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Issue No.9
Markets Wrap
Market Highlights
Canada has become the first country to approve the use of the Pfizer Inc. vaccine for children as young as 12. Also, the U.S Chief Medical Advisor has now advised that the country is likely to issue emergency authorization for the use of the shot on children in the near future.
Investment Buzz
An ETF is a type of investment fund which tracks an index, sector, commodity or asset group. It can be purchased or sold throughout the day on stock exchanges. ETFs can contain a variety of investments including commodities, stocks or bonds.
| Index |
YTD ∆ |
1Yr % ∆ |
| S&P 500 |
11.32% | 43.56% |
| MSCI ACWI | 8.60% | 43.47% |
| ALL T&T |
0.52% | 6.60% |
| T&T Composite |
0.66% | 5.15% |
| Index |
YTD ∆ |
1Yr % ∆ |
| GORTT 3M |
0.20% |
0.08% |
| GORTT 10Yr | 4.76% |
4.68% |
| US 3M |
0.00% |
0.08% |
| US 10Yr |
1.63% |
0.92% |
| Commodities |
Current |
YTD % ∆ |
| Oil (WTI) |
$63.58 | 31.04% |
| Nat Gas (HH) |
$2.93 | 15.44% |
| Gold |
$1,767.70 |
39.68% |
Local Equities
For the month ended April 2021, the TT Composite Index declined by -0.86%, led downwards by the Cross Listed Index which decreased by -2.8%. The share prices of NGL and AGL decreased by -10.8% and -6.7% respectively as investors lacked confidence in a local economic recovery. Over the month GKC and AHL reported improved profits whilst FIRST reported declining income and profitability. The Cross Listed Index fell by -2.8% in April 2021 as FCI and NCBFG returned -6.47% and -2.24%, respectively. During the month, 11 stocks declined, 11 increased and 3 held firm. The government recently announced new restrictions which lead to the closure of several business sectors for a period of three weeks. In light of these restrictions business earnings will likely be compressed in the short term. We do not expect a significant change in company performances until a large segment of the population is vaccinated and restrictions are lifted. Growth is still projected for 2021 but it remains dependant on the ability of the government to procure more vaccines and conduct a successful rollout campaign.
International Equities
In the past few months extensive fiscal support has led to an increase in individual consumption, business investment and government spending. These factors along with the vaccine rollout have fueled economic activity and growth. As at May 5th 106 million people or 32% of the U.S population were vaccinated. Stocks posted robust returns, with more than three quarter of the companies in the S&P 500 beating analysts’ earnings expectations. Real Estate, Consumer Discretionary and Financials were the top performing stock during April, returning 7.3%, 6% and 6% respectively. The Energy sector was the laggard with a monthly return of 0.3%. Further indicators of strong economic activity were higher home sales, high growth in the manufacturing index, significant job creation and growth in retail sales. Overall long term growth is expected as a result of a successful vaccination campaign, accommodative monetary policy and fiscal support. However, globally the uneven pace of vaccine campaigns threatens a synchronous global recovery.
Local Fixed Income
Short term TTD rates were stable over the last month. The 1 year rate remained at 0.54%, significantly lower than a rate of 2.08% a year ago. High demand for bonds is expected in 2021 with oversubscription likely for plain vanilla GORTT securities. Despite the low interest rate environment new corporate bonds weren’t issued during the month. We continue to expect short term rates to trend higher in the short term as system liquidity, which currently stands in excess of TT$8.1BN, has trended downwards year to date.
International Fixed Income
US Investment grade corporate spreads, as measured by the CSI BBB Index, fell by -0.87% over the month of April. The US 10 year treasury yield fell from a 1 year high of 1.74% on March 31st to 1.62% on April 30th. The pace of inflation remains in focus for investors as they evaluate the latest fiscal package and the expected spending from pent up demand. The consensus forecast is for inflation to average around 2% for the year.
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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.