• 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)

• 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)