Market Volatility To Continue In Global Equities

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CORONAVIRUS IMPACT

Global equity markets are observing unprecedented times as the coronavirus pandemic has caused significant worldwide economic disruption. The downward pressure continued during the week as fundamentals are painting a gloomy short-term picture across global economies. The governments pledging further fiscal support and Central Banks injecting economic stimulus were also not able to calm the markets as investors appear sceptical about the ability of these measures to forestall near-term economic challenges.

Moreover, oil prices remain near its lows and vulnerable to the downside as the OPEC+ price war has increased supply, while the economic crisis has reduced the demand for commodities. As a result, Brent crude oil declined for the sixth consecutive week, plunging 20.30% for the week and 59.12% for the year so far.

For the region, equity markets followed the sentiments in global markets to continue the downward trend. During the week, all the regional indexes closed in red. Egypt was the worst performing index regionally with losses of 17.76%, followed by losses of 10.48% in Dubai, and 6.03% in Abu Dhabi.

Going forward, the market volatility might continue in global equities but the downside risk appears to be limited after declining by an average of 30% since the start of 2020. The regional markets have also followed the sentiments in global markets and witnessed sharp decline since the start of 2020; however, long-term investors might access the current environment in analysing companies with strong fundamentals that are expected to benefit once the current environment has been stabilized.

Indexes   Last WTD (%) MTD (%) YTD (%)
Dubai (DFMGI) 1,819.24 -10.48% -29.76% -34.20%
Abu Dhabi (ADSMI) 3,685.56 -6.03% -24.81% -27.39%
Saudi (SASEIDX) 6,267.56 -1.41% -17.84% -25.29%
Kuwait (KWSE) 4,031.72 -4.79% -15.47% -17.90%
Egypt (EGX30) 9,205.58 -17.76% -29.24% -34.06%
Bahrain (BHSEIDX) 1,408.58 -1.93% -15.17% -12.52%
Oman (MSM30) 3,567.40 -4.45% -13.64% -10.39%

 

Commodities    Value WTD (%) MTD (%) YTD (%)
Gold (s/OZ) 1497.64 -2.07% -5.50% -1.28%
Silver ($/Oz) 12.58 -14.31% -24.50% -29.44%
WTI ($/bbl) 22.43 -29.31% -49.89% -63.27%
Natural Gas 1.6 -14.18% -4.75% -26.72%
OPEC Oil ($/bl) 26.98 -20.30% -46.60% -59.12%
Copper ($/MT) 4806.72 -11.77% -13.40% -22.47%
Aluminium ($/MT) 1617.77 -2.98% -2.95% -11.23%

 

FX Rates   Value WTD (%) MTD (%) YTD (%)
USD/AED 3.6728 0.00% 0.00% 0.00%
USD/SAR 3.7577 0.12% 0.17% 0.18%
USD/EGP 15.7 0.32% 0.67% -1.88%
USD/EUR 0.9349 3.84% 3.10% 4.84%
USD/JPY 110.8 2.68% 2.53% 2.02%

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