Unit­ed States:

Da­ta re­leased dur­ing the week end­ed Feb­ru­ary 10, 2012, in­di­cat­ed that con­sumer bor­row­ing in the Unit­ed States rose more than fore­cast in De­cem­ber, dri­ven by de­mand for au­to and stu­dent loans.

Cred­it in­creased by US$19.3 bil­lion to US$2.5 tril­lion and topped the US$7 bil­lion me­di­an fore­cast by econ­o­mists. This gain fol­lowed the US$20.3 bil­lion in­crease in De­cem­ber. Non-re­volv­ing cred­it, in­clud­ing ed­u­ca­tion­al and au­to loans in­creased by US$16.6 bil­lion, the biggest gain since No­vem­ber 2001, while re­volv­ing debt, which in­cludes cred­it cards, climbed US$2.76 bil­lion. In No­vem­ber, re­volv­ing cred­it to­talled US$5.6 bil­lion, while non-re­volv­ing cred­it mea­sured US$14.8 bil­lion. The im­proved labour mar­ket has lent sup­port to con­sumers' con­fi­dence in the econ­o­my. An im­prov­ing job mar­ket may be giv­ing house­holds the courage to take on more debt in or­der to sus­tain spend­ing, which ac­counts for about 70 per cent of the econ­o­my.

At the same time, the in­creas­ing de­pen­dence on cred­it may be an in­di­ca­tion the gains in em­ploy­ment have yet to push wages high enough to sin­gle-hand­ed­ly give con­sumers the means to keep shop­ping. The trend con­tin­ued in the fourth quar­ter, giv­en the hol­i­day sea­son and will be mon­i­tored to see if it trans­lates to a more sus­tained path. De­spite a low­er job­less rate, this re­duc­tion has been at­trib­uted to low­er par­tic­i­pa­tion rate, which may point to­ward a less sus­tained path in con­sumer spend­ing. The trade deficit for De­cem­ber widened to a six-month high as a strength­en­ing econ­o­my prompt­ed big­ger gains in im­ports to ex­ports. The gap in­creased 3.7 per cent to US$48.8 bil­lion from US$47.1 bil­lion a month ear­li­er. Pur­chas­es of goods and ser­vices pro­duced over­seas were the strongest in more than three years, dri­ven by record de­mand for cap­i­tal equip­ment. Im­ports are es­ti­mat­ed to have ad­vanced 1.3 per cent, the largest since Ju­ly 2008, while ex­ports in­creased 0.7 per cent, boost­ed by record sales of pe­tro­le­um to buy­ers over­seas.

Eu­rope

Greece: Fol­low­ing last week's ap­proval for ad­di­tion­al aus­ter­i­ty mea­sures by the Greek par­lia­ment, Eu­ro-area fi­nance min­is­ters will meet in Bel­gium on Feb­ru­ary 15, 2012, for an ex­tra­or­di­nary meet­ing to dis­cuss the re­quest for ad­di­tion­al sup­port by Greece. De­spite the Greek ap­proval, con­cerns are be­ing raised by key play­ers, in­clud­ing Ger­many, over the will­ing­ness and abil­i­ty of Greece to im­ple­ment these poli­cies. Eu­ro-zone gov­ern­ments are yet to vote on ap­prov­ing the bailout, the funds from which are need­ed to pre­vent a Greek de­fault in March 2012.

ECB and BOE: The Eu­ro­pean Cen­tral Bank (ECB) last week an­nounced that its pol­i­cy in­ter­est rate would re­main un­changed at 1.00 per cent.

Sim­i­lar­ly, the Bank of Eng­land (BOE) kept its pol­i­cy rate at 0.50 per cent, but in­creased the size of its as­set pur­chase pro­gramme from £275 bil­lion to £325 bil­lion in an ef­fort to main­tain cred­it con­di­tions and stim­u­late eco­nom­ic ac­tiv­i­ty.

Da­ta on Eu­ro-zone eco­nom­ic growth in the fourth quar­ter of 2011 is ex­pect­ed on Feb­ru­ary 15, 2012.

Re­gion­al

T&T: A team from the In­ter­na­tion­al Mon­e­tary Fund vis­it­ed T&T be­tween Feb­ru­ary 1 and Feb­ru­ary 10, 2012, to hold dis­cus­sions with var­i­ous stake­hold­ers in the econ­o­my. In their find­ings, the team not­ed that there was ev­i­dence that eco­nom­ic con­di­tions were im­prov­ing and that growth was ex­pect­ed in 2012. Down­side risks to their ex­pec­ta­tions in­clude a de­te­ri­o­rat­ing glob­al econ­o­my, weak­er gas prices, and im­ple­men­ta­tion de­lays in the Pub­lic Sec­tor In­vest­ment Pro­gramme.

EC­CU: Busi­ness Mon­i­tor In­ter­na­tion­al has in­di­cat­ed that the bank­ing sec­tor of the East­ern Caribbean Cur­ren­cy Union (EC­CU) will prob­a­bly ex­pe­ri­ence very lit­tle growth over the com­ing years.

The re­search agency not­ed that bank loan port­fo­lios had ex­pand­ed by just 0.5 per cent (year-on-year) in No­vem­ber 2011 and that the main com­po­nents of this growth were low yield­ing, low risk as­sets, which sug­gests that the banks were choos­ing to keep ad­di­tion­al de­posits in risk-free as­sets rather than en­gage in lend­ing.

TTSE Com­pos­ite In­dex sees a mar­gin­al week­ly gain

The Com­pos­ite In­dex saw an in­crease of 0.31 per cent dur­ing the week end­ing Feb­ru­ary 10, ris­ing to a val­ue of 1,013.64 as ten stocks ad­vanced and five de­clined. An­gos­tu­ra Hold­ings Ltd (AHL) was the week­ly vol­ume leader with 45,948 shares trad­ing at a clos­ing price of $7.95-un­changed for the week. Wit­co (WCO) saw the largest price ap­pre­ci­a­tion ris­ing by 1.69 per cent dur­ing the week to a close of $63.00. Na­tion­al Flour Mills (NFM) saw the largest price de­cline falling by 7.14 per cent dur­ing the week to a close of $0.65. Year-to-date, the TTSE Com­pos­ite In­dex is up 0.08 per cent.

Fla­vorite Foods Ltd ac­quires Romike Ltd

• Fla­vorite Foods Ltd has in­formed the T&T Stock Ex­change that it has ac­quired all of the shares of Romike Ltd, lo­cat­ed at the cor­ner of Bound­ary Road and Churchill Roo­sevelt High­way, San Juan.

• Romike is a suc­cess­ful frozen meat, chilled and dry goods dis­tri­b­u­tion com­pa­ny with an­nu­al sales in ex­cess of $50 mil­lion for the last fi­nan­cial year end­ing March 31, 2011.

• This ac­qui­si­tion will like­ly ben­e­fit the en­larged group due to the many syn­er­gies avail­able fol­low­ing the merg­er.

First Cit­i­zens In­vest­ment Ser­vices Ltd

re­search@firstc­i­t­i­zen­stt.com