YEAR UNDER REVIEW

The Stock Market recorded an excellent year as investors experienced a continuous bull-run throughout 2003, as share prices reached and in some cases exceeded their intrinsic value.  On the other hand, some  shares having historic low and/or negative earnings experienced unrealistic price increases as they benefited from strong market forces which pushed their prices unrealistically high. Surely, this  tremendous performance by the Stock Market was influenced by the continuing low interest rates that existed throughout the year, thereby causing a shift in investment strategies from the Bond and Money Markets to the Equity Market. As a result, both indices reached new highs and surpassed growth figures of the previous year. The Composite Index which started the year January 2nd at 545.66 points gained 148.57 points to close the year at 694.13, up 27.23 percent.

On the other hand, the All T&T Index January 2nd 654.19 gained 257.78 points to close at 911.97 points, up 39.40%. During the year, three (3) Jamaican companies cross-listed on the Trinidad and Tobago Stock Exchange and have contributed greatly to the increase in volume of shares traded on the local Stock Market. Overall, a total volume of 417,116,593 (2002 - 96,466,062) shares was traded for a value of $2,357,851,204, (2002 - $1,057,273,514). Market Capitalisation at year end reached $67.98 billion or US$10.79 billion. This tremendous performance means that our Stock Market was perhaps the best performing emerging market in the world. In the year 2003, 25 of the 35 securities listed on the Stock Market advanced, 7 declined, while 3 remained unchanged. For the first quarter, the Composite index increased by 18.64 points to reach 564.20 points, up 3.42 percent and the All T&T index rose 34.54 points to 688.73 points, up 5.28 percent. A volume of 121,772,827 shares traded for a value of $285,309,129.
Trading slowed in the second quarter as 58,494,249 shares crossed the floor for a value of $324,877,809. The Composite index slipped 3.84 points or 0.68% to 560.36 points, however the All T&T index inched up 2.37 points to 691.10 points, up 0.34 percent.In the third quarter, the market regained momentum with 83,671,486 shares changing hands for a value of $190,359,469 resulting in the Composite index gaining 39.65 points or 7.08 percent and the All T&T index moving up 68.02 points or 9.84 percent to 759.12. The fourth quarter produced strong activity with 153,178,021 shares traded for 957,34,797. The Composite index rose 94.44 points to reach 694.13, up 15.74 percent, while the All T&T gained 152.35 points to 911.97 points, up 20.14 percent.

STOCK MARKET OUTLOOK 2004

With the year 2003 now behind us, the outlook for the New Year appears to be very promising in terms of the economic growth of Trinidad and Tobago. Government’s initiatives to progress Trinidad and Tobago towards a developed nation status, along with the prospects of an impending boom driven by developments in the energy sector, augers well for attracting foreign investments to Trinidad and Tobago. Employment opportunities are anticipated to come from increased activity in the non-oil sectors and real growth in GDP. Further, it is anticipated that the Construction Industry would produce increased activity this year, as some of Government’s mega projects come on stream. We also expect low interest rates to be maintained in the new year, which in turn will continue to attract investors to the Equity Market as they seek the best possible returns from their investments. The US economy has started showing modest growth and as a result, tourism in the Caribbean is beginning to regain some measure of growth. On the downside, the political and socio-economic climate remain puzzling factors and could spark off activities that may impact negatively on investments in general and the Stock Market in particular. At the present time, however, the Stock Market remains an attractive vehicle for investors seeking medium to long-term growth. The Trinidad and Tobago Central Securities Depository (CSD) which was commissioned on 21 January 2003, has made the market more efficient in the settlement of transactions. This year Stock Exchange is expected to introduce an automated trading platform system which will transform the Stock Exchange into modern times. Bargains will thereafter be struck via an electronic system, thereby removing the manual auction system currently in use.

RECOMMENDATIONS:

RBTT Financial Holdings Ltd. produced a strong performance in their second quarter ended 30th September with Profit attributable to shareholders increasing 37.25 percent in Q2. Operating profit for the six -month period was up 35.22 percent to $366.8 million, of which $227 Million or 62 percent represents profit from operations outside of Trinidad & Tobago. Jamaica and the Dutch Caribbean were the major contributors to the increased profitability from overseas operations. RBTT Profit before tax rose 27.74 percent to $388.9 Million, while Profit after tax increased 39.65 percent to $326.9 Million. The Group posted earnings for the period of 95 cents per share, an increase of 37.5 percent or 27 cents over the corresponding period last year.

NEAL & MASSY HOLDINGS LTD achieved yet another year of solid growth in Operating earnings, as the Group posted $1.90 per share. Operating Profit from Retail and Distribution was up 10 percent, Automotive/Industrial Equipment & Support Services 34 percent, Energy 12 percent, Industrial Gas 7 percent, while the operations in Guyana increased 7 percent. The IT division which produced losses last year, ended this year on a more positive note with a slight profit. Total Operating Profit reached $203.4 million, up 20.7 percent compared with $168.5 million. Profit before tax of $232.5 million, was up 6.3 percent, while Profit after tax grew by 3 percent to $182.9 Million and Profit attributable to shareholders rose 2.8 percent to $169 Million. Management is in discussions with possible joint venture partners in seeking to develop the activities in the Energy sector in order to benefit from developments now taking place in the oil and gas sector.  The Group intends to refurbish and expand three Hi-Lo Food Stores and implement strategies to drive sales and will soon introduce a more price sensitive brand of supermarket. In our view Neal & Massy Holdings is well positioned to achieve sustainable growth in both the medium and long term.