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LOCAL FIXED INCOME REVIEWLOCAL MARKET REVIEW

FEATURES

WEEKLY MARKET ROUND-UP

All information contained herein is obtained by JMMB® Investment Research from sources believed by it to be accurate and reliable. All opinions and estimates constitute the Analyst’s judgment as of the date of the report. 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 REPORT IS GIVEN OR MADE BY JMMB® IN ANY FORM WHATSOEVER. JMMBITT is a member of the JMMB Group and a registered broker dealer with TTSEC.

Local Equity Market Review

ISSUE NO. 53 15TH APRIL, 2019

Last week, trading activity on the First Tier Market registered a volume of 647,600 shares crossing the floor of the Exchange valued at $6,444,678.35. For the second consecutive week, JMMB Group Limited (JMMBGL) reigned as the volume leader with 273,017 units (42.16% of market activity) followed by CLICO Investment Fund (CIF) with 234,731 units (36.25% of market activity) and Sagicor Financial Corporation Limited (SFC) with 152,787 units (23.59% of market activity). Overall trading activity on the Trinidad and Tobago Composite Index resulted from trading in 23 stocks of which 13 advanced, 6 declined while 4 stocks traded steady. L J Williams B Limited (LJWB) advanced 14.10% or $0.11 to close the week at its 52 week high of $0.89. Prestige Holdings Limited (PHL) followed closely, with an increase of 2.49% or $0.19 to close at $7.81. National Enterprises Limited (NEL) experienced the largest decline of the week of 10.53% or $0.80 to end at $6.80, its 52 week low. On the TTD Mutual Fund Market, 234,731 CLICO Investment Fund (CIF) units traded with a value of $5.4 million, closing the week at unit price of $23.02 (↑0.13%). Local indices weekly performances: � The Composite Index declined by 2.08 points (↓0.16%) to close at 1,328.64. (YTD: ↑2.16%) � The All T&T Index declined by 9.37 points (↓0.53%) to close at 1,761.73. (YTD: ↑3.63%) � The Cross Listed Index advanced by 0.74 points (↑0.62%) to close at 120.85. (YTD:↓0.75%) �The SME Index by 0.00 points (0.00%) to close at 99.50. (YTD:↓0.50%)

The Indices ended the week in mixed territories. The Composite Index closed at 1328.64, down 0.16% or 2.08 points. The All Trinidad and Tobago Index fell to 1761.73 while the Cross Listed Index closed at 120.85.

Find New Treasury Bill issues and local bond activitysummarized below.

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2 JMMB INVESTMENTSMARKET ROUND-UP

Local Fixed Income ReviewBonds There were no bonds traded on the Trinidad and Tobago Government Bond Market last week. Corporate bonds - NIF August 2023 - traded with a value of $2,040 and a last traded yield of 3.99% Liquidity The Commercial Banks closed last week with an excess reserve of $2.4 billion compared to $1.8 billion last week, up by $0.6 billion.

Republic Bank Ltd (RBL) last week announced that it had executed a seven-year subordinated loan agreement to borrow the sum of US$75 million from the International Finance Corporation (IFC). The disclosure that RBL, and not its holding company, Republic Financial Holdings Ltd, was executing the loan agreement came yesterday in a market notice posted on the T& T Stock Exchange website. The effective date of the execution of the agreement to borrow US$75 million was yesterday's date, April 12. But, in response to nine questions from the Express, a spokesperson for the bank said: 'In accordance with SEC rules, we are legally required to publiclydisclose the execution of the subordinated loan agreement, however the actual terms are confidential.' The news that Republic Bank had executed the loan agreement with the IFC, which is often referred to as the private sector arm of the World Bank, would have surprised the local market. That is because in the January 30 edition of Express Business, the magazine reported that negotiations for a US$75 million subordinated loan were going on with another institution, Washington DC-based IDB Invest. In a January 25 interview, which was recorded, Enrique Canas, the chief of financial institutions at IDB Invest, said the board of the institution, which is the private sector arm of the Inter-American Development Bank, was due to deliberate on a request by RFHL for funding in February. Canas told Express Business that IDB Invest was seeking the approval of its board to invest around US$75 millionin Tier 2 capital, in the bank holding company 'to improve their capital structure for the bank to invest more in technology and also to grow the sectors of small and medium enterprises and housing.' Explaining the proposed arrangement with Republic, the IDB Invest executive said: 'It's what we call an equity instrument, which is subordinated debt that counts as capital under the regulation of banks. For the bank to grow its business, it needs more capital. So whatever dollar we invest, it gets multiplied because for every dollar of capital, a bank can lend almost ten times as much in loans.' Responding to a question that sought to link IDB Invest's proposed investment in RFHL to the group's estimated expenditure of a total of US$325 million to acquire banking operations in the Cayman Islands from the Cayman National Corporation and in nine Caribbean countries from the Bank of Nova Scotia, Canas told Express Business on January 25: 'For us, Republic Bank is what we call a strategic partner because they are becoming one of the premier financial groups in the Caribbean. And for us, it is important because Republic is a Caribbean group,' that is expanding its footprint throughout the region. 'By them being in different countries, they will have economies of scale, and they can make this technology investment that will make them globally very competitive,' he added. The IFC has had a long relationship with T& T companies, going back to June 2005, when it entered into a loan agreement with Trinidad Cement Ltd for US$105 million. In March 2011, the IFC invested up to US$100 million in Sagicor, comprising US$80 million in convertible and redeemable preference shares and US$20 million in common shares, equal to about 4 per cent of the regional insurer. The IFC paid US$1.88 per share for that investment.

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Local Economic OutlookTrinidad Express Newspaper : Republic borrows US$75m - Terms 'confidential', says bank

The Petroleum Corporation of Jamaica (PCJ) is inviting prospective investors to apply for 11,000,000,000 shares in the capital of Wigton Windfarm Limited (WWF) at a price of $0.50 per share, as it seeks to sell 100% of its shareholdings. Of this number, 2,200,000,000 shares are reserved for public sector workers. The PCJ, under the direction of the Jamaican Government is undertaking this Offer for Sale by listing on the Jamaica Stock Exchange to: widen the ownership base of the Company; allow direct equity participation in the economy by encouraging local ownership; and provide funds for PCJ. Recommendation We recommend Wigton Windfarm Limited as OVERWEIGHT / BUY as we believe the Shares are being offered below our estimate of its fair value. This offer is suitable for investors seeking portfolio diversification and capital appreciation. The Company has a significant debt burden with significant maturities in the next five years. As such, dividends are expected to be modest if any in the short term as the Company seeks to reduce its leverage. Based on our forecast for net profits for the 2019 FY and assuming a 25% dividend pay-out ratio, the potential dividend yield on IPO price is 3.4%.

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Regional Economic OutlookJMMB Research -Wigton Windfarm Limited Initial Public Offering (IPO)

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Reuters: India's 2018/19 Iran oil imports up 5 percent year on year despite U.S. sanctions

India imported about 5 percent more oil from Iran in the last fiscal year through March as companies raised purchases ahead of U.S.sanctions against Tehran from November, preliminary tanker arrival data obtained from shipping and industry sources showed. Despite Washington restricting India’s purchases from Tehran, refiners shipped in about 479,500 barrels per day (bpd) of Iranian oil in 2018/19 compared with about 458,000 bpd a year before, according to the data. The United States introduced sanctions in November but gave a six-month waiver to eight nations, including India, which allowed them to import some Iranian oil. India was allowed by Washington to continue to buy about 300,000 bpd oil until early May. In March India’s oil imports from Iran roseto about 405,000 bpd, about 56 percent higher than February, the data showed. March volumes were however about 6 percent lower than the purchase in the same month a year earlier. A lack of ships delayed lifting of some cargoes to end-February, leading to higher arrivals in March, sources said. BPCL could not lift a cargo from Iran as tanker was not available, a company source said. Since November, when India received the sanctions waiver, only state-run Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum and Mangalore Refinery and Petrochemicals have been buying Iranian oil. India’s overall imports from Iran in 2018/19 were lower than the 500,000 bpd that Iran was hoping to sell to its second-biggest oil client after China. Indian refiners raised purchases from Iran in April-October 2018, drawn to almost free shipping and extended credit offered by Tehran to boost sales. In the first quarter of 2019, India shipped in about 40 percent less oil from Iran at about 313,400 bpd, the data showed. The sources declined to be identified as they were not authorized to speak with media. Indian refiners have not yet placed orders to lift Iranian oil in May pending clarity on whether Washington will extend the sanctions waiver. India wants to keep buying Iranian oil at a level of 300,000 bpd, Indian sources said last month. Refiners placed orders to buy 8 million barrels in April but India would receive higher volumes as some delayed cargoes of March arrive at Indian ports this month.

International Economic Outlook