• Britain’s economy shrank by a record of 20.4% in the second quarter when the coronavirus lockdown was tightest, the most severe contraction reported by any major economy so far, with a wave of job losses set to hit later in 2020.
• The data confirmed that the world’s sixth-biggest economy had entered a recession, with the low point coming in April when output was more than 25% below its pre-pandemic level. 

(Source: Reuters)

• As the Bank of Japan tries to pump more funds to companies hit by the coronavirus pandemic, it is offering banks hundreds of millions of dollars in bonuses, a move analysts say is aimed at easing the side-effects of its negative interest rate policy.
• In March, as COVID-19 clobbered the global economy, the BOJ cobbled together special “coronavirus relief” operations to help keep cash-strapped companies afloat. Under the scheme, the BOJ lends cash to banks against their lending to the private sector, such as loans and bonds, as collateral.
• Banks rushed to the plan, gobbling up 27 trillion yen ($250Bn) through the channel by July. That is roughly as much as the number of banks’ deposits on which the BOJ imposes negative interest rates.
• Record bank lending in recent months suggests the BOJ’s plan is working — a rare success of late in its battle to revive the economy — but it is also a sign that policymakers’ focus is now more on supporting banks, rather than keeping rates low.

(Source: Reuters)

• Jamaica remains in an advantageous position in the business process outsourcing (BPO) industry. The principal of Ryan Strategic Advisory (RSA), Peter Ryan, said for North American investors, Jamaica is an attractive option and will remain so going into the second half of this year and definitely 2021.
• “I think that the efforts on the part of the trade association, the Government, as well as individual players working together, [are] truly paying off, and with such a focus on business continuity, certainly alongside that of quality and the ability to deliver quality interactions, Jamaica is certainly in a position of advantage,” he added.

(Source: JIS)

• Net profit at tTech Limited edged down 23.5% ($3.91Mn) for the six months ended June 30, 2020, despite growth in revenues and other income of 8.5% (or $13.36Mn) and 49.9% (or $2.56Mn), Net profit declined to $12.73Mn (EPS: 12¢) from $16.64Mn (EPS: 16¢) in the corresponding period of 2019.
• The main contributor to this performance was a 55.0% (or $19.05Mn) growth in the cost of sales—to facilitate the increase in revenues—as well as a 6.2% ($5.78Mn) increase in administrative expenses. The company’s bottom line was also affected by the $1.21Mn in finance cost for the review period, relative to 2019 where there was no finance cost recorded.
• The stock has fallen 8.3% since the start of the calendar year. tTech closed Tuesday’s trading session at $5.98 and currently trades at a P/E of 31.5x earnings which is above the Junior Market Average of 23.4x.

 (Source: tTech Financials)

• The ruling People’s National Movement (PNM) claimed victory in Trinidad and Tobago’s August 10 general election, after initial results showed the PNM winning 22 of the 41 seats in the House of Representatives.
• The PNM, which had seen its public approval fall in recent quarters, likely benefitted from its relatively successful response to the Covid-19 pandemic, overshadowing the opposition United National Congress (UNC) campaign that largely criticized the PNM government’s record on economic development.
• Following the election, Fitch Solutions has revised T&T’s score on the Short-Term Political Risk Index (SPTRI) up to 57.3 out of 100, from 55.7 previously. Also, since the PNM and Prime Minister Keith Rawley have a mandate for a five-year term, T&T’s score on the ‘policy continuity’ subcomponent has been raised from 58.8 out of 100 to 65.0.

(Source: Fitch Solutions)

• The Covid-19 pandemic will cause a historic contraction in Sint Maarten in 2020 as a collapse in tourism activity pushes unemployment higher and weighs on economic growth. 
• While Fitch Solutions expects a global economic rebound will support domestic real GDP in 2021, a second wave of Covid-19 cases in North America that extends the economic downturn and blunts demand for overseas travel would threaten Sint Maarten's recovery.
• Fitch Solutions has revised its 2020 real GDP growth forecast to -16.6% y-o-y, from -4.3% previously, as the scope of the global recession and minimal overseas travel will cause sharp downturns in many Caribbean markets. However, they forecast 7.4% growth in 2021, largely due to base effects in tourism.

(Source: Fitch Solutions)

• U.S natural gas production and demand will drop in 2020 and 2021 from record highs last year as coronavirus lockdowns cut economic activity and energy prices, the U.S. Energy Information Administration (EIA) said on Tuesday.
• EIA’s Short-Term Energy Outlook (STEO) projected dry gas production will drop to 88.65 billion cubic feet per day (bcfd) in 2020, and 84.02 bcfd in 2021 from the all-time high of 92.21 bcfd in 2019.
• It also projected gas consumption would fall to 82.42 bcfd in 2020, and 78.71 bcfd in 2021, from a record 84.97 bcfd in 2019.

(Source: Reuters)

• The number of people in work in Britain has suffered the biggest drop since 2009 and signs are growing that the coronavirus will take a heavier toll on the labor market as the government winds down its huge job-protection scheme.
• The unemployment rate unexpectedly held at 3.9%. However, that reflected more people who had given up looking for work and therefore were not considered unemployed, and 300,000 people who said they were working but getting no pay, the Office for National Statistics said.
• The number of people claiming universal credit - a benefit for those on low pay as well as the unemployed - rose to 2.69Mn in July, leaping by 117% from March. Economists polled by Reuters had expected the unemployment rate to rise to 4.2%. Last week, the Bank of England forecast the jobless rate would hit 7.5% by end-2020.

(Source: Reuters)

• For the six months ended June 30, 2020, Victoria Mutual Investment Ltd. reported an unaudited audited net profit of $170.89Mn (EPS: 11¢), down by 32.4% (or $81.89Mn) YoY.
• The company saw a pull-back in all revenue lines— net interest income was down marginally (-0.6% YoY), while other operating income contracted (18.7% YoY).  Combined with higher operating costs (up 21.7% YoY), the company’s profit before tax sank (72.1%) to $90.43Mn.  The bottom-line was supported by an $80.46Mn tax credit. 
• The stock price has fallen 22.5% since the start of the calendar year, closing the Wednesday trading session at $6.94. At this price, the stock currently trades at a P/E of 20.4x earnings, which is above the Main Market Financial Sector Average of 14.8x.

 (Source: VMIL Financials)

• Fitch Solutions forecast the Peruvian economy will contract 10.7% y-o-y in 2020, a more downbeat view than the Bloomberg consensus estimate of a 9.0% decline.
• The domestic outbreak of Covid-19 will disproportionately affect Peru as stringent restrictions on business activity and personal mobility combine with weak global demand for exports to cause substantial contractions throughout much of 2020.
• That said, Fitch expects sustained fiscal stimulus measures and a positive investment outlook will aid Peru’s rebound in the medium-to-long term, with real GDP growth of 5.2% in 2021.

(Source: Fitch)