Capital Markets
From The Report: Trinidad & Tobago 2016
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Trinidad and Tobago’s capital markets have developed against a background of strong energy sector growth. Therefore, the current lower price environment for oil and gas is expected to translate into slower and more modest stock market growth in the near term. A total of 38 stocks were traded in 2015 – 20 recorded advances, 13 experienced declines and five held steady – with share prices remaining broadly flat on the T&T Stock Exchange. Though stock exchange activity has been muted in recent years, some optimistic investors believe this is a good time to start taking positions for an eventual recovery. The government is committed to divesting some state-owned assets, which could lead to new initial public offerings and stimulate the market. In the fixed-income segment, increased levels of activity are expected, with government bond issuance set to grow.

Articles from this Chapter

Overview

Moving into position: Market sentiment is generally cautious, although a number of players point to signs for optimism
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Trinidad and Tobago’s capital markets have developed against a background of strong energy sector growth, so the current “lower prices for a longer time” outlook for hydrocarbons prices is expected to translate into slower and more modest growth in the near-term. Share prices have remained broadly flat on the Trinidad and Tobago Stock Exchange (TTSE) in 2015, and the outlook for 2016 is that they will remain the same or contract. Yet some optimistic investors believe this is a good time to…

Analysis

Market offers: New listings seen as a means of absorbing excess liquidity and deepening local capital markets
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Many brokers argue that a steady stream of initial public offerings (IPOs) and new listings will be the key to triggering renewed interest in the Trinidad and Tobago Stock Exchange (TTSE) as a source of capital and investment opportunities. Nancy Chen, an investment analyst at West Indies Stock Brokers (WISE), told OBG, “If we were to have some IPOs come to market, that would help mop up some of the excess liquidity that we have. People look to a new investment to see increased yields. There is…

Analysis

Sovereign bonds: Increased borrowing is on the cards
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The government bond market in Trinidad and Tobago was somewhat subdued in 2015, with no public auctions of TT$-denominated debt taking place. However, as the government embarks on what should be an aggressive domestic borrowing programme in 2016 and the interest rate environment changes, activity could be set to increase markedly. Activity On The Rise Activity on the secondary market was muted in 2015, with the lowest traded value recorded since 2011. The value of bonds traded in 2015 across the Trinidad and Tobago Stock Exchange was just TT$82m – 91% less than the TT$964m traded value in 2014. The low-level activity could be attributed to…

Analysis

Economic adjustments: Equity and debt market dynamics changing due to new measures
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Trinidad and Tobago’s mid-year budget review announced new initiatives by the government to boost revenues, cut expenditures and raise financing to correct the fiscal imbalances brought about by changes in the energy market. Inevitably, many of these initiatives will have consequences for both T&T’s equity and debt capital markets. Equity Market Hurdles Increases to several taxes and duties were announced in April 2016, aimed at raising government revenues. If successfully implemented, these taxes could change the spending patterns of consumers, with knock-on effects for the companies providing the goods and services covered. First,…

Analysis

Stock market matters: Activity remains steady while new issuance looms
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The fiscal year 2015/16 may be remembered as a period offering both risk and opportunity to investors in the Trinidad and Tobago stock market. While the effects of lower energy prices on an oil and natural gas driven economy cannot be ignored, it remains to be seen how capital markets in T&T will react. Strong Performance Trading activity on the Trinidad and Tobago Stock Exchange (TTSE) has been robust, despite an economic slowdown driven by lower energy prices. The value of shares traded in 2015 was, at TT$1.15bn ($177.1m), the highest level recorded in the past five years. As of mid-April 2016, activity for the year seems set to match…