• Accelerating oil production and sustained investment will underpin a significant economic expansion in Guyana over the coming quarters, bucking the global headwinds from the Covid-19 pandemic.
• Fitch Solutions forecasts that the Guyanese economy will grow 24.6% y-o-y in 2020 and 18.5% in 2021, from an estimated 4.7% in 2019.
• That said, ongoing political uncertainty and the lack of high-frequency economic data present significant risks to our forecast, particularly if the US or other foreign governments authorize sanctions against Guyanese government officials for refusing to leave office after the March 2020 election.

(Source: Fitch Solutions)

• Three groups of bondholders have responded to a proposed bond swap from Ecuador with two groups rejecting it and one expressing support, according to separate statements on Monday.
• A group of 25 institutional investors, including Amundi, Contrarian Capital Management, Grantham Mayo Van Otterloo (GMO) and T Rowe Price, dismissed the offer, saying "the terms... do not represent Ecuador's best effort to reach an equitable restructuring with a majority of bondholders or its ability to implement social development goal principles to build a sustainable future."
• Another group of holders of Ecuador's 2024 notes also refused Ecuador's offer. Together, the two groups hold more than 25% of Ecuador's bonds and more than 35% in certain series.
• On the other hand, a group of bondholders that includes AllianceBernstein, Ashmore Group, Ayres Management, BlackRock, BlueBay Asset Management and Wellington Management came out in support of Ecuador's plans to restructure $17.4Bn in outstanding bonds. The group, which calls itself the Ad Hoc Group of Ecuador Bondholders, holds more than 53% of Ecuador's sovereign bonds.

(Source: LatinFinance)

• British government borrowing surged to a record £127.9Bn in the first three months of the 2020/21 financial year, when COVID-19 lockdown measures were at their tightest, official figures showed on Tuesday.
• Public sector net borrowing between April and June was £103.9Bn higher than in the same three months last year, and more than double the £55.4Bn borrowed in all of the 2019/20 tax year which ended in March.
• Public sector net debt, excluding state-owned banks, rose to £1.984Tn, which Britain’s Office for National Statistics said was equivalent to 99.6% of gross domestic product - also a downward revision compared with May.

(Source: Reuters)

• The 27 European Union governments have reached a breakthrough agreement over new fiscal stimulus, following marathon talks in Brussels that lasted four days.
• The European Commission, the executive arm of the EU, has been tasked with tapping financial markets to raise an unprecedented €750Bn ($857Bn). The funds will be distributed among the countries and sectors most impacted by the coronavirus pandemic, and will take the form of grants and loans.
• In addition to the recovery fund, the EU said its next budget, which will fund initiatives between 2021 and 2027, will total €1.07Tn. The two combined bring upcoming investments to the level of €1.824Tn. “This recovery fund will help us to almost double the European budget for the years to come,” French President Emmanuel Macron said Tuesday morning.

(Source: CNBC)

• Barita announced this week that it received board approval to issue up to 200,000,000 ordinary shares, as part of the authorized capital of the Company to the general public by way of an Additional Public Offer, with the option to upsize by inviting offers for up to an additional 100,000,000 New Ordinary Shares.
• Other conditions include: APO Price(s) of between J$48.00 to J$53.00 per New Ordinary Share;
• New Ordinary Shares will be reserved for the benefit of certain specified investors in the amount and at prices as determined in the discretion of the Company;
• APO to open on August 26^th, 2020, and closes on September 16^th, 2020 for subscription by investors.

(Source: JSE)

• Radio Jamaica Limited reported an audited net profit of $37.56Mn (EPS: 2¢) for the year ended March 31, 2020, representing a $60.00Mn improvement from the $22.44Mn (EPS: -1¢) loss reported in 2019.
• This performance was driven by a 2.0% (or $109.81Mn) increase in total revenue coupled with a 5.7% (or 156.41Mn) decrease in cost of sales, a 1.1% (or $13.47Mn) reduction in admin expenses as well as 9.4% (or $5.25Mn) decline in finance cost.
• The stock has fallen by -29.5% since the beginning of 2020. RJR closed Thursday’s trading session at $1.29 and currently trades at a P/E of 64.5x earnings which is equivalent to the Main Market Communications Sector Average of 64.5x earnings.

 (Source: RJR Financials)

• The coronavirus pandemic will swell the ranks of the poor and unemployed in Latin America and the Caribbean and drag the region´s economic output down by 9.1%.
• The Economic Commission for Latin America and the Caribbean (ECLAC) estimates that an additional 18 million people will find themselves out of work relative to 2019 levels, as lockdown measures continue to hammer already frail economies.
• The region´s poor will swell to 230.9 million in 2020, up from 185.5 million in 2019, and account for 37.3% of Latin America and the Caribbean´s population. Argentina, Brazil, Ecuador, Mexico, and Peru will see the largest spikes, the agency said.
• Slumping growth globally, alongside a downturn in consumption and investment by top trade partners China and the United States, will hit demand for the region´s abundant raw materials, driving exports down by 23%.

(Source: Reuters)

• The global spread of Covid-19 will undermine short-term tourism in Saint Kitts and Nevis (SKN) and cause significant contractions in exports and private consumption.
• Fitch Solutions has revised down its 2020 growth forecast for SKN to -11.5% y-o-y, from -4.5%, as the economy has remained closed to foreign tourists.
• A second wave of infections globally in Q4 2020 poses downside risks to their forecast, as SKN would likely extend its border closure.

(Source: Fitch Solutions)

• OPEC and its allies will restore some oil supplies next month, but the impact will be “barely felt” as demand recovers from the coronavirus crisis, said Saudi Arabia’s Energy Minister.
• After almost three months of historic output curbs to offset the global pandemic's worst effects, the 23-nation coalition led by Riyadh and Moscow will proceed with its plan to taper the reductions gradually. The decision was widely expected but still carries some risks for the cartel after a resurgence of the virus in the U.S., the world's largest oil consumer.
• The Organization of Petroleum Exporting Countries and its allies will withhold 7.7 million barrels a day from the market in August, compared with cuts of 9.6 million currently. The group’s two largest members, Russia and Saudi Arabia, publicly backed the move, and other ministers participating in the video conference had agreed in principle, delegates said.

(Source: Bloomberg)

• Global debt surged to a record $258Tn in the first quarter of 2020 as economies around the world shut down to contain the coronavirus pandemic, and debt levels are continuing to rise, according to the Institute for International Finance (IIF).
• The IIF, which represents global banks and financial institutions, said the first-quarter debt-to-GDP ratio jumped by over 10 percentage points, the largest quarterly surge on record, to reach a record 331%.
• Overall, gross debt issuance hit an “eye-watering” record of $12.5Tn in the second quarter, compared with a quarterly average of $5.5Tn in 2019, the IIF said. It noted that 60% of those issues came from governments.

(Source: Reuters)