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 continued their positive run

Published Date: 16 February 2020

Facebook
Linkedin
Twitter
Email
Print

 

Global equities continued their positive run on the back of strength in corporate earnings and macroeconomic data. The Citi Economic Surprise index for major economies has now remained in positive territory since the start of 2020 and is, in fact, close to levels last seen in September 2019. The MSCI All Country index added +1.1% 5d on the back of strength in the MSCI G7 index (+1.1% 5d) and the MSCI EM index (+1.3% 5d).

Notwithstanding the limit impact of coronavirus on equity markets, investors will continue to keep an eye on the virus’s pace of expansion. Further, investors will also look at the minutes from the US Federal Reserve’s last meeting and the decision of the People’s Bank of China on the prime lending rate.

Chart of the week

The mixed signals from different asset classes about the impact of coronavirus have led to questions about the sustainability of the current rally in equities. One another example of the same is the outperformance of European equities relative to the EUR. The spread between the Euro Stoxx 50 index and the EUR has widened in 2020 and the 60-day correlation is at the lowest since September 2017.

Correlation between EUR and European equities at its lowest since September 2017

Source: Bloomberg

MENA Markets

Regional markets closed lower as weak corporate earnings weighed on investor sentiment. The S&P Pan Arab Composite index declined -1.3% 5d. The rebound in oil prices did not assuage investor concerns.

UAE bourses saw sustained weakness with the MSCI UAE index (-1.9% 5d) closing lower for a third consecutive week. Emaar-related names led the decline on the DFM following their earnings announcement. Emaar Properties dropped -3.3% 5d and Emaar Malls declined -3.4% 5d. Emaar Development bucked the trend with a gain of +0.5% 5d. Emaar Properties reported 2019 net income of AED 6.2bn (+1% y/y), higher than consensus estimates of AED 5.96bn. The full year property sales in Dubai stood at AED 15bn. Dubai Islamic Bank (+0.2% 5d) ended the week higher after the bank’s board recommended raising foreign ownership limit (FOL) to 40% from 25%. The increase in FOL could see inflows, according to market estimates, of as much as USD 200mn when the index compilers readjust their broader indices. The bank also reported earnings that beat consensus estimates.

Elsewhere, the Tadawul and the Qatar Exchange dropped -2.2% 5d and -4.4% 5d respectively. The weakness was led by heavyweight petrochemical stocks. Industries Qatar and Saudi Aramco dropped -6.9% 5d and -0.9% 5d respectively. Sabic also declined -5.1% 5d to take its year to date losses to -14.1%.

Developed Markets

Developed market equities closed higher as investors continued to shrug off the impact of coronavirus on the global economy and take comfort from statements of various policymakers about their willingness to act should the situation warrant. Investor sentiment also received a boost from better than expected corporate earnings and macroeconomic data. The S&P 500 index, the Euro Stoxx 600 index added +1.6% 5d and +1.5% 5d while the Nikkei index lost -0.8% 5d.

Given the outperformance of equities at a time when other asset classes are giving mixed signals, the make-up of the recent rally has come into focus. The outperformance of technology stocks and their weightage has also been highlighted. The Nasdaq Composite index has rallied +8.5% ytd compared to gains of +4.6% on the S&P 500 index. It is no surprise to see that an equal weight S&P 500 index would have underperformed the broader S&P 500 index by 250 bps ytd.

The Q4 2019 earnings in the US have turned out better than expected. According to data from FactSet, the blended earnings growth for the S&P 500 index stood at +0.7% compared to the start of quarter estimates of -1.7%. If the number holds then it will be the first time since Q4 2018 that the index would have reported positive earnings growth.

Emerging Markets

Emerging market equities continued their recovery from coronavirus induced sell-off. The MSCI EM index added +1.3% 5d on the back of strength in the MSCI BRIC index which gained +1.6% 5d.  The decision of China to halve tariffs of USD 75bn of imports from the US and the continued talk of further stimulatory measures by Chinese policymakers helped investors to look beyond the impact of coronavirus.

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