• Supreme Ventures Limited reported a marginal decline in net profit of 0.7% to $1.54Bn (EPS: $0.58) for the nine months ending September 30, 2021. This came on the back of a rise in selling and administration expenses, which outstripped the rise in total gaming income. 
• Gaming income for the period grew 13.5% (or $3.77Bn), driven by the lotteries segment. The sports betting segment also saw year on year growth given the attractiveness and flexibility of participating in gaming activities, enhanced with the use of mobile platforms and the support of the ecommerce platform. 
• The Group continues to focus on expanding channels and terminals, which have been well received by the marketplace. SV Games (Mobile/Online) has seen exponential growth in both usage and the number of active online users, due to the increased number of games that can be played on the platform, as well as strong promotional and product enhancement activities. The expansion of the Supa Sellaz program has provided an additional sales channel for both the company’s customers and third-party retailers. 
• However, the impact of strong topline growth was eroded by a 23.0% rise in selling, general and admin expenses, which may have been as a result of SVL’s strong promotional activities. 
• New products will be launched through the retail channel as the company provides continuous opportunities to grow with its retail partners. SVL’s Guyana market is showing steady growth. Furthermore, management noted that, the improvements in the horse racing product and operations using technology and new product solutions promise to create a profitable, sustainable business for the first time in the history of Caymanas Park. These opportunities will in turn support an improvement in the company’s bottom-line, especially as economic activity in its operating territories recover. 
• SVL’s stock price has appreciated by 0.95% since the start of the year and closed Tuesday’s trading session at a price of $17.78 per share. At this price the stock trades at a P/E multiple of 19.9x.

(Source: SVL Financials & NCBCM Research)

• The Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, says recovery from the ravages of the coronavirus (COVID-19) pandemic is gathering pace, as evidenced by the recent positive economic indicators. 
• He cited, among other things, the 14.2% growth for April to June 2021, and the 93,400 increase in the number of persons in jobs in July. Dr. Clarke said that the growth out-turn for the June 2021 quarter came in way above what anybody would have forecasted, thought or expected. He noted that while it does not recover all the lost output owing to the pandemic, it substantially advances the likelihood of that. 
• Clarke said that the best part about the recovery is that the jobs are returning, describing this development as a big deal. Noting that Jamaica lost approximately 100,000 jobs over four years following the 2008/09 global financial crisis, he said it took us 10 years to get those jobs back. 
• The Minister noted that approximately 150,000 jobs had been lost in the pandemic over four months in 2020, and in 12 months just under 100,000 of those have been brought back, which is surely a sign that the economic recovery is gathering pace. He added that Jamaica is among the leaders in the Caribbean region, as far as the strength, pace and momentum of its economic recovery is concerned. While acknowledging that Jamaica had not yet returned to pre-COVID economic performance, he maintained that there is reason for cautious optimism going forward. 
• Clarke has said that notwithstanding the challenges Jamaica has had with vaccine hesitancy and vaccine supply, economic recovery in Jamaica is under way. He pointed out that leading international agency, S&P Global Ratings, upgraded its outlook for Jamaica from ‘Negative’ to ‘Stable’, in the midst of the pandemic, with a low vaccination rate. The Minister added that today, Jamaica has a credit rating that is effectively unchanged from its pre-pandemic credit rating. Dr. Clarke maintained that the recovery is showing up where it matters most, and that is with people having an income in their pockets, once again, in exchange for the work that they put out.

(Source: JIS News)

• As Guyana moves ahead with the development of its petroleum industry, Vice-President Bharrat Jagdeo said that oil blocks, which remain untouched in some cases, would be up for auction by the third quarter of 2022. 
• Speaking during a press conference at the Arthur Chung Conference Centre on Monday, Vice-President Jagdeo said the government intends to move first towards the enforcement of relinquishment provisions in all oil contracts before auctioning new blocks. 
• Simply put, relinquishment provisions are enforced when a party might no longer be able to deliver on a contract. By adopting an approach which involves the enforcement of relinquishment provisions, authorities would be able to have not just virgin blocks but also relinquished areas for the impending auction.

(Source: CariCRIS)

•  Mexico’s economy shrank in the third quarter after new legislation banning labor outsourcing hit the services industry and coronavirus cases surged. 
• Gross domestic product declined 0.2% from the previous three-month period, compared to the median estimate in a Bloomberg survey of no growth. It’s the first contraction since the second quarter of 2020, when Mexico imposed its harshest set of restrictions to tackle the Covid-19 pandemic. 
• The contraction halts the recovery of Latin America’s second-largest economy, which still has to recoup pre-pandemic levels after suffering its worst recession in almost a century last year. 
• It also complicates plans by President Andres Manuel Lopez Obrador, who has repeatedly said the economy was doing “well” after refusing to stimulate it with additional fiscal spending to help households and companies during the coronavirus outbreak.

(Source: Bloomberg)

• This week, the Federal Reserve is widely expected to announce the unwinding of its monthly bond-buying program, a measure it started to support the economy during the pandemic. However, the bigger story for markets is how the central bank will discuss inflation. 
• That’s because report after report of hotter-than-anticipated inflation has ramped up expectations that the Fed will fight the trend of higher prices by beginning to raise interest rates next year, about six months sooner than the last Federal Reserve forecast. 
• Economists expect the central bank to say after its 2-day meeting concludes Wednesday that it will begin winding down its $120 billion in monthly bond purchases by mid-November or December and end the program entirely by the middle of next year.

(Source: CNBC)

• Oil prices fell on Wednesday as industry data pointed to a big build in crude oil and distillate stocks in the United States, the world’s largest oil consumer, and as pressure mounted on OPEC to increase supply. 
• Brent crude futures fell by 98 cents, or 1.2%, to $83.74 a barrel by 0034 GMT, while U.S. West Texas Intermediate (WTI) crude futures tumbled by $1.32, or 1.6%, to $82.59 a barrel. 
• “Crude oil lower as pressure mounted on OPEC to boost output. U.S. President Biden led calls from major economies for the group to increase production beyond what has already been agreed,” analysts from ANZ said in a note on Wednesday. 
• Crude stocks rose by 3.6Mn barrels for the week ended Oct. 29. Gasoline inventories fell by 552,000 barrels and distillate stocks rose by 573,000 barrels, the data showed, according to the sources, who spoke on condition of anonymity. Data from the U.S. Energy Information Administration, the statistical arm of the U.S. Department of Energy, will be released later on Wednesday. 
• In a sign that high prices are encouraging more supply elsewhere, BP said on Tuesday it will ramp up investments in its onshore U.S. shale oil and gas business to $1.5Bn in 2022 from $1Bn this year.

(Source: CNBC)

• According to Fitch Solutions, the Jamaican economy will rebound slowly in 2021 as tourism moderately recovers but remains below pre-pandemic levels. 
• In the medium term, however, Fitch Solutions expects Jamaica to see stronger economic performance following a reform programme, which will put the country on a more sustainable growth trajectory. 
• After poor economic governance led to two sovereign debt defaults since 2010, Jamaica is now closely coordinating policy with the IMF in a bid to improve its business environment, rein in government spending, diversify its economy and reduce its external vulnerabilities. As a result of recent and upcoming initiatives, Fitch is forecasting that real GDP growth will average 2.6% over the next decade. This remains significantly above the average of just 0.2% over the past 10 years. 
• Following difficult reforms, including streamlining the government and reducing public outlays, Jamaica's fiscal deficit has turned into a modest surplus, and Fitch expects this to continue over the coming decade. Its view for sustained fiscal consolidation is supported by efforts to expand the tax base. Although Jamaica has lowered its corporate tax rate as part of its ongoing efforts to improve the business environment and incentivize investment, the government has worked to simplify its consumption tax framework and eliminate tax breaks for some industries, which will lead to increased revenue over the long term. 
• Better fiscal management on the part of the central government is critical for Jamaica's future, since investors concerned about the country's long-term viability will need assurances that further defaults are not on the horizon. Fitch believes that a political consensus has emerged over demonstrating a firm commitment to more sustainable economic policy, which will underpin progress from a business environment standpoint.

(Source: Fitch Solutions)

• Household spending in Jamaica will remain by far the largest component of economic activity in 2021 (89.8% of GDP in 2019). While Fitch forecasts that annual growth will average 2.3% from 2021 to 2030, relatively weak investment will ensure that household spending will make up a greater part of the economy. 
• Fixed investment currently accounts for approximately 24.6% of GDP, supported by large investments in Jamaica's tourism industry. Tourism and the services sector will remain key drivers of economic growth, with agriculture and manufacturing playing an increasingly important role. 
• Consumption will be supported by structurally lower inflation rates (compared with historical averages) and rising employment. Additionally, programmes aimed at reducing taxes for lower-income households will bolster disposable incomes.
• Fitch expects government consumption as a percentage of GDP to decline moderately over the next decade. The Jamaican government will continue to exercise fiscal restraint, adhering to International Monetary Fund-prescribed policies aimed at reducing the national debt. Government consumption as a percentage of GDP already fell from 16.3% in 2012 to 13.6% in 2019, with further plans to reduce government outlays. 
• Gross fixed capital formation accounted for 24.1% of GDP in 2019. In the medium term, Fitch expects to see a moderate rise in investment as a share of economic output as tax reductions help spur investment, particularly in the tourism sector. 
• That being said, over the long term, structural weaknesses, such as corruption, crime, poor infrastructure and an unskilled labour force, will weigh on investment and reduce its share of the overall economy.

(Source: Fitch Solutions)

• Fitch Solutions expects the Costa Rican economy will grow 3.9% in 2021 and 3.4% in 2022, marking a full recovery from the COVID-19 pandemic, which caused real GDP to contract 4.5% in 2020. 
• Private consumption will lead the economic rebound in Q421 and H122 as COVID-19 risks ebb and inflation remains subdued, though consumption and investment will decelerate from H222 onwards as the government tightens fiscal policy and borrowing costs rise. 
• Fitch notes downside risks to its growth outlook in the short-to-medium term with the main risks being a sudden slowdown in the global economy or if domestic instability in Costa Rica constrains economic activity. 

(Source: Fitch Solutions)

• The Central Bank of Barbados (CBB) revised its 2021 growth outlook to 1%-2% in its 3Q21 review from the 0%-3% estimate in the 2Q21 review. 
• This was one of several downward revisions to the growth forecast this year, with previous estimates as high as 7%-10% at the onset of the calendar year. Economic activity improved 10% Y/Y in 3Q21, reflecting an improving tourism sector and making the second consecutive quarter of positive growth. 
• However, accumulated activity through the first nine months remains 3.2% below the 2020 level. Long-stay tourist arrivals totaled 43k during the quarter, representing a 225% Y/Y improvement but are 72% below the pre-pandemic level. 
• The results are said to point to the process of a return to normalcy for the pandemic depressed tourism industry, with a speedier recovery contingent on the developments in Barbados’ key source markets as well as the vaccination efforts domestically.

(Source: Oppenheimer)