• Canadian mergers and acquisitions (M&A) fell to a nine-year low in 2020 as the pandemic put brakes on companies' growth strategies, but bankers expect the pickup in deal-making in the fourth quarter to revive activity this year.
• The arrival of multiple COVID-19 vaccines in 2021 is expected to improve public confidence in an economic recovery and revive deal-making, say bankers. Market stability and continued access to capital that led to a resurgence in transactions in the second half of the year is expected to continue.
• Over $158.7 billion worth of M&A deals were announced in 2020, making it the slowest year since 2011, compared with $234 billion in the previous year, data from Refinitiv showed.

(Source: Reuters)

• Proven Investments Limited (PROVEN) has advised that the Company has entered into an Agreement for Sale and Purchase of Shares on December 30, 2020, to acquire 50.5% of the common equity of Roberts Manufacturing Co. Limited (RMCL) from Massy Properties (Barbados) Limited (MPBL) for a consideration of US$21,452,500.00.
• PROVEN further advised that “RMCL, located in Barbados, operates from a 21-acre industrial complex consisting of large manufacturing plants producing a variety of margarine, shortening, soya bean oils and animal feed products which are distributed to over 15 markets regionally and internationally.
• “The proposed acquisition of the majority shareholding of RMCL from MPBL is aligned with PROVEN’s strategy to grow through acquisition in the real sector throughout the Caribbean and Latin American regions with a view to creating value to its shareholders.”

(Source: JSE)

• The Colombian peso (COP) will continue to trade above its 2020 lows against the US dollar in 2021, boosted by an economic recovery, higher crude oil prices, and improving risk sentiment.
• That said, persistent fiscal deficits, the limited long-term upside for energy prices, and rising domestic inflation will cause the COP to modestly weaken over the coming years.
• Fitch Solutions forecasts the unit will average COP3,502.0/USD in 2021 and COP3,562.9/USD in 2022, from an estimated COP3,695.5/USD in 2020.

(Source: Fitch Solutions)

• Fitch Solutions forecasts Brazil's overall government fiscal deficit will narrow to 9.7% of GDP in 2021, from a historic 18.8% in 2020.
• While revenues will rebound and expenditures will most likely fall as stimulus measures are reduced, the lack of a budget for 2021 leaves significant uncertainty over government spending.
• Together with waning momentum towards enacting structural fiscal reforms, investors will likely remain cautious towards Brazil, limiting the benefits it sees from improving global risk sentiment.

(Source: Fitch Solutions)

• Economic activity in the eurozone contracted more sharply than previously thought at the end of 2020 and could get worse as renewed lockdown restrictions imposed to contain the coronavirus hit the bloc's dominant service industry, a survey showed.
• With infection rates soaring across Europe, countries have clamped down on public life. Germany is set to extend its strict lockdown until the end of the month and Italy decided on Tuesday to keep some nationwide restrictions in place.
• IHS Markit's final December Composite Purchasing Managers' Index (PMI), seen as a good gauge of economic health, did rise to 49.1 from November's 45.3 but was significantly below a flash reading of 49.8. Anything below 50 indicates contraction.
• With much of the service industry being forced to close demand also shrank a lot more than thought. The final services new business index was 46.6 compared to the flash estimate of 47.9, albeit better than November's 40.6.

(Source: Reuters)

• U.K businesses were suffering even before the latest lockdown, leaving many in a precarious position as they enter new restrictions with what many say is insufficient government support, a survey showed
• The findings from the British Chambers of Commerce add to pressure on Chancellor of the Exchequer Rishi Sunak to extend aid to companies beyond the 9,000-pound ($12,000) one-time grants he’s offering.
• With non-essential shops and hospitality venues closed for weeks after a dismal 2020, a growing number of businesses are headed for a financial abyss.
• Four in 10 firms said their cash flow deteriorated in the fourth quarter, according to a survey in November of 6,203 businesses conducted by the lobby group. Almost 80% of hospitality firms reported a drop in sales in the period.
• Prime Minister Boris Johnson’s government is counting on a mass vaccination program taking root by Easter to allow an easing of the restrictions. The latest measures to support companies add to the 280 billion pounds it has cost the Treasury to tackle the virus and bolster firms and workers through the pandemic.

(Source: Bloomberg)

• For the year ended September 30, 2020, Eppley Caribbean Property Fund reported a 50.9% (or BD$1.96Mn) year over year decline to BD$1.89Mn (EPS: $0.02) in audited net profit attributable to shareholders of its Value Fund.
• The result was driven by a BD$2.53Mn share of loss of investments accounted for using the equity method which compares to a share of profit of BD$2.95 reported in 2019.
• This outweighed the 68.9% (BD$1.39Mn) rise in fair value gains on investment property, 63.6% (BD$1.14Mn) increase in net rental income, and 18.6% (BD$0.58Mn) drop in operating expenditure.
• The company’s stock price has increased by 0.6% since the start of the year, closing Tuesday’s trading session at $43.43. At this price, the stock currently trades at a P/E of 30.6x earnings, which is above the Main Market Real Estate Sector Average of 18.0x.

(Source: CPFV Financials)

• Brazil's relatively rapid economic rebound is likely to decelerate over the coming quarters as the government reduces stimulus spending.
• Fitch Solutions revised its forecast for real GDP growth to -4.7% in 2020 and 3.5% in 2021, from -5.3% and 3.2% previously, following a stronger than expected rebound in Q3 2020.
• However, a weak outlook for structural reforms suggests that investment will remain weak over the coming quarters, limiting Brazil’s medium-term growth potential.

(Source: Fitch Solutions)

• The Banco de la República (BanRep) will extend its accommodative monetary policy stance in Colombia in the coming quarters to boost the country’s economic recovery and increase domestic liquidity.
• Anchored inflation, a negative output gap, and a dovish US Federal Reserve will support the central bank's policy direction, which will remain unchanged despite Leonardo Villar's appointment to succeed Governor Juan José Echavarría in January 2021.
• The agency forecasts that BanRep will maintain its policy interest rate at 1.75% in 2021, and that inflation will average 2.7% y-o-y in 2021, from an estimated 2.6% in 2020.

(Source: Fitch Solutions)

• The European Union and China agreed on Wednesday to an investment deal that will give European companies greater access to Chinese markets and help redress what Europe sees as unbalanced economic ties.
• The agreement has been nearly seven years in the making and is likely to take at least another year to enter into force. It forms part of a new relationship with China, which the EU views as both a partner and a systemic rival.
• European firms will gain permission to operate in China in sectors including electric cars, private hospitals, real estate, advertising, the maritime industry, telecom cloud services, airline reservation systems, and ground handling.
• Some requirements that companies operate as part of joint ventures with Chinese partners will be lifted.

(Source: Reuters)