• The All Jamaica Consumer Price Index for June 2020 was 105.2, indicating an inflation rate of 1.4%. This increase was large as a result of the 3.6% increase in the index for the heavily weighted division ‘Food and Non-Alcoholic Beverages’ division
• Higher prices for agricultural products such as Irish potato, yellow yam, carrot, and lettuce for the review period, resulted in the index for the class ‘Vegetables, tubers, plantains, cooking bananas, and pulses’ moving up by 14.4%. There was an increase of 0.5% in the index for the division ‘Clothing and Footwear’.
• For the divisions ‘Furnishings, ‘Household Equipment and Routine Household Maintenance’ and ‘Personal Care, Social Protection and Miscellaneous Goods and Services’ each increased by 0.4%. These increases were however tempered by the decline in the division ‘Housing, Water, Electricity, Gas and Other Fuels’ down by 0.3% and ‘Transport’ down by 0.1%.

(Source: STATIN)

• In the latest release of result from Access Financial Services Limited, the company reported an 80.0% (or $131.98Mn) contraction in unaudited net profits for the three months ended June 30, 2020. Net profits fell to $33.01Mn (EPS: 12¢) from $164.98Mn (EPS: 60¢) reported in the same period one year prior.
• This outcome was primarily driven by a 15.5%% (or $56.21Mn) decline in net interest income, a 32.9% (or $48.71Mn) fall in net fees and commission on loans, and a $20.11Mn increase in tax expenses.
• The stock has fallen 22.0% since the start of the calendar year. AFS closed Monday’s trading session at $26.90 and currently trades at a P/E of 37.4x earnings, which is below the Junior Market Financial sector average of 43.3x earnings.

 (Source: AFS Financials)

• The Grenadian economy will severely contract in the coming quarters as the Covid-19 pandemic undermines tourism, commercial activity, and investment.
• In the longer term, the country's fiscal space, investment pipeline, and competitive services sector will support an economic rebound beginning in 2021.
• Fitch Solutions have revised their 2020 and 2021 real GDP growth forecast to -13.7% y-o-y and 5.2%, from -4.7% and 2.6% previously, as the pandemic depresses external demand for overseas travel in the near term. In 2021, Fitch expects base effects, and stronger investment will support headline growth.

(Source: Fitch Solutions)

• Fitch Solutions believe Argentina will secure a deal to renegotiate its external debt obligations over the near term.
• Even with a debt deal secured, it is expected that the government's strained relationship with its creditors and lack of a plan to restore economic stability will remain barriers to its market access.
• Additionally, Fitch expects the IMF will push the government to develop a macroeconomic plan before agreeing to any new concessions to assist the government.

(Source: Fitch Solutions)

• One of the world’s major credit-rating companies fired a warning shot regarding the U.S.’s worsening public finances, just as lawmakers in Washington contemplate spending more to combat the economic fallout from the coronavirus pandemic.
• Fitch Ratings revised its outlook on the country’s credit score to negative from stable, citing a “deterioration in the U.S. public finances and the absence of a credible fiscal consolidation plan.” The country’s ranking remains AAA.
• “High fiscal deficits and debt were already on a rising medium-term path even before the onset of the huge economic shock precipitated by the coronavirus,” Fitch said. “They have started to erode the traditional credit strengths of the U.S.”

 (Source: Bloomberg)

• Japan’s economy shrank an annualized 2.2% in January-March, unchanged after a second revision, data from the Cabinet Office showed on Monday. The additional revision for the gross domestic product (GDP) compared with economists’ median forecast for a 2.8% contraction in a Reuters poll.
• On a quarter-on-quarter basis, GDP shrank 0.6%, also unchanged from the second preliminary reading and compared with a median forecast for a 0.7% fall.
• The government published additional revisions to GDP for the January-March quarter reflecting revised capital spending data from the finance ministry, which had initially drawn fewer respondents than usual due to coronavirus-related disruptions.

 (Source: CNBC)

• For the three months ended June 30, 2020, Lasco Manufacturing Limited reported an unaudited net profit of $341.81Mn (EPS: 8¢), up by 21.0% (or $59.39Mn) when compared to the same period in the prior year.
• This performance was driven by a 3.4% (or $60.76Mn) increase in revenues, a 5.8% (or $19.26Mn) reduction in operating expenses, and a 49.3% (or $15.79Mn) decline in finance costs.
• Since the start of the year, the company’s stock price has fallen 19.4% to close trading at $3.78 on Wednesday, July 29, 2020. The stock currently trades at a P/E of 15.2x earnings, which is below the Junior Market Manufacturing Sector Average of 21.6x earnings.

(Source: LASM Financials)

• Lasco Distributors Limited reported an unaudited net profit of $258.02Mn (EPS: 7¢) for the three months ended June 30, 2020, which represents 57.4% (or $94.11Mn) increase relative to the corresponding period in 2019.
• This favorable outcome can be attributed to an 8.4% (or $366.23Mn) increase in revenue, a 38.9% (or $20.48Mn) increase in other operating income, and a 10.2% (or $73.79Mn) decline in operating expenses. These improvements countered the 9.6% (or $334.70) hike in the cost of goods sold.
• The stock price has fallen 3.1% since the start of the year, closing Wednesday’s trading session at $3.12. At this price, the stock trades at a P/E of 13.4x earnings, which is below the Junior Market Distribution Sector Average of 19.9x earnings.

(Source: LASD Financials)

• Fitch Solutions expects that the Mexican government’s recent pension reform proposal will be approved in the months ahead, increasing required employer contributions and reducing weeks of contributions of workers.
• While this proposal will increase the costs of employing formal workers, it has backing of the business community and is less radical than some had feared, which will support investor sentiment.
• The proposal is also a political victory for Mexican President Andrés Manuel López Obrador, though pressures stemming from Covid-19 and security issues will limit any boost in his political capital.

(Source: Fitch Solutions)

• Fitch Solutions has revised its 2020 real GDP growth forecast for Panama to -6.4% y-o-y, from -2.9% previously, to reflect the impact of Panama’s extended lockdown measures on economic activity.
• Extended shutdowns of major sectors of the Panamanian economy will contribute to a significant decline in private consumption over the coming months. Furthermore, fiscal stimulus measures will be insufficient to offset the COVID-19-induced fall in demand over the short term.
• The risks to Panama’s economic outlook are skewed heavily to the downside, as sustained Covid-19 lockdowns into Q4 2020 could delay a recovery in key sectors of the economy.

(Source: Fitch Solutions)