Issue No. 55

The Trinidad and Tobago stock market, gauged by the Composite Index (TTCOMP), recorded an overall decline of 0.31% during February 2025, with both the Cross-Listed Index and the All T&T index slipping 0.40% and 0.27% respectively.

The largest detractor was Unilever Caribbean Limited (UCL), which fell 3.40%, followed by Trinidad and Tobago NGL Limited (TTNGL) declining 3.38% over the month. The month’s top gainers were Prestige Holdings Limited (PHL) and National Enterprises Limited (NEL) with gains of 11.67% and 6.75% respectively. Trading activity on the TT COMP saw 29 securities being traded during February, of which 11 stocks advanced, 11 declined and 7 held firm. Trading activity was dominated by MASSY Holdings Ltd (MASSY), which was the volume leader, followed by JMMB Group Limited (JMMBGL).

While we remain cautiously optimistic of a gradual turnaround in the local equity market, we note that investor confidence may be fragile, given local and international geopolitical developments which may blur the trajectory of economic growth. Given this backdrop, investors are advised to remain focused on their long-term investment goals by adopting a value-oriented and diversified approach to investing. This includes identifying stocks with strong fundamentals, robust management and valuation upside to weather market volatility over their investment horizon.

Volatility within International equity markets continued in February, with news headlines dominated by the Trump administration’s announcement of the imposition of tariffs on Canada, Mexico and China at the beginning of the month. However, soon after the announcement, swift negotiations between the countries encouraged President Trump to postpone the proposed 25% tariffs on Canadian and Mexican imports for 30 days following agreements on enhanced border security measures. Meanwhile, the U.S. imposed 10% tariffs on Chinese imports, prompting Beijing to retaliate with targeted measures. Economic growth and inflationary concerns also remained elevated as an inflation rate of 3% was reported in the United States (U.S) for January, its highest rate in six months and Quarter 4 2024. U.S. Gross Domestic Product (economic activity) grew at an annualized rate of 2.3%, reflecting a slowdown from the 3.1% growth recorded in Quarter 3. The deceleration reflected downturns in investment and exports that were partly offset by an acceleration in consumer spending.

The general risk-off sentiment led the S&P 500 to close down 1.42% for the month, bringing the index’s one-year total return to 18.38% as of the end of February 2025. 6 sectors advanced over the month with 5 sectors detracting. The Consumer Discretionary sector was the largest detractor, declining 9.37%.  

Broadly, commodities produced mixed results in February 2025. Gold rose 0.48% to $2,848.50 while WTI Crude prices fell 3.08%, and natural gas prices gained 24.89%.

The local fixed income market continued to be influenced by rising interest rates. Trinidad and Tobago yield curve movements for February 2025 compared with the month prior were generally mixed, characterised by unchanged short-term rates, declining medium-term rates while longer term rates rose marginally. While we highlight that yields have generally increased from a year ago, with the increases being pronounced on the shorter end of the curve, the pace of these increases has slowed considerably, suggesting that stabilization of local rates maybe on the way.

International Fixed Income markets delivered positive returns during February 2025 as investors rotated into the safety of bonds given the policy and macroeconomic uncertainty within developed markets. The U.S. Fixed Income market gauged, by the Bloomberg U.S. Aggregate Bond Index outperformed with a 2.74% total return to investors, while the Global Investment Grade market, measured by the Bloomberg Global Aggregate Index, returned 2.01%. The 10-year U.S. treasury yield settled at 4.24% and the 2-year yield fell to 3.99% as of the end of February 2025. The U.S. Federal Reserve reiterated its cautious stance amid the hotter than expected inflation report and Trump 2.0 policy uncertainties, however, geopolitical risks and macroeconomic data releases will continue to play a crucial role in shaping the interest rate trajectory for the remainder of 2025. 

Fund of the Month

Scotia Trinidad & Tobago Fixed Income Fund

- Income and Capital Appreciation

- Low to Medium Risk