Issue No. 47
Markets Wrap
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Local Equities
In June, the local equity market lost -0.82%, marked by declines in all indices for the 3rd 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 2nd 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.
International Equities
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.
Index |
YTD ∆ |
1Yr % ∆ |
S&P 500 |
14.48% |
22.70% |
MSCI ACWI |
10.32% |
17.45% |
ALL T&T |
-5.99% |
-8.95% |
T&T Composite |
-7.11% |
-7.28% |
Rates |
Current |
31-Dec-23 |
GORTT 3M |
1.40% |
1.05% |
GORTT 10Yr |
5.32% |
5.19% |
US 3M |
5.35% |
5.33% |
US 10Yr |
4.39% |
3.87% |
Commodities |
Current |
YTD % ∆ |
Oil (WTI) |
$81.54 |
13.80% |
Nat Gas (HH) |
$2.601 |
3.46% |
Gold |
$2,339.60 |
12.86% |
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Local Fixed Income
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.
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International Fixed Income
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 31st to 4.36% on June 28th while the 2-year yield stood at 4.71%.
Market Highlights
Ratings agency, Moody’s, changed the Government of Trinidad & Tobago's outlook to stable from positive driven by increasing external vulnerability risks as highlighted by the accelerated pace of liquid foreign exchange reserves drawdown observed over the first four months of 2024.
Investment Buzz
An Additional Public Offering (APO) is the subsequent issuance of additional shares after a private company goes public through an initial public offering (IPO). An APO allows the company to raise further capital from public investors or boost capital reserves.
Fund of the Month
Scotia Global Equity Fund (USD$)
- Equity Investments
- Medium to High Risk
- Capital Appreciation
Historical Returns (June 2024)
6 Months |
1-Year |
5-Year |
8.60% |
14.38% |
5.00% |
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Mutual Funds
USD Funds
TTD Funds
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estelle.narine@scotiabank.com
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candice.desormeaux@scotiabank.com
Adesha Gonzales
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adesha.gonzales@scotiabank.com
General Disclosures:
This report has been prepared by Scotia Investments Trinidad and Tobago Limited (“SITT”), a subsidiary of Scotiabank Trinidad and Tobago Limited. It is provided to you, our clients, for information purposes only and may not be redistributed. The information herein is believed to be reliable and includes information from public sources also believed to be reliable. While the objective is to provide information in a fair, clear and non-misleading manner, SITT does not represent or warrant that any information in the report is free from errors or omissions. Opinions and projections in this report are the views of the author(s) as at the date of this report.
The views expressed are subject to change and SITT has no obligation to update, modify or amend this report or to otherwise notify a recipient thereof in the event that any opinion forecast or estimate herein changes or subsequently becomes inaccurate. Nothing contained in this report is or should be relied upon as a promise or representation as to the future. Neither SITT nor any of its officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from the use of this report or any of its contents. The securities discussed in this publication may not be suitable for all investors.
This report is provided to you for informational purposes only. It is not an offer or a solicitation of an offer to buy or sell any securities or to participate in any trading strategy. This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation or particular needs of any specific person. Investors should seek advice regarding the appropriateness of investing in securities and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Nothing contained in this report is or should be relied upon as a promise or representation as to the future. The information in this publication is not intended to predict actual results, which may differ substantially from those mentioned in this report. Scotia Investments Trinidad and Tobago Limited, its directors, or other officers may have a position in, or engage in transactions in any of the securities mentioned herein.