• Global trade is starting to crawl back after collapsing to a record low in June, the World Trade Organization said, but the outlook remains too murky to conclude whether a sharp rebound will be happening or the recovery will muddle along for months.
• The Geneva-based organization’s latest Goods Trade Barometer fell to 84.5 in June, compared with a level of 87.6 in May and 95.5 in February. Readings of 100 indicate growth over the next quarter in line with medium-term trends, while those higher or lower than 100 points to growth above or below the recent trend.
• The WTO previously projected that trade flows could fall by as much as 30% and potentially exceed the losses seen during the Great Depression. The latest report said that scenario now seems less likely as trade flows remain on-trend for an 18.5% decline in the second quarter of 2020.

 (Source: Bloomberg)

• General Accident Insurance Company Jamaica Limited reported a 4.0% (or $5.47Mn) decline in net profit attributable to shareholders to $129.91Mn (EPS: 11¢) in for the six months ended June 30, 2020.  
• Despite a 37.1% ($366.37Mn) increase in net premiums earned, the unfavorable outturn was largely due to a material rise in expenses, including a 40.2% (or $254.47Mn) increase in claims expense and a 36.1% (or $151.41Mn) rise in management expenses.
• Management noted that GENAC has been impacted by COVID-19 and that the full impact of the virus on the business remains uncertain.
• The stock has fallen by 8.7% since the start of the year, closing Tuesday’s trading session at $6.48. At this price, the stock currently trades at a P/E of 12.5x earnings, which is below the Junior Market Financial Sector Average of 36.6x.

(Source: GENAC Financials)

• Inflationary pressures in Venezuela will increase over the coming months, driven by recurring gasoline shortages and wider public deficits.
• As a result, Fitch Solutions expects that the Bolívar Soberano (VES) will continue to depreciate in 2020 while inflation remains near the hyperinflationary territory. It forecasts the bolívar will average VES340,065.9/USD in 2020, while inflation will average 2,473.2% y-o-y.
• It also maintains its view that the current Venezuelan government, led by President Nicolás Maduro, lacks the tools to address the core drivers of inflation and currency depreciation, suggesting the situation is unlikely to change moving forward.

(Source: Fitch Solutions)

• Colombian real GDP fell 15.7% y-o-y in Q2 2020, after a 1.1% expansion in Q1 2020, as the Covid-19 pandemic and the resulting government restrictions on mobility and economic activity caused the largest quarterly contraction on record and the first y-o-y decline in over 20 years.
• Private consumption (15.9%), fixed capital investment (32.2%), exports (27.4%) and imports (28.8%) all registered double-digit declines, while government consumption increased 3.0% y-o-y.
• It is forecasted that real GDP will contract 5.0% y-o-y in 2020, with risks heavily weighted to the downside. The 2021 outlook, however, is more upbeat, with forecast 3.6% growth.

 (Source: Fitch Solutions)

• The Trump administration is considering additional sanctions on Venezuela aimed at halting the remaining fuel transactions permitted with the South American nation, according to people familiar with the matter.
• The measures could target crude swaps with companies in Asia and Europe.
• S. officials have debated the move for months, yet they initially prioritized actions against Iran, which began exporting gasoline to fuel-starved Venezuela. The sanctions have not been decided and talks are ongoing.

(Source: Bloomberg)

• President Donald Trump said he called off last weekend’s trade talks with China, raising questions about the future of a trade deal that is now the most stable point in an increasingly tense relationship.
• The phase-one trade deal, which came into force in February, had called for discussions on the implementation of the agreement every six months.
• Chinese Vice Premier Liu He was supposed to hold a video conference call with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, but it was postponed indefinitely.
• While China is making many of the structural changes it promised on issues such as intellectual property protection, its purchases of U.S. goods are well below where they need to be to meet promised targets, and there is almost no chance they can be fulfilled now with the damage COVID-19 has done to the global economy.
• A collapse of the deal increases the risks of a return of the tit-for-tat tariff war that hurt trade and companies around the world.

(Source: Bloomberg)

• Salada Foods Jamaica Limited reported an unaudited net profit attributable to shareholders of $35.79Mn (EPS: 34¢) for the nine months ended June 30, 2020, which represents a 68.7% (or $78.60Mn) decline when compared to the same period of 2019.
• This performance can be explained by a 16.9% (or $85.25Mn) increase in the cost of sales, an 86.2% (or $4.24Mn) decline in other operating income, as well as an 8.0% (or $3.45Mn) increase in selling expense. This was despite the 6.5% (or $49.91Mn) increase in revenues.
• Earnings were also impacted by net finance costs of $39.73Mn for the review period when compared to a net finance income of $24.36Mn reported in the same period one year prior.
• The stock has fallen 19.2% since the start of 2020 and closed Wednesday's trading session at $27.15 per share. At this price, it currently trades at a P/E of 44.5x earnings, which is above the Main Market Distribution & Manufacturing Average of 22.6x.

(Source: Salada Financials)

• Despite a 39.9% (or $403.01Mn) increase in revenues, Jamaica Teas reported a 61.4% (or $135.20Mn) fall-off in net profit attributable to shareholders for the nine months ended June 2020 to $84.93Mn (EPS: $0.12). 
• The main contributor to this performance was the $475.22Mn in other operating losses recorded for the review period, relative to the $206.92Mn other operating income recorded in the previous year. Additionally, the company’s bottom line was also affected by increased costs: cost of sales rose by 39.7% ($289.86Mn), total operating costs grew by 13.6% (or $24.67Mn), while finance costs climbed 51.4% (or $8.14Mn).
• The stock has declined by 20.3% since the start of the calendar year. JAMT closed Wednesdays’ trading session at $5.00 and currently trades at a P/E of 14.7x earnings, which is below the Junior Market Manufacturing Sector Average of 22.1x.

(Source: JAM Teas Financials)

• The ruling Dominica Labour Party (DLP) will push a pro-business agenda in the coming months, in an effort to stimulate economic activity amid a COVID-induced recession.
• Fitch Solutions does not expect the recession to impede policymaking, given that an election is not constitutionally mandated until December 2024, although the weak economic outlook is expected to dent popular support for the DLP in the short term.
• Fitch Solutions has revised down Dominica’s score in the Short-Term Political Risk Index to 74.8 out of 100, from 75.2 previously, as the sharp recession increases risks to social stability.

(Source: Fitch Solutions)

• Fitch Solutions expects a renegotiation of Argentina's external debt obligations will provide near-term fiscal relief and lessen a major source of uncertainty.
• However, it still faces the challenge of developing a credible macroeconomic plan in order to secure more assistance from the IMF and regain some level of affordable market access.
• Moreover, Argentina's re-profiled debt could create a daunting challenge for future administrations that risks exacerbating its long-term financial struggles.

(Source: Fitch Solutions)