In Brief
- T&T Energy Revival: Trinidad and Tobago’s energy sector is entering a positive phase, with regional gas developments and renewed exploration pointing towards stronger production by 2027.
- Global Markets: US and European equities faced a volatile week, pressured by rising oil prices and expectations of ‘higher-for-longer interest rates.’
- Asian Volatility: Japan’s Nikkei fell on rate hike fears, while Chinese and Hong Kong markets saw uneven performance.
- Caribbean Resilience: T&T equities posted modest gains alongside improved banking liquidity, and Caribbean sovereign bonds remained stable despite surging US Treasury yields.
By Dave Dookie
Trinidad and Tobago’s energy sector is entering a more constructive phase, with improving upstream activity, higher hydrocarbon prices and renewed investment offering the prospect of stronger gas availability and downstream utilisation. After several years in which declining natural gas production constrained LNG and petrochemical output, the outlook is increasingly being shaped by regional gas development, renewed exploration and efforts to restore capacity at Point Lisas. The timing is particularly important: Brent crude climbed above US$90 per barrel this week as renewed U.S.-Iran tensions disrupted energy markets, providing a stronger commodity price backdrop for energy exporters.
Attention is now shifting towards 2027, when several initiatives could begin materially changing Trinidad and Tobago’s production outlook. Cross-border gas developments involving Venezuela, continued exploration by major international operators, and progress towards commercialising additional offshore resources could improve feedstock availability for Atlantic LNG and Point Lisas. Greater domestic gas supply could support LNG exports while allowing currently underutilised petrochemical capacity to return to production. The key risk remains execution; that is, projects must move from exploration and negotiation into sustained commercial production, but the direction of activity is significantly more encouraging than in recent years.
United States
U.S. equities ended a volatile five-day period broadly flat. The S&P 500 gained approximately 0.1%, while the Nasdaq Composite advanced 0.4% and the Dow declined 0.3%. Friday reversed some earlier gains after August payrolls increased by a stronger-than-expected 162,000, pushing Treasury yields higher and renewing expectations that the Federal Reserve could maintain a restrictive stance. The 2-year Treasury yield moved to approximately 4.37%, while the 10-year approached 4.78%. Technology remained an important source of support, with NVIDIA gaining approximately 5.9% over five days, although broader technology performance was mixed.
UK and Europe
European markets were weaker as investors confronted higher energy prices, fiscal concerns and the prospect of tighter-for-longer monetary policy. The STOXX Europe 600 declined approximately 0.8% over five days, while France’s CAC 40 fell around 1.5% and Germany’s DAX was also under pressure. The Middle East conflict and rising oil prices have complicated the inflation outlook, increasing sensitivity to upcoming European Central Bank decisions. The UK FTSE 100 was comparatively resilient, gaining around 0.1%, although rising gilt yields remained a headwind.
Asia
Performance was mixed. Japan’s Nikkei 225 declined approximately 2.1% over five days despite a strong Friday rebound, as expectations for further Bank of Japan tightening weighed on sentiment. The yen strengthened as markets considered the possibility of another 25-basis-point increase. China’s Shanghai Composite declined approximately 0.6%, while Hong Kong’s Hang Seng gained around 0.3%, leaving the regional picture uneven.
Caribbean
Trinidad and Tobago equities improved, with the TTSE Composite Index rising 0.44% to 1,021.18 and the All T&T Index gaining 0.56%. Trading activity nevertheless remained relatively modest, as 1.34 million shares changed hands with a value of TT$13.52 million. Banking system liquidity strengthened materially, with commercial bank excess reserves increasing by approximately TT$1.29 billion to TT$5.24 billion.
Caribbean Bonds
Regional USD sovereign bonds remained relatively stable despite the sharp rise in U.S. Treasury yields. Trinidad and Tobago’s 2030 4.50% bond was indicated around 95.50-96.25, yielding 5.60%, while the 2036 6.50% traded around 101.00-101.75, yielding 6.25%. Trinidad and Tobago’s 2038 6.20% bond was approximately 98.55-99.15, with an offer yield of 6.30%.
Jamaica continued to trade at comparatively firm levels: its 2039 8.00% bond was around 117.25-118.25, yielding 5.80%, while the 2045 yielded approximately 6.29%. Barbados’ 2035 8.00% was quoted around 105.20-106.20, yielding 6.80%. Dominican Republic bonds remained liquid across the curve, with the 2034 5.75% around 96.95-97.35 and yields near 6.20%, while the 2036 and 2045 issues offered yields around the mid-6% range.
Outlook
Markets enter the coming week balancing resilient economic growth against higher inflation and interest-rate risks. For Trinidad and Tobago, the combination of stronger energy prices, improving sector activity and the prospect of additional gas supply in 2027 provides an increasingly constructive medium-term backdrop for economic growth, government revenues and external credit fundamentals.
About the author: Dave Dookie is the Managing Director of Waterloo Capital Advisors Limited, a Trinidad and Tobago based financial advisory firm specializing in investment management, capital markets and structured finance. He has advised governments, financial institutions, and energy companies on debt issuance, project financing, and strategic capital raising across the Caribbean. He holds degrees and advanced qualifications from the London School of Economics and Political Science (LSE) and the University of London and has completed advanced training in data science through the MIT Applied Data Science Programme
