Trinidad at an Inflection Point, Economic Confidence and Market Strength Return

Natural Gas facility in the Western Hemisphere

Trinidad at an Inflection Point

May 22, 2026

Dave Dookie, Managing Director

• IMF sees improving outlook for Trinidad & Tobago: The IMF highlighted low inflation, current account surpluses, strong banking sector conditions, and reserves equivalent to approximately 5.5 months of imports, supported by HSF assets near 25% of GDP, reinforcing confidence in the economy.

• Structural reforms remain critical: Despite a more positive outlook, challenges persist around foreign exchange shortages, energy sector risks, and slower productivity growth. The IMF emphasized accelerating digitalization, improving the business environment, and attracting greater investment.

• Global equities rallied on AI optimism: Major markets advanced over the week, led by technology stocks. Europe posted strong gains, Japan outperformed in Asia, while Chinese markets remained mixed amid ongoing growth concerns.

• Trinidad equity market strengthened: The TTSE recorded a positive week with 16 advancing securities versus 6 decliners, while the Composite Index rose 2.16%. Large-cap names including ANSA McAL, Massy, First Citizens and NCB Financial supported market activity.

• Trinidad bonds remain regional defensive credits: Trinidad sovereign USD bonds continued trading tighter than many Caribbean peers, supported by improving fundamentals and domestic excess liquidity estimated near TT$4 billion, while Barbados and Jamaica maintained higher yields for longer maturities.

The IMF’s 2026 Article IV Consultation provides a constructive signal for Trinidad and Tobago, highlighting low inflation, a current account surplus, a sound and well-capitalized banking system, and international reserves projected at about 5.5 months of import cover, supported by Heritage and Stabilisation Fund assets near 25% of GDP. The report also points to medium-term growth supported by upcoming energy projects and continued non-energy momentum

The IMF assessment also provides several encouraging signals beyond the headline growth projections. The Fund highlighted Trinidad and Tobago’s return to low inflation, a stable banking system with healthy capitalization levels, and continued external surpluses, while emphasizing the importance of the Heritage and Stabilisation Fund as a critical macroeconomic buffer. It also acknowledged progress in fiscal reforms and Trinidad and Tobago’s removal from the European Union’s list of non-cooperative tax jurisdictions, an important development that strengthens international credibility and could improve investor confidence.

However, the IMF also identified structural weaknesses that could constrain medium-term growth if left unaddressed. Challenges remain around foreign exchange availability, mature energy field decline, potential delays in new energy projects, and broader global uncertainties.

Required are faster digitalization, labor market reforms, and improvements in the ease of doing business. To improve the economic outlook, the Government may need to accelerate energy investments, expand non-energy export sectors, deepen capital market development, streamline regulatory approvals, and pursue reforms that attract foreign direct investment.

Increasing public-private partnerships and leveraging technology and artificial intelligence initiatives could also improve productivity and create more sustainable growth. Taken together, the IMF message appears balanced, that is Trinidad and Tobago has stabilized and regained credibility, but the next phase of growth will depend heavily on execution and structural reform.

Global and Regional Markets

Global equity markets finished the week in broadly positive territory, led by renewed enthusiasm for artificial intelligence and technology stocks. The Nasdaq Composite rose 0.45% over the last five trading days and is up 39.20% over one year, while the S&P 500 advanced modestly, supported by resilient earnings expectations and continued investor appetite for growth stocks. Apple gained 2.86% for the week, Meta declined 0.65%, and Micron advanced 3.63%, while Alphabet fell 3.48%. Energy and commodity-linked shares were mixed as Brent crude traded near US$103.54, while natural gas fell 3.21% on the day.

In the UK, the FTSE 100 gained 2.66% over five trading days, supported by defensive sectors and energy exposure, although investor sentiment was tempered by concerns over public borrowing. In Europe, for the week the STOXX 600 rose 3.00%, the Euro Stoxx 50 advanced 3.29%, France’s CAC 40 gained 2.05%, and Germany’s DAX increased 3.92%. The broad European rally reflected stronger risk appetite and stabilizing bond markets, even as higher oil prices kept inflation concerns alive.

Asian markets were mixed. Japan’s Nikkei 225 rose 3.14%, helped by export-oriented and technology names, while China’s Shanghai Composite declined 0.54%. Hong Kong’s Hang Seng fell 1.37%, suggesting continued caution toward Chinese growth and property-related risks. Australia’s S&P/ASX 200 marginal increase by 0.30%, benefiting from financials, resources, and improved regional sentiment.

The Trinidad and Tobago Stock Exchange recorded a stronger week of trading activity, reflecting improved market breadth and investor sentiment. During the week ended May 22, 2026, trading took place in 29 securities, of which 16 advanced, 6 declined and 7 traded unchanged, highlighting a broadly positive tone across the market. The Composite Index rose 21.19 points (2.16%) to close at 1,000.64, while the All T&T Index gained 24.51 points (1.73%) to 1,438.41. The Cross-Listed Index advanced 3.46%, although the SME Index slipped marginally by 0.21%.

Market leadership came from a combination of banking and diversified names. ANSA McAL led trading volume with approximately 639,696 shares, followed by Massy Holdings with 485,598 shares, indicating continued institutional interest in large capitalization stocks. Among the week's strongest performers, A.S. Bryden surged 13.1%, National Enterprises gained 9.8%, and NCB Financial rose 6.3%, while First Citizens advanced nearly 6.1%.

Overall, the week’s performance suggests investor confidence is gradually strengthening, supported by improving macroeconomic sentiment and increased interest in financial and consumer-oriented sectors.

According to data from the Central Bank, in April 2026 domestic liquidity conditions in Trinidad and Tobago remained elevated but continued to normalize, with excess banking system liquidity estimated at approximately TT$4.39 billion. While still supportive of financial system stability, liquidity conditions remain below the exceptionally high levels of TT$6.56 billion observed in mid-2025, reflecting Central Bank foreign exchange interventions and tighter monetary conditions. Lower excess liquidity may support future government bond demand and contribute to firmer domestic yields over the medium term.

Caribbean USD sovereign bond yields remained relatively stable during the week, with Trinidad and Tobago continuing to trade as one of the region’s stronger credits. Trinidad sovereign yields ranged from approximately 4.23% on shorter maturities to 6.08% on longer dated bonds, reflecting investor confidence in the country’s credit fundamentals and relatively defensive positioning. Jamaica’s sovereign yields ranged between 4.46% and 6.25%, while Barbados traded at higher levels between 5.27% and 6.84%, reflecting greater perceived credit risk and a higher return requirement from investors.

The yield differentials carry important implications for investors and issuers. Trinidad’s tighter yields suggest lower borrowing costs and stronger market confidence, supported by its investment grade profile and macroeconomic buffers. Meanwhile, the wider yields available in Barbados and Jamaica sovereign bonds may attract investors seeking additional income, but those returns come with higher perceived risk. For Portfolio Managers, the Caribbean fixed-income market continues to present a balance between defensive, lower risk credits and higher-yielding opportunities that offer enhanced carry potential.

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 Program.

Disclosure, Conflicts of Interest & Important Information

This publication has been prepared and issued by Waterloo Capital Advisors Limited (“Waterloo Capital”) for informational and market commentary purposes only. The material contained herein does not constitute, and should not be construed as, investment advice, a recommendation, or an offer or solicitation to buy or sell any security, financial instrument, or to participate in any investment strategy. The information contained in this report has been obtained from publicly available sources and other third-party data believed to be reliable, including financial market data providers, government publications, and industry sources. While Waterloo Capital has made reasonable efforts to ensure the accuracy and completeness of the information presented, no representation or warranty, express or implied, is made as to its accuracy, reliability, or completeness. Any opinions, projections, or forward-looking statements expressed herein reflect the judgment of Waterloo Capital as of the date of publication and are subject to change without notice.

Investments in financial markets involve risks, including the possible loss of principal. Past performance is not indicative of future results, and market conditions may change rapidly. Economic forecasts, price projections, and market outlooks are inherently uncertain and should not be relied upon as guarantees of future performance.

Waterloo Capital Advisors Limited, its affiliates, directors, officers, employees, and associated persons may from time to time have positions in securities, commodities, currencies, or other financial instruments referenced in this publication. In addition, Waterloo Capital may provide, or seek to provide, investment banking, capital markets advisory, asset management, research, or other financial services to companies, governments, or institutions mentioned in this report. Such activities may give rise to potential conflicts of interest.

Recipients of this publication should not treat it as a substitute for the exercise of their own independent judgment. Investors should consider the appropriateness of any investment strategy in light of their individual objectives, financial circumstances, and risk tolerance, and should seek independent professional advice, including financial, legal, tax, or accounting advice where appropriate. This report is intended solely for general informational distribution and may not be reproduced, redistributed, or published in whole or in part without the prior written consent of Waterloo Capital Advisors Limited. The distribution of this publication may be restricted by law in certain jurisdictions, and persons into whose possession this report comes are required to inform themselves of and observe any such restrictions.

Waterloo Capital Advisors Limited accepts no liability whatsoever for any direct, indirect, incidental, or consequential loss or damage arising from the use of, or reliance on, the information contained in this publication.

© Waterloo Capital Advisors Limited. All rights reserved.