Issue No. 52

The Trinidad and Tobago equity market delivered positive returns in November with the T&T Composite Index recording gains of 2.44% and year to date losses softening to -12.70% vs -14.78% a month prior. This marks the 1^st monthly gain since March 2024, breaking its 8th month losing streak. This recovery was driven by advances from the TT Cross listed Index of 9.17% and the All T&T index of 0.51%.

CIBC Caribbean Bank Limited (CIBC), JMMB Group Limited (JMMBGL) NCB Financial Group Limited (NCBFG) all posted share price increases of approximately 7% or higher on the TT Cross listed Index. The All T&T Index’s growth was due to the climb in Prestige Holdings Limited (PHL), Unilever Caribbean Limited (UCL) and MASSY Holdings Ltd (MASSY) of 12.44%, 9.07% and 6.11% respectively. Amongst the 27 traded securities, 13 stocks made modest gains, while 11 retreated and 3 held firm. The month saw heightened trading activity amongst MASSY Holdings Ltd (MASSY) and NCB Financial Group Limited (NCBFG) during November.

Investors seeking to outperform in the local equity market can seek dividend paying stocks for stable income and focus on value investing in undervalued stocks, which can offer upside potential when the market rebounds. By maintaining a long-term perspective when investing in equities, investors gain from capital growth potential over time.

Following the Republican led Presidential election, the US equity market initially posted a broad based rally, with the Financials Sector gaining 6.2% on the speculation of deregulation. In November, optimisim peaked over US equities resulting in a 5.73% growth, bringing its year to date returns to 26.47%. Continued growth is expected during 2025, despite concerns that new tarriffs may contribute to higher inflation. The S&P 500 closed the month at 6,032.38, up from October’s close of 5,705.45. Bloomberg predicts a 12 month return of 8.6%.

With the final FOMC meeting for 2024 around the corner, there is an anticipation for a further decline in rates as the economy remains buoyant. According to the CME FedWatch tool, the expectation of a 25-basis point rate cut at the December meeting stands at 68.6%.

In November, gold prices lost 3.36%, as investors seeked out risk-on assets while oil prices slipped 1.82% month on month to US$68.00 per barrel. Natural gas prices soared 24.23% month on month to $3.363, the highest recorded price since October 2023.

Yields increased along the October GORTT curve, with no major movements recorded on the 3 month to 2 year tenors. The largest jump in rates was seen on the 7-year tenor where rates moved from 5.09% to 5.23% month and month, followed by the 10-basis point climb on the 8 year tenor to 5.34%.  

Local headline inflation, measured on a year-on-year basis, stood at 0.02% in October vs 0.04% in September 2024. Despite seeing a persistent decline in core inflation, local food inflation rose to 2.4%, the highest in the last 5 months.

Net Official reserves remained relatively stable during the month, closing at $5.6 billion in October, the equivalent of 7.9 months import cover. The market’s liquidity remained robust at $6.3 billion in October, slightly lower than $6.5 billion in September.

In November, the FED continue to lower rates by 25 basis points to a range of 4.50% to 4.75%. Treasury yields narrowed with the 10-year treasury yields moving from 4.28% on October 31^st to 4.18% in November while the 2-year yield fell to 4.13%, 0.03% lower than previous month.

Bond markets, however, gained marginally as investors now turn their focus on the possible Trump’s administration impact on inflation and future rate cuts. The Global Investment Grade market, measured by the Bloomberg Global Aggregate Index, climbed 0.34% while the Investment Grade corporate spreads narrowed further from 1.15% to 1.08% in November.  The US High yield bond market returned 1.15% during the month.

Fund of the Month

Scotia Caribbean Income Fund (USD$)

- Income

- Low to Medium Risk

- Modest Capital Appreciation