Global Markets Volatility To Remain Elevated

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CORONAVIRUS IMPACT

The global equity markets witnessed mixed sentiments during the week, and were dominated by elevated levels of volatility on the back of unpredictable impact of the coronavirus on global economies. The US markets are reflecting heightened anxiety from the spread of coronavirus as investors are ignoring robust job data and the Fed’s 50 bps rate cut during the week.

Moreover, the drastic moves in treasury yields during the week might be another factor driving volatility in equity markets. Brent crude recorded a steep decline of 10.39% during the week, as major producing nations failed to agree on supply cuts to offset the slowdown in demand for fuel, stemming from the coronavirus outbreak.

For the region, equity markets recorded a negative performance, with all the 8 indexes closing in red during the week. Abu Dhabi plunged by 5.27%, followed by 5.08% in Egypt, 5.00% in Dubai, and 3.64% in Kuwait.

Going forward, global markets volatility might continue to remain at elevated levels as the heightened anxiety might persist due to the rapid spread of the epidemic globally, coupled with its unpredictable impact on global economies.

Moreover, investors are struggling to balance between the competing forces of the more widely coronavirus and of monetary and stimulus measures taken by leading Central Banks. The regional markets will continue to follow the trend in global markets but the sharp decline in oil prices is becoming a bigger concern for regional investors amid adverse global headlines.

Indexes   Last WTD (%) MTD (%) YTD (%)
Dubai (DFMGI) 2,460.54 -5.00% -5.00% -11.01%
Abu Dhabi (ADSMI) 4,643.09 -5.27% -5.27% -8.52%
Saudi (SASEIDX) 7,467.52 -2.11% -2.11% -10.99%
Kuwait (KWSE) 4,595.65 -3.64% -3.64% -6.42%
Egypt (EGX30) 12,347.65 -5.08% -5.08% -11.56%
Bahrain (BHSEIDX) 1,617.79 -2.57% -2.57% 0.47%
Oman (MSM30) 4,107.79 -0.56% -0.56% 3.18%

 

Commodities    Value WTD (%) MTD (%) YTD (%)
Gold (s/OZ) 1673.85 5.62% 5.62% 10.34%
Silver ($/Oz) 17.31 3.91% 3.91% -2.90%
WTI ($/bbl) 41.28 -7.77% -7.77% -32.39%
Natural Gas 1.71 1.43% 1.43% -21.97%
OPEC Oil ($/bl) 45.27 -10.39% -10.39% -31.41%
Copper ($/MT) 5650.41 1.80% 1.80% -8.86%
Aluminium ($/MT) 1709 2.52% 2.52% -6.23%

 

FX Rates   Value WTD (%) MTD (%) YTD (%)
USD/AED 3.6728 0.00% 0.00% 0.00%
USD/SAR 3.752 0.02% 0.02% 0.03%
USD/EGP 15.59 -0.03% -0.03% -2.56%
USD/EUR 0.886 -2.29% -2.29% -0.64%
USD/JPY 105.3 -2.56% -2.56% -3.05%

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