Issue No.12

For the month ended July 2021, the TT Composite Index rose by 1.06%, led upwards by the Cross Listed Index which increased by 3.47%. The share prices of Grace Kennedy Limited (GKC) and FirstCarribean International boosted the return of the index, climbing by 13.89% and 4.67% respectively. GKC’s price was propelled by a reported 30.3% increase in profit after tax for the six-month period ended June 2021. Additionally, First Citizens Bank and Guardian Holdings Limited reported improved performance whilst NCB Financial Group reported a decline in EPS due to increased operating expenses and tax charges. 

The All T&T Index increased modestly, by 0.09% in July 2021, as gains in National Enterprises Limited and Prestige Holdings Limited were countered by declines in Republic Financial Holdings Limited and Scotiabank Trinidad and Tobago. During the month 13 stocks increased, 7 declined and 5 held firm. The government has again extended restrictions and curfews, further delaying the start of any economic bounce post Covid-19. Several businesses have closed permanently, and unemployment is rising due to the lengthy lockdown period. There are signs of vaccine hesitancy over the past month with the pace of vaccinations slowing. On a positive note over 400,000 persons have received at least one dose of the vaccine.

Earnings season commenced in the past month causing stocks to rise as investors balanced mixed corporate earnings against the threat to the economic recovery from the spread of the Delta virus variant. US stocks remain at and near all time highs with many believing that a pullback in stimulus will not happen in the short term. The rate of vaccination increased by 16% in the last week of July as restrictions such as mask requirements were reinstated in several states. New York recently announced that entry into restaurants, gyms and leisure events will require proof of vaccination. The S&P 500 Index reported a positive return of 2.27% in July 2021. Health Care and Real Estate were the top performing sectors during July, returning 5.9% and 4.8% respectively. 

Six sectors increased whilst five sectors declined during the month. The energy sector was the laggard, pulling back -9.6%. US Economic fundamentals have been strong, for instance the unemployment rate is expected to decline from 5.9% to 5.7% in July. Year over year personal income grew by 2.3% and consumer spending increased 13.6%. The US economy grew by 6.4% in the first six months of 2021 and has a consensus estimated growth of 6.9% for the second half of the year. However rising fears in the market surrounding the Delta variant could hamper the recovery if governing bodies reverse the opening of the economy.