Issue No. 48

The T&T Composite Index fell by 1.27% during July, stemming from a decline in the All T&T Index.The All T&T index returned -2.28% due to declines of 10.45% in MASSY Holdings Limited (MASSY) and 4.05% in Republic Financial Holdings Limited (RFHL). In contrast, the TT Cross listed Index posted an increase of 2.31% led by price gains in NCB Financial Group Limited (NCBFG) and GraceKennedy Limited (GKC) of 9.09% and 5.28% respectively. Trading activity on the TT Composite Index was derived from 27 securities being traded of which 9 stocks advanced, 17 declined and 1 traded firm.

During the month, GraceKennedy Limited (GKC) released its half year financial results ended June 30, 2024. GKC recorded growth in their EPS of 6.2% from J$4.22 to J$4.48.  Subsequently, the company declared a divided payment of J$0.55 payable in September 2024.

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

The S&P 500 rose 1.13% in July, bringing its YTD returns to 15.78%. There was a rotation in sector performance and Utilities, which produced negative returns in June, was a top performer with a return of 7%. Meanwhile the Information Technology sector’s monthly return moved from 3.5% in June to the 0.4% in July. The S&P 500 Index closed the month at 5,522.30, after reaching another all time high of 5,669.67.

The US economy is estimated to have grown 2.8% in Q2 2024, ahead of economists’ estimates and the 1.4% rise reported in Q1. Year over year headline inflation increased 2.5%, in line with expectations and below the 2.6% annual increase reported in May. Investors now expect that the Federal Reserve will begin cutting rate in September due to cooling inflation and solid economic growth.

In 2024 the oil market has largely looked past geopolitical tensions in the Middle East as crude oil supplies have not faced any significant disruption. However, concerns around reducing consumption and a worsening outlook for the global economy led to price declines in the last month. Oil prices dropped 4.45% month-on-month moving from US $81.54 to US $77.91 per barrel. Natural gas prices recorded a 21.72% decline to $2.601 while gold prices gained 3.71%, moving from 2,322.90 to 2,426.50 at the end of July. Analysts are predicting that oil prices will range in the mid to high 70s over the next year.

Short term TT rates continued its upward trajectory, the June GORTT yield curve saw increases across the curve.  The 1-year rate moved 0.35% from 3.05% to 3.40% while the 10-year rate moved to 5.43%, 0.11% higher than the prior month. 

According to data from the Central bank, during the 8 months ended May 2024 the primary debt market recorded 14 bond issues raising $9,178 million. The government was the primary borrower issuing 11 bonds at $8,075 million via private placements while 3 state enterprises financed $1,102.5 million. 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 continues to provide great investment opportunities for investors to reinvest at higher rates.

Global Investment Grade debt, denoted by the Bloomberg Global Aggregate Index, showed growth climbing 2.76% during July while the US Investment Grade corporate spreads, as measured by the CSI BBB Index, was relatively flat at 1.27% compared to 1.28% in June. The 10-year treasury yield softened moving from 4.39% on June 30^th to 4.03% on July 31^st while the 2-year yield ended the month down 0.50% at 4.25%. The spread between the 10-year Treasury yield and the 2-year Treasury yield narrowed to just 0.22% in July.

Fund of the Month

Scotia Caribbean Income Fund (USD$)

- Fixed Income Investments

- Medium to High Risk

- Income and modest Capital Appreciation