Global Market Review and Outlook

Global markets sustained a bullish performance this week as concerns about the outlook for global economic growth eased following positive data from major economies – particularly US private sector job data - and the rebound in commodity prices, bolstering risk appetites globally. Performance remained impressive notwithstanding Thursday’s wane in oil prices amid swell in US crude inventories and the absence of fresh initiatives from world’s largest producers to reduce supply; dousing some of the bullish sentiments seen earlier this week in oil prices.

Under the BRICS classification, the Brazil Ibovespa gained the most, up 18.9% despite data revealing a 3.8% contraction in its economy in 2015 as market had earlier priced-in much weaker numbers. This performance was trailed by the India BSE Sens which rose 6.4%, fueled by gains in Tata Steel amid plans by the Indian government to support metal producers. The South Africa FTSE/JSE grew 5.3% on gains in MTN Group Ltd following news that US$600.0m has been set aside to offset the US$3.9bn regulatory fine in Nigeria, signaling confidence that the fine will be reduced. Similarly, the Russia RTS gained 4.8% W-o-W as oil prices trended upwards on most days of the week.

Performance in the developed market was upbeat as the UK FTSE gained 1.8% W-o-W as mining stocks extended gains on rally in commodity prices. The US S&P 500 and NASDAQ rose 2.3% and 2.5% W-o-W respectively, against the backdrop of the expansion in energy and banking stocks, a result of market expectation of strong job data which dispelled concerns over the health of the US economy.

In the African markets, the Nigeria All Share Index rebounded (up 6.6% W-o-W) from last week’s dip to top indices under our coverage in the category. The Kenya NSE advanced 2.8% while the Egypt RGX closed relatively flat. The GSE Composite was the lone loser across all indices under our coverage, shedding 0.4%. The extended gains in equities globally suggests market is already reassessing the prospect of a dim global growth and we expect the optimism to continue to bolster sentiments.

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