Jan 2008 Financial News

US slowdown not affecting local stock exchange

Jan 30, 2008

Minister of Finance Karen Nunez-Tesheira said yesterday the Government is satisfied that the slowdown in the US economy and the volatility in the US stock market has not had any significant impact on the T&T Stock Exchange (TTSE).

She made the statement during an address at the inaugural conference on Capital Market Development which was organised by the newly formed Securities Dealers Association of T&T (SDATT) at the headquarters of the T&T Chamber of Industry and Commerce, Westmoorings.

Nunez-Tesheira said any impact of the slowdown of the US economy on T&T would depend on the magnitude and duration of the slowing.

“This is hardly surprising given the limited integration of the domestic market to US and emerging market economies,” she said.

“The current economic circumstances of T&T are such that a temporary slowing of the US economy does not impose a requirement for immediate adjustment—fiscal or otherwise,” she said.

Nunez-Tesheira said despite problems in the US economy she expects that world oil prices will remain high.

“We expect that oil prices will continue to be relatively buoyant even in the face of declining US growth as demand from China, India and other Asian countries continue to increase.”

Nunez-Tesheira said this represents some measure of insulation from the current turbulence in the global marketplace and new opportunities.

“The adjustments unfolding in the international economy point to a rebalancing of global trade and capital flows. Within these developments there are opportunities for new markets, new sources of investment inflows, and new alliances,” she said.

Nunez-Tesheira said there are several factors being addressed and changes being made to ensure a sustainable domestic capital market in light of the international scenario.

“These changes are driven largely by financial liberalisation, increased assimilation of technology into the financial services sector, a substantial redirection of capital flows across borders, the evolution of new generations of financial instruments, and the emergence of global financial conglomerates as mergers and acquisitions become increasingly commonplace,” she said.

Nunez-Tesheira said in terms of local legislative reforms, Government is currently finalising amendments to the Financial Institutions Act 1993, the Securities Industries Act, and the Central Bank Act.

She said Government is working together with the credit union sector to create a new enabling environment for the development of credit unions.

“Indeed, credit unions are a significant component of the financial services sector comprising over 400,000 members with assets in excess of $4 billion,” she said.

Nunez-Tesheira said several initiatives led to T&T’s readiness to engage the international economy on a competitive basis.

“The structural reforms of the early 1990s involved interest rate, exchange rate, current and capital account liberalisation and were complemented by the upgrading of the regulatory framework for the financial sector...the results of these initiatives are reflected in the performance of the manufacturing sector in the intervening period,” she said.


Source :
Raphael John Lall
The Trinidad Guardian, Page 25
Wednesday January 30, 2008

http://www.guardian.co.tt/business4.html