Issue No. 58

During May 2025, the Trinidad and Tobago (T&T) stock market, gauged by the Composite Index (TTCOMP), recorded an overall decline of 0.23%. The index of All T&T (TTALL) stocks declined 0.14%, while the Cross-Listed Index (TTCROSS) slipped 0.49%.

The largest detractor was ANSA McAL Limited (AMCL), which fell 12.71%, followed by Trinidad Cement Limited (TCL) declining 8.84% over the month. The month’s top gainers were Trinidad and Tobago NGL Limited (TTNGL) and Unilever Caribbean Limited (UCL) with monthly gains of 9.69% and 8.25% respectively. Trading activity on the exchange saw 27 securities being traded during May 2025, of which 14 stocks advanced, 10 declined and 3 held firm. Trading activity was dominated by NCB Financial Group Limited (NCBFG), which was the volume leader, followed by MASSY Holdings Ltd (MASSY).

Locally, the economic outlook is subdued, as natural gas production remains muted, foreign exchange challenges are ongoing and the new Government Administration implements policies regarding the economy and social objectives. Given the uncertainty and accompanying volatility that may persist in the short-term, our approach to local equity investing is based on fundamental research with a long-term view of the resilience and potential of select local equities. 

The performance of the international markets was characterised by a broad rotation back into risk assets, as equities rallied following the partial rollback of tariffs announced on Liberation Day. The risk-on rally drove the Information Technology sector, which led the S&P 500 Index to a gain of 6.3% over the month. Global equities also finished the month strong with a total return of 5.81% over May 2025 gauged by the MSCI All Country World Index. 

Easing in trade tensions helped to reduce recession fears and supported a rebound in market sentiment. Within the United States, ‘hard’ inflation data showed signs of cooling further. The consumer price index, which measures the costs for a broad range of goods and services, rose a seasonally adjusted 0.2% for the month, putting the 12-month inflation rate at 2.3%, its lowest since February 2021. However, the new U.S. import taxes, in combination with other countries’ retaliatory measures and an overall sense of elevated policy uncertainty, are likely to weigh on global economic growth prospects. Currently, the forecasters believe that global GDP will expand by 2.7% for the year which is down from the 3.1% level expected by this same group six months ago. This compares to longer-term average growth for the world economy at closer to 3.4%.

Commodities produced mixed results in May 2025, as Gold fell 0.6% to $3,289.25 while WTI Crude prices and natural gas prices rose 4.4% and 3.6% respectively on the progress on trade negotiations.

The local fixed income market continued to be characterized by elevated rates over the 1-to-3-year term segments. Over the month of May 2025, the Trinidad and Tobago yield curve moved downward along the 12-to-14-year time-horizons. Yields have generally increased from a year ago, with the increases being pronounced on the shorter end of the curve.

International Fixed Income markets experienced another volatile month and posted negative results within aggregate indexes. Lingering concerns related to the potential inflationary impact of pending tariffs, economic growth and fiscal concerns in the United States (US) weighed on the interest rate environment over the month. May 2025 was another volatile month for US Treasuries. On Friday 16^th May 2025, Moody’s downgraded the U.S.’s rating by one notch from the pristine Aaa rating to Aa1. This move reinforced investor’s growing worries over the nation’s fiscal outlook as Capitol Hill debates even more unfunded tax cuts. The Bloomberg United States Aggregate Bond Index ended the month down 0.72%, while the Global Investment Grade market, measured by the Bloomberg Global Aggregate Index, ended 0.36% in the red.

While market fundamentals remain strong, US trade policy has weakened market sentiment causing uncertainty and volatility to rise materially. The path markets will take is highly dependent on the direction of trade policy developments. Overall, yields remain attractive from both income and potential capital appreciation perspectives.

Fund of the Month

Scotia Canadian Equity Fund (USD)

- Capital Appreciation

- Medium to high Risk