The head­line of the Busi­ness Guardian on Feb­ru­ary 5 re­flect­ed a call to ac­tion: “Fix (the) Lo­cal Stock Mar­ket.” The ar­ti­cle sup­port­ing the head­line in­di­cat­ed that the T&T’s stock mar­ket was in struc­tur­al trou­ble as cu­mu­la­tive­ly the mar­ket had lost close to “40 per cent of val­ue” since 2022. It not­ed that whilst some com­pa­nies had per­formed well, the com­pos­ite in­dex (the uni­fied met­ric for mea­sur­ing the over­all per­for­mance of the TTSE) had de­clined in every year since 2021.

This is crit­i­cal be­cause pen­sion funds (in­clud­ing NIB and the Unit Trust), mu­tu­al funds, and in­di­vid­u­als are in­vest­ed in the mar­ket. Con­tin­ued weak per­for­mance will se­ri­ous­ly im­pact the fi­nan­cial po­si­tion of cur­rent and fu­ture re­tirees, in turn sig­nif­i­cant­ly strain­ing fis­cal (gov­ern­ment) ex­pen­di­ture on so­cial ser­vices for the aged. This is not mere­ly a pri­vate sec­tor sav­ings is­sue—it has broad and ur­gent im­pli­ca­tions for the coun­try’s over­all eco­nom­ic per­for­mance.

The econ­o­my’s health is bet­ter mea­sured by in­di­ca­tors like GDP, em­ploy­ment, and con­sumer con­fi­dence. Re­cent sur­veys show busi­ness out­looks vary by sec­tor but re­main cau­tious. Fi­nance the­o­ry and fun­da­men­tal val­u­a­tion sug­gest the stock mar­ket is for­ward-look­ing, with cur­rent prices re­flect­ing the col­lec­tive, dis­count­ed present val­ue of all ex­pect­ed fu­ture earn­ings and growth.

On this ba­sis, the stock mar­ket is a ma­jor, lead­ing eco­nom­ic in­di­ca­tor re­flect­ing in­vestor sen­ti­ment and growth ex­pec­ta­tions. If cor­po­rate earn­ings are grow­ing and the com­pos­ite in­dex is de­clin­ing, this sug­gests that pub­lic con­fi­dence in the T&T mar­ket’s growth pos­si­bil­i­ties is lim­it­ed. What tech­ni­cal fac­tors or changes in eco­nom­ic pol­i­cy would or could achieve a turn­around in mar­ket sen­ti­ment and an im­prove­ment in eco­nom­ic per­for­mance?  What re­cent pro­nounce­ments could be pos­i­tive in this re­gard?

The bud­get speech an­nounced a rise in Na­tion­al In­sur­ance rates ef­fec­tive Jan­u­ary 1, 2026. This could turn NIB’s net flow of funds pos­i­tive and im­prove in­vest­ment po­ten­tial. But NIB alone, even as a ma­jor play­er, can­not re­vive the mar­ket. De­ci­sive ad­di­tion­al mea­sures are es­sen­tial. Crit­i­cal­ly, as long as lo­cal mar­ket con­fi­dence lan­guish­es, in­vestors will rush to stronger mar­kets.

In­ter­na­tion­al mar­kets are sub­ject to the same geopo­lit­i­cal un­cer­tain­ties as the T&T mar­ket but of­fer high­er re­turns, a wider range of prod­ucts and sec­tors, and are de­nom­i­nat­ed in for­eign cur­ren­cy. The clear im­pli­ca­tion is that mar­kets de­nom­i­nat­ed in for­eign cur­ren­cy with high­er yields are more at­trac­tive and of­fer bet­ter prospects for main­tain­ing val­ue than the TTSE. Sim­ply put, as long as con­fi­dence in T&T is weak and high­er re­turns are avail­able in oth­er stock mar­kets abroad, for­eign ex­change for in­vest­ment pur­pos­es (sav­ings, spec­u­la­tive, and pre­cau­tion­ary) will ex­ac­er­bate forex de­mand. Fur­ther, there will be a thriv­ing un­der­ground mar­ket to fa­cil­i­tate this de­mand if the for­eign ex­change short­age is not ad­dressed with a mar­ket-based so­lu­tion.

Build­ing con­fi­dence re­quires demon­stra­ble ev­i­dence that the do­mes­tic econ­o­my is im­prov­ing. The coun­try is aware that the Drag­on Gas and Man­a­tee deals are held hostage by the cur­rent ten­sions in Venezuela. Bloomberg re­ports that Shell’s CEO, Wael Sawan, said that it wants to process Venezue­lan gas for ex­port through its fa­cil­i­ties in T&T. This would be a pos­i­tive de­vel­op­ment for AL­NG if it were to hap­pen, but it re­mains de­pen­dent on the grant of OFAC li­cences and on the du­ra­tion of those li­cences when grant­ed. The arith­metic of the trans­ac­tion and the net val­ue-added ben­e­fit is not yet known. The po­si­tion with the Man­a­tee field al­so re­quires ex­pla­na­tion.

Shell’s in­ter­est is in gas for ex­port as LNG, which suits Shell. T&T has two oth­er pri­or­i­ties. The first is gas as a feed­stock for the ex­port of petro­chem­i­cals, as the petro­chem­i­cal com­pa­nies add more val­ue from a na­tion­al per­spec­tive. Nu­tri­ent and oth­er plants re­main shut be­cause they do not have ac­cess to ad­e­quate gas sup­plies. How does ac­cess­ing Drag­on or Man­a­tee help the petro­chem­i­cal sec­tor?  The sec­ond is gas as the en­er­gy dri­ver for do­mes­tic man­u­fac­tur­ing and its im­pli­ca­tions for the ex­port thrust an­nounced by the Min­is­ter of Trade, name­ly to in­crease mer­chan­dise ex­ports by USD 5 bil­lion in five years.

The cost and avail­abil­i­ty of en­er­gy un­der­pin eco­nom­ic de­vel­op­ment. En­er­gy shapes pro­duc­tiv­i­ty, in­dus­try, com­pet­i­tive­ness, and long-term growth. For ex­am­ple, Ger­many, for­mer­ly the Eu­ro­pean Union’s eco­nom­ic pow­er­house, has stag­nat­ed since 2022 due to the loss of cheap en­er­gy im­ports from Rus­sia.

NGC’s re­cent 77% in­crease in en­er­gy prices has raised man­u­fac­tur­ing costs for non-en­er­gy firms. Trinidad Ce­ment Ltd (TCL), a key sup­pli­er to con­struc­tion and ex­port mar­kets, an­nounced a 15% in­crease in prod­uct prices as a re­sult of NGC’s ac­tion. ANSA McAL is al­so af­fect­ed by NGC’s in­crease but has not yet an­nounced any price change on the glass bot­tles it man­u­fac­tures. How­ev­er, the Group in­creased al­co­hol prices due to high­er ex­cise tax­es from the 2026 bud­get.

The bud­get al­so an­nounced an in­crease in elec­tric­i­ty charges on com­mer­cial build­ings. Was this an iso­lat­ed mea­sure to be fol­lowed by oth­er mea­sures in the next bud­get? There are re­al­i­ties and ad­just­ments that must be made be­cause of the coun­try’s eco­nom­ic po­si­tion. But busi­ness­es need to plan. En­ter­ing new for­eign mar­kets or re­main­ing in ex­ist­ing mar­kets re­quires ei­ther prod­uct en­hance­ments or cost im­prove­ments if they are to re­main com­pet­i­tive. Mar­ket ac­tors must re­cal­i­brate their busi­ness­es and achieve pro­duc­tiv­i­ty gains to re­main suc­cess­ful. This re­quires phas­ing, co­or­di­na­tion and di­a­logue to achieve con­fi­dence and buy-in.

Mar­i­ano Browne is the Chief Ex­ec­u­tive Of­fi­cer of the UWI Arthur Lok Jack Glob­al School of Busi­ness.