T&T Election Offers Buy Opportunity

Trinidad & Tobago’s surprise election could present fixed income investors with a buying opportunity, says JPMorgan. Prime minister Patrick Manning last week formally asked the president to dissolve parliament a day before an opposition motion of no-confidence was scheduled to be debated in parliament. The election must be held by July 9, but political analysts expect the date to be around mid-May, says JPMorgan. “We expect policy continuity regardless of the outcome of the election as T&T’s major political parties are centrist and are unlikely to significantly alter macroeconomic policy,” says the bank. “While we have no allocation of T&T’s USD bonds in our EMBIG model portfolio, we would view any weakness on the back of the political noise as a buying opportunity,” it adds. “All the political parties in Trinidad are pretty centrist,” says Carl Ross, managing director of investments at Oppenheimer & Co. “The base case is that the prime minister will stay in power.” JPMorgan notes that T&T’s dollar bonds have returned 4% this year, underperforming the broader market.