HIGHLIGHTS

Local Equity Markets

• HY2025 Performance:
  • TTCI ↓ 4.2%
  • All T&T ↓ 4.7%
  • CLX ↓ 2.7%
• Performance Drivers:
  • Resilient Earnings
  • Weak Investor Sentiment
• Outlook:

• Economic Normalization

This week, we at Bourse review the performance of the local equity market for the first half of 2025 (HY2025). Despite generally resilient financial performance, the local equity market continues to grind lower, extending its multi-year decline. We consider key factors currently shaping the local equity market and economic landscape and ask the question, “are local stock attractive?” Could positive earnings momentum result in price recovery across the sector, or will investors continue their more cautious approach? We discuss below.

Local Indices Lower

All major indices on the Trinidad and Tobago Stock Exchange (TTSE) recorded a decline at the mid-way point of 2025 (HY2025). The All Trinidad and Tobago Index (All T&T) fell 4.7%, while the Cross Listed Index (CLX), which includes some of the largest publicly traded regional companies, also fell 2.7% during the same period. The Trinidad and Tobago Composite Index (TTCI) decreased 4.2%. MASSY Holdings Limited (MASSY) led trading activity on the First Tier Market for the first half of 2025 with 6.7M shares traded, followed by NCB Financial Group Limited (NCBFG) with a total of 5.0M shares exchanged.

Major Movers

LJ Williams Limited ‘B’ (LJWB) led gains appreciating 66.7% for the quarter, while Unilever Limited (UCL) rose 26.4%. Prestige Holdings Limited (PHL) advanced 14.6%, due to investor interest stemming from the AGL acquisition offer. Guardian Holdings Limited (GHL) increased 12.8% and Point Lisas Industrial Port Development Corporation Limited (PLD) improved 9.8%.

For HY2025, major decliners included National Enterprises Limited (NEL, ↓ 17.4%), Trinidad Cement Limited (TCL, ↓ 18.0%), Guardian Media Limited (GML, ↓ 19.2%), Trinidad & Tobago NGL (NGL, ↓ 24.5%) and Ansa McAL Limited (AMCL, ↓ 29.8%).

 Trade Values Decline

In addition to price levels, trading activity over the Trinidad and Tobago Stock Exchange (TTSE) has been on a continuous decline. HY2025 recorded a total volume of 43.9M shares and a traded value of $351.6M. In terms of trade value, this represented a 1.1% decline over the comparable period in HY2024, and a 61.7% decline from a peak level of $918.6M in HY2021.

While traded volumes increased in HY2025 by 13.1% to 43.9M shares (HY2024: 38.8M shares), this has been largely as a result of greater trading in lower-priced and split-adjusted stocks. Waning activity could be attributed to a combination of economic uncertainty, declining investor confidence and limited capital market opportunities.

Market Capitalization Lower

TTCI overall market capitalization fell from $142.8B in 2021 to $98.0B in HY2025, representing a cumulative decline of approximately 31.4%.

The Banking sector, which constitutes 57% of the total index value on the TTSE, experienced a 30.0% decline from $80.1B in 2021 to $56.0M in HY2025. Other sectors recorded declines over the period including Energy (-82.1%), Manufacturing I & II (-56.3%), Non-Banking Finance (-37.0%) and the Conglomerate sector (-28.0%). Conversely, the strongest performance was recorded by the Trading and Property sector, reflecting growth of 92.8% from $2.8B to a current $5.5B in HY2025.

The repricing of equity markets has brought about a general improvement in valuations on offer at the broader market level.

Aggregate Earnings Resilient

Aggregate earnings for companies listed on the Trinidad and Tobago Composite Index (TTCI) have been broadly resilient in recent years, overcoming the effect of global pandemic, supply chain shocks, commodity market disruptions and general economic sluggishness. Following a peak of $10.1B in FY2022, earnings dipped to $7.6B in FY2023, before rebounding to $9.8B in FY2024. For the first half of 2025 (HY2025), total aggregate trailing 12-month earnings stood at $8.5B, highlighting some degree of resilience in the face of multiple headwinds to financial performance.

 From a value perspective, the market Price-to-Earnings (P/E) ratio declined from a high of 16.8 times in FY2021 to 10.5 times in FY2024, before edging up slightly to a trailing 12-month P/E of 11.5x in HY2025, suggesting that valuations have become more attractive.

Total dividends paid by companies on the TTCI have steadily increased from $3.5B in FY2021 to $4.4B in FY2024, with an estimated $4.0B in HY2025, based on aggregate trailing 12-month dividends per share. The estimated market dividend yield rose from 2.4% to 4.3% over the same period, currently standing at a trailing 4.1%.

The trend highlights stable-to-growing dividend payouts, offering potentially attractive opportunities for income-oriented investors who are also seeking growth opportunities.

Are local stocks attractive?

With the downward trend in local stock prices, investors would naturally be hesitant to consider this asset class for an investment portfolio. Are there any reasons for investors to add stocks to holdings at this time? Here are a few factors to consider.

• Valuations appear attractive. As evidenced by the overall market Price-to-Earnings (P/E) ratio, local stock – on average – appear cheap relative to historical levels. At a more stock-specific level, several blue-chip companies are trading at compelling valuations. As an example, regionally diversified financial services giant Republic Financial Holdings Limited (RFHL) is currently trading at a P/E ratio of 9.1 times, compared to its 5-year average of 14.0 times.
• Compelling dividend yields. Cash flows from most companies to investors have remained – on aggregate – broadly resilient. Banking stock dividends (with Banking being the largest sector of the market) have continued to grow, rewarding investors who have remained in the market. On average, banking sector dividend yields range from 3.5% to 5.9%. Outside of the banking sector, traditional dividend stocks have been less certain, with a few exceptions. On average, however, dividend yields have improved with the repricing of the equity market. For investors, then, there is a reasonably attractive cash yield while awaiting stock price growth. 
• Built-in diversification. Several locally listed stocks offer increasingly diversified risk, both from a geographic and business risk perspective. Massy Holdings Limited (MASSY), for example, operates across broadly diversified business lines including Integrated Retail, Motors and Machinery and Financial Services. From a geographic perspective, MASSY’s profit before tax came primarily from Trinidad and Tobago (33%), followed by Guyana (25%), Barbados (15%), the Eastern Caribbean (11%), Jamaica (8%), Colombia (5%), and the United States (3%). Investors willing to place their faith in a well-established brand such as MASSY, will be buying into a business with ‘off the shelf’ diversification.
• The inflation hedge argument. A less straightforward reason to own stocks is the ability to (at least partially) hedge against the impact of inflation. While this can vary widely across stocks by industry and associated pass-through pricing power, some stocks have the ability to adjust to inflation – whether driven by import costs, foreign exchange movements, interest rates or other factors – and pass these adjustments through to investors through price appreciation and/or dividend flows.
•  Macroeconomic Conditions. Perhaps one of the primary drivers of lower investor sentiment in local stocks, the current macroeconomic environment is one which inevitably tilts investor risk tolerance towards more conservative options. In terms of growth, the IMF projects GDP in Trinidad & Tobago to expand modestly from 1.4% in 2024 to 2.4% in 2025. As an energy-centric economy, lacklustre domestic energy production and a conservative near-term production outlook would influence investor confidence on economic activity.For the period January to March 2025, domestic Natural Gas and Crude Oil production averaged 2.5 billion cubic feet per day (bcfd) (-6.2% year-on-year) and 51.8 thousand barrels of oil per day (bopd) (+3.9% year-on-year) respectively. 
• Lower-Risk Asset Alternatives. Increases in the returns of lower risk investment solutions such as mutual funds, repurchase agreements and bonds have made more conservative asset classes relatively more attractive. This could be causing investors to think twice about stocks, despite more attractive stock valuations and dividend yields.In addition,evolving legislation may be making lower-risk assets more attractive from the perspective of capital adequacy and risk-adjusted returns, particularly for asset managers, insurers and other large institutional investors who are traditionally significant participants across equity markets.

Are stocks right for you?

With the above in mind, stocks can play an important role in generating wealth for investors. For longer-term investors with the willingness and ability to work through economic cycles, the current market may represent an attractive entry point. Lower market valuations reflected in P/E ratios now below their historical averages alongside more compelling dividend yields, have enhanced the investment opportunity for select local stocks.

For investors with a shorter-term outlook and/or more conservative risk profile, stocks should form a less significant part of your investment portfolio. In this case, lower-risk solutions such as Repurchase Agreements (Repos), Fixed NAV mutual funds, fixed deposits and bonds may be better tailored to the needs of conservative investors.

As always, it makes sense to have a conversation with an experienced investment advisor – like Bourse – to help in making the most informed investment decisions.

This document has been prepared by Bourse Securities Limited, (“Bourse”), for information purposes only. The production of this publication is not to in any way establish an offer or solicit for the subscription, purchase or sale of any of the securities stated herein to US persons or to contradict any laws of jurisdictions which would interpret our research to be an offer. Any trade in securities recommended herein is done subject to the fact that Bourse, its subsidiaries and/or affiliates have or may have specific or potential conflicts of interest in respect of the security or the issuer of the security, including those arising from (i) trading or dealing in certain securities and acting as an investment advisor; (ii) holding of securities of the issuer as beneficial owner; (iii) having benefitted, benefitting or to benefit from compensation arrangements; (iv) acting as underwriter in any distribution of securities of the issuer in the three years immediately preceding this document; or (v) having direct or indirect financial or other interest in the security or the issuer of the security. Investors are advised accordingly. Neither Bourse nor any of its subsidiaries, affiliates directors, officers, employees, representatives or agents, accepts any liability whatsoever for any direct, indirect or consequential losses arising from the use of this document or its contents or reliance on the information contained herein. Bourse does not guarantee the accuracy or completeness of the information in this document, which may have been obtained from or is based upon trade and statistical services or other third-party sources. The information in this document is not intended to predict actual results and no assurances are given with respect thereto.”