• The United States’ trade deficit in goods fell sharply in June as exports rebounded following several months of decline, suggesting a recovery in global trade after being severely disrupted by the Covid-19 pandemic.
• The goods trade deficit dropped 6.1% to $70.6Bn last month. Exports of goods accelerated 13.9% to $102.3Bn, eclipsing a 4.8% increase in goods imports to $173.2Bn. Goods imports fell in May to their lowest level since July 2010.
• The rebound in exports was led by a 144.1% surge in shipments of motor vehicles and parts. Exports of capital goods soared 11.0% and consumer goods jumped 12.6%. There were also increases in exports of industrial supplies and other goods, but shipments of food, feeds and beverages fell.

(Source: CNBC)

• On July 27, 2020, the Statistical Institute of Jamaica (STATIN) reported that Jamaica’s imports from January to April 2020 were valued at US$1,680.6Mn, a 23.1% decline when compared to the US$2,186.7Mn spent for the same period in 2019.
• Also, Revenue from exports amounted to US$425.1Mn for the current review period, 24.1% lower than the US$560.3Mn earned in a similar period in 2019.
• Expenditure on imports from the United States of America (USA) - Jamaica’s main trading partner was valued at US$637.7Mn. This is 40.2% below the US$1,067.1Mn recorded for the period January to April 2019. Earnings from total exports to the USA amounted to US$215.8Mn, an increase of 6.7% when compared to the US$202.3Mn earned in 2019.

(Source: STATIN)

• Despite a 2.2% (or $201.92Mn) expansion in revenues, Caribbean Cement Company Limited reported a 32.9% contraction in net profit for the six months ended June 30, 2020. Net profit declined to $1.00Bn (EPS: $1.18) from the $1.50Bn (EPS: $1.76) made in the previous year.
• The drop in profit was primarily as a result of a 68.9% ($268.31Mn) increase in losses on foreign exchange. Additionally, cost of sales increased by 4.4% (or $217.39Mn), and tax expenses were  up 34.3% ($188.74Mn)
• The stock has declined 46.8% since the start of the year and closed trading at $44.37 on Tuesday. At this price, CCC currently trades at a P/E of 27.2x earnings which is above the Main Market Industrials and Materials sector average of 22.2x earnings.

(Source: CCC Financials)

• Latin America will emerge from the COVID-19 pandemic with higher poverty rates as efforts to control the virus lead to spikes in unemployment and indebtedness, Inter-American Development Bank President Luis Alberto Moreno said in an interview.
• Latin America, where economic growth has already been slowing in recent years, is expected to see an economic contraction between 8% and 10% in 2020 as a result of the coronavirus and associated quarantine measures.
• The IADB, which is Latin America’s largest regional lender, this year will approve nearly $20Bn dollars in loans. Around $15Bn of those will go to governments to strengthen healthcare systems.

(Source: Reuters)

• Fitch Solutions forecast that real GDP in Costa Rica will contract 4.0% y-o-y in 2020 due to the economic impact of the Covid-19 pandemic and tightening fiscal policies. This is a revision from the previous forecast of a 3.1% decline.
• A weak global economy will limit exports and inbound investment, while rising unemployment will undermine private consumption over the coming quarters.
• While Fitch forecasts that the Costa Rican economy will return to 3.1% growth in 2021, they noted the possibility of a second wave of Covid-19 in Costa Rica, or a prolonged recession in the US, as downside risks to their outlook.

(Source: Fitch Solutions)

• Confronting signs that the U.S. economy may be losing momentum, Federal Reserve policymakers will turn their attention to how to jumpstart a stronger rebound from the virus-induced recession.
• The Federal Open Market Committee is all but certain to keep its benchmark overnight rate in a target range of 0% to 0.25%, where it has been since March 15 to help soften the pandemic’s blow. The committee will release a statement at 2 p.m. and Chair Jerome Powell will hold a press conference 30 minutes later. Quarterly forecasts are not due to be updated at this meeting.

(Source: Economic Times)

• Japan’s government expects the economy will contract this year as activity slowly recovers from the coronavirus crisis, with a return to growth seen next year, four government sources told Reuters.
• The world’s third-largest economy is expected to have contracted 23.9% in the second quarter as the pandemic slammed global demand and Japan’s state of emergency prompted people to stay at home and businesses to close. Preliminary GDP data will be released on Aug 17.
• Reflecting uncertainty over how long the pandemic will last, the government will take the unusual step of announcing several growth scenarios for 2020 and 2021 this week, based on whether the pandemic will end quickly or be prolonged. Real GDP is expected to shrink in the current fiscal year through March 2021 under either scenario, but it would be smaller than a 5% contraction, one of the sources said.

(Source: Reuters)

• For the year ended March 31, 2020, Proven Investment Limited reported an audited net profit attributable to shareholders of US$29.98Mn (EPS: US 4.79 ¢), up 337.8% (or US$23.13Mn) relative to the prior year.
• This favorable outcome can be attributed to the 86.2% (or US$32.51Mn) increase in total income primarily due to a one-off US$24.93Mn gain from the disposal of Access Financial Services. This increase along with a US$9.13Mn rise in the share of profit from associates outstripped the 45.1% (or US$11.79Mn) growth in total operating expenses.
• If this one-off gain from the sale of the subsidiary is removed, the profit attributable to shareholders is US$8.70Mn relative to the non-normalized profit of US$29.98Mn.
• Proven’s stock has fallen 28.6% since the start of the year and closed Monday’s trading session at $33.21. At this price, the stock trades at a P/E of 5.2x earnings, which is below the Main Market Financial sector average of 13.9x earnings.

(Source: PIL Financials)

• More than 40,000 local fisheries stakeholders are poised to benefit from the implementation of the ‘Promoting Community-based Climate Resilience in the Fisheries Sector Project’ by the Ministry of Industry, Commerce, Agriculture, and Fisheries (MICAF).
• The US$4.875Mn five-year World Bank-funded initiative aims to enhance climate-resilient practices among targeted fishing and fish-farming communities across Jamaica in a bid to strengthen the sector through several engagements.
• Minister without Portfolio in MICAF, Hon. Leslie Campbell noted that over the past two years, the sector contributed US$79Mn to Jamaica’s gross domestic product (GDP), with exports totaling more than one tonne.

(Source: JIS)

• President David Granger’s refusal to concede the March 2020 election and leave office will heighten political risks in Guyana in the coming weeks.
• While Fitch’s core view remains that Granger will eventually step down and allow the opposition People’s Progressive Party/Civic (PPP) to assume control of the government, they note the possibility of increased sanctions by the US and other governments if Granger remains in power.
• Fitch Solutions has revised Guyana’s score in the Short-Term Political Risk Index to 48.0 out of 100, from 54.3 previously, as the government’s refusal to verify the election results or leave the office to underpin the possibility of political violence.

(Source: Fitch Solutions)