The Oxford Business Group (OBG), a source for global market intelligence, says while share prices have remained broadly flat on the Trinidad and Tobago Stock Exchange (TTSE) in the last couple of years, some optimistic investors believe this is a good time to start taking positions for an eventual recovery.
OBG is encouraged by government plans to divest some state-owned assets, which could lead to new initial public offerings (IPOs) which in turn could stimulate the market. Investors are also expecting increased government bond issuance.
A number of seminal pieces of legislation has served to make the TTSE one of the finest bourses in the Caribbean. The Securities Industry Act of 1981 created the TTSE. The Securities Industry Act of 1995 went on to establish the T&T Securities and Exchange Commission (TTSEC). Then came the Securities Act 2012.
The TTSE trades 38 securities which are the main and most active stocks listed on the exchange. OBG outlines that among those which are most active are six banking companies, three conglomerates – including ANSA McAl and Massy Holdings – nine manufacturing companies, three general trading companies and one firm in the energy sector, T&T NGL.
” The JSE was the world’s top performer in 2015, with its main share price index gaining 96.3%.”
The bulk of trading on the TTSE reflects the largest 15 companies listed, led by Republic Bank Limited (RBL). Total market capitalisation is around US$17.7 billion.
OBG says while the outlook for investors on the TTSE remains muted, the recent performance of the Jamaica Stock Exchange (JSE) is casting a more optimistic light on the TTSE. The JSE was the world’s top performer in 2015, with its main share price index gaining 96.3%.
It continues to lead top equity indexes.
OBG said despite differences in the two economies and their respective capital markets, “T&T market players have been looking to Jamaica for inspiration.”
The market intelligence source states, “Trinbagonian investors nevertheless identify three trends on the JSE that they would like to see more of at home. These are, first, an increasing number of IPOs; second, successful efforts to attract small and medium-sized enterprises (SMEs) to list; and third, innovation, as shown by the launch in 2015 of the Caribbean’s first online retail share-trading platform, designed to attract expatriate Jamaicans living in the US and the UK.”
OBG cites reports that the TTSE, which has failed to increase SME listings, may be getting serious competition from T&T’s commercial banks, which have been “supplying what should otherwise have been equity capital in the form of loans.”
The Cross-Listed Index has been a strong performer with brokers, according to OBG, noting that that Jamaica-based companies tend to have lower P/E ratios and therefore appear well-positioned for future growth. Also, it is suggested that “holding both cross-listed stocks and local-currency Jamaican bank accounts can provide an alternate means to acquire foreign currency, which has become scarce in T&T,” declared OBG.