• President David Granger’s refusal to concede the March 2020 election and leave office will heighten political risks in Guyana in the coming weeks.
• While Fitch’s core view remains that Granger will eventually step down and allow the opposition People’s Progressive Party/Civic (PPP) to assume control of the government, they note the possibility of increased sanctions by the US and other governments if Granger remains in power.
• Fitch Solutions has revised Guyana’s score in the Short-Term Political Risk Index to 48.0 out of 100, from 54.3 previously, as the government’s refusal to verify the election results or leave the office to underpin the possibility of political violence.

(Source: Fitch Solutions)

• Fitch Ratings has affirmed Banco Atlantida, S.A.'s (Atlantida) Long-Term (LT) Issuer Default Ratings (IDRs) at 'B+', and revised the outlook from stable to negative.
• Fitch also placed both Inversiones Atlantida’s (Invatlan) LT and ST IDRs, each at 'B', and the US$150Mn senior secured notes 'B'/'RR4' on Rating Watch Negative (RWN).
• The negative outlook on Atlantida LT IDRs reflects the increased downside risks from the economic implications of the coronavirus pandemic. Fitch believes that although the ultimate impact of the weaker economic conditions is yet unclear; this could materially affect the banks' financial performance.
• Invatlan's RWN reflects the delay in the delivery of the audited 2019 financial information due to operational issues with the external auditor derived from the pandemic, according to management.

(Source: Fitch Ratings)

• Unemployment benefits would be cut by nearly half in a new plan proposed by Senate Republicans. The policy would replace a $600-a-week federal boost, which lapsed over the weekend in all states, with a reduced benefit of $200 a week.
• The plan would pay the new $200 subsidy through September. In October, that would be replaced by a different formula capping total state and federal jobless benefits at 70% of lost wages.
• That amounts to a 43% cut in total benefits when compared with the prior, $600-a-week policy, a temporary measure enacted in March under a federal relief law. The proposal would impact nearly 32 million Americans currently receiving unemployment benefits — about five times the level of the Great Recession more than a decade ago.

(Source: CNBC)

• New orders for key U.S.-made capital goods increased by the most in nearly two years in June and shipments accelerated, but the gains were likely insufficient to avert the deepest plunge in business investment and economic activity since the Great Depression in the second quarter because of the COVID-19 crisis.
• Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, jumped 3.3% last month, the Commerce Department said. That was the biggest increase in these so-called core capital goods orders since July 2018 and followed a 1.6% rise in May.
• The improvement in manufacturing reported by the Commerce Department on Monday was driven by pent-up demand following the reopening of businesses.

 (Source: CNBC)

• The Jamaican dollar (JMD) will depreciate over the coming months due to a widening current account deficit and loose monetary policy.
• In the long term, Fitch expects the JMD to weaken steadily as a slow economic recovery weighs on investors’ expected returns and the Bank of Jamaica (BOJ) continues to reduce its participation in the foreign exchange market.
• Fitch revised its 2020 forecast average to JMD144.0/USD, from JMD139.3/USD previously, and its 2021 forecast to JMD149.0/USD, from JMD143.2/USD.

 (Source: Fitch)

• The Short-Term Political Risk Index score for the Dominican Republic of 67.0 out of 100 is now higher than last quarter's score of 65.9. While the election of opposition candidate Luis Abinader in the July 2020 election represents a change in power from the ruling Partido de la Liberación Dominicana (PLD), this shift poses little risk to policy continuity.
• In addition, Abinader's party, the Partido Revolucionario Moderno (PRM), secured majorities in both houses of Congress, which will support policymaking.
• The Dominican Republic scores well in almost every sub-component, yet its score in the 'social stability' sub-component remains below the regional average. This is primarily due to a high level of inequality, persistent tensions with the Haitian migrant community and perceived impunity for government officials accused of corruption.
• Risks to social stability have increased this quarter due to the Covid-19 pandemic, which will push unemployment higher and may cause public unrest in the near term.  

(Source: Fitch)

• The impact of the coronavirus pandemic on Latin America's economic growth and public finances continues to put pressure on sovereign credit profiles, Fitch Ratings says in a new report.
• This is reflected in the high proportion of sovereign ratings on Negative Outlook in the region, even after a number of downgrades this year.
• The proportion of Latin American sovereigns on Negative Outlook has almost doubled since end-2019 to about 70% (excluding those rated 'CCC' or below, where Fitch does not assign Outlooks).
• The region has become the new hotspot for the pandemic, having initially recorded far fewer COVID-19 cases than affected countries in Europe and Asia.
• Despite some recovery in commodity prices (especially copper), Fitch has continued to revise down 2020 GDP forecasts for the region and its largest economies to reflect weak incoming data, the extension of lockdowns in some countries, difficulty in easing social distancing measures, and the risk of prolonged economic pain where attempts to contain the virus have been less effective.

(Source: Fitch)

• China’s Foreign Ministry announced Friday it is revoking the license for the U.S. consulate general in the southwestern city of Chengdu.
• The consular covers the autonomous region of Tibet, the municipality of Chongqing, and the provinces of Sichuan, Yunnan and Guizhou.
• The announcement came after the U.S. ordered China to close its consulate in Houston, citing efforts to protect American intellectual property and the private information of its citizens.

(Source: CNBC)

• Concerns that the U.S. economic recovery may be faltering sent a chill through global markets, hitting risk assets and supporting havens.
• The yield on the U.S. 10-Year Treasury note fell to 0.56%. It has only ever closed below that level once, back in April. Gold futures, however, failed to break through the $1,900 level for the second day in a row.
• The move was triggered on Thursday by a combination of a rise in weekly initial jobless claims and a fresh delay to the announcement of Republican plans for the next package of stimulus measures. These will now only be published next week, according to Senate Majority Leader Mitch McConnell.

(Source: Investing.com)

• For the three months ended May 31, 2020, Caribbean Cream Ltd. (KREMI) reported a 31.2% (or $6.43Mn) increase in net income relative to the corresponding period in 2019. Net Profit rose from $20.62Mn (EPS: 5¢) in 2019 to $27.06Mn (EPS: 7¢) in 2020.
• This favorable result was largely due to a 2.9% (or $12.31Mn) increase in revenue, a 1.9% (or $2.05Mn) decline in administrative and selling & distribution expenses as well as a 44.4% (or $2.69Mn) fall in finance cost.
• The stock price has fallen 1.9% since the start of the calendar year and closed Monday’s trading session at $3.54. At this price, the stock currently trades at a P/E of 22.1x earnings, which is above the Junior Market Manufacturing Sector Average of 21.9x.

(Source: KREMI Financials)