• Royal Caribbean and Carnival cruise lines have agreed to a new combined investment of $350Mn in the Grand Bahama Shipyard, Prime Minister the Most Hon. Dr. Hubert Minnis announced today in his wrap-up of the 2021/22 Budget Debate in the House of Assembly. 
• The Prime Minister pointed out that to understand the scale of this investment, the original investment and other investments to date in the Shipyard have totaled approximately $250Mn dollars. “This new investment will match this and exceed it by $100Mn,” said Prime Minister Minnis on Monday 21 June 2021. 
• The proposed infrastructure works will replace the two damaged docks with larger docks. The new docks will be capable of handling and servicing the largest ships in the world, said the Prime Minister. 
• Once the expansion is completed, the shipyard will be the largest civilian shipyard in the Americas. Prime Minister Minnis said the new investment will result in a notable increase in employment and economic activity on Grand Bahama and for local businesses throughout Freeport and the rest of the island

(Source: Office of the Bahamian PM)

• Inflation has picked up markedly in recent months, both in emerging markets (EMs) and developed markets (DMs). The simple average of inflation among 22 of the world’s largest EMs rose from 3.8% y-o-y at the start of 2021 to 5.9% in May. However, it is believed that the rise will be temporary. 
• Accelerating inflation has already prompted interest rate hikes in Brazil, Russia, Mexico and elsewhere. It is expected that policymakers in EMs, including South Africa, Egypt and Colombia, will follow their lead by hiking their key rates before the end of 2021. 
• Even so, the risk of an economically disruptive acceleration in EM-wide inflation is low. For one, recent inflation prints may mark a sharp increase from the abnormally slow inflation of the past year, but they are not particularly elevated by recent standards and even these figures are currently being flattered by the base effects caused by lockdowns in 2020. 
• In addition to fading base effects, there are two key reasons why it is forecast that current period of comparatively elevated inflation will soon fade in most economies. Firstly, temporary factors that are disrupting supply chains will probably be resolved over the coming months; and secondly, the agency believes that commodity prices have peaked and will now ease in late 2021 and into 2022.

(Source: Fitch Solutions)

• Coronavirus vaccine booster shots will likely be needed in the fall, according to experts, who are urging governments to organize them now. It comes as the Delta variant of the coronavirus, first identified in India, continues to spread rapidly across the world. 
• Some countries, like the U.S. and U.K., have already signaled that they could roll out COVID-19 booster shots within a year. Now, pressure is building on governments to mobilize booster shot programs — no easy task given the ongoing uncertainties surrounding the pandemic, vaccines and variants. 
• However, concrete plans for Covid-19 booster shots are lacking. Dr. Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, last month said it was, “just something we’re gonna have to figure out as we go.” 
• There are currently question marks over whether we actually need a third dose of any COVID-19 vaccine given that we don’t know how long immunity currently lasts. There are also unknowns regarding whether people should get a booster shot that’s the same as the vaccines they originally had. And also whether the shots need to be tweaked to deal with variants, much like the flu vaccine, or whether they can remain as they are. 
• Booster shots could potentially be rolled out before countries have even completed their initial vaccination programs. To date, almost 60% of the adult population in the U.K. is fully vaccinated, while just over 55% of adults in the U.S. are. 
• Any decision to roll out programmes to deliver booster shot to populations in developed economies in the fall, is likely to exacerbate challenges accessing sufficient doses of the vaccine by developing countries such as Jamaica and others in the region.

(Source: CNCB News & NCBCM Research)

• Iranian President-elect Ebrahim Raisi gave his first press conference since the country’s election, saying Monday his priorities would be to improve ties with regional neighbors and revive the 2015 nuclear deal — while at the same time squarely ruling out meeting with U.S. President Joe Biden. 
• The 2015 Joint Comprehensive Plan of Action, or JCPOA, brokered by the Obama administration, lifted sanctions on Iran that had crippled its economy and cut its oil exports roughly in half. In exchange for billions of dollars in sanctions relief, Iran agreed to dismantle some of its nuclear program and open its facilities to more extensive international inspections. 
• Tehran has since ramped up its nuclear activity far beyond the deal’s limits in what it says is a protest against the sanctions — sanctions that Washington says it will not lift until Iran reverses its increased nuclear activity, such as increased uranium enrichment and stockpiling.
• The deal “if revitalized, would provide a substantial lift to Iran’s economy — it could plausibly expand by 8-10% per year in 2021-23,” Jason Tuvey, senior emerging markets economist at London-based consultancy Capital Economics, wrote in a note before the election. But he added that its higher crude production would pressure other dynamics in the region. 
• “Higher Iranian oil output would act as a drag on global oil prices and could prompt governments in the Gulf countries to keep fiscal policy tight, weighing on their recoveries,” Tuvey said.

(Source: CNBC News)

• Preparations are in high gear to enable Jamaican producers to better meet the demands of a revived tourism industry. The Ministry of Tourism is working in tandem with the Ministry of Agriculture & Fisheries and has initiated a series of high-level meetings to finalize the requisite arrangements.
• Two crucial meetings were held at the Montego Bay Convention Centre on the weekend with representatives from the agricultural sector: One meeting involving the Jamaica Hotel and Tourist Association (JHTA), to discuss the supply chain for meat and meat cuts, and agricultural produce, and the other with the Jamaica Manufacturers and Exporters Association, exploring supply chain issues.
• The Minister of Tourism noted that the discussions were “in the vein of reimagining tourism in the wake of the COVID-19 pandemic and to drive the new production and consumption patterns that we require to enable more local Jamaicans to be connected to the tourism value chain.” This is aimed at ensuring that a larger percentage of the tourism dollar stays in Jamaica and more jobs are created.
• He expressed confidence that tourism was showing signs of recovery “…and this is why we’re moving so fast to bring the partners together because the pandemic brought tourism literally to a halt and what it meant is that we were all at point zero, and this is a good time to bring the partners together so that we build back together.”

(Source: JIS)

• Brazilian goods exports are likely to surge to historic highs in 2021 on the back of multi-year high commodity prices.
• Fitch previously highlighted that a widening current account deficit and persistent shortfalls in capital inflows would create a significant risk of external account pressures over the coming quarters that would weaken the real and cut into reserves. 
• However, exports have outperformed expectations, and as such, its current account forecast for 2021 was revised to a deficit of 0.6% of GDP, from 2.3% previously. Following this the deficit will widen to 2.6% in 2022. 
• This revision reflects a surge in commodity prices to multi-year highs in H1 2021 as the global recovery takes hold, which has driven up Brazil's export earnings far more significantly than anticipated.

(Source: Fitch Solutions)

• On June 18, Venezuelan President Nicolás Maduro used a TV interview with Bloomberg Television to ask the Biden administration to ease sanctions on his regime, citing their humanitarian cost. Maduro also stated he plans to restructure the government’s US$60.0Bn in outstanding debt if sanctions are lifted. 
• On June 20, the US State Department indicated that any shift in US policy would require major changes in Venezuela, including a path to free and fair elections and the restoration of political rights. 
• The Biden administration’s dismissal of Maduro’s request for sanctions relief is in line with Fitch’s view that the US will not adjust its approach to Venezuela unless the Maduro government offers significant concessions around electoral conditions, such as allowing international observers or moving presidential elections forward from 2024. 
• With or without a change in stance from the US, Fitch maintains its view that a window for talks between the Venezuelan government and opposition exists. Guaidó has recently adopted a more pragmatic stance that would include negotiations with the Maduro government, which he had previously rejected. 
• Talks would likely centre on electoral conditions and opposition participation in local elections scheduled for November. Given the opposition’s growing acceptance that its ‘all-or-nothing’ approach has failed and the Venezuelan government’s desire to both appeal to the US and to have the opposition legitimize the upcoming elections by participating, the agency sees scope for compromise in the coming months.

(Source: Fitch Solutions)

• The U.S. economy is rebounding rapidly from the crisis caused by the coronavirus pandemic, but more progress is needed before the Federal Reserve should begin to scale back some of the robust support it is providing, New York Fed president John Williams (NYSE: WMB) said on Monday. 
• The recent inflationary pressures appearing as some businesses struggle to keep up with a surge in demand should also subside as the economy stabilizes, the Fed official said. "It’s clear that the economy is improving at a rapid rate, and the medium-term outlook is very good," Williams said in remarks prepared for a virtual event with the Midsize Bank Coalition of America. "But the data and conditions have not progressed enough for the FOMC to shift its monetary policy stance of strong support for the economic recovery." 
• Bolstered by rising vaccinations and strong fiscal support, the U.S. economy could grow by 7% this year after adjusting for inflation, Williams said. The rapid opening of the economy is creating imbalances between supply and demand and leading to temporary price increases, but inflation could level off over time, he said. Williams said he expects inflation to come down from around 3% this year to close to 2% next year and in 2023. 
• With more than 7 million jobs lost when compared to before the pandemic, the U.S. economy still has a long way to go before it is back at full strength, the policymaker said. Further job gains are expected, but it could take time for employers to fill open positions, he said.

(Source: Reuters)

• The euro zone and the United States are "clearly in a different situation" when it comes the outlook for inflation, European Central Bank President Christine Lagarde said on Monday, playing down any impact from across the Atlantic. 
• With the U.S. economy reopening and prices rebounding fast, Federal Reserve officials have started discussing ending their bond purchase programme and last week brought forward their expectations for the first rate hike since the start of the coronavirus pandemic. 
• This has triggered market speculation about rising inflation and a tightening of monetary policy across the globe. But Lagarde rejected comparisons between both economies, saying the U.S. recovery was farther ahead of the euro zone's. 
• She acknowledged that there would be some "spillovers" from rising inflation in the United States through higher import prices, stronger exports and potentially even euro zone citizens' expectations about inflation. "Overall, however, the effects on euro area HICP inflation are expected to be moderate," she added. 
• She added the ECB estimated a cumulative impact of 0.15 percentage point on inflation and of 0.3 percentage point on growth between 2021 and 2023 in the euro zone from the U.S. stimulus package, reaffirming the bank's March projections.

(Source: Reuters)

• For the 6-month period ending April 2021, The LAB reported a net profit of $113.56Mn (EPS: $0.12), a 31.0% (or $26.89Mn) increase over H1 2020 on the back of brisk growth in operating revenue (31.3%) and a $11.72Mn rise in net finance income. 
• Revenue growth was supported by an expansion in both the production and media segments of the business, which saw increases of 83% (or $106.70Mn) and 18% (or $43.50Mn), respectively. 
• This was enough to outweigh the 28.0% rise in the company’s indirect expenses and 36.3% increase in direct costs. The higher indirect costs were reflective of greater staff costs due to increased work volume, repairs and maintenance of production equipment, and depreciation and amortization charges. Despite the increase, total expenses as a percentage of revenue remained relatively flat at 16.2% compared to 16.7% in the previous period. 
• Since the start of the year, the LAB’s stock price has increased by 2.2% to close trading at $3.13 at the end of June 17, 2021. At this price, the stock trades at a P/E of 19.6x earnings, which is below the junior market average of 24.3x earnings.

(Source: Company Financials)