• Jamaica Producers Group ('JP') announced that it has established Grupo Frontera Limited ('GFL' or 'Grupo Frontera'), a 50/50 holding company with Norbrook Equity Partners (‘Norbrook’). As part of the transaction, Grupo Frontera recently acquired the assets and operations of Grupo Alaska ('Alaska'), a leading ice and water company in the Dominican Republic. Grupo Frontera was established by JP and Norbrook to acquire and grow well-positioned companies in the Spanish speaking Caribbean and Central America, the first of which is Grupo Alaska. 
• JP is a Jamaican-owned multinational with its primary businesses in food and drink and logistics and infrastructure. JP owns and operates Hoogesteger Fresh Specialist BV, the market leading fresh juice manufacturer supplying Holland, Scandanavia and other markets in Northern Europe. It is also the largest shareholder of CoBeverage Labs SL, a fresh juice manufacturer supplying Southern Europe. JP’s specialty food interests include its Tortuga subsidiary, through which JP operates a Jamaica-based bakery that supplies Tortuga Rum and Spirit cakes to over 15 countries. 
• JP Snacks Caribbean, a subsidiary of JP is a leading regional producer of tropical snacks. JP Farms, Jamaica’s leading banana farm, is the largest private sector employer in St. Mary, Jamaica. JP Group’s logistics interests include Kingston Wharves Limited, a regional multipurpose port, Geest Line Limited, a UK based shipping line connecting European, Caribbean and Latin America markets, and JP Shipping Services a freight forwarding and logistics enterprise based in the UK. 
• This investment in the Dominican Republic will allow JP to tap into this lucrative market while leveraging its expertise in the food and drink business. The Dominican Republic, which was one of the fastest growing countries prior to the pandemic, is expected to grow by 8.2%  in 2021 and 4.8% in 2022, as a swift national vaccination campaign and resilient private consumption drive domestic activity.

 (Source: JSE News, Fitch Solutions & NCBCM Research Team)

• For the 6-month period ending June 2021, Mayberry Investments reported a net profit of $288.93Mn (EPS: $0.24), which is a significant improvement over the net loss of $962.01Mn incurred in the prior year. This came on the back of a $1.74Bn rise in net operating income. 
• Although fees and commission, dividend income and net foreign exchange gains fell by 20.9%, 20.9% and 16.6%, respectively, the primary contributor of this increase in net operating income was an unrealized gain on investment of $508.72Mn, relative to a loss $1.19Bn in 2020. The gains reflect in the year on year rise in the prices of stocks held by the subsidiary company, Mayberry Jamaican Equities. Net interest income (68.3%) and net trading gains ($85.99Mn) also rose to support the bottom-line. 
• These increases in income were enough to offset the $61.27Mn (8.5%) expansion in operating expenses which was driven by higher expenditure, namely computer licensing fees, management fees, sales and marketing, donations, insurance and IT consulting fees. 
• Mayberry Investments’ operating performance should continue to improve in the coming quarters, as increases in private consumption, investor confidence and corporate earnings bolstered by more relaxed COVID-19 restriction measures, support improvements in equity prices and therefore unrealized gains from its equity investments. Nevertheless, the current rise in cases, which could lead to the reemergence of the restrictions poses a risk to the recovery, especially with the emergence of new strains of the virus. 
• Mayberry Investment’s stock price has depreciated by 5.8% since the start of the year to close at $5.65 on Thursday. It currently trades at a price to book of 0.76x, which is below the main market financial sector average of 1.92x.

(Source: Company Financials & NCBCM Research)

• The Guyanese economy will be a regional and global outperformer in the coming quarters as an energy boom and a recovery in the non-oil sector are expected to drive real GDP growth. 
• Fitch Solutions, has long highlighted its constructive outlook for Guyana as a nascent energy boom offers tailwinds to short- and long-term growth. In 2020, the economy grew 43.5% despite an estimated 7.3% decline in non-oil activity and the 3.4% global contraction due to the COVID-19 pandemic. 
• That being said, easing domestic risks from COVID-19 and a robust global growth recovery, which is forecasted at 6.7% in 2021 and 4.2% in 2022, will support Guyanese domestic demand and underpin stronger exports in the coming quarters. 
• Sustained export growth and higher public spending will underpin a longer-term expansion; particularly as foreign energy companies accelerate crude oil production in the offshore Stabroek block. 
• Fitch Solutions forecasts Guyanese real GDP growth of 21.1% in 2021 and 19.2% in 2022, from a 45.3% expansion in 2020.

(Source: Fitch Solutions)