• Main Event Entertainment Group (MEEG) reported a net profit of $103.94Mn for its nine months ending July 31, 2022, which represents a $94.77Mn increase relative to the prior period. This increase was mainly attributed to an 84.6% increase in revenues.
• The improved performance of the nine months was underpinned by increased activity from the recovering entertainment industry. The entertainment industry has seen a strong return of outdoor events and lifestyle experiences after a nearly 2-year hiatus, and this has had a positive effect on MEEG. In fact, its third-quarter revenue outturn of $601.53Mn represents the highest quarterly outturn in the company’s history.
• The entertainment industry is expected to continue recovering in the coming months and is expected to be supported by other recovering industries such as tourism which bodes well for entertainment services companies like Main Event. However, the high inflation environment presents risks to consumers' spending on non-discretionary services such as entertainment services.
• MEEG’s stock price has increased by 85.4% since the start of the calendar year. The stock closed Tuesday’s trading session at $8.34 and currently trades at a P/E of 22.5x which is above the Junior Market Sector Average of 20.7x.

(Source: JSE and NCBCM Research)

• Fitch modestly revised its forecast for Mexico’s 2022 current account deficit from 0.9% of GDP to 0.7%, with the expectation that strong remittance inflows will offset a wider goods and services trade deficit.
• In 2023, the current account deficit will widen slightly, to 0.8%, as a slowdown in remittances, driven by weaker growth in the US, outweighs the impact of a slightly narrower goods and services trade deficit.
• These projected current account deficits are notably narrower than the 1.6% of GDP averaged in the decade before the pandemic, posing little risk to Mexico’s external position.
• Importantly, the Agency does not foresee a major risk to Mexico’s external account stability, given modest deficits and stable stock of reserves; however, a dispute settlement consultation between Mexico, the US and Canada is a downside risk to exports in the medium term.

(Source: Fitch Solutions)

• Oil prices dipped on Tuesday, following other risk assets lower, as the dollar stayed strong and investors anticipated more central bank interest-rate hikes designed to quell inflation.
• The U.S. Federal Reserve is likely to raise interest rates by another 75 basis points on Wednesday to rein in inflation. Those expectations are weighing on equities, which often move in tandem with oil prices. Other central banks, including the Bank of England, meet this week as well.
• Higher rates have bolstered the dollar, which remained near a two-decade high against peers on Tuesday, making oil more expensive for holders of other currencies.
• "The oil market is caught between downward concerns and upside hopes. The concerns are driven by the aggressive monetary tightening in the U.S. and Europe, which is increasing the likelihood of a recession and might weigh on oil demand prospects," said Giovanni Staunovo, commodity analyst at UBS.

(Source: Reuters)

• The U.N. secretary-general said Tuesday that developed economies should impose an extra tax on the profits of fossil fuel firms, with the funds diverted to countries affected by climate change and households struggling with the cost-of-living crisis.
• In a wide-ranging address to the U.N. General Assembly in New York, Antonio Guterres described the fossil fuel industry as “feasting on hundreds of billions of dollars in subsidies and windfall profits while households’ budgets shrink and our planet burns.”
• Fossil fuel firms and their “enablers” needed to be held to account, he went on to state. “That includes the banks, private equity, asset managers and other financial institutions that continue to invest and underwrite carbon pollution.”

(Source: CNBC)

• For the period January to May 2022, Jamaica’s total spending on imports was valued at US$3,050.0Mn which represents a 34.1% increase relative to last year, while earnings from exports amounted to US$641.4Mn which represents a 2.8% decline relative to the prior period.
• The increase in imports was primarily attributed to higher imports of “Fuels and Lubricants”, “Raw Materials/Intermediate Goods” and “Consumer Goods”, which rose by 56.0%, 28.1% and 35.9% respectively.
• Meanwhile, the fall in the value of exports was due primarily to a 59.0% decline in the value of exports of “Crude Materials (excl. Fuels)”. Domestic exports from January to May 2022 fell by 6.1% to US$531.7 million, due to a 60.7% decline in exports from the Mining and Quarrying industry as this industry has been negatively affected by Jamalco’s plant closure after its fire in August 2021. Earnings from domestic exports accounted for 82.9% of total exports.
• The value of imports for the period January to May 2022 from Jamaica’s five main trading partners, the United States of America (USA), Brazil, China, Trinidad and Tobago and Japan, was US$1,977.4 million, representing 64.8% of the total imports.
• The top five destinations for Jamaica’s exports were the USA, Puerto Rico, Canada, the United Kingdom and the Russian Federation. The value of exports to these countries increased by 25.2% to US$517.0 million, due mainly to higher exports of fuels to the USA.

(Source: STATIN)

• Jamaica’s tourism earnings are expected to be “significantly higher” this year, exceeding pre-COVID-19 levels, according to Tourism Minister, Hon. Edmund Bartlett.
• The ministry now expects that Jamaica will earn in excess of US$4 billion this year, which would exceed 2019 figures by between US$500 million to US$600 million. This growth is expected to be supported by an increase in visitor arrivals, including cruise ship arrivals which are projected to be above three million, which is similar to 2019 figures.
• Overall, visitors are staying longer in Jamaica and are spending more. In 2019, the average length of stay for visitors would have been approximately 7 nights. In 2022, visitors are staying just over eight nights. Additionally, the average daily spending rate in 2019 was approximately US $168 per person, per day while in 2022, the rate is US $180 per person, per day.

(Source: JIS News)

• Fitch expects that economic growth in Latin America will ease in the latter half of 2022, making it an underperformer compared with other regions.
• Latin America's real GDP growth will only be 3.0% in 2022 and 1.8% in 2023, making it a global underperformer, outpacing only EM Europe among the world’s major regions.
• The economic tailwinds of the post-pandemic recovery will continue to give way to headwinds posed by weak demand in key export markets and persistent inflationary pressures.
• Inflationary pressures will weigh on private consumption in most of the region’s major markets, while the deteriorating US growth outlook will depress exports from and remittance inflows to the region.
• Additionally, elevated political uncertainty will also play a significant role in dampening investment growth throughout the region.

(Source: Fitch Solutions)

• Fitch Ratings reported that Petroleos Mexicanos (PEMEX) has failed to leverage elevated oil prices to strengthen itself and evolve into a sustainable, reliable energy company due to a stubbornly high government take.
• Saverio Minervini, Head of Latin American Energy, Utilities, and Natural Resources Corporates noted that “PEMEX faces a mountain of maturities in a higher rate environment that will further squeeze its profitability and ability to effectively invest. This will pressure the government to provide further support through an equity injection or to lower its take from the company.”
• Notably, Pemex’s ‘BB-’ rating is three notches below Mexico’s (BBB-/Stable) due to weak government support, which to date has been insufficient and uncertain.
• For PEMEX to be upgraded, the company’s Standalone Credit Profile would need to improve to ‘b’ from ‘ccc-’. This could only be achieved through a combination of massive debt repayment or a significant reduction in the government’s take from the company via taxes, royalties, and other measures, including consistent government support.
• Mexico’s government has financially supported PEMEX by cutting its effective tax rate, injecting more capital into the company, and devoting a greater share of public investment toward PEMEX and energy-related projects. However, the support has been insufficient and has not improved the company’s credit profile.
• The continued need for fiscal resources has led to a negative notch adjustment for the sovereign rating assessment, as the support is likely to negatively affect public finances. However, Fitch does not expect further deterioration of the sovereign rating in the near term due to PEMEX’s financial position.

(Source: Fitch Ratings)

• Treasury yields climbed on Monday as traders anticipated the Federal Reserve’s next moves in the face of persistently high inflation.
• The benchmark 10-year Treasury yield gained 6 basis points to 3.518%, hitting its highest level since April 2011. The yield on the 2-year Treasury bond rose 8 basis points to trade at 3.942%, trading around levels not seen since 2007.
• The Fed’s two-day meeting will begin Tuesday, with most market participants expecting another 75-basis-point hike by the central bank. Some analysts have, however, argued the Fed could increase interest rates by a full point, or 100 basis points.
• It comes after inflation rose more than expected in August. The consumer price index increased 0.1% for the month and 8.3% over the past year — higher than economists expected. The data has led investors to expect the Fed to double down on higher interest rates for longer until prices fall.

(Source: CNBC)

• A group of bank regulators appointed by U.S President Joe Biden is considering new rules which will require big regional banks to add financial cushions that can be used in times of crisis, the Wall Street Journal reported on Sunday.
• The new steps include the regional banks raising long-term debt that will help absorb losses in cases of insolvency.
• The WSJ report comes over a week after U.S. Federal Reserve chief Michael Barr said that there soon may be tougher rules on large regional lenders after a 'holistic' review of bank capital requirements is concluded.

(Source: Reuters)