• The aggressive rollout of COVID-19 vaccines in Barbados and the return of tourism activity will reinforce the popularity of Prime Minister Mia Mottley. As of April 23, 25.0% of the Barbadian population had been vaccinated, a leading position among Caribbean countries.
• The government also has agreements in place to fully vaccinate 42.4% of the population. Given the pace of the vaccination program, Fitch Solutions expects economic activity to normalize relatively quickly following strict lockdown measures enforced in February and March 2021. 
• In the near term, the Mottley administration will focus on fostering economic activity through continued spending and a pledge to not raise taxes in FY2021/22 (April 2021 to March 2022).    
• However, Barbados’ fiscal outlook poses downside risks to Mottley’s re-election prospects as unpopular fiscal consolidation measures will likely be implemented in the run-up to the May 2023 parliamentary elections.

(Source: Fitch Solutions)

• The Democratic Party will continue efforts to resolve Puerto Rico’s territorial status in the coming months, while the party retains control of the US Congress and the presidency.
• Representatives have introduced two separate bills that would resolve the issue, though the bills have created divisions within the party that reflect divisions on the issue in Puerto Rico.
• If passed, Puerto Ricans would have equal voting rights and access to more resources which could improve their quality of life.
• However, given a lack of unified support behind a single bill and staunch opposition from the Republican Party, Fitch Solutions maintains its view that Puerto Rico is unlikely to be admitted as a US state in the near term.

(Source: Fitch Solutions & NCBCM Research)

• The European Central Bank should not dial back its aggressive stimulus measures until the eurozone economy achieves its growth potential and inflation is back at 2%, ECB board member Fabio Panetta said on Monday.
• The ECB, which kept its policy unchanged last week, is set to decide in June the future of its emergency bond purchases, the key plank of its response to the coronavirus pandemic, which crippled the eurozone economy.
• Panetta said the ECB could and should keep credit cheap for a long time, even if borrowing costs around the world rise as a result of a booming U.S. economy.
• "This evidence suggests that we should avoid withdrawing policy support – either deliberately or by tolerating adverse spillovers – until the output gap is closed and we see inflation sustainably back at 2%," Panetta said in a speech at a central banking conference. "For the ECB, this implies that we will have to maintain very favourable financing conditions well beyond the end of the pandemic period," he added.
• Panetta, Italy's representative on the ECB's board, said that failing to bring inflation back to 2% would make the debt burden heavier for the private sector as well as governments, and hurt the poorest segments of society.

(Source: Reuters)

• The German government has raised its growth forecast for this year to 3.5%, compared with the 3% growth it was expecting back in January, a source said, adding that the upward revision was justified by a stronger-than-expected fourth quarter.
• The source added that the government expected Europe's largest economy to expand by 3.6% in 2022. The economy ministry declined to comment on the figures. The government is due to present its 2021 economic growth forecast on Tuesday.
• Germany's leading economic institutes said earlier this month they expected the gross domestic product to grow by 3.7% this year and 3.9% in 2022.
• German business morale improved only slightly in April as the third wave of COVID-19 infections and a semiconductor shortage in the motor vehicle sector slowed recovery in Europe's largest economy, a survey showed on Monday.
• Export-oriented manufacturers are currently benefiting from higher demand from China and the United States, whereas domestically-focused services are suffering under extended restrictions to contain the third wave of COVID-19 infections.

(Source: Reuters)

• For the 6 month period ending March 2021, Barita Investments reported a net profit of $2.06Bn (EPS: $1.90), which was 103.7% (or $1.05Bn) higher than the outturn for the same period in the prior year.
• The growth was largely influenced by a $1.03Bn (or 965.3%) increase in FX trading and translation gains, as well as a 79.3% (or $603.07Mn) and 37.1% (or $200.58Mn) increase in fee & commission and net interest income, respectively.
• An expansion of the scale of its foreign exchange trading operations through a combination of greater customer engagement and increased transactional activity drove the increase in FX trading and translation Meanwhile, fee & commission income grew due to an increase in fees generated by its investment banking and asset management business lines relative to the prior year.
• During the second quarter of its financial year, the company completed several capital market deals, including the Derrimon Trading Company Limited APO, which was oversubscribed, attracting more than $7.00Bn in subscriptions.
• A rise in staff ($247.36Mn) and administrative ($260.490Mn) costs as the company continued to invest in critical pillars of its transformational growth strategy including the acquisition and retention of human capital, and customer acquisition initiatives partially tempered the overall impact of higher operating revenues on its bottom-line.
• Barita’s stock price has appreciated by 5.0% since the start of the year and currently trades at a P/E of 21.6x earnings when compared to the Main Market Financial Sector average of 19.8x earnings. 

(Source: Barita’s Financials)

• For its first quarter ending March 2021, Supreme Ventures Limited earned $592.26Mn (EPS: $0.22) in net profit attributable to shareholders, which translates to a 19.8% (or $146.11Mn) contraction when compared to the comparative period last year.
• Although total gaming income rose 5.7% (or $580.54Mn) due to a significant rise in sports betting, this was outweighed by the 11% (or $859.58Mn) increase in direct costs owing to efforts to expand the business in preparation for the economic recovery.
• Management also attributed the outturn to several external factors including government-imposed restrictions to contain the spread of COVID-19, higher lottery liabilities during the quarter when compared to Q1 2020, and the introduction of competition. 
• Nevertheless, the company states that it will continue to roll out its channel diversification strategy, giving its customers the option to game at their fingertips in the next few months. This growth in its mobile channels across all gaming segments through the increased acquisition of customers will be key to the company’s ability to continue growing revenue. It also aims to grow revenues through its new loan product, Evolve, which will strengthen its relationship with retailers and allow them access to low-cost funding to grow their businesses.
• Supreme Ventures stock price has depreciated by 9.1% since the start of the year and currently trades at a P/E of 18.9x earnings, which is below the Main Market average of 31.8x earnings.

(Source: SVL’s Financials)

• The Legislative Assembly voted to suspend yesterday’s ordinary and extraordinary sessions due to COVID-19 exposure concerns. A close advisor to Eduardo Cruickshank, the Legislative Assembly President, tested positive.
• The Assembly was nearing the end of the discussions of motions for the public employment bill, having approved extraordinary sessions this week. The public employment bill is a structural benchmark of the IMF three-year Extended Fund Facility (EFF), with an end of May 2021 deadline.
• This the latest unfortunate news representing yet another setback for the government and the proposed approval timeline for the EFF, which could impact future payout under the program.

(Source: Oppenheimer)

• The outlook for Argentinean consumer spending over 2021 is one of a gradual recovery, with household spending to post real growth of 10.2% y-o-y. This marks the beginning of a recovery from the -13.7% y-o-y contraction in household spending estimated over 2020, as a result of the COVID-19 pandemic.
• High consumer price inflation will remain one of the main constraints for consumer spending in the country. Whilst inflation was at its highest in 2019, averaging 53.6% for that year, it is forecasted to remain elevated in 2021, with an average of 42.1% projected, slightly down from the 42.7% estimated in 2020. 
• Notably, Argentina had some of the most stringent restrictions in Latin America throughout 2020. This has continued into 2021, with authorities remaining cautious as a new variant (the Brazil variant) emerges in the region.
• Fitch Solutions notes that the vaccination program has also been gradually gaining momentum since the start of the year, with Argentina receiving shipments of vaccine doses which will help support the consumer recovery outlook that will help to drive the economic rebound. 

(Source: Fitch Solutions)

• The European Central Bank left policy unchanged as expected on Thursday, keeping copious stimulus flowing even as it saw reasons to expect a firm rebound of the euro area economy this year.
• The ECB is keeping borrowing costs pinned near record lows via massive bond purchases to see the 19-country currency bloc through a scarring recession that has kept schools, shops, restaurants, and hotels closed for most of the last year.
• But growth is expected to rebound quickly from mid-year as COVID-19 infections are brought under control, the pace of vaccination picks up and restrictions are removed, raising questions about just how much ECB help is still needed.
• "There are clearly signs of improvement," President Christine Lagarde told a news conference. "Progress with vaccination campaigns and an envisaged gradual relaxation of containment measures underpin expectations of a firm rebound in economic activity in the course of 2021."
• She stressed the overall situation was still "clouded with uncertainty", however, due to factors including the possible spread of new virus variants to risks to financing conditions and continued pressures on struggling sectors of the economy.

(Source: Reuters)

• Canada's annual inflation rate doubled to 2.2% in March, Statistics Canada said on Wednesday, as the central bank signaled economic slack would likely be absorbed earlier than it had previously forecast.
• Previously, the Bank of Canada had said it would be 2023 before inflation returned sustainably to its 2% target. On Tuesday, the central bank said it would happen in the second half of next year. In the meantime, inflation would temporarily breach its target, the bank said.
• Part of the March price bounce is due to a statistical effect caused by a sharp deceleration last year during the coronavirus pandemic, Statscan said. The bank also held its key overnight interest rate at a record low of 0.25% as expected.
• Analysts polled by Reuters had expected the annual rate to rise to 2.3% in March, up from 1.1% in February. Energy prices gained 19.1% on a year-on-year basis, while inflation excluding gasoline and food rose 0.9% versus a year ago.
• "The headline spike, as expected, is largely an energy story, but there are some signs that underlying pressures are starting to show up," said Nathan Janzen, senior economist at the Royal Bank of Canada.
• The bank now expects Canada's economy will grow 6.5% in 2021, up from its January forecast of 4.0%, with real GDP growth of 3.7% in 2022, down from a previous forecast of 4.8%.

(Source: Reuters)