Global Market Review and Outlook

As the month of March winds down, performance across global equities markets was rather bullish as the Ghana GSE and France CAC were the only losers’ (-2.4% and -0.4% MTD). The best performing indices for the month were the Egyptian EGX (+22.8%) which was majorly driven by the currency devaluation in the month, the Russian RTS (+15.6%) and the Brazillian Ibovespa (+14.5%) which rallied with oil prices despite the macroeconomic challenges currently facing the country.

During the week, the US dollar further strengthened which dampened the demand for oil. Also, data showing rising US crude stockpiles raised concerns of a glut and resulted in the decline in oil prices that ultimately weakened investor sentiments across markets. Following the conclusion of the US Fed meeting last week, there was a downward revision on the number of rates hike in the year, however, during the week some contradicting statements have arisen that point to the fact that consideration of a rate hike may come as early as the meeting in April. All these factors culminated in the negative sentiments that pervaded the developed markets.

Performance across markets in the BRICS classification was mixed. The India BSE Sens was the best performing index, appreciating 1.5% WTD. Similarly, the Chinese Shanghai Composite appreciated for the 2nd consecutive week improving 0.2% WTD, however, investors still believed that the positive performance recorded is more of a “dead cat bounce” that a “bull run” as macroeconomic fundamentals remain weak. On the flipside, the Brazilian Ibovespa lost 3.6% WTD as political tensions continues to weigh on investor sentiments while the South African JSE trailed, depreciating 3.3% WTD.

Across the developed markets, as noted earlier, the mixed policy direction coupled with the developments in the oil market dampened investor sentiments as the UK FTSE fell 1.2% WTD while the in the US, the S & P 500 and the NASDAQ declined 1.1% and 0.9% WTD respectively at the time of compiling this report. The bearish sentiments filtered into the European markets and in addition to that the terrorist attack in Belgium affected European equities as the France CAC and Germany DAX dipped 2.9% and 0.8% W-o-W respectively even as investors await the decision on the stimulus plan from the next ECB meeting. In the African markets under our coverage, the Ghanaian GSE closed flat while the Kenya NSE appreciated the most (1.2% WTD), followed by the Nigerian ASI and the Egypt EGX which appreciated 0.8% apiece WTD.

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