WEEKLY MARKET ROUND-UP

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1 WEEKLY MARKET ROUND-UP ISSUE NO rd APRIL, 2018 FEATURES LOCAL MARKET REVIEW Local Indices posted negative returns at the end of last week and on a year to date basis. The Trinidad and Tobago Composite Index fell 1.30% or points to close at The All T&T Index decreased by 0.22% or 3.70 points to 1, mainly to the decrease in the share price of Guardian Holdings Limited (GHL). LOCAL FIXED INCOME REVIEW Last week there was no bond activity on the Trinidad and Tobago Stock Exchange Bond Trading Market. Find New Treasury Bill issues summarized below. Local Equity Market Review Last week's trading activity on the First Tier Market strengthened to 890,935 shares being traded with a market value of over $12.09 million. This translates into an improvement of 18.7% and 73.2% in market volume and market value respectively, compared to the prior week. Last week's volume leaders were led by Trinidad Cement Limited (TCL), trading 235, units or 31.37% of market activity followed by JMMB Group Limited (JMMBGL) with 195,831 units (26.09%). Sagicor Financial Corporation Limited (SFC) ranked third,capturing 11.86% of market activity and 88,988 shares traded. Overall market activity resulted from the trading activity of 20 stocks of which 6 advanced, 9 declined and 5 traded steady. Major price movements were experienced by Trinidad Cement Limited (TCL) and NCB Financial Group Limited (NCBFG). TCL closed the week at $2.60, up 3.59% or $0.09 while NCBFG declined 8.07% or $0.48 to end at $5.47. On the TTD Mutual Fund Market, 62,344 CLICO Investment Fund (CIF) units were traded and its unit price closed at $ Additionally, Calypso Macro Index Fund (CALYP) closed at $20.00, down 2.34% or $0.48. Local indices weekly performances: The Composite Index declined by points ( 1.30%) to close at 1, (YTD: 2.93%) The All T&T Index declined by 3.70 points ( 0.22%) to close at 1, (YTD: 2.04%) The Cross Listed Index declined by 3.97 points ( 3.71%) to close at (YTD: 4.98%) All information contained herein is obtained by JMMB Investment Research from sources believed by it to be accurate and reliable. All opinions and estimates constitute the Analyst s judgment as of the date of the report. However, neither its accuracy and completeness NOR THE OPINIONS BASED THEREON ARE GUARANTEED. As such NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS OR COMPLETENESS OF THIS REPORT IS GIVEN OR MADE BY JMMB IN ANY FORM WHATSOEVER. JMMBITT is a member of the JMMB Group and a registered broker dealer with TTSEC.

2 MARKET ROUND-UP 2 Local Economic Review Trinidad and Tobago Q "Over the next two years real economic output is expected to expand in Trinidad and Tobago driven by increased hydrocarbon production and improvements in prices. This will have some spill over benefits for the non-petroleum sector and government coffers. The increase in revenue to the government however will not result in any significant shift in the ratio of petroleum revenues to total revenues. As such no major windfall is anticipated to support government spending on subsidies and transfers, as was the case in the period leading up to The risk to the growth outlook is fairly balanced at this time with the main downside risk being lower than projected hydrocarbon prices. Consensus forecast is pointing to moderate increases over the medium-term. Inflation has subsided and is expected to remain low throughout much of However, as the economy picks up and household income increases, spending on goods and services is expected to rise and push inflation upward. The increase in household spending is expected to be mitigated by cuts in government spending, which will help to put a halt on the inflation momentum. As a consequence, a gradual rise in inflation is expected towards the long-term average. At this point the probability is weighted towards an increase in repo rates. As we have noted overleaf the spread between USD- and TT-dollar investments is negative. With further rate hikes by the US Fed, it places further downward pressure on spreads and raises the risk of capital flight despite the authority s tight grip on investment flows. It is hard to envisage a scenario where the CBTT does not act if policy rates increase by at least 75 bps in the US, which is the consensus forecast in 2018." Source: JMMB Investment Research

3 3 MARKET ROUND-UP JMMB INVESTMENTS Local Fixed Income Review

4 4 MARKET ROUND-UP Regional Economic Outlook DOMINICAN REPUBLIC JMMB Invest Research -Quarterly Update - Q "The Banco Central de la Republic Dominica (BCRD) is projecting real economic growth in the Dominican Republic of 5.5% - 6.5% in The growth outlook is predicated on continued expansion in tourism, construction, exportation from the export zones, and the mining sector. We are forecasting growth of under 5% driven by higher levels of output in the aforementioned sectors. Higher GDP growth in the US buoyed by an increase in consumer spending will contribute to expansion in demand for tourism and goods from the free trade zones. It is envisaged that the current account deficit will fall despite higher oil prices as increased flows are expected from tourism and remittance. Inflows into the capital account, primarily foreign direct investment from the service sector, are likely to offset the deficit leading to accumulation in reserves. Given developments in the external accounts, the outlook is for depreciation of the currency in line with the average over the last three years. This will help to keep exports competitive. The reserve position of the sovereign will allow the BCRD to defend the currency from wild swings in the event of shocks to the external accounts. Having kept the policy rate stable over the last two quarters, upward rate adjustments are expected in keeping with anticipated rate increases by the US Federal Reserve (Fed) to help preserve the external account and to mitigate the risk of volatility in the currency market. Risks to the domestic economy are fairly balanced at this time. A slowdown in economic expansion in the US and by extension the rest of the world could adversely impact growth in tourism and remittance. A continuous rise in oil prices and/or bad weather, especially hurricanes, could negatively affect the terms of trade and the current account, which could feed through into the foreign exchange market and cause volatility." Source: JMMB Investment Research

5 5 MARKET ROUND-UP International Economic Review U.S. ECONOMY 10-year Treasury yield inches towards 3% "Inflation worries are stalking global bond markets last week as commodity prices push higher on a combination of U.S. sanctions, trade dust-ups, and continuing tight oil supplies. CHINA ECONOMY Economic fundamentals are strong "China s economic fundamentals are strong and it has sufficient policy tools to guard against systemic risks, central bank governor Yi Gang said, as the IMF cautioned that the world economy is under threat from trade tensions and heavy debt burdens. With the 10-year Treasury yield close to its 2018 high, investors once again have the 3 percent mark in focus. The breakeven rate signaled by 10-year inflation-linked Treasuries rose to 2.19 percent at the end of work, the highest since In the market, the 10-year Treasury yield was relatively unchanged at percent, with the two-year yield at percent, ahead of a week packed with economic data and new debt supply." Source: Bloomberg In statements carried on the People s Bank of China website, Yi reiterated recently announced measures to open the financial sector, which would be implemented either in the next few months or by the end of this year." The IMF s policymaking committee said on Saturday that a strong world economy was threatened by increasing tension over trade and countries heavy debt burden. Longer-term prospects were clouded by sluggish growth in productivity and ageing populations in wealthy nations." Source: South China Morning Post All information contained herein is obtained by JMMB Investment Research from sources believed by it to be accurate and reliable. All opinions and estimates constitute the Analyst s judgment as of the date of the report. However, neither its accuracy and completeness NOR THE OPINIONS BASED THEREON ARE GUARANTEED. As such NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS OR COMPLETENESS OF THIS REPORT IS GIVEN OR MADE BY JMMB IN ANY FORM WHATSOEVER. JMMBITT is a member of the JMMB Group and a registered broker dealer with TTSEC.