Issue No. 43

The TT Composite Index closed the month lower driven by declines recorded by the Cross Listed Index, indicating further weak investor sentiment amongst the cross listed stocks. The TT Cross listed Index contracted 0.14% as the share price of NCB Financial Group Limited (NCBFG) and GraceKennedy (GKC) fell by 4.48% and 2.93% respectively. The All T&T index gained 0.15% during February due to increases in Angostura Holdings Limited (AHL) of 14.38% and Prestige Holdings Limited (PHL) of 10.75%. Trading activity on the TT Composite Index was derived from 24 securities being traded of which 8 stocks advanced, 14 declined and 2 held firm.

During the month, Prestige Holdings Limited (PHL) released its year end performance ended November 2023, which saw a 57.8% increase in earnings per share to $0.91.  With the opening of 5 new units, PHL’s revenue rose 20% to $1.3 billion. The Group is expected to pay a final dividend of $0.30 on May 2024.

Local equities continue to display volatility despite some companies delivering strong corporate earnings. During these periods of heightened price fluctuations, investors are reminded that equity investing yields the best results over the long term through its capital growth potential. 

The US equity market continued its momentum for the fourth consecutive month resulting in a 5.17% return in the S&P 500 Index. As the US corporate earnings season continued in February, the reported results of five of the magnificent 7 stocks contributed to the recent equity rally, with NVIDIA appreciating 59.8% YTD on higher than anticipated reported earnings. The S&P 500 Index finished the month at 5,096.27, a new record high. Bloomberg’s 12-month target price for the S&P 500 stands at 5,560.07, an estimated 9.1% growth from February’s close.

January’s Personal Consumption Expenditures (PCE) price index release, the FED’s favoured measure of inflation, matched market expectations which eased the market concerns of an accelerated uptick in U.S. prices and could encourage the FED to begin rate cuts.

In February, commodities delivered mixed performances with crude oil prices trading at US $78.26 per barrel, a month-on-month gain of 3.2%, while natural gas prices saw a negative change due to high inventories and lower heating demand. Gold prices strengthen marginally moving from 2,048.40 to 2,054.70 at the end of February.  Commodity prices are anticipated to show overall stability in 2024 after years of high volatility. However, the risks of changing weather patterns, escalating geopolitical conflicts and rising shipping costs can threaten the cautiously optimistic outlook for the market.

In the local bond market, movements along the January GORTT curve were mixed, with the growth in yields seen on the 3 year to 11 year tenors while yields fell on the longer end of the curve.  The 3-year rate climbed from 3.15% to 3.18% while the 30-year rate moved from 7.66% to 7.63%. Inflation slowed considerably during the latter half of 2023 into 2024. Local headline inflation, measured on a year-on-year basis, softened in January at 0.3% vs 0.7% in December 2023.

The market continues to display a robust demand for fixed income securities.  As anticipated, the National Investment Fund (NIF) 4.50% 2029 bond offering was oversubscribed according to initial reports from the Finance Minister. Market liquidity fell significantly to TT$3.0 billion in January, when compared TT$4.6 billion in December.

International fixed income markets were under pressure this month as investors continued to drive out interest rate cut expectations further into 2024. According to the CME FedWatch tool, the market is signalling a 63.3% chance of a 25-basis point rate cut at the Fed's June meeting with increasing probabilities of rate cuts as the year progresses.

The Bloomberg Global Aggregate index lost 1.3% during February as treasury yields climbed. The US 10-year Treasury yield jumped from 3.99% on January 31^st to 4.25% on February 29^th. When compared to the 2-year treasury yield, spreads have expanded 0.39% during the period. The US Investment Grade corporate spreads, as measured by the CSI BBB Index, moved from 1.35% to close at 1.36% in February. 

Fund of the Month

Scotiabank Global Equity Fund (USD$)

- Equity Investments

- Medium to High Risk

- Capital Appreciation