How to invest in Trinidad and Tobago?

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How to invest in Trinidad and Tobago

Trinidad and Tobago (T&T) were historically the pawn piece everybody traded when attempting to resolve European disputes by exchanging off far-flung colonies.  Between 1498 and 1802, this island traded hands between the Spanish, British, French, Dutch and if you’ll believe it, even the Latvians through the Duchy of Courland.

Since claiming independence in 1962, the country has become the wealthiest in the Americas after the United States and Canada with a GDP (PPP) per capita of more than $30,000.  T&T is also the home of the Limbo, calypso and the King of Chutney music Sundar Popo.  In addition to Guyana, T&T is also a center for Indo-Caribbean food.

Economy

T&T has an economy that is heavily dependent on fossil fuels and the islands’ oil wealth.  Figure 1 below highlights this.

The country has an economic complexity rating of -0.09, keeping it right in the middle of Oman and Panama.  The country runs a relatively large trade surplus, ~$10bn, with its largest surplus coming from the US at roughly ~$3bn.   The country has 11 ammonia plants and 3 methanol plants; T&T is the largest exporter in the world of ammonia and the second largest exporter of methanol in the world.

Notable Companies

  • The West Indian Tobacco Company (WCO) is over 100 years old and one of the largest companies in T&T, it is part of the British American Tobacco company. The company has a market cap of ~$1.6bn and sells its products all over the Caribbean
  • ANSA McAL (AMCL) is a conglomerate that is even older than WCO. It is a conglomerate with business interests in almost every facet of the country’s economy.  The company has annual revenues of ~$1.7bn.
  • Scotiabank Trinidad and Tobago (SBTT) is the subsidiary of Canadian bank, Scotiabank. It is the 2nd largest foreign bank in the country and the primary bank for the energy industry in the country.  The bank has a market cap of ~$1.5bn.
  • Republic Financial Holdings (RBFL) is the largest bank in T&T and one of the largest banks in the Caribbean. Major operations exist in the entire English-speaking Caribbean.  Total asset base is approximately ~$20bn.
  • FirstCaribbean International Bank (FCI) is the Caribbean subsidiary of CIBC, the Canadian bank. It is one of the oldest banks in the Caribbean and provides both retail banking and commercial banking services.  It is the largest foreign bank in the country, with a market cap of ~$2.1bn.
  • Telecommunication Services of Trinidad and Tobago is owned by the Government and Cable and Wireless (UK-based telecom company). It is the largest provider of cell phone and internet services on the island with approximately 160,000 customers.
  • National Enterprises Limited owns majority stakes in a variety of companies in T&T on behalf of the government. It is a pseudo-efficient way for the government to manage its ownership of the largest energy companies, flour company, and telecom company.

Is it safe to invest in Trinidad and Tobago?

T&T is ranked 69th in terms of investment safety rankings, with similar levels of risk to Peru and Mexico.  Legislation is conducive to investment, but the business culture remains more ‘emerging markets’-like rather than being similar to a developed country.  What this means is that politicians tend to have significantly more conflicts of interest, and often maintain business interests with discretionary authority while being involved in politics.  However, as far as asset protection and security of investments are concerned, the country is reasonably strong.

Can foreigners invest in Trinidad and Tobago?

Yes.  T&T actively encourages individual foreign investors.  There are currently 6 registered broker-dealers in the country and the country worked to establish the Central Depository in 2003 to enable foreign investment.

Trinidad and Tobago Stock Exchange (TTSE) Snapshot

In operation since 1981

Location: Port of Spain, Trinidad

Market hours: 09:00 to 2:00

Currency: East Caribbean Dollar (XCD)

Market Capitalization (as of Feb 2017): around 36 billion XCD (approx. $13 billion USD)

Locally Listed companies (as of Feb 2017): 28 companies listed on the Regulated market

Exchange Fees: Depends on your brokerage firm

Taxes: Capital gains are currently taxed at 10% and 15% based on your country of domicile.  If you are a resident of Trinidad and you dispose of an asset after 12 months, there is no capital gains tax.  Dividend income is treated as normal income, and based on your country of domicile could range from 10% to 25%.

Main Index: TTCOMP, Trinidad and Tobago Composite Index which includes all listed equities on the stock exchange.   FirstCaribbean and Republic Bank are together about 25% of the index.  The index has returned 4% annualized without dividends and 7% with dividends.

How is the Trinidad and Tobago Stock Exchange structured?

The TTSE is structured with both equities and bonds listed in addition to mutual funds which are traded like equities.  The TTSE trading system is fully electronic, with no physical trading floor; it has been this way since 2005.

Orders are filled based on price and time stamp.  All time-stamps are unique.

Top Companies on the Trinidad and Tobago Stock Exchange

Here are the top 10 companies on the TTSE, as at Feb 2017.

Company Ticker Industry Market Cap ($USD, mm)
Republic Financial RFHL Banks 2.590
FirstCaribbean Bank FCI Banks 2,060
ANSA McAL AMCL Diversified 1,730
West Indian Tobacco WCO Tobacco 1,580
Scotiabank Trinidad and Tobago SBTT Banks 1,530
National Commercial Bank of Jamaica NCBJ Banks 1,310
First Citizens Bank FIRST Banks 1,210
National Enterprises Limited NEL Diversified 963


How to invest on the Trinidad and Tobago Stock Exchange?

To trade on TTSE, you need to trade through a local brokerage firm which is a member of the exchange. Opening processes are similar to opening bank accounts and will depend on the brokerage firm you choose.

BOURSE BROKERS LIMITED

CARIBBEAN STOCKBROKERS LIMITED

FIRST CITIZENS BROKERAGE & ADVISORY SERVICES

JMMB SECURITIES (T&T) LIMITED

REPUBLIC SECURITIES LIMITED

WEST INDIES STOCKBROKERS LIMITED

The brokerages have similar opening requirements, and all of the brokers are open to foreign investors.

 

 

 

 

 

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