Issue No. 47

In June, the local equity market lost -0.82%, marked by declines in all indices for the 3^rd consecutive month. The All T&T index slid -0.93% due to the double-digit decline of -15.67% in the West Indian Tobacco Company Limited (WCO) while National Flour Mills Limited (NFM) eroded -8.89% in June. The TT Cross listed Index also posted a marginal decline of -0.43% led by price contractions in GraceKennedy (GKC) and JMMB Group Limited (JMMBGL) of -4.26% and -0.82% respectively. Trading activity on the TT Composite Index was derived from 26 securities being traded of which 8 stocks advanced, 17 declined and 1 held firm.

During the month, First Caribbean International Bank Limited (FCI) released its half year financial results ended April 30, 2024. FCI generated a 5.1% growth in total net income to USD $152.02 million during period, resulting in an EPS of USD $0.095, 7.9% higher than the USD $0.088 EPS recorded in April 2023. FCI provides investors with access to USD currency through its quarterly dividend payments. The Group is expected to pay its 2^nd quarterly interim dividend of US$0.0125 per share payable to shareholders on July 19, 2024.  

Investors are reminded that equity investing yields the best results over the long term through its capital growth potential. 

The US equity markets continued posting gains and bolstering past previous market highs. In June, the S&P 500 was up 3.47%, bringing its YTD returns to 14.48%. To close the month, gains were recorded from 5 of the 11 S&P 500 sectors. The Information Technology sector led monthly returns with a 3.5% uptick while the materials sector struggled, generating the largest monthly loss of -4.2%. The S&P 500 Index closed the month at 5,460.48, after reaching another all time high of 5,487.03.

Target prices continued its upward trajectory on the heels of improving economic data. Bloomberg’s 12-month target price for the S&P 500 now stands at 5,969.86, an estimated 9.3% growth is expected to be fuelled by recovery from the energy, consumer discretionary, health care and communication services sectors.

OPEC+ extended its oil production cuts in June, of approximately 3.66 million barrels a day until the end of 2025 while continuing its cuts of 2.2 million barrels a day for three months until the end of September 2024. The market responded favorably to this news as oil prices soared 5.91% month-on-month moving from US $76.99 to US $81.54 per barrel. Natural gas prices recorded a 0.05% gain of $2.601 while gold prices strengthened marginally, moving from 2,322.90 to 2,322.90 at the end of June. 

With short term TT rates continuing its upward climb, the May GORTT yield curve saw a significant jump in the 1 year and 2-year rates to record highs.  The 1-year rate moved 0.76% from 2.29% to 3.05% while the 2-year rate moved to 3.25%, 0.69% higher than the previous month. 10-year yields rose marginally to 5.32%. This upward trend in TT interest rates is expected to continue until the gap between the short-term TTD and the USD local rates tightens. On the longer end of the curve, rates compressed with the largest decline in rates recorded on the 30-year timeline, which moved from 4.48% to 4.43%.

The market continues to display a robust demand for fixed income securities, with corporate and government issues gaining healthy traction from investors. The climbing interest rates environment provides great investment opportunities for investors to reinvest at higher rates.

Global Investment Grade debt, denoted by the Bloomberg Global Aggregate Index, showed slowing growth climbing 0.14% during June while the US Investment Grade corporate spreads, as measured by the CSI BBB Index, widened month on month to 1.28%. The 10-year treasury yield softened moving from 4.51% on May 31^st to 4.36% on June 28^th while the 2-year yield stood at 4.71%.

Fund of the Month

Scotia Global Equity Fund (USD$)

- Equity Investments

- Medium to High Risk

- Capital Appreciation