he Stock Market has experienced
unprecedented growth in 1995. The Composite Index has increased
from 88.5975 at the beginning of the year to 147.9319 at October
13, an increase of 66.97 percent. Year to date stock volumes at
the end of September, excluding put-throughs were 79,138,262 which
means that the market is on target to break the all time high
of 103,475,630 set in 1991. This phenomenal growth was precipitated
by:
Twenty-one stocks advanced for the year. The biggest winner for the year has been Trinidad Cement Limited which has increased 231.80 percent for the year when adjusted for the two one-for-one bonus issues. Other big winners were Royal Bank, Neal and Massy, Scotiabank and Republic Bank which have increased by 88.50 percent, 88.24 percent, 86.23 percent, and 74.15 percent respectively. The only stock to decline was Furness Trinidad Limited which declined by 10 cents to $1.15. The market capitalization went from $3.117B at the beginning of the year to $6.373B as at October 13, an increase of 104.46 percent. The increase was not only because of the phenomenal increase in prices but also the many bonus issues and the listing of National Flour Mills. There were five bonus issues:
National Flour Mills was listed on June 14, after Government divested 20 percent of the issued capital of the company by an offer for sale. This offer was more than three times oversubscribed.
By sector, the Manufacturing II sub-index has shown the largest increase moving from 142.47 at the beginning of the year to 382.85 at the end of September, an increase of 168.72 percent.
The Conglomerates sub-index moved from 69.29 to 124.58 at the end of September, an increase of 79.80 percent. The Banks sub- index was the other big mover, increasing from 82.12 at the beginning of the year to 122.49 at the end of September, an increase of 49.16 percent. The Manufacturing I, Property and Trading sub-indices have lagged behind the top three with increases of only 27.08 percent, 22.37 percent, and 20.92 percent respectively for the year to the end of September.
Volumes were very low in the first two months of the year with only 3,383,095 stocks being traded. However on March 10 the Stock Market experienced its biggest single day of trading. This days trading of 19,499,963 stocks makes up 24.61 percent of all stocks traded up to the end of September.
Another big trading day was August 4, when Guardian Life purchased a major equity stake in Royal Bank as part of a larger strategic alliance between the two financial entities. This days trading of 9,504,029 stocks makes up 12.00 percent of all stocks traded to the end of September.
Thus trading on the market has been characterised by ultra high trading days as opposed to a steady stream. The biggest contributors were Royal Bank, Republic Bank and Caribbean Communications Network, which accounted for 22,252,276 [28.08 percent], 11,500,869 [14.51 percent], and 7,889,979 [9.96 percent] respectively of all stocks traded up to the end of September.
The intensity the market has developed during the year has not yet subsided. As at October 13, the market had increased by 5.42 percent for the month of October alone. We expect this to continue to the end of the year as the anticipated release of good results by the major banks would inch the market upwards.
The calling of a General Election has had little or no impact on the Stock Market. Whatever the result, the domestic economy is well-placed to continue its recovery. Even if another party wins, it will be foolhardy of them to reverse the enormous strides the country has made in the last two years.
We expect after the current rally brought on by the anticipated good results from the banks that the market would continue to increase but probably at a slower rate with emphasis on stocks with a December year end of which good results are anticipated. These include Trinidad Cement Limited, Lever Brothers, West Indian Tobacco Company Limited and ANSA McAL.