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Issue No.10
Markets Wrap
Market Highlights
Agostini’s Limited announced the purchase of 100% of the outstanding shares of Process Components Ltd, a supplier of industrial, oilfield and energy related products. This marks the company’s third acquisition for the year.
Investment Buzz
Liquid assets or investments are those which can be cashed in or sold quickly. Cash and Money Market Funds are the most liquid of assets whilst tangible assets, such as real estate, are less liquid.
| Index |
YTD ∆ |
1Yr % ∆ |
| S&P 500 |
11.93% |
38.76% |
| MSCI ACWI | 10.95% |
39.69% |
| ALL T&T |
5.78% |
8.01% |
| T&T Composite |
4.17% |
7.13% |
| Index |
YTD ∆ |
1Yr % ∆ |
| GORTT 3M |
0.26% |
0.08% |
| GORTT 10Yr | 4.78% |
4.68% |
| US 3M |
0.00% |
0.08% |
| US 10Yr |
1.59% |
0.92% |
| Commodities |
Current |
YTD % ∆ |
| Oil (WTI) |
$66.32 |
36.69% |
| Nat Gas (HH) |
$2.99 |
17.61% |
| Gold |
$1,902.50 |
0.50% |
Local Equities
For the month ended May 2021, the TT Composite Index climbed by 3.48%, led upwards by the Trinidad and Tobago All T&T Index which increased by 5.23% as the share prices of NGL and GHL increased by 39.31% and 27.40% respectively. NGL’s Q2 earning per share increased by over 600% following a recovery in natural gas liquid prices whilst GHL’s share price moved upwards on news of the group’s listing on the Jamaica Stock Exchange. Additionally, over the month AGL reported improved profits stemming from a reduction in finance costs. The Cross Listed Index fell by 0.44% in May 2021 as FCI and JMMBGL returned -6.15% and -2.23%, respectively. During the month 8 stocks declined, 16 increased and 1 held firm. The TT government has tightened COVID restrictions and implemented additional curfews, further prolonging the start of a post pandemic economic bounce. As such, any improvement in short term company performance will be dependent on the pace of vaccinations and the removal of restrictions. The Government recently announced the successful procurement of a large number of vaccines, thereby providing hope that a successful rollout campaign will take place over the next three months.
International Equities
Better than expected economic data and a strong earnings season drove the US stock market upwards during May. Also, fiscal support remains and members of the Fed have reiterated that they believe the economy is still on the mend from the coronavirus and thus any tightening of current accommodative policies is not likely this year. Retail sales in May 2021 were 51.2% above its May 2020 figure and unemployment fell from 6.1% in April to 5.8% in May. However, volatility in the energy and technology sector and rising COVID-19 cases in some parts of the world offset some of the gains in the equity market. Energy, Materials and Financials were the top performing sectors during May, returning 6.7%, 5.2% and 4.6% respectively. The Utilities sector was the laggard with a monthly return of -2.0%. A rally is likely throughout the year in those sectors tied to the U.S economic recovery. Global growth remains reliant on countries’ access to sufficient vaccines and the speed of the vaccination rollout
Local Fixed Income
Short term TTD rates were again stable over the month. The 1 year rate remained at 0.54%, significantly lower than a rate of 2.08% a year ago. Strong demand for bonds continued in May, in particular demand for plain vanilla GORTT securities. New corporates weren’t issued during the month as the corporate segment of the bond market remains mostly dormant. Short term rates are expected to inch upwards in upcoming months. Meanwhile liquidity currently stands at approximately TT$7.4BN.
International Fixed Income
US Investment grade corporate spreads, as measured by the CSI BBB Index, fell by 0.94% over the month of May. The US 10 year treasury yield fell from 1.63% on April 30th to 1.59% on May 31st, after a peak of 1.74% on March 31st. The spread between the 2 year and 10 year Treasury yields narrowed, closing the month at around 144 basis points. Higher inflation sparked a debate on when the Fed will start increasing interest rates. Fed officials have been trying to placate inflation fears by talking up growth and downplaying price risks.
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General Disclosures:
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