• The RJRGLEANER Communications Group has signed an agreement to acquire a 15.0% equity stake in StarApple Analytics Limited, a startup data analytics and artificial intelligence consulting company operating in Jamaica, which plans offer services regionally and beyond. The acquisition was done through the Group’s St. Lucia-based subsidiary, Media Plus Limited.
• StarApple, which was founded in December 2019, provides three main service offerings including data analytics consulting, artificial intelligence model development and corporate data analytics training. The company is poised to exploit growing corporate demand for its services arising from ongoing digital transformation strategies.
• The investment continues the group’s strategic objective of diversification into complementary businesses, following the increase in its ownership stake in the e-commerce business, Gustazos, to 50.0% and the acquisition of a 10.0% stake in digital marketing player ePost Caribbean Limited. The investment also aligns with the Group’s strategy of building capacity to harness insights from its vast store of market data to buttress business decisions and enhance client offers.

(Source: JSE News)

• Jamaica Producers Group Limited (‘JP’) announced its acquisition of a 50% interest in Co Beverage Lab, S.L. (CBL), effective September 1, 2021. JP is now the largest shareholder of CBL, a producer of fresh juice, based in Barcelona, Spain. According to Mr. Jeffrey Hall, Chief Executive Officer of JP: “The acquisition is directly in line with the stated strategic plan of Jamaica Producers Group Limited which includes the development of major new markets in Europe for fresh juice.”
• CBL serves a range of customers in Southern Europe and will target business opportunities in that market. JP currently operates A.L. Hoogesteger Fresh Specialist B.V. which is among the market leaders in fresh juice in Northern Europe and is JP’s largest business by revenues. Mr. Hall further stated: “CBL is a useful platform for growth. We believe it has the team and the facilities to benefit from JP’s larger established footprint and overall expertise in fresh juice.”
• This acquisition will help JP to expand its global footprint and grow its top and bottom-line to provide more value for investors.

(Source: JSE News)

• The Government has confirmed that The Bahamas’ national debt has breached the $10Bn mark due to the borrowing blow-out inflicted by the combination of COVID-19 and Hurricane Dorian.
• The Ministry of Finance, in its 2020-2021 full-year and fourth quarter “fiscal snapshot”, revealed Central Bank of The Bahamas data showing that the combination of the Government’s $9.909Bn direct debt - together with loans it has guaranteed on behalf of various state-owned enterprises (SOEs)- had taken the national debt to $10.356Bn at end-June 2021.
• It also confirmed the substantial increase in The Bahamas’ debt-to-GDP ratio, which rose from 66% of the latter at end-June 2020 to 86.3% some 12 months later. This resulted from the collapse in revenues due to the COVID-related contraction in economic activity as well as increased spending on business and social support measures to prevent families and wider society from imploding.
• While the Government had little choice but to respond to COVID and its devastating fall-out in the way that it did, and save the businesses and households that it could, the latest “snapshot” - issued just ten days before the upcoming general election - shows the scale of the economic and fiscal crisis confronting the next administration.
• Higher debt will likely result in greater future taxes, and the implementation of fiscal consolidation measures to achieve debt reduction and improve fiscal balances. It could also result in higher borrowing costs for the government.

(Source: The Tribune & NCBCM Research)

• The Guyanese Government has approached the Inter-American Development Bank (IDB) for a loan totalling US$1,817,764 to support the development, and implementation of a Medium-Term Development Strategy which will leverage the country’s emerging oil and gas revenues. The strategy would be used to grow investment, increase employment and strengthen the economic resilience of the country.
• According to the loan documents seen by Kaieteur News, the funding would be spent to: strengthen the technical capacity of the government to lead economic transformation in Guyana; and to achieve economic diversification and mid-term development strategy.
• It is expected to include a forum for infrastructure opportunities, targeted investor workshops to assist in structuring specific Public Private Partnership (PPP) projects, public consultation, and awareness building through strategic communications to investors, stakeholders and the general public will be held.
• There will also be several activities, such as the engagement of a strategic advisor on economic development, to facilitate consultations and provide insight into success stories on economic diversification, amongst others.

(Source: Kaieteur News)

• 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)