• 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)

• Brazil’s top four listed lenders are giving months-long extensions for consumers and companies to repay 235 billion reais (US$43.98 billion) in outstanding loans, a move to give financially squeezed borrowers a breathing room.
• The loans subject to forbearance programs, which range from 13% of Banco Santander Brasil SA’s (SANB11.SA) portfolio to 10% of Itau Unibanco Holding SA’s (ITUB4.SA), are an indicator of potential defaults.
• The extensions, granted between March and June, vary from 60 to 180 days, depending on the bank. That echoes the situation at their U.S. cohorts, some of which acknowledge more loans may go bad as forbearance plans expire.

 (Source: Reuters)

• U.S employment growth likely slowed significantly in July amid a resurgence in new COVID-19 infections, which would provide the clearest evidence yet that the economy’s recovery from the recession caused by the pandemic was faltering.
• A $600 weekly unemployment benefit supplement expired last Friday, while thousands of businesses have burned through loans offered by the government to help with wages.
• A labor market relapse would be more bad news for President Donald Trump, who is lagging in opinion polls behind former Vice President Joe Biden, the presumptive Democratic Party nominee for the Nov. 3 election.

(Source: Reuters)

• China’s economy appeared to be gathering pace in July as exports rose the most this year while some raw material imports hit record highs, adding to hopes for a more sustained recovery.
• Exports in July increased 7.2% from a year earlier, the fastest pace since December last year, customs data showed on Friday, confounding analysts’ expectations for a 0.2% drop, and quickening from a 0.5% increase in June. Imports, on the other hand, fell 1.4%, missing market expectations for a 1.0% increase.
• The economy is gradually emerging from a record contraction in the first quarter but the recovery remains fragile as rising coronavirus cases around the world and renewed lockdowns could hit demand.
• Chinese consumer spending also remained subdued amid job losses and concerns about a resurgence in infections.

 (Source: Reuters)