• On October 15, 2021, Fitch Ratings downgraded Peru's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'BBB' from 'BBB+', and maintained its stable outlook. 
• The downgrade, via the removal of the former positive notch for macro and fiscal policy credibility, reflects the steady erosion over time of Peru's sovereign balance sheet and other key rating metrics. This came on the back of a series of shocks, which has accelerated since 2020 due to the pandemic-related recession and fiscal response. 
• The government’s debt ratio is materially higher than in 2013 when Fitch upgraded Peru to 'BBB+'. Furthermore liquid fiscal buffers have been depleted, eroding the strength of Peru's government balance sheet relative to peers. 
• The trend in economic growth has been declining and Fitch believes that Peru's medium-term investment and economic outlook has weakened as a result of political volatility in recent years. 
• This downgrade of the sovereign could trigger a similar one-notch downgrade of corporates such as Scotiabank Peru whose operations are significantly impacted by the operating environment.

(Source: Fitch Ratings & NCBCM Research)

• Cuba's goods trade deficit will gradually widen in the next decade, as the decline in heavily subsidised oil from Venezuela outweighs the positive impact of currency unification and new trade deals. 
• The services account will fare better as rising tourist arrivals bode well for service sector export growth. Given expectations of solid hard currency inflows from tourism after the COVID-19 shock fades, the beneficial impact of a currency devaluation on exports and a falling debt burden, Fitch expects the stability of Cuba's external accounts will broadly improve over the next decade. 
• That being said, the agency forecasts for Cuba's current account balance shows a shift to a large deficit in 2021. This largely reflects the devaluation of the Cuban peso, which has reduced the forecast for Cuba's GDP in US dollar terms and therefore widened the headline deficit relative to GDP in US dollar terms. 
• Fitch Solutions notes that official data on Cuba's primary and secondary income balances are not regularly updated, introducing significant uncertainty into its forecast.

(Source: Fitch Solutions)

• Surging Covid cases in the U.K. have left the country behind the rest of Europe with former U.S. Food and Drug Administration Commissioner Scott Gottlieb calling for urgent research into a mutation known as delta plus. 
• The delta plus strain Gottlieb highlighted includes the K417N mutation, which has stoked concern because it’s also harbored by the beta variant that’s associated with an increased risk of reinfection. 
• “We need urgent research to figure out if this delta plus is more transmissible, and has partial immune evasion,” he said in a tweet. “There’s no clear indication that it’s considerably more transmissible, but we should work to more quickly characterize these and other new variants.” 
• Britain, faster to reopen and relax restrictions than other European countries, reported the highest daily jump in new cases on Sunday since mid-July. Weekly deaths from the virus topped 800 for each of the past six weeks, higher than in other major western European nations, according to Bloomberg’s tracker. 
• The U.K. also has lagged in rolling out the vaccines to adolescents amid concerns that some side effects undermined the net benefit of the shots given children are less likely to become seriously ill. The delay meant most older children weren’t offered a vaccine until the school year had started, and they’re now seeing the highest levels of infection in the population.

(Source: Bloomberg)

• China’s economy grew at its slowest pace in a year in the third quarter of 2021, with a global energy crunch, supply chain bottlenecks, and an unsteady property market also adding pressure on policymakers to bolster a faltering economic recovery. 
• China’s real GDP for Q321 came at 4.9%, which was in line with expectations for a sharp slowdown owing to COVID-19 outbreaks that resulted in localised lockdowns between July and August 2021, as well as acute power shortages.
• It is expected that growth will slow further in Q421 given continued shortages, while 2022 will likely see slower growth than pre-pandemic trend levels. A poorer outlook for investment amid Beijing’s regulatory campaign and push for 'common prosperity', as well as a likely end to China’s export outperformance will cap economic growth in China in 2022.

(Source: Investing.com)

• Director of Tourism, Jamaica Tourist Board (JTB), Donovan White recently revealed that the plans to create a digital experience for Jamaica’s tourism product are advanced. 
• Digital experiences are based on the ability to convey real experiences virtually and to date, some 12 or 13 virtual tours of interesting places across Jamaica are now currently available at visitjamaica.com coupled with written content. 
• The entirety of the planned digital experience is one that will take several evolutions, and one of the important aspects of the digital transformation is baked into the Minister’s vision of developing a Blue Ocean Strategy for Jamaica’s tourism. Blue Ocean is a model that allows for your strategy to go into places where your competition does not operate or will have a hard time catching up in the short term. 
• As such, the JTB is working to have that kind of approach to its thinking and strategic modelling, and the  digital transformation will form part of that experience. To date, Jamaica is still one of the few destinations that play in that space aggressively.

(Source: JIS)

• SSL Venture Capital Jamaica Ltd. (SSLVC) advises that it has sold a 20.0% stake in Blue Dot Data Intelligence Limited to Yes Iyah Limited. The terms of the transaction were not disclosed. Yes Iyah Limited is a company operated by Ryan Reid, Michael Banbury and Sean Shelton. Reid and Banbury are cofounders of FirstRock Capital Holdings. 
• SSLVC had notified the market on May 1, 2020 that it sold the shares to the Founder of Blue Dot and later notified on August 15, 2021 that the Founder’s obligations were not completed. SSLVC exercised its rights, and the Agreement was repudiated. 20% of the shares held by SSLVC were then sold to a third party Yes Iyah Limited on October 06, 2021. 
• SSLVC is in discussions to sell the remaining shares and will notify the market as soon as the transaction is completed. The relationship between SSLVC and the Founder remains positive. 
• The sale will likely result in a one-off gain for the company but could result in a decline in future revenues if the funds are not reinvested in a lucrative opportunity.

(Source: JSE & NCBCM Research)

• The International Monetary Fund (IMF) projects that DomRep’s economy will grow 9.5% in 2021, 40 basis points  higher than the 9.1% recently estimated by the World Bank. A swift vaccination campaign and resilient private consumption will drive domestic activity. 
• The positive projection is contrary to the drop of -6.7% registered by the DomRep economy in 2020, as a result of the economic closures imposed by the COVID-19 pandemic. 
• Based on  IMF projections, only Guyana (20.4%), Aruba (12.8%), Panama (12%), Chile (11%) and Peru (10%) from the region are expected to grow at a faster pace than the Dominican Republic.

(Source: IMF & Dominican Today)

• CIBC FirstCaribbean yesterday said it was “business as usual” for its Bahamas operations despite its move to exit five smaller regional jurisdictions. 
• In a sign that the Canadian-owned commercial bank has reverted to ‘Plan B’ following the February 2021 break-up of its deal to sell a controlling 66.73 percent equity stake to the Colombia-headquartered GNB Financial Group, CIBC announced that it has agreed to sell its operations in St Vincent, Grenada, Dominica and St. Kitts to a consortium of local banks. 
• They are The Bank of St. Vincent and the Grenadines; Grenada Co-Operative Bank; National Bank of Dominica; and St Kitts Nevis Anguilla National Bank. In addition, Aruba bank is acquiring its assets in that nation, with all transactions subject to regulatory approval. 
• Colette Delaney, CIBC’s chief executive, said in a statement: “These transactions enable FirstCaribbean to optimise and simplify its business, further enhance efficiency and focus on core markets to accelerate growth”.

(Source: The Tribune)

• The Federal Reserve could begin reducing the pace of its monthly asset purchases as soon as mid-November, according to minutes from the September meeting. 
• The summary, released Wednesday, indicated the tapering process could see a monthly reduction of $10 billion in Treasurys and $5 billion in mortgage-backed securities. The target date to end the purchases should there be no disruptions would be mid-2022. 
• In the “dot plot” of individual members’ expectations for interest rates, the committee indicated it could begin raising interest rates as soon as 2022. Markets currently are pricing in the first rate hike for next September, according to the CME FedWatch tool. Following the release of the minutes, traders increased the likelihood of a September hike to 65% from 62%.

(Source: CNBC News)

• Fitch Solutions, believes that the IMF’s latest economic forecasts present an overly optimistic look at EMs’ economic recovery in 2021. Instead, it expects that growth in key EMs including Chile, Turkey, Vietnam and Malaysia will fall far below the Fund’s expectations. 
• The IMF’s forecasts for 2022 are closer to Fitch’s, though, Fitch is a bit more optimistic about Chile and Vietnam and more pessimistic about Indonesia and Hungary. 
• Both Fitch and the IMF are of the view that EM inflation will ease in 2022 and over the coming years.

(Source: Fitch Solutions)