Issue No. 44

The TT Composite Index closed the month higher driven by increases recorded by both the All T&T Index and the Cross Listed Index. The TT Cross listed Index gained 1.29% as the share price of JMMB Group Limited (JMMBGL) and GraceKennedy (GKC) increased by 7.86% and 2.51% respectively. The All T&T index gained 0.45% during March due to increases in Scotiabank T&T Limited (SBTT) of 1.71% and Ansa Merchant Bank Limited (AMBL) of 4.58%. Trading activity on the TT Composite Index was derived from 27 securities being traded of which 13 stocks advanced, 11 declined and 3 held firm.

During the month, Angostura Holdings Limited (AHL) released its year end performance ended December 2023. The company’s EPS improved from $0.71 to $0.74 boosted by revenue growth across the Caribbean and Latin American markets.

The local equity market has experienced heightened price fluctuations and price declines in the past two years. 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 upward trend for the fifth consecutive month resulting in a 3.1% return in the S&P 500 Index. For the quarter the S&P climbed 10.2%, marking the best start to the year in five years. The Energy sector was the top performer returning 11.8% for the month whilst Healthcare was the laggard at 2.6%.  Investors remained optimistic that the economy is set for a soft landing, in which inflation eases but the economy avoids a severe downturn.

The Leading Economic Index (LEI), which provides an early indication of where the economy is heading in the near term, unexpectedly rose by 0.1% in February. Additionally, GDP was revised higher from a 3.2% gain to 3.4% based on upward revisions for personal and service consumption.

In March crude oil prices traded to US $83.17 per barrel, a month-on-month gain of 6.3%, as reports indicated OPEC production cuts are likely to continue. Meanwhile natural gas prices continued to decline due to high inventories and lower heating demand. Gold prices gained momentum moving from 2,054.70 to 2,217.40 at the end of February.  

The latest data from the Central Statistical Office showed that real GDP increased by 3.6% during the second quarter of 2023 compared with 1.4% in the previous quarter. Yields increased across the GORTT curve during February.  The 5-year rate climbed from 4.23% to 4.30% while the 10-year rate moved from 5.23% to 5.26%.

The market continues to display a robust demand for fixed income securities.  Two major banks, Republic Bank Limited and First Citizens Bank Limited, are set to issue fixed rate bonds within the next two months. These issues are likely to be oversubscribed given the dearth of local corporate securities on the market. Market liquidity increased to TT$4.3 billion at the end of March, when compared TT$3.7 billion in February.

Yields are expected to rise in the short term as strong economic data and sticky inflation cause investors to reassess the likelihood of rate cuts this year. Futures markets are showing that there has been a shift in the expected rate cuts for 2024 from 150 basis points to 70 basis points.

The Bloomberg Global Aggregate index gained 0.55% during March. The US 10-year Treasury yield moved from 4.25% on February 29^th to 4.20% on March 29^th. When compared to the 2-year treasury yield, spreads have expanded 0.42% during the period. The US Investment Grade corporate spreads, as measured by the CSI BBB Index, moved from 1.36% to close at 1.28% in March. 

Fund of the Month

Scotia Canadian Equity Fund (USD$)

- Equity Investments

- Medium to High Risk

- Capital Appreciation