• The number of jobs in the Business Process Outsourcing (BPO) sector increased by 15.0% over the past year, with 44,000 people employed in the sector as of June 30, 2021, relative to 38,400 people over the same period last year. 
• Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Senator the Hon. Aubyn Hill, who made the disclosure, said this increase in jobs happened despite the economy shrinking by over 10.0% during the same period. 
• “I am extremely pleased to tell Jamaicans that in the year to June 30, 2021, the BPO Services sector brought in US$780 million to the Jamaican economy. That’s no small sneeze during a time when our economy was shrinking,” he said, while making his contribution to the State of the Nation Debate in the Senate, on Friday (July 16). 
• Hill stressed that the Government truly appreciates the commitment of cash, management and energy that the 87 operators in the sector, including 10 Fortune500 companies, have made to Jamaica and the thousands of jobs these investors have provided for so many Jamaicans. 
• “This Ministry of Economic Growth and Job Creation will continue to do everything in our power and within the law to provide the support and ease-of-operation these investors need to run their businesses,” he said.

(Source: JIS)

• Owing to lower costs, for its financial year ending March 2021, the RJR Communications Group reported a 354.4% increase in net profit to $170.66Mn (EPS: $0.07). 
• Due to cost cutting initiatives, direct, selling and other operating expenses fell by 11.6% (or $298.98Mn), 19.2% (or $164.17Mn) and 32.7% (or $299.80Mn), respectively. During the year there was a reduction in newsprint usage, programming and salary costs, directly related to adjustments made in response to reduced revenues, and other cost containment measures pursued. Additionally, the company reduced expenditure on special events and other expenses that normally went towards boosting sales effort. 
• For the year, the company’s revenues declined by 7.2% (or $400.30Mn) to $5.19Bn, driven by reductions in sales from the audio ($32.00Mn or 4.0%) and print division ($529.00Mn or 19%). Nevertheless, there was an increase in sales from the audio/visual division which grew by $162.00Mn (or 7.0%), but it was not enough to offset the contraction from the print division. The increase in revenues from the audio/visual division was attributed to collaborations with the Ministry of Health and Education, along with the staging of general elections during the year. 
• RJR’s stock price has depreciated by 1.2% since the start of the year to $1.69, and currently trades at a P/E of 24.1x earnings which is above the main market sector average of 20.5x earnings.

(Source: Company Financials)

• The Costa Rican President, Carlos Alvarado, during a virtual act signed a law to attract investors, rentiers and pensioners that provides benefits such as incentives for import taxes and exemption of 20% of the transfer tax, among others. 
• With the legislation, whoever wishes to opt for a temporary residence as an investor must demonstrate to the Directorate of Migration and Foreigners a minimum investment of $150,000, down up from $200,000 in real estate, registrable assets, shares, securities and productive projects or projects of national interest. 
• The benefits include a duty free and all import taxes present only once, for the importation of household goods, while the amounts declared as income to become a creditor will be exempt from income tax. Beneficiaries may also import up to two land, air or sea transportation vehicles, for personal or family use, free of all import, tariff and value-added taxes. 
• According to the Minister of Tourism, Gustavo Segura, it is intended to produce a necessary revitalization of the economy and a recovery of the levels of foreign investment, which now represents 3.5% of GDP, down from 7.8% a decade ago.

(Source: The Costa Rica News)

• The Dominican Republic will improve connectivity to boost access to digital services as well as people’s adoption and continuity of such services with help from a $115Mn loan approved by the Inter-American Development Bank (IDB). The project will finance investments to expand broadband infrastructure, including the expansion of backbone, aggregation and access networks in order to improve connectivity for the country’s citizens. 
• The operation will include private sector participation and support the deployment of infrastructure in areas that would not be economically profitable on their own, thus ensuring resource optimization. With this approach, both the public and the private sectors will contribute to reduce the digital gap and foster the sustainability of this type of infrastructure in the country. 
• In addition, the IDB’s project will endorse moves to improve broadcasting services, paving the way for transitioning from analog to digital television and enhancing digital abilities and competencies. One key aspect of the project is its promotion of policies that support digital dividend spectrum auctions in order to boost universal access. 
• The IDB is financing the project with a $115Mn loan for a 25-year term, a 6.1-year grace period, and interest rate based on LIBOR. The project is expected to help raise annual GDP by 1.46%, boost productivity by 1.2 percent, and generate 33,000-plus jobs.

(Source: IDB)

• One positive out the pandemic is how little damage it has inflicted on average household and corporate balance sheets in Europe. 
• In the past, recessions were followed by protracted weakness as they left households and businesses with significantly higher debt and lower-income and capital. So far this has not been the case with the COVID-19 crisis, largely thanks to the extraordinary policy response by governments and central banks. 
• The new IMF staff research, observes the resilience of private sector balance sheets. It uses a simple balance sheet vulnerability index, which combines measures of leverage (or indebtedness) and liquidity. Based on the index it can be seen that despite the collapse in GDP in European Union countries and the United Kingdom in 2020, business and household balance sheets in Europe were slightly affected on average. 
• Even in the worst phase of the crisis last year, the index for the corporate sector in Europe only fell marginally and by the end of 2020, the index improved. European household balance sheets also improved on aggregate in 2020, despite higher unemployment and shorter working hours. People stayed home more and spent less, while policy measures supported their income. 
• The question arises if business and household balance sheets did not bear most of the losses from the COVID-19 crisis in Europe, then who did? The short answer is the public sector. The public accumulated more debt to mitigate the effects of the pandemic.

(Source: IMF)

• The global economic recovery remains strong, as such Fitch Solutions has maintained its 5.7% global growth forecast despite several upward revisions, mostly in Europe. The cause of the upward revisions was mostly attributed to faster than anticipated vaccination programmes.  However, Fitch's estimate remains below the consensus (6.0%) as they believe that while growth will continue over the coming quarters it is in the process of peaking. 
• Although purchasing managers' index readings remain quite positive across the 26 economies that Fitch tracks regularly, readings declined in 10 economies from April to May 2021, which suggests that activity in several economies may be peaking. 
• In particular, it can be highlighted that there are mounting downside risks to growth in emerging markets given a sharp rise in COVID-19 infections amid a slow vaccine rollout, rising nominal interest rates as central banks tighten policy in response to rising inflation and increasing political risk. 
• In terms of cross-asset strategy, Fitch’s views remain unchanged from June 2021, and risk appetite has remained fairly positive, but they note some minor shifts. For example, the decline in US bond yields, which was likely a re-pricing of growth and inflation to the downside. This could provide some support to equity markets over the coming months but could also be signaling some challenges to the US and global growth. 
• Moreover, low nominal bond yields and elevated inflation that compress real bond yields in the US could see the US dollar index continue to trade sideways over the near term. Emerging markets are also now facing several risks that could weigh on the performance of their assets.

(Source: Fitch Solutions)

• The All-Jamaica Consumer Price Index (CPI) rose by 0.7% for June 2021 contributing to the point-to-point inflation rate of 4.3%, which is a drop from the 5.0% reported in May 2021, but still within the target range. 
• A 1.9% increase in the heavily weighted index for “food and non-alcoholic beverages‘’ division was a major contributor due in part to an upward movement of 4.0% in the index for the class ‘Vegetables, tubers, plantains, cooking bananas and pulses’. 
• Higher prices for items within the class ‘Restaurant, cafes and the like’ resulted in the 5.9% increase in the index for the division ‘Restaurant and Accommodation Services’. Additionally, increased petrol prices contributed to the 0.4% increase in the index for the ‘Transport’ division. 
• However, these increases were tempered by the 2.4% decline in the index for ‘Housing, Water, Electricity, Gas and Other Fuels’ division, which resulted mainly from the fall in electricity, water, and sewage rates. 
• For the review period, the calendar year-to-June inflation rate was 2.4%, and the fiscal year to date inflation was 1.9%. 
• Inflation is projected to average 4.8% over the next two years according to Bank of Jamaica. The inflation forecast anticipated that commodity (oil and grains) price inflation would accelerate in the context of global supply chain disruptions and increasing demand as economies reopen, leading to higher domestic transport and processed food inflation. However, this was expected to be tempered by subdued domestic agricultural food price inflation, based on expectations of favourable weather conditions.

(Source: STATIN & BOJ)

• For the first quarter ending May 2021, Kremi’s net profit doubled to $54.16Mn (EPS: $0.14). 
• This came on the back of a 27.6% (increase in revenues, which the company attributed to strong product demand, as it has taken the initiative to engage key suppliers, whose supply chains and prices are being affected by the ongoing pandemic. 
• Direct and operating expenses grew by 16.9% (or $49.37Mn) and 34.7% (or $36.28Mn), respectively. Opex grew owing to higher transportation costs due to higher consumer demand, salary increases, staff related expenditure and the full annualized cost for the new Ocho Rios depot. 
• Kremi stock price has appreciated by 36.4% since the start of the year to a price of $5.72 and currently trades at a P/E ratio of 16.8x earnings which is in line with the junior market manufacturing sector average.

(Source: Company Financials) 

• Fitch Solutions has downwardly revised its 2021 real GDP growth forecast for Cuba to 1.0%, from 2.7% previously, as the country grapples with a severe spike in COVID-19 cases and social unrest. 
• This follows an 11.0% contraction in 2020, the worst in Cuba since 1993, as the arrival of the pandemic brought the island’s tourism industry to a halt and US sanctions cut off remittance inflows, generating hard currency shortages that undermined imports and private consumption. 
• While Cuba’s rebound will gain steam in H221 and 2022 as vaccinations pick up domestically and abroad, leading to 4.2% growth in 2022, US sanctions relief is highly unlikely in the coming quarters. 
• Over the longer term, a recent economic reform push could boost Cuba’s growth trajectory if the government keeps the reforms in place post-pandemic.

(Source: Fitch Solutions)

• Minister of Health of Bahamas Renward Wells gave a recent update on the mixing of vaccines to the people. The Bahamas awaits a tranche of Pfizer doses from the World Health Organization’s (WHO) COVAX Facility and it could offer beneficiaries of AstraZeneca a second dose of the US-manufactured vaccine (Pfizer), as studies have shown that vaccine mixing offers strong immune protection. 
• In a statement, he pointed to existing studies where mixing of AstraZeneca and Pfizer were found to have been “very effective”. However, he did not definitively say whether The Bahamas would adopt the measure. Canada, Spain and South Korea have approved dose-mixing due to concerns about rare but possible blood clots linked to the AstraZeneca vaccine. 
• As per the preliminary results of the CombivacS Spanish study, the presence of antibodies in the bloodstream was between 30 & 40 times more in people who got the follow-up Pfizer shot than others in the control group, who only got one AstraZeneca dose. 
• The presence of neutralizing antibodies rose sevenfold after a Pfizer dose — more than double the effect observed when receiving a second dose of AstraZeneca. Nearly 700 volunteers between the ages of 18 and 59 participated in the state-backed study, with around 450 given a Pfizer dose. 
• Amid concerns about coronavirus variants, including the Delta strain, Wells said the vaccines have proven effective against all five variants of concern, maintaining that it is not a matter of if but when the Delta variant is confirmed in The Bahamas. 
• However, the World Health Organization’s chief scientist advised against mixing and matching COVID-19 vaccine doses on Monday, calling it a “dangerous trend” given the limited data about the long-term health impact.

(Source: West Indies and Caribbean News)