Issue No.13

For the month ended August 2021, the TT Composite Index rose by 0.64%, led upwards by the Cross Listed Index which increased by 1.33%. The share prices of Jamaica Money Market Group limited (JMMBGL) and National Commercial Bank Financial Group (NCBFG) boosted the return of the index, climbing by 6.44% and 2.88% respectively. JMMBGL’s price was supported by a reported 148% increase in profit after tax for the three-month period ended June 2021. Over ten companies released financial results during the month. MASSY Holdings Limited and Republic Financial Holdings Limited reported improved performance whilst West Indian Tobacco Company and National Flour Mills reported a decline in EPS. The All T&T Index increased slightly, by 0.36% in August 2021, as gains in MASSY Holdings Limited and Trinidad Cement Limited were countered by declines in Prestige Holdings Limited and National Enterprises Limited. During the month 14 stocks increased, 9 declined and 2 held firm.

The Government recently announced an extension of the ‘State of Emergency’ by a further 3 months to November, causing business owners to lament over their restricted operating hours. The reopening of sectors has been slow with some businesses owners announcing permanent closures due the difficulty of operating under restrictions and the stop and start nature of the economy in the past 18 months. Over 30% of the population has been fully vaccinated with a choice of vaccines now easily accessible to all citizens over 12 years old. We continue to encourage persons to vaccinate as further advances in this area should bode positively for increased economic activity.

 In a late August release, Federal Reserve Chair Jerome Powell announced that the Central Bank would likely begin reducing its monthly bond purchases later this year. Interest rate increases however, are not expected in the short term. The Fed is monitoring employment figures, which are still below pre pandemic levels despite increased hiring in the June and July months. Inflation has heated up as global supply chains remain disrupted and demand for goods and services have increased with re-openings. The rampant spread of the delta variant has led to a recent climb in vaccination rates across the US with approximately 74.5 % of adults now have received at least one dose of the vaccine, surpassing the target of 70% set by the Biden Administration.

A strong corporate earnings season continued in August with approximately 88% of the companies on the S&P 500 which released second quarter earnings have beaten analyst expectations. The S&P 500 Index reported a positive return of 2.90% during the month. Financials and Utilities were the top performing sectors during August, returning 5.7% and 3.2% respectively. Eleven sectors increased whilst just one sector, Energy, declined over the month. Investors are trying to predict both the trajectory and impact of the delta variant’s outbreak, as well as the implications of reduced policy support from central banks in upcoming months.