• For the first half of Carib Cement’s FY2021, it recorded a 207.6% year over year rise in net profit to $3.09Bn (EPS: $3.63), on the back of a 32.0% increase in revenues. The company attributed the higher revenues to strong domestic demand, and its capacity to supply the local market. 
• The bottom-line was also augmented by effective expense management and the company’s ongoing USD debt repayment policy, which has allowed it to reduce its financial expenses by $30.39Mn. This has also resulted in the company reducing the foreign exchange risk compared with the prior year, evident by the $399.42Mn decline in foreign exchange losses in H1 2021. 
• The company’s performance should continue to improve in the coming months, given the continued buoyancy of the construction sector, which is being driven by government initiated infrastructure projects and the many private sector development initiatives. Furthermore, the planned rollout of 1.4Mn doses of vaccine by September 2021 should bolster confidence and fuel private investments, which bodes well for the construction sector. 
• Caribbean Cement stock price has appreciated by 45.9% since the start of the year to $91.64, and current trades at a P/E ratio of 14.8x earnings. This is below the main market average of 20.3x earnings.

(Source: Company Financials & NCBCM Research)

• For the 6-month period ending June 2021, Jamaica Stock Exchange reported a net profit of $190.42Mn (EPS: $0.27), which was 10.7% lower than the same period last year. This was due to a 3.9% drop in revenues, driven by declines in cess fees and other operating income. 
• The drop in the bottom-line was also influenced by a modest rise in the company’s total expenses which grew YoY by 2.5% ($14.63Mn) owing to higher staff costs, professional fees and property expenses. 
• Despite the H1 falloff in net profit, the JSE realized a level of recovery in Q2 2021, with net profit growing by 32.2% supported by higher fee income and eCampus revenue. 
• JSE believes its performance will continue to be impacted by the global pandemic, as investor confidence remains below pre-COVID-19 levels. Nevertheless, market activity has picked up in 2021, and that should continue aided by new listings and improvements in market confidence and economic activity, particularly if the administration successfully improves the vaccination rate by September as planned. 
• The JSE indicated that it will continue to pursue a strategic path of growth through the promotion of new and existing markets, new product development and the continuous improvement in systems and service delivery to its customers and other stakeholders, which will support medium- to long-term growth. 
• Since the start of the year, the Jamaica Stock Exchange stock price has declined by 11.1% to $17.79, and currently trades at a P/E ratio of 32.3x earnings. This is above the main market financial sector average of 17.0x earnings.

(Source: Company Financials & NCBCM Research)

• Barbados has started to claw its way out of recession, evident by a 5.5% growth in economic activity during the April to June quarter of this year. However, while Governor of the Central Bank of Barbados Cleviston Haynes is maintaining his prediction of a modest growth rate of between 1% and 3% for this year, he said the second quarter growth rate was weaker than expected. 
• At the same time, Haynes, who is hinging a lot of the island’s recovery on the return to a vibrant tourism sector, said vaccination of the population would be a major factor in that process. 
• “As a country, it seems to me it is in the national interest for as many persons as possible to be vaccinated – clearly in terms of taking care of ourselves, but beyond that, I think that if the economy is to rebound quickly we also have to be able to provide some comfort to those who may want to visit here who are vaccinated,” he said. As at July 26^th the country has fully and partially vaccinated 8.58% and 25.93%, respectively (Our World In Data).

(Source: Barbados Today)

• Dominican industrialists reacted to statements by the U.S. State Department on its foreign investment report on the Dominican Republic, which collects complaints from investors who pointed to the country as a destination that has accusations of widespread corruption with requests for bribes. 
• The U.S. report also notes that investors face delays in government payments, poor enforcement of intellectual property rights, bureaucratic hurdles, slow, sometimes biased judicial and administrative processes, atypical customs valuation procedures, and import classification. 
• In response, the president of the Association of Industries (AIRD), Celso Juan Marranzini, said that the investment climate in the country is favourable with a very positive outlook, especially when compared with countries in the region and even with nations of the world. 
• He also noted that the Dominican Republic is a country with a geographical position and an enviable climate and one of the most diversified economies, with very attractive investment opportunities in industry, agribusiness, agriculture, tourism, and free zones, according to Listín Diario. 
• “The current Government has made a great effort to boost economic growth and strengthen the climate of confidence. It has also taken important steps in the fight against corruption and impunity and must continue to move firmly in that direction, and carry out the institutional
  reforms that are pending,” he said.

(Source: Dominican Today)

• Emerging markets investors are increasingly concerned about the outlook for economic growth in developing countries and are clinging to high cash levels with scarce plans to deploy funds in the months to come, an HSBC (Hongkong and Shanghai Banking Corporation) poll showed on Thursday. 
• Nonetheless, respondents expected central banks in many emerging markets to continue to raise interest rates. “The feeling among investors is that while the growth outlook is dimmer and inflation is less of a concern than at the beginning of the year, EM countries will continue to hike rates because they are trying to pre-empt Fed tightening and avoid a repeat of the taper tantrum we saw in 2013-2014," Murat Ulgen, global head of EM research at HSBC said. 
• Central banks in Brazil, Russia, Hungary and Mexico, among others, have already hiked rates this year to counter inflation pressures and currency depreciation. Respondents cited the U.S. Federal Reserve hiking interest rates and tapering its pandemic bond purchase as the biggest risk for emerging markets, ahead of COVID or higher-than-expected inflation. 
• While the number of respondents holding more than 5% of their portfolio in cash decreased to 45% from 48%, investors willing to keep cash levels unchanged for the next three months stood at six out of ten, the highest in at least a year. Investors also reduced overweight positions in fixed income assets and added to overweight positions in equities and currencies, according to the poll. HSBC conducted the survey between June 8-July 23, asking 124 investors from 119 institutions representing $506 billion of emerging market assets under management.

(Source: Reuters)

• China will raise export tariffs for pig iron and ferrochrome, and remove export tax rebates for 23 steel products from Aug. 1, the second adjustment in three months as it seeks to ensure domestic supply while controlling output to curb emissions. Export tariffs for high-purity pig iron will be lifted to 20% from 15%, and for ferrochrome will be increased to 40% from 20%, the Ministry of Finance said in a statement on Thursday. 
• The country will also cancel export tax rebates for 23 steel products, including some cold-rolled coils and silicon steel which have higher added-value compared with carbon steel. "The changes aim to promote upgrade and high-quality development of the steel industry," said the finance ministry. 
• China, the world's top steel producer had already adjusted its tariffs on May 1, when it removed export tax rebates for 146 steel products, hiked pig iron and ferroalloys export tariffs and exempt some temporary import tariffs. The adjustments came as the country wants to ensure domestic supplies when curtailing production for fewer carbon emissions. 
• However, as steel demand and prices are still well supported by the global economic recovery, the country's steel products exports picked up 23% in June after a 34% drop in May. Meanwhile, steel output in the first half also jumped 11.8% in China, making it harder to keep to the promise of no rise in annual crude steel production in 2021. 
• The rise in steel prices will raise the costs of construction materials in the domestic market, causing a rise in development costs for commercial and residential buildings. However, these costs will likely be passed on to consumers considering the strong demand influencing robust growth in the construction sector, resulting in an increase in real estate prices, particularly for new construction.

(Source: Reuters & NCBCM Research)

• Owing to a 25.5% increase in revenues, for the first quarter ending June 2021, Lasco Manufacturers reported a net profit of $401.76Mn (EPS: $0.10), a 17.5% increase over Q1 2020.  
• However, despite the higher revenues, gross margin declined to 36.0% from 39.0% in the prior year due to higher raw materials and shipping costs, which were not immediately recovered through selling price increases. Nevertheless, admin expenses were well contained, falling by 2.1%, which along with an increase in “other income” helped to augment the bottom-line. 
• Higher material and shipping costs due to rising demand relative to supply stemming from the reopening of economies across the world could keep input costs elevated over the near term. Nevertheless, this could be offset by higher revenues influenced by the reopening of schools in September. The government has committed to reopen schools, once it is able to contain the number of new COVID-19 cases and vaccinate a sufficient portion of the population. It is planning to distribute up to 1.4Mn doses of the COVID-19 vaccine by September 30. 
• Lasco Manufacturing stock price has appreciated by 35.1% since the start of the year and closed Wednesday’s trading session at a price of $5.20 per share. At this price, the stock trades at a P/E ratio of 14.7x earnings, which is below the junior market manufacturing sector average of 16.5x earnings.

(Source: Company Financials & NCBCM Research)

• Minister of Health and Wellness, Dr. the Hon. Christopher Tufton, says that approximately 1.4Mn doses of vaccines – both double and single doses, are expected in the island over the next few months up to the end of September. “The target is to deliver doses to 900,000 Jamaicans between now and the end of September. It’s an ambitious target, but I believe with the support of the population and all of society, we can achieve that target,” he said. 
• Tufton, who was addressing a virtual press conference hosted by Prime Minister, the Most Hon. Andrew Holness, on Monday (July 26), noted that as soon as new batches of vaccines arrive, the programme will be opened up to all Jamaicans who qualify, aged 18 years and over. He noted that once “we get to the 900,000, plus those who have already benefited, then we will be somewhere in the region of 50% of target, given that we are looking at 1.95Mn or so”. 
• If the government is able to deliver on the distribution of these 1.4Mn doses, this could help to fast-track the country’s economic recovery, as it will put the government in a better position to relax COVID-19 containment measures.

(Source: JIS & NCBCM Research)

• On July 28, 2021, the IMF Executive Board completed the first review under the two-year Precautionary and Liquidity Line (PLL) arrangement for Panama which was approved on January 19, 2021 in the amount equivalent to US$2.7 billion (SDR 1.884 billion). 
• The PLL serves as insurance against extreme external shocks stemming from the COVID-19 pandemic, with access in the first program year equivalent to about US$1.35 billion (0.942 billion SDR). The authorities intend to continue treating the arrangement as precautionary. 
• According to the IMF, the performance under the program has been strong and Panama continues to meet the PLL qualification criteria. The authorities remain resolute in implementing the strong policies under the PLL.

(Source: IMF)

• Mexico's state oil company Petroleos Mexicanos (PEMEX) on Wednesday reported net profit of $722.5 million for the second quarter, swinging from a loss in the same period last year, thanks to higher crude prices and production. 
• The company said the 14.4-billion-pesos profit was driven by higher income from international sales, which doubled from a year earlier due to higher crude prices and a slight rise in oil volumes exported. 
• However, PEMEX's debt rose from the first quarter of the year, reaching $115.1 billion at the end of the April-to-June period due to the use of short-term financing. Despite this, PEMEX has said it will not resort to the bond markets this year for refinancing as it plans to receive capital injections from the government through the fourth quarter, which should lead to a net debt reduction, a long-standing but so far unfulfilled goal. 
• Given its weak liquidity, and negative free cash flow. which will rise in the next three years due to high debt maturities and lower operating cash flow derived from the expansion of its refining business, on July 27^th Moody’s downgraded PEMEX’s corporate family rating and the senior unsecured ratings on the company's existing notes, from Ba2 to Ba3 (S&P Equivalent: BB-). 
• The agency also maintained the negative rating outlook on PEMEX's Ba3 ratings primarily based on the negative outlook on Mexico's Baa1 rating given the importance of the sovereign's credit strength and ongoing support to PEMEX's ratings.

(Source: Reuters & Moody’s)