Tag: Moody’s

Do Sovereign Credit Ratings Really Matter?

31 July 2017

A FIRSTLINE SECURITIES LIMITED BLOG BY: MIKE

As the dust settles on the recent sovereign downgrades of Trinidad and Tobago and the Minister of Finance’s vexation levels recede, we take a look at the wider issue of sovereign downgrades. Are we alone and does it matter?

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A Time to Get Even More Moody?

28 April 2017

Moody’s downgrade Trinidad and Tobago Again

Photo courtesy: http://www.reuters.com/article/us-usa-ratings-moody-s-idUSKCN0S11AM20151007

A Firstline Securities Limited Blog by: Mike

Yesterday we reported on S&P’s recent Trinidad and Tobago downgrade…now let’s look at what Moody’s thinks:

On the 25th April 2017, Moody’s Investor Services (Moody’s) downgraded Trinidad and Tobago’s government bond rating from Baa3 to Ba1 and assigned a country outlook classification of stable.

This downgrade is the third successive Moody’s downgrade of Trinidad and Tobago. On the 30th April 2015 Moody’s downgraded Trinidad and Tobago’s government bond rating from Baa1 to Baa2, and on the 15th April 2016 Moody’s downgraded the same securities from Baa2 to Baa3. Read more…

A time to get a little Moody? – The Reboot

18 April 2016

Moody’s downgrade of Trinidad and Tobago

On the 15th April 2016 Moody’s Investor Services downgraded Trinidad and Tobago’s government bond rating from Baa2 to Baa3, and confirmed the country outlook as being negative.

This downgrade comes just under a year after Moody’s downgraded Trinidad and Tobago’s bond rating from Baa1 to Baa2 on the 30th April 2015.

Moody’s cited two factors for the downgrade:

  1. Despite the Government’s fiscal consolidation efforts, low oil and gas prices will negatively and materially undermine Trinidad and Tobago’s economic and government financial strength at least throughout 2018 (in other words at least for the next two years) and,
  2. There is a high likelihood that the policy response to the commodity price shock will not be as timely and effective as required due to a lack of macroeconomic data and weak policy execution ability.

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Are Things That Bad That We Have to Remove the Fuel Subsidy?

24 March 2016

Imagine removing the fuel subsidy on gas at the pump in Trinidad? Well, it may become reality as the Minister of Finance is inviting public feedback on this proposal come April, in just a couple days….It may seem warranted, given the current economic state in Trinidad and Tobago. For me, I think anything that results in less traffic on the road on the way to work is worth considering. Also, the removal of the fuel subsidy is actually a recommendation of the International Monetary Fund, which thinks that spending money on the subsidy is unsustainable. I guess that if we want a good evaluation from the IMF, we should comply. I think the removal of the subsidy can help T&T only if it is done gradually to limit inflationary pressures and only if the savings from the removal of the subsidy are spent to diversify the T&T economy away from oil and gas.

But are we that badly off to justify removing the fuel subsidy? The current repo rate of 4.75% acts as a signal for all other interest rates in Trinidad and is usually increased to contain inflation. The index of retail prices actually rose in February 2016 to 103.4 from 102.4 in January 2016 and many consumers are complaining that retailers are raising the price of food items from by more than the 12.5% Value added tax.

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