Trinidad and Tobago Stock Exchange
||This article's introduction may be too long for the length of the article. (June 2012)|
|Location||Port of Spain, Trinidad and Tobago|
|Key people||Peter E. ClarkeChairman
Ray A. SumairsinghDeputy Chairman
|Currency||Trinidad and Tobago dollar|
|No. of listings||29|
|Market cap||US$15.66 Billion|
Composite - 1121.72 All T&T- 1813.10 Cross Listed- 55.98(To May 2013)
The Trinidad and Tobago Stock Exchange (TTSE) is the main stock exchange in the Republic of Trinidad and Tobago. It is, by far, the leading stock exchange in the Caribbean region. The Trinidad and Tobago stock exchange caters mostly to the strong financial position of many indigenous companies incorporated in Trinidad and Tobago. As a member-state of CARICOM several companies from Barbados, Jamaica, and the Eastern Caribbean Securities Exchange also cross-list their stocks onto the Trinidad and Tobago Stock Exchange.
The TTSE has experienced some slowdown, both in terms of activity and listings, within the last decade, stemming from legislation which restricted institutions from holding more than 10% of their portfolio in any single company's shares. The Global Recession (2007-2010) has also contributed to a depressed state of liquidity, listings and pricing on the TTSE. There has been some significant rebound within the last three years which has seen the Market Capitalization cross the psychological TT$100 billion mark. (US$15.54 billion, J$1.54 trillion, Bd$31 billion)
The Securities Market which informally existed in Trinidad & Tobago for well over twenty years prior to the opening of the Trinidad & Tobago Stock Exchange really achieved significance in the early 1970s when Government decided as a matter of policy to localise the foreign owned commercial banking and manufacturing sectors of the economy. The thrust of the policy was to get such companies to divest and sell a majority of their shares to nationals.
Two bodies chosen to effect this policy were the Capital Issues Committee which was set up by the Ministry of Finance in July 1970 to direct developments in the primary market and the Call Exchange (an association of share dealers) which was established under the umbrella of the Central Bank in August 1965 to monitor activities in the secondary market.
Parallel to this development in the public sector in the early 1970s was the rapid establishment of private institutions such as trust companies and stock broking firms to satisfy the demands of investors in both the primary and secondary markets.
With such infrastructure in place and the concomitant increase in the securities business the decision was taken to establish a securities market within a framework of established Rules and Regulations to facilitate the development of the domestic capital market.
The establishment of the Stock Exchange under the provisions of the Securities Industry Act 1981 was a natural extension of the policy to formalise the securities market in Trinidad and Tobago. This Act was proclaimed on the 23rd October, 1981 and the Stock Exchange was formally opened on the 26th October, 1981 under the auspices of the Ministry of Finance.
Over the years and leading up to the current time, there was no doubt that the original Securities Law, that is, The Securities Industry Act, 1981 became ineffective. In attempting to bring both Primary and Secondary market activity under one umbrella, the Act created confusion, and for the most part the provisions were unenforceable.
This was because the Exchange as a regulatory Organisation, had no discretion to reasonably moderate the strict and unreasonable application of the letter of the Act once a particular provision was not explicitly stated in the Act. The Ministry of Finance, in recognizing this problem, worked with the Exchange to introduce a more dynamic piece of legislation.
As a remedial measure, the Government, through the Ministry of Finance, passed legislation repealing the 1981 Act and replacing it with the Securities Industry Act of 1995 which brought into operation the establishment of a Securities and Exchange Commission.
The 1995 Act vests with the Commission, the authority to maintain surveillance over the securities market and ensure orderly, fair and equitable dealings in securities. Furthermore, all market actors, meaning issuers, underwriters, investment advisers, stockbrokers and dealers, etc. must register with the Commission, who will be responsible for controlling and supervising their activities. The Exchange on the other hand will regulate trading on the secondary market, as well as the activities of the Members of the Exchange, subject of course to the oversight by the Commission.
On December 31, 2012 the Securities Industry Act of 1995 was repealed and replaced by the Securities Act, 2012.
As of June 2013 the TTSE Market Capitalization was estimated at TT$102.3 billion (US$15.9 billion), with conglomerates and financial institutions accounting for the vast majority of value. The companies with the greatest capitalisation on the exchange are Republic Bank (RBL) at TT$17.7 billion and First Caribbean International Bank (FCIB) at TT$12.6 billion. Significant upward share price movements in West Indian Tobacco (WCO) (TT$9.3 billion), Scotiabank Trinidad and Tobago (SBTT) (TT$12.3 billion), National Enterprises Limited(NEL) (TT$9.4 billion), ANSA McAL (AMCL)(TT$11.8 billion) and Neal and Massy Holdings (NML)(TT$5.7 billion) has led the recovery. Together, these 7 companies account for over 75% of the total value of the exchange.
At present, there are 29 listings on the main board of the exchange. A delisting of BCB Holdings is anticipated in the near future while the long anticipated listing of First Citizens Bank will occur by the end of June 2013. The addition of FCB is expected to raise TT$1 billion (US$155 million) for the Government of Trinidad and Tobago (the only shareholder) and will be the largest ever IPO undertaken in the Caribbean. It is also expected to add approximately TT$6.2 billion (US$1 billion) to the TTSE's market capitalization.
The newest addition to the market, Clico Investment Fund (CIF) is a company vested with the shares of Republic Bank Limited which were held by the now collapsed CL Financial. The security is listed on the Mutual Fund Market and consists of those shares as well as Government of Trinidad and Tobago Bonds (S&P Rating: A). The company was listed in January 2013 and is a closed end mutual fund with a lifespan of approximately 20 years.
The energy sector of Trinidad and Tobago, which is the main driver of the economy and the major source of revenue for the country, is poorly represented on the TTSE, with only the minor oil company, Moraven Holdings (MOV) and National Enterprises (NEL) offering any access to the local energy market. NEL is a government holding company which holds the state owned shares of the National Gas Company of Trinidad and Tobago, Atlantic LNG (Trinidad and Tobago), TRINGEN (ammonia production) and the National Flour Mills (NFM), which in itself is separately listed on the exchange.
Over the last four years, successive Ministers of Finance have mooted the idea to have large, successful state agencies list on the TTSE. These entities include, but are not limited to First Citizens Bank, Petrotrin, Hilton Trinidad and the Unit Trust Corporation. There have also been calls to have NEL divested into its individual entities and have these entities listed separately. In addition, suggestions have been made for large multinationals operating in Trinidad and Tobago to list Depository receipt to allow wider national participation in these companies. Such companies include British Petroleum (Trinidad and Tobago Ltd), Mittal Steel and Repsol (Trinidad and Tobago Ltd). As a result of the sale of RBTT Holdings to the Royal Bank of Canada in a cash and share deal in the late 2000s, a significant number of RBC shares are held by former shareholders of RBTT Holdings, which, at the time of its delisting, was one of the widest held shares on the TTSE.
In addition to the First Citizens Bank IPO, the IPO for the company created from the merger of the Home Mortgage Bank and the Trinidad and Tobago Mortgage Finance Company is expected by December 2013.
The Trinidad and Tobago Stock Exchange falls under the jurisdiction of the Trinidad and Tobago Securities and Exchange Commission .
- Economy, Economy of Trinidad and Tobago, Trinidad and Tobago, Trinidad and Tobago dollar
- List of stock exchanges
- List of American stock exchanges
- Trinidad and Tobago Stock Exchange - official website