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Issue No.11
Markets Wrap
Market Highlights
Saudi Arabia and the United Arab Emirates, two key oil producers, have caused OPEC (Organization of the Petroleum Exporting Countries) to halt discussions on oil production. Markets are in limbo and oil is currently surging above $75 a barrel.
Investment Buzz
Inflation is the general rise in the prices of goods and services in an economy. As a result each unit of currency buys fewer goods and services.
Index |
YTD ∆ |
1Yr % ∆ |
S&P 500 |
14.41% |
38.62% |
MSCI ACWI |
11.54% |
37.26% |
ALL T&T |
8.78% |
8.95% |
T&T Composite |
6.00% |
7.02% |
Rates |
Current |
31-Dec |
GORTT 3M |
0.31% |
0.08% |
GORTT 10Yr |
4.79% |
4.68% |
US 3M |
0.04% |
0.08% |
US 10Yr |
1.47% |
0.92% |
Commodities |
Current |
YTD % ∆ |
Oil (WTI) |
$73.47 |
51.42% |
Nat Gas (HH) |
$3.65 |
43.76% |
Gold |
$1,771.60 |
-6.52% |
Local Equities
For the month ended June 2021, the TT Composite Index rose by 1.76%, led upwards again by the Trinidad and Tobago All T&T Index which increased by 2.84%. The share prices of MASSY and Angostura Holdings reported the highest returns, climbing up by 14.64% and 9.93% respectively. Both companies reported improved EPS for the second quarter compared to the prior year. Additionally, Scotiabank reported an increase in profit for their half year results due to a reduction in expenses and impairment losses. The price subsequently rose 4.8% over the one month period. The Cross Listed Index fell by 0.78% in June 2021 as NCBFG, which accounts for 51% of the Index, returned -5.99%. During the month 14 stocks increased, 7 declined and 4 held firm. The government has extended restrictions and curfews, further delaying the start of an economic bounce post Covid-19. The pace of vaccinations has continued at a steady pace with supply on track to facilitate a successful rollout campaign. Approximately 10% of the population have received at least one dose of the vaccine.
International Equities
US investors are of the view that the Federal Reserve will not imminently taper its stimulus program. As a result, the S&P 500 Index reported a positive return of 2.22% in June 2021. Approximately 55% of the population have received at least one dose of the vaccine and there is evidence that the country is well on the way to herd immunity. However, variants of the virus such as the delta variant are still a threat to the recovery. Energy and Technology were the top performing sectors during June, returning 5.8% and 3.6% respectively. Seven sectors declined during the month. The materials sector was the laggard with a return of -5%. Inflation has been at the forefront in the market as producers struggled to meet a surge in demand stemming from rising vaccinations and a general rollback in restrictions. According to the Confidence Board, at the end of June consumer confidence in the US rose from 120 to 127.3, surpassing expectations and achieving a new pandemic high. All signs are pointing to a robust recovery with US Q2 GDP growth forecasted at 6.6% and 2022 GDP growth forecasted at 4.1%.
Local Fixed Income
Short term TTD rates dipped slightly over the month. The 1 year rate moved downwards from 0.54% to 0.52%, significantly lower than a rate of 2.08% a year ago. Throughout the first half of the year demand for plain vanilla GORTT securities remained strong. The corporate bond market remains dormant with little signs of new corporate issues in the next month. Meanwhile liquidity inched upwards over the month and currently stands at approximately TT$7.9BN.
International Fixed Income
US Investment grade corporate spreads, as measured by the CSI BBB Index, fell by 3.71% over the month of June. The US 10 year treasury yield fell from 1.59% on May 31st to 1.47% on June 30th. U.S 10-year treasury yields have been range bound after the surge in Q1 2021.Inflation pressures have increased in the last few months mainly due to supply shortages in several industries. The Fed has made it clear to investors that they expect inflation to prove temporary with price pressures decreasing in 2022.
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General Disclosures:
This report has been prepared by Scotia Investments Trinidad and Tobago Limited (“SITT”), a subsidiary of Scotiabank Trinidad and Tobago Limited. It is provided to you, our clients, for information purposes only and may not be redistributed. The information herein is believed to be reliable and includes information from public sources also believed to be reliable. While the objective is to provide information in a fair, clear and non-misleading manner, SITT does not represent or warrant that any information in the report is free from errors or omissions. Opinions and projections in this report are the views of the author(s) as at the date of this report.
The views expressed are subject to change and SITT has no obligation to update, modify or amend this report or to otherwise notify a recipient thereof in the event that any opinion forecast or estimate herein changes or subsequently becomes inaccurate. Nothing contained in this report is or should be relied upon as a promise or representation as to the future. Neither SITT nor any of its officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from the use of this report or any of its contents. The securities discussed in this publication may not be suitable for all investors.
This report is provided to you for informational purposes only. It is not an offer or a solicitation of an offer to buy or sell any securities or to participate in any trading strategy. This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation or particular needs of any specific person. Investors should seek advice regarding the appropriateness of investing in securities and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Nothing contained in this report is or should be relied upon as a promise or representation as to the future. The information in this publication is not intended to predict actual results, which may differ substantially from those mentioned in this report. Scotia Investments Trinidad and Tobago Limited, its directors, or other officers may have a position in, or engage in transactions in any of the securities mentioned herein.