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1834 Investments Off to Strong Start Published: 27 August 2019

  • 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)

Market Crisis Undermines Argentina's Fiscal And External Accounts Published: 27 August 2019

  • 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)

Positive Outlook For Brazilian Gold Production Published: 27 August 2019

  • 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)

Fading trade hopes Published: 27 August 2019

  • 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)

Talks stumble Published: 27 August 2019

  • 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)

Stonger Sales Boost WISYNCO’s Bottom-Line Published: 20 August 2019

  • 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 20th

(Source: Wisynco Financials)

Knutsford Express Reports Increased Profit in 2019 Published: 20 August 2019

  • 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)

Trinidad Petroleum Shows Strong Results Since Corporate Reorg Published: 20 August 2019

  • TPHLTT's results through June of this year show strong growth which reflects the company's corporate reorganization into a pure E&P company and the new management focus on profitability. Management mentioned in the results releases that TPHLTT "exceeded all its financial and operational targets."
  • For the first nine months of the 2019 fiscal year (last 3 quarters ending June '19) revenues were $1.30Bn and EBITDA was $255.00Mn, which annualized indicates a $340.00Mn EBITDA with a 19.0% margin.  This results in net leverage of about 5x and estimated interest coverage at between 2.7x-3.0x.
  • The company's release indicates that production grew sequentially every month since the beginning of the year, reflecting new management efforts to increase operating efficiency. TPHLTT also said that it signed an MOU with Shell to develop its offshore oil reserves, among other activities.
  • The TPHLTT '26s entered the EMBIGD index in August, which should increase its investor base given its high coupon, government ownership, and  'Ba3/BB' ratings. 

(Source: OPCO)

Tourism And Increasing Government Spending Will Support St. Vincentian Growth Published: 20 August 2019

  • Saint Vincent and the Grenadines (St. Vincent) will see moderate real GDP growth in the coming quarters as tourism arrivals increase and the government boosts current and capital spending.
  • However, the economy will remain vulnerable to Atlantic hurricanes and a growth slowdown in developed markets, which would likely undermine tourism activity.
  • Fitch maintains its real GDP growth forecasts of 2.3% y-o-y for 2019 and 2.4% in 2020, an uptick from 2018's estimated 2.1% expansion. 

(Source: Fitch)

EU Rebuffs Johnson Bid to Reopen Brexit Deal as Deadlock Remains Published: 20 August 2019

  • British Prime Minister Boris Johnson made his first public attempt to renegotiate his predecessor’s agreement on the U.K.’s withdrawal from the European Union by focusing on the intractable problem of the Irish Border. 
  • There seems to be little hope for a breakthrough in negotiations as the government plans a publicity blitz aimed at preparing the public for a no-deal exit.
  • Johnson is to meet the leaders of Germany and France in their capitals this week before going to the Group of Seven summit.
  • The pound unwound some recent gains to trade under $1.21 this morning. 

(Source:  Bloomberg)