Emirates NBD Research
 

Find anything about our articles and more.
Enter a query in the search input above, and results will be displayed as you type.

Try typing "Dubai Economics", "Dubai GDP", "GCC Macro"

Emirates NBD
Search
Subscribe
   
  • Home
  • Economics

    Emirates NBD Research provides detailed coverage of 16 GCC and MENA economies, analysing them from a top down macro and strategic perspective as well as by a bottom up sector by sector approach.

    • SUBTOPICS
    • GCC Macro
    • MENA Macro
    • Global Macro
    • Sector Economics
    • Monthly Insights

     

    Latest Article Lebanon continues to face multiple challenges
    Latest Article UAE: A mixed bag of data in January
    Latest Article Moroccan growth will outperform MENA oil importer peers in 2021

     

  • Markets

    Emirates NBD Research publishes reports on global forex, rates and commodities, as well as regional fixed income and equity markets.

    • SUBTOPICS
    • Foreign Exchange
    • Fixed Income
    • Commodities
    • Equities
    • Monthly Insights

     

    Latest Article IEA lowers demand forecasts
    Latest Article Monthly Insights: January 2021
    Latest Article Gold prices stumble to start 2021

     

  • Daily
  • PMIs

    Emirates NBD sponsors Purchasing Managers’ Indices for the UAE, Saudi Arabia, Egypt and Dubai. The indices are compiled by IHS Markit, the leading global provider of financial market data.

    • SUBTOPICS
    • UAE PMI
    • Saudi Arabia PMI
    • Egypt PMI
    • Dubai PMI
    • Methodology

     

    Latest Article Dubai PMI moves back into expansion territory in December
    Latest Article Regional PMIs- Saudi PMI rises to year high in December
    Latest Article Regional PMI round-up: A mixed bag in November

     

  • About Us
  • EmiratesNBD.com
  • Subscribe
EQUITIES > MARKETS

Global equities closed lower for the first time in three weeks

Published Date: 26 April 2020

Facebook
Linkedin
Twitter
Email
Print

 

Global equities closed lower for the first time in three weeks. However, the move appears relatively muted when weighed against a multitude of negative catalysts which emerged throughout the week. These included absolute dislocation in oil markets, grim economic data out of the US and Europe and mounting risk of structural damage. Policymakers continued to firefight with the European Central Bank making a move towards accepting junk bonds as collateral and the US passing additional stimulus measures.

Overall, the MSCI All Country index dropped -1.6%% on the back of losses across its sub-indices. The MSCI G7 index, the MSCI EM index and the MSCI FM index declined -1.4% 5d, -2.4% 5d and -1.4% 5d respectively. Volatility jumped in emerging markets but eased off elsewhere. The CBOE EM ETF Volatility index jumped +36.6% 5d.

Beyond coronavirus, the focus this week will be on central banks with scheduled meetings of the Federal Reserve, the European Central Bank and the Bank of Japan. Given that these central banks have been rather proactive outside of their regular meetings, we do not expect major changes to their policy this week. Yet, it will be important to hear their prognosis of the health of the global economy. Corporate earnings and economic data will also be keenly watched.

Chart of the week

Last week saw WTI oil futures plunge into negative territory for the first time in history. Unsurprisingly, oil volatility jumped to a record high. However, what was surprising was the limited contagion impact of the move on the volatility of other asset classes including equities and fixed income.

Volatility in other asset classes were unaffected by a spike in oil volatility

Source: Bloomberg

MENA Markets

Regional markets closed mixed amid a collapse in oil prices. It does appear that some markets were supported by the emergence of bargain hunting. Overall, the S&P Pan Arab Composite index ended the week with losses of -1.5%.

UAE bourses closed higher with the DFM index and the ADX index adding +1.7% 5d and +2.4% respectively. Telecom companies led the gain with du adding +2.4% 5d and Etisalat gaining +5.9% 5d. Both these companies reported Q1 2020 earnings wherein Etisalat reported a net income of AED 2.18bn (-1.5% y/y) and du reported a profit of AED 355mn (-21.0% y/y). The first interim dividend payment of AED 0.25 per share, announced by Etisalat, was lower than last year’s interim dividend. Both companies did highlight that a greater impact of the viral outbreak will reflect in Q2 2020 earnings.

The Tadawul ended the week marginally lower with losses of -0.40% 5d. Saudi Aramco closed flat while Sabic declined -4.9% 5d. Saudi Electricity Co. ended the week flat even as the company received a waiver to not pay dividends for the Public Investment Fund’s 74.31% stake in the company. The waiver was given to ensure the company’s financial and operational sustainability.  

Developed Markets

With most economies in the developed world plotting their way to ease restrictions, the focus of investors has shifted on the pace and efficacy of these measures. This coupled with continued measures by policymakers to support and stimulate the economy helped investors to navigate through massive distortion in energy markets and pare early week losses. Along with measures from the ECB, European leaders signed off a EUR 540bn plan to tackle the immediate fallout from the pandemic.

Overall, the S&P 500 index, the Euro Stoxx 600 index and the Nikkei index lost -1.3% 5d, -1.2% 5d and -3.2] respectively. Over the past month, healthcare and technology sector stocks have outperformed with gains of +22.1% 1m and +15.2% 1m respectively in the US and +14.1% 1m and +8.8% 1m respectively in Europe.

The earnings season in the US continues to remain rather dismal. With nearly 24% of companies in the S&P 500 index having reported earnings, 60% of companies are reporting profits and sales above estimates. According to FactSet, the blended earnings growth at the end of last week came in at -15.8%. If this rate of decline holds, then this will be the largest y/y decline in earnings since Q2 2009. The S&P 500 index is currently trading at 19.1x 12m forward earnings, higher than the 5y and 10y averages.

Emerging Markets

Emerging market equities underperformed the broader market. The MSCI EM index lost -2.4% 5d relative to a decline of -1.5% 5d in the MSCI World index. The weakness in EM currencies and a sharp drop in oil prices contributed to this underperformance. Turkey’s Istanbul 100 index (+2.6% 5d) was a notable outperformer after the central bank surprised markets by a 100 bps cut in interest rates. Brazil’s Bovespa index dropped -3.2% 5d as political turmoil coupled with the viral outbreak weighed on investor sentiment.

Click here to see the full publication

Written By:
,

RELATED ARTICLES

Global equities moved higher
21.06.2020

GCC Equity Flow Monitor - May 2020
15.06.2020

Global equities suffered a reversal last week
14.06.2020

Last week global equities had one of their best weeks
07.06.2020

Notwithstanding heightened political tensions, global equities rallied last week
31.05.2020

See all

LATEST ARTICLES

Regional growth to be driven by improving global backdrop
13.01.2021

Lebanon continues to face multiple challenges
25.01.2021

UAE: A mixed bag of data in January
21.01.2021

See all
 

 Subscribe to our newsletter


Never miss out what is going on in UAE Economics

KEEP READING MORE

Regional growth to be driven by improving global backdrop

We expect GCC growth to average 2.3 percent in 2021 following an estimated 5 percent contraction in 2020.

ECONOMICS, GCC MACRO - 13.01.2021

Monthly Insights: January 2021

A round-up of our key research insights and forecasts this month.

ECONOMICS, MARKETS - 17.01.2021

Energy markets focus on US presidential election

Oil industry braces for a Biden administration.

MARKETS, COMMODITIES - 25.10.2020

 

Markets pricing in Democratic victory

Anticipation of a Democratic win in the US election is sending yields higher.

MARKETS, FX - 27.10.2020

MENA Quarterly Q4 2020

Our quarterly report on MENA economies

ECONOMICS, MENA MACRO - 13.10.2020

OPEC and allies reach agreement for 2021

The oil market should be able to absorb modest production increases

MARKETS, COMMODITIES - 06.12.2020

Green bond market has room to expand in MENA

Renewables projects across the region could attract new pool of investors.

MARKETS, FIXED INCOME - 21.10.2020

  • Economics
  • Markets
  • PMIs
  • About Us
  • Subscribe to our publications
  • Economics
  • GCC Macro
  • MENA Macro
  • Global Macro
  • Sector Economics
  • Markets
  • Foreign Exchange
  • Fixed Income
  • Commodities
  • Equities
  • PMIs
  • UAE PMI
  • Saudi Arabia PMI
  • Egypt PMI
  • Dubai Economy Tracker
  • Methodology
  • About Us
  • Subscribe to our publications

 


Terms and Conditions
Copyright © 2021 Emirates NBD Bank PJSC. All Rights Reserved