• Economic activity growth in El Salvador is expected to decelerate as remittance growth slows in line with a slowdown in the US.
• Investment opportunities remain limited by security concerns, though the potential for Chinese investment is emerging.
• Downside risks to El Salvador’s growth stem from the potential for a greater than expected slowdown in the US, as well as the impact of US policy toward Central America.

(Source: Fitch)

• The British pound fell as much as 1.1%, the most in a month, after the BBC reported that U.K. Prime Minister Boris Johnson will ask Queen Elizabeth II to suspend parliament from Sept. 12 until Oct. 14, a move which could severely hamper efforts by anti-Brexit lawmakers to block a no-deal exit from the European Union.
• While suspending parliament, known as proroguing, is not unusual, using it to strategically frustrate opposition to the government is likely to cause an uproar.
• The decision is expected to be confirmed by the Privy Council – a group of senior politicians who advise the Queen – later today.

(Source: Bloomberg)

• Director-General of the Planning Institute of Jamaica (PIOJ), Dr. Wayne Henry, says policy certainty is among the measures which will be key in safeguarding the country against the possible emergence of another global economic recession.
• “The intensity of any global recession is usually exacerbated by policy uncertainty. As such, policymakers have a critical responsibility to ensure that there is certainty surrounding policies related to external trade and macroeconomic fundamentals,” Dr. Henry said.
• Key among these, he pointed out, are: continued strengthening of the macroeconomic environment; creating the appropriate social safety nets for the society’s most vulnerable citizens, and facilitating investments and trade policies focused on encouraging product and market diversification.
• His comments come against the background of concerns about the possible emergence of a recession over the short to medium term, and its likely impact on Jamaica’s economy.

 (Source: JIS)

• 1843 Investments reported a 61.7% increase in unaudited net profit for the three months ended June 2019. Net profit for the quarter was $18.35Mn (EPS: 1.51¢) relative to $11.35Mn (EPS: 0.94¢) reported in 2018.
• A 25.3% increase in revenues together with a 26.8% decline in administrative expenses were the main contributors to the improved performance.
• The stock has fallen 13.8% since the start of the calendar year and closed yesterday’s trading session at $1.00. The stock currently trades at a P/E of 97x earnings which is significantly above the Main Market average of 21x.

(Source: 1834 Financials)

• A renewed crisis of market confidence in Argentina is generating significant risks to the country's fiscal and external accounts.
• The expectation is that the fiscal deficit will widen over the coming quarters, as the government attempts to mitigate the impact of a significant depreciation of the peso and anticipated a spike in inflation.
• Fitch also believes that Argentina's external accounts will be under tremendous pressure as investor concerns over policy direction and fiscal sustainability will severely restrict its access to capital markets.

(Source: Fitch)

• Fitch remains positive about Brazilian gold production growth through 2022, expecting it to grow at an average rate of 3.5% y-o-y, on the back of a solid project pipeline.
• Brazil’s long-term gold mining production sector growth will be underpinned by the country’s significant gold reserves and a favorable gold price outlook, encouraging investment in the sector.
• Jair Bolsonaro's administration’s proposal to expand permissible mining territories, coupled with its mining-friendly policy approach, present upside potential to the current forecast. Increased costs related to compliance with environmental regulations and attracting the necessary labor force will be hurdles for miners looking to invest.

(Source: Fitch)

• Markets are still in thrall to the whims of President Donald Trump’s latest trade threats. Yesterday’s rally was driven by optimism following comments made by the president at the G-7 meeting, where he said that China called looking for a deal.
• That hope is fading today as it is becoming increasingly unclear whether any call from China happened over the weekend at all.
• The one deal that seemed secure came under doubt, with Japan insisting it wanted the U.S. to end the threat of new tariffs on autos before finalizing an agreement.

 (Source: Bloomberg)

• The risk of snap elections in Italy is rising this morning as talks between the anti-establishment Five Star Movement and center-left Democratic Party do not seem to be going well.
• Both sides have until tomorrow evening to show President Sergio Mattarella that they have a solid parliamentary majority and have agreed on a program for the government for the next four years.
• Elsewhere in Europe, the second reading of German second-quarter GDP showed that a collapse in exports is weighing enough on the country’s economy to push it to the brink of recession.

(Source: Bloomberg)

• WISYNCO reported a 27.8% increase in unaudited net profit to $2.93Bn (EPS: $0.78) for the year ended June 30, 2019. This outturn was driven by an increase in sales volumes that resulted in a 16.9% expansion of revenue.  In particular, for the fourth quarter, the company saw a greater percentage increase in sales of existing third party products within its portfolio.
• Despite the increase in revenues, management states that some challenges were experienced in the fourth quarter that resulted in a slightly lower gross profit margin for the period, moving from 37.2% in 2018 to 36.7% in 2019.
• Nevertheless, the company has implemented initiatives that it believes will improve the gross profit margin in the near term. Overall, WISYNCO’s cost of operation was fairly well-maintained, as the net profit margin grew by 90 bps to close the year at 10.2%.
• The stock has advanced by 121.8% YTD and currently trades at a P/E of 31.12x earnings. This is above the main market manufacturing and distribution sector average of 20.27x earnings as of Monday, August 20^th

(Source: Wisynco Financials)

• Knutsford Express reported a net profit of $224.77Mn (EPS: $0.38) for the financial year ending May 31, 2019, representing a 6.1% increase relative to the $177.58Mn (EPS: $0.36) earned last year.
• This improvement was supported by a 23.8% growth in revenue along with an increase in finance income (267.1%) due to unrealized foreign exchange gains.
• Knutsford Express stock price has declined 14.2% YTD and currently trades at a P/E of 29.34x earnings which is slightly above the junior market average of 27.26x.

(Source: KEX Financials)