IN the first six months of 2010, the Trinidadian and Jamaican equity markets showed signs of improvement, while the Barbados market continued its decline from last year.

The T&T Composite and All T&T Indices increased 7.82 per cent and 6.25 per cent, respectively. Locally, the indices would have benefited from the strong performance of seven of the top 10 companies by market capitalisation. It should be pointed out that the T&T Composite Index peaked at 9.27 per cent on June 7 and has since retreated to the current level. In Jamaica, the JSE Main Index fell early in the first quarter as some level of uncertainty arose with the implementation of the Jamaican Debt exchange (JDX) programme and the IMF intervention. However, the index was able to pick up and has increased 3.64 per cent for the first six months of 2010.

T&T EQUITY REVIEW

Trading Activity

Investors opted to remain in cash and more liquid instruments during the first half of 2009, citing the lack of interest in the equities market. Sentiments remained the same despite an increase in volumes in the first half of 2010.The increase trading occurred in the ‘cheaper’ stocks as reflected in the significant fall in value of trade by 51 per cent from a year ago.

It should be pointed out that a Put-Through transaction took place on the 5th May 2010, whereby 21,587,779 shares valued at $602,946,667.47 of Barbados Shipping and Traded Company were traded.

Four of the five most traded stocks were Jamaican cross-listed companies. National Commercial Bank of Jamaica (NCBJ) remained at the top accounting for 17.4 per cent of the total stocks traded, this was followed by JMMB’s share of 16.1 per cent or 7.5 shares and in third was National Enterprise Limited (NEL), which made up 10.7 per cent of the total stocks traded.

Advances and Declines

Of the 32 ordinary shares listed there were 15 advances, seven declines and 10 stocks remaining flat.

GraceKennedy Ltd (GKC) was the top advancer for the period increasing 33.3 per cent, Agostini Ltd followed with a 32.9 per cent increase, National Flour Mills (NFM) advanced 30.4 per cent, FirstCaribbean International Bank Ltd (FCIB) 26.9 per cent and round out the top fie was WITCO at 24.4 per cent.

On the downside, Capital and Credit declined 57.7 per cent for the period. Trinidad Cement Ltd (TCL) fell by 15.6 per cent, Sagicor Financial Corporation was down 14.9 per cent. While Prestige Holdings Ltd and Jamaican cross-listed Supreme Ventures Ltd eroded 14.5 per cent and 10.0 per cent respectively.

Increased provision for loan loss was common among some of the listed companies under the Banking sectors in T&T. Scotiabank (SBTT), FCIB, BCB Holdings Ltd increased its loan provisioning. However, NCBJ and Republic Bank Ltd (RBL) benefited from lower provisioning for the period. Among the locally listed banks, the contraction in private sector credit due to continued contraction in both consumer and business lending resulted in lower Advances and loans to consumers for these banks.

The local Conglomerates overall performance was relatively flat, Neal & Massy half-year EPS was up 1 per cent year on year, while the Group’s Third Party Revenue declined by 4.2 per cent. Ansa McAl Limited (AMCL) earnings were up 8.1 per cent for its first quarter ended March 31st, 2010. However, the Jamaican conglomerate, GKC performance declined as the JDX came into effect. Growth in construction-related industries was muted as weather conditions and a slowdown in the construction sector prevailed in the HY 2010.

In the Non-Banking and Financial Sector, companies like Guardian Holdings Limited (GHL) and SFC were impacted by high Claims and Benefits payments. This trend may continue as a strong hurricane season is forecasted for the Caribbean in 2010.

REGIONAL MARKETS

Jamaican Equity Market

The implementation of the JDX impacted on the Net Interest Income of some of the listed companies on the JSE. SDBG and NCBJ Net Interest Income contracted as a consequence of its participation in the JDX. On a positive note, SDBJ for instance was able to diversify its revenue base by adjusting its business model away from dependency on Interest Income, further the Group was able to maintain interest rate spreads in light of reducing Interest Income.

Trading activity in Jamaica for the HY of 2010 increased drastically relative to the previous year. The number of shares traded for the period increased by 163.71 per cent. This volume included a 1.3Bn trade in SVL in January, discounting this trade, the volume of trade remained relatively flat.

Berger Paints Ltd led the price advances increasing by 130.83 per cent, Radio Jamaica Ltd and GraceKennedy jumped 57.21 per cent and 48.15 per cent, respectively. While Hardware and Lumber Ltd gained 42.86 per cent. Jamaica Broilers Limited advanced 42.14 per cent.

The exchange rate between the JMD and USD had been fairly stable for the first three months of the year. However, the JMD coming down to the end of the HY of 2010 appreciated against the USD by 3.98 per cent.

Barbados Equity Market

The Barbados economy continued to suffer the effects of a slowdown in its Tourism Industry. The BSE Indices continued to underperform when compared to the T&T and Jamaican markets. Further there existed relative inactivity on the Barbados Stock exchange (BSE). The local stock market also experienced the de-listing of GraceKennedy from the BSE, which took effect on June 30th 2010, while the de-listing of Barbados Dairy Industries Ltd is still pending.

In Barbados GraceKennedy took the lead in price advances, increasing by 32 per cent YTD. Barbados Farm Ltd followed with a 19.5 per cent, while West India Biscuit advanced by 9.4 per cent.