OECS Market
The well publicized soaring oil prices are now hitting home at the pumps for users across the Caribbean with prices rising in Antigua, St Lucia and set to rise in Grenada and St Kitts. Fuel taxes are an important source of revenue for OECS governments and up until recently many governments have been holding off on passing on increases, effectively reducing revenue into the government coffers and subsidizing distributors and consumers.

However, the effects of sustained high oil prices are unlikely to stop there. There is the possibility that growth in US and other economies will slow leading to a slowdown in the growth in the Caribbean region which would only be compounded by higher prices across the board. The clouds gathering on the horizon may not be those of a tropical storm but in fact a worldwide energy crisis.
ECSE Report
It was all quiet this week for the trading of shares on the ECSE. Last trade reported was S.L. Horsford & Company (SLH) which traded firm at $1.80 per share. The value of the ECSE All-Share Index remains unchanged at 102.79.
The Government of St Vincent was back in the ECSE primary debt securities market on Wednesday of this week with another 91-day treasury bill. In last minute trading sixteen million dollars worth of bonds were picked up by investors at a yield of 4.25%, down significantly from a yield of 5.72% obtained by investors in a July issue. The auction was over-subscribed by $10.5 million.
Regional Markets
Well it’s not all doom and gloom in the face of high oil prices. Trinidad and Tobago has earned TT$2 billion in additional revenue from the record high international oil prices according to Conrad Enill of T&T’s Ministry of Finance. Enill went on to add that the Government is spending TT$1.2 billion to ensure local vehicle owners do not pay more for gasoline at the pumps. And while Enill said the State’s subsidy of gasoline prices is not going to change anytime soon he asserted it is undergoing a review.
Regional Markets have continued to decline with all major market indices moving further into negative territory for the period 16th August 2005 to 23rd August 2005. In Trinidad the TTSE Composite Index declined 1.77% a slight improvement from the 2.07% fall reported for the comparable period last week. The Advance Decline ratio worsened to 1 to 18 with 15 stocks trading firm. The major declines included National Enterprises Limited (-9.96%), Jamaica Money Market Brokers (-6.25%), Guardian Holdings (-5.38%) and Ansa Merchant Bank Limited (-4.35%). The lone advancer for the period was Witco advancing $0.20 to $18.50.
In Jamaica, all three indices continued to fall with the JSE Composite falling 1.61%. Indicative of the challenges facing the Jamaican companies the All Jamaican Composite and JSE Select Indices were down by a substantial 5.13% and 4.59% respectively. Seventy-one percent of the listed shares declined with only 6 stocks advancing.
In Barbados, the Local Index declined by 0.18%. Only four shares recorded changes in price, with two stocks advancing and two declining. The advances were Ansa Mcal (Barbados) (0.75%) and Cable and Wireless (2.55%). The declining stocks were Barbados Shipping & Trading (-4.70%) and First Caribbean International Bank (-2.44%).
International Market Performance
Concerns about the ever rising oil prices continue to dominate the international landscape. In the US, with the technology and airline sectors being adversely affected by oil prices, all indices were on the decline. The S&P Index fell by 0.80% while the Dow Jones also declined by 0.75%. In Europe similar sentiments prevailed with the FTSE down 0.88% and the broader Euro Stoxx falling 0.40%. The only exception to this general trend has been in the Japanese market which saw the Nikkei 225 index hitting the 12,500 mark for the first time in four years. Gains from banks and oil companies as well as general speculation about the recovery of the Japanese economy would have contributed in part to the boost in market performance.
Other News
Jamaica’s national carrier Air Jamaica is expected to report a record loss of US$160 million by the end of this year. For the first 6 months of this year US$72 million has already been lost. With the onset of more competition from the low-budget airline Spirit Airlines, later this year, Richard Branson’s Virgin (flying Boeing 747s next July) and the adding of capacity on Jamaican routes by American Airlines, Air Jamaica’s passenger loads are expected to be sliced by 35 per cent. The Airline is now under Government control and the new management under Dr Vin Lawrence has vowed to return Air Jamaica to profitability by 2010. A number of cost-cutting measures have been put in place in an effort to streamline its operations. There have been slashes in fleet size, staff and pilot’s salaries as well as certain routes being discontinued.
Good news for FirstCaribbean International Bank (FCIB) as it maintains its A- credit rating by the international rating board of Standard & Poors. FCIB’s A- rating is the highest rating of any commercial bank in the English-speaking Caribbean.

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.

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