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Brazil Industry Powers to Seventh Straight Gain on Capital Goods Published: 08 January 2021

  • Brazil’s industrial production rose for the seventh straight month on a surge in capital goods, adding to signs of a gradual improvement in Latin America’s largest economy.
  • Output rose 1.2% in November from the month prior, less than the 1.4% median estimate from analysts in a Bloomberg survey. From a year ago, production increased 2.8%, the National Statistics agency reported on Friday.
  • Brazil’s industry has gotten a boost from record-low interest rates, a weak currency, and emergency government spending against the coronavirus. Those factors have helped propel sector confidence close to pre-pandemic levels despite an uneven recovery. Going forward, production faces headwinds including rising virus cases, as well as the government’s move to reduce stimulus.

(Source: Bloomberg)

Economy Sees Job Loss In December For The First Time In Eight Months Published: 08 January 2021

  • The U.S. labor market suffered its first net loss of jobs in eight months in December, as the surge in COVID-19 cases hit service sectors of the economy hard in the run-up to the Christmas holiday.
  • The Bureau of Labour Statistics said nonfarm employment fell by 140,000 through the middle of the month, compared with expectations for an increase of 71,000. However, the waters were muddied by a big upward revision to hiring in November, where payrolls grew by 336,000, rather than the 245,000 initially reported last month.
  • The unemployment rate, meanwhile, stayed at 6.7% of the workforce, defying expectations of an increase to 6.8%.
  • The carnage of lockdown measures was most evident in the hospitality sector, where 372,000 jobs were lost in bars and restaurants nationwide. Another 92,000 were lost in entertainment parks and casinos.

(Source: CNBC News)

Canada M&A Seen Picking Up After Hitting 9-Year Low In 2020 Published: 08 January 2021

  • Canadian mergers and acquisitions (M&A) fell to a nine-year low in 2020 as the pandemic put brakes on companies' growth strategies, but bankers expect the pickup in deal-making in the fourth quarter to revive activity this year.
  • The arrival of multiple COVID-19 vaccines in 2021 is expected to improve public confidence in an economic recovery and revive deal-making, say bankers. Market stability and continued access to capital that led to a resurgence in transactions in the second half of the year is expected to continue.
  • Over $158.7 billion worth of M&A deals were announced in 2020, making it the slowest year since 2011, compared with $234 billion in the previous year, data from Refinitiv showed.

(Source: Reuters)

PROVEN– 50.5% Share Acquisition of Roberts Mfg. Co. Ltd. from Massy Properties (Barbados) Ltd Published: 06 January 2021

  • Proven Investments Limited (PROVEN) has advised that the Company has entered into an Agreement for Sale and Purchase of Shares on December 30, 2020, to acquire 50.5% of the common equity of Roberts Manufacturing Co. Limited (RMCL) from Massy Properties (Barbados) Limited (MPBL) for a consideration of US$21,452,500.00.
  • PROVEN further advised that “RMCL, located in Barbados, operates from a 21-acre industrial complex consisting of large manufacturing plants producing a variety of margarine, shortening, soya bean oils and animal feed products which are distributed to over 15 markets regionally and internationally.
  • “The proposed acquisition of the majority shareholding of RMCL from MPBL is aligned with PROVEN’s strategy to grow through acquisition in the real sector throughout the Caribbean and Latin American regions with a view to creating value to its shareholders.”

(Source: JSE)

Colombian Peso's Short-Term Rally Will Turn To Long-Term Weakness Published: 06 January 2021

  • The Colombian peso (COP) will continue to trade above its 2020 lows against the US dollar in 2021, boosted by an economic recovery, higher crude oil prices, and improving risk sentiment.
  • That said, persistent fiscal deficits, the limited long-term upside for energy prices, and rising domestic inflation will cause the COP to modestly weaken over the coming years.
  • Fitch Solutions forecasts the unit will average COP3,502.0/USD in 2021 and COP3,562.9/USD in 2022, from an estimated COP3,695.5/USD in 2020.

(Source: Fitch Solutions)

Lack Of Budget Weighs On Brazil's Fiscal Outlook Published: 06 January 2021

  • Fitch Solutions forecasts Brazil's overall government fiscal deficit will narrow to 9.7% of GDP in 2021, from a historic 18.8% in 2020.
  • While revenues will rebound and expenditures will most likely fall as stimulus measures are reduced, the lack of a budget for 2021 leaves significant uncertainty over government spending.
  • Together with waning momentum towards enacting structural fiscal reforms, investors will likely remain cautious towards Brazil, limiting the benefits it sees from improving global risk sentiment.

(Source: Fitch Solutions)

Euro Zone Contraction Deeper Than Thought In Dec As Lockdowns Bite -PMI Published: 06 January 2021

  • Economic activity in the eurozone contracted more sharply than previously thought at the end of 2020 and could get worse as renewed lockdown restrictions imposed to contain the coronavirus hit the bloc's dominant service industry, a survey showed.
  • With infection rates soaring across Europe, countries have clamped down on public life. Germany is set to extend its strict lockdown until the end of the month and Italy decided on Tuesday to keep some nationwide restrictions in place.
  • IHS Markit's final December Composite Purchasing Managers' Index (PMI), seen as a good gauge of economic health, did rise to 49.1 from November's 45.3 but was significantly below a flash reading of 49.8. Anything below 50 indicates contraction.
  • With much of the service industry being forced to close demand also shrank a lot more than thought. The final services new business index was 46.6 compared to the flash estimate of 47.9, albeit better than November's 40.6.

(Source: Reuters)

U.K. Businesses Enter New Lockdown With Dwindling Cash Flows Published: 06 January 2021

  • U.K businesses were suffering even before the latest lockdown, leaving many in a precarious position as they enter new restrictions with what many say is insufficient government support, a survey showed
  • The findings from the British Chambers of Commerce add to pressure on Chancellor of the Exchequer Rishi Sunak to extend aid to companies beyond the 9,000-pound ($12,000) one-time grants he’s offering.
  • With non-essential shops and hospitality venues closed for weeks after a dismal 2020, a growing number of businesses are headed for a financial abyss.
  • Four in 10 firms said their cash flow deteriorated in the fourth quarter, according to a survey in November of 6,203 businesses conducted by the lobby group. Almost 80% of hospitality firms reported a drop in sales in the period.
  • Prime Minister Boris Johnson’s government is counting on a mass vaccination program taking root by Easter to allow an easing of the restrictions. The latest measures to support companies add to the 280 billion pounds it has cost the Treasury to tackle the virus and bolster firms and workers through the pandemic.

(Source: Bloomberg)

Eppley Caribbean Property Fund Limited Records Drop in Net Profit Published: 30 December 2020

  • For the year ended September 30, 2020, Eppley Caribbean Property Fund reported a 50.9% (or BD$1.96Mn) year over year decline to BD$1.89Mn (EPS: $0.02) in audited net profit attributable to shareholders of its Value Fund.
  • The result was driven by a BD$2.53Mn share of loss of investments accounted for using the equity method which compares to a share of profit of BD$2.95 reported in 2019.
  • This outweighed the 68.9% (BD$1.39Mn) rise in fair value gains on investment property, 63.6% (BD$1.14Mn) increase in net rental income, and 18.6% (BD$0.58Mn) drop in operating expenditure.
  • The company’s stock price has increased by 0.6% since the start of the year, closing Tuesday’s trading session at $43.43. At this price, the stock currently trades at a P/E of 30.6x earnings, which is above the Main Market Real Estate Sector Average of 18.0x.

(Source: CPFV Financials)

Brazil Economic Recovery Likely To Slow As Aid Reduced Published: 30 December 2020

  • Brazil's relatively rapid economic rebound is likely to decelerate over the coming quarters as the government reduces stimulus spending.
  • Fitch Solutions revised its forecast for real GDP growth to -4.7% in 2020 and 3.5% in 2021, from -5.3% and 3.2% previously, following a stronger than expected rebound in Q3 2020.
  • However, a weak outlook for structural reforms suggests that investment will remain weak over the coming quarters, limiting Brazil’s medium-term growth potential.

(Source: Fitch Solutions)