Main Market financial sector average of 14.9x. On the other hand, USD share price is unchanged year to date with the P/E at 10.7x, which is above the USD sector average of 7.7x.

(Source: SCI Financials)

• In its July Economic Bulletin, the Central Bank of Trinidad and Tobago (CBTT) said: 'The short-term economic outlook for Trinidad and Tobago will be directly impacted by the virus' path and the domestic response’.
• 'If sustained, the gradual relaxation of restrictions on movement and business activity from August could see, by the end of 2021, a meaningful recovery of non-energy output lost during the first 2½ quarters of the year'.
• The price of the two commodities that drive T&T’s energy sector recovered for the first seven months of 2021, bolstered by favourable demand conditions on account of the re-opening of several economies alongside crude oil production cuts. West Texas Intermediate (WTI) crude oil price increased by 69.5%year-on-year over the first seven months of 2021 to an average of US$63.46 per barrel, while natural gas prices rose by 81.5% to an average of US$3.26 per million British Thermal Units (mmbtu).
• 'While some improvement is anticipated in export earnings as the country benefits from the ascent in international energy prices, continued efforts to shore up domestic energy output will be critical'.

(Source: Central Bank of Trinidad & Tobago)