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 had one of their worst weeks since the 2008 financial crisis

Published Date: 01 March 2020

Facebook
Linkedin
Twitter
Email
Print

 

Global equities had one of their worst weeks since the 2008 financial crisis as investors reacted to the escalating pace of the coronavirus outbreak outside of China. The breadth of its spread laid bare the worries over its impact on global economic growth as equities finally caught up with moves in other asset classes. The MSCI All Country index dropped -10.5% 5d on the back of weakness across its sub-indices. A much sharper move was seen across volatility indices with the VIX index, the V2X index and the CBOE EM ETF Volatility index jumping +135% 5d, +168% 5d and +120% 5d respectively.  

The primary focus of investors’ will be on the virus’s pace of expansion. Additionally, investors will be paying attention to first-tier economic data to gauge the severity of impact and will also be watching out for a response from various policymakers. Regionally, we expect markets to follow global cues.

Chart of the week

Global equities lost USD 6tn in market capitalization over the last week. The Bloomberg World Stocks Market Capitalization index ended last week at below USD 80tn, a level last seen in October 2019.

Bloomberg World Stocks Market Capitalization index (USD tn)

Source: Bloomberg

MENA Markets

Regional bourses closed lower as weak global backdrop and the sharp increase in coronavirus cases reported from the region weighed on investor sentiment. The sustained decline in oil prices also contributed to the weakness. All major indices closed in negative territory with the S&P Pan Arab Composite index ending the week -3.9% 5d.

The weakness across markets was broad based with market heavyweights bearing the brunt. Most of these stocks had their biggest weekly declines since 2017. Emaar Properties (-10.0% 5d), Abu Dhabi Commercial Bank (-6.0% 5d), Al Rajhi Bank (-5.5% 5d) and Qatar National Bank (-3.4% 5d) were among major losers. Oil-related stocks also drifted lower with Saudi Aramco, Sabic and Industries Qatar dropping -0.9% 5d, -6.3% 5d and -0.1% 5d respectively.

Following the sharp decline in equities over the last week, the dividend yield on GCC equities has shot to record levels. According to Bloomberg, the 12m forward dividend yield on the MSCI GCC Countries index at the end of last week stood at 5.0%. This is in contrast to a 3.2% 12m forward dividend yield on the MSCI Emerging Markets index and a 2.9% 12m forward dividend yield on the MSCI G7 index.

Developed Markets

Developed market equities had their worst week since the 2008 financial crisis. The immediate trigger was the increasing pace of coronavirus outbreak outside of China which in turn prompted countries to take hard measures such as restrictions on travel, quarantining a large number of people and cancellation of major events. Such measures are expected to have a significant impact on economic growth which at the moment appears hard to quantify. Overall, the S&P 500 index, the Euro Stoxx 600 index and the Nikkei index dropped -11.5% 5d, -12.3% 5d and -10.0% 5d respectively.

One indicator which reflected the current state of the market was CNN’s Fear and Greed index which ended the week deeper into the extreme fear quartile with a reading of 10. One month ago the index was in neutral territory with a reading of 52.

Emerging Markets

Emerging market equities outperformed broader indices with the MSCI EM index dropping -7.3% 5d compared to a decline of -10.5% 5d in the MSCI World index. However, that could be more of a case of broader equities catching up with the drop in emerging market equities which had been leading the decline in risk assets so far.

Some of the technical factors helping emerging markets could be already showing signs of waning. For example, the Chinese equity markets are now at its most leveraged since 2016 and the value of shares sold short has also surged to a record CNY 15bn. Elsewhere, Turkey’s Borsa Istanbul 100 index dropped -9.3% 5d. Beyond the pressures from broader indices, the escalating rhetoric between Turkey and Russia also 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