CMMB Market Wrap

OECS Market
Eastern Caribbean Gas Pipeline Company Ltd received an equity injection from the Trinidad & Tobago Unit Trust which has undertaken a multi-billion dollar project to supply gas via a pipeline from T&T to several eastern Caribbean islands. The gas pipeline represents an investment of US$550 million and promises to deliver natural gas from Trinidad and Tobago to Barbados, St Lucia, Dominica, Martinique and Guadeloupe, primarily for electric power generation.

ECSE Report
Two financial stocks were active up until midweek. Both Eastern Caribbean Financial Holdings (ECFH) and St Kitts Nevis Bank Limited (SKNB) traded firm on decent volumes. The value of the ECSE All-Share Index stood at 106.10 by mid-week up, no change on last week’s close. There was no activity on the regional governments securities market this week. On the secondary bond market there is demand for Government of St Lucia 10 year bonds at EC$101.80 and Government of St Vincent 10 year bonds at par (EC$100).

Regional Markets
Again a week of mixed performances by the regional equity markets with the Trinidad market reporting a marginal decline while more positive performances were reported from the Jamaican and Barbadian counterparts. The TTSE Composite reported a meager 0.10% return for the period 6th September 2005 to 13th September 2005, closing at 1,065.29, a value last seen in December 2004. A much welcome increase in the number of advancing stocks was also observed during this period. Overall there were 14 stocks declining and 7 stocks advancing. These advances come on the heels of good earnings reports as well as the fact that stocks are now trading at relatively low multiples.
In Jamaica, markets were mixed with the JSE Composite index increasing 0.10% while the JSE Select and All JA Composite remained negative declining 0.73% and 1.33% respectively. Markets may have been reacting in part to reports that the Jamaican economy may face some challenges in terms of bauxite exports as a result of the effects of Hurricane Katrina on the US Gulf states. The Advance Decline ratio was 18:12 with 9 stocks trading firm.
In Barbados, the BSE local index increased by 0.07% with only one stock reporting a movement in price. The sole mover was West India Biscuit Company which increased 8.37%.

International Market Performance
The US market has been awaiting several economic data releases over the period 6th September to 13th September. Weaker than expected retail sales data as well as reports of a manufacturing slowdown in the Philadelphia region in the wake of Hurricane Katrina would have weighed on market sentiment. The S&P index closed down 0.18% while the Dow Jones and Nasdaq increased by 0.08% and 0.23%. European markets were in negative territory as concerns about the impending German election continued to hamper activity. The FTSE reported a decline of 0.40% while the Euro Stoxx was down 0.49%. By far the best performer, Japan’s Nikkei, reported a return of 2.40% for the period under review, as key indicators indicated that confidence among households was improving.

Other News
At a ceremony held recently in London, England, First Citizens Bank received an award from The Banker magazine as T&T’s Bank of the Year 2005. A press release from The Banker stated, “The Banker has chosen First Citizens as the best bank in the country against its competitors, because of its stronger profit growth, better non-performing loans and generally the good story you have to tell.”
In what is possibly the most devastative natural disaster in US history, Hurricane Katrina is estimated to cost the Federal Government as much as US$150 billion to US$200 billion, providing aid for the victims as well as rebuilding costs, according to initial Congressional estimates. This far exceeds the cost that Hurricane Andrew left behind in 1992 and the initial costs of recovering from the 9/11 terror attacks. With over thousands feared dead and the death toll on the rise, the human catastrophe continues to worsen. The disruption in economic activity may reduce real GDP growth in the near term, given the fallout on the tourism sector in New Orleans, where losses are estimated at about $10 billion in annual tourism revenue and dislocation of about 120,000 people. The impact on economic expansion may be aggravated further, given the disruption to oil production and refining capacity. Katrina knocked out about 16% of natural gas production, 26% of crude oil output and 20% of US petroleum refining.
Disclaimer: All information contained in this article has been obtained from sources that CMMB believes to be accurate and reliable. All opinions and estimates constitute the Author’s judgment as of the date of the article; 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 article is given or made by CMMB in any form whatsoever. CMMB and/or it employees or directors may, where applicable, make markets and effect transactions, or have positions in securities or companies mentioned herein. Neither the information nor any opinion expressed shall be construed to be, or constitute an offer or a solicitation to buy or sell.