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

The relief rally in global equities halted last week

Published Date: 05 April 2020

Facebook
Linkedin
Twitter
Email
Print

 

The relief rally in global equities halted last week as the pace of virus spread coupled with economic data painted a rather grim picture for investors. The rally in oil prices following reports of a potential deal to cut output did offer some succor to markets. Overall, the MSCI All Country World index dropped -2.6% 5d on the back of weakness across its sub-indices. The MSCI G7 index, the MSCI EM index and the MSCI FM index dropped -3.1% 5d, -1.3% 5d and -2.3% 5d respectively. Volatility did ease off slightly but remained elevated. The VIX index, the V2X index and the CBOE EM ETF Volatility index dropped -28.6% 5d, -24.8% 5d and -21.8% 5d respectively.

While investors will continue to keep an eye on policymaker’s response to the evolving situation across various economies, the greater focus will be on a potential OPEC+ emergency meeting sometime next week. With production cuts already priced in, a disappointment could be another negative catalyst for investor sentiment.

Chart of the week

The dividend yield premium is often cited as a valuation tool. However, in light of a near-halt in economic activity owing to the viral outbreak, we are seeing more corporates announce cancellation or suspension of dividend payments. While analysts are yet to factor that in their models, the dividend futures on the S&P 500 index and the Euro Stoxx 50 index have already slumped 31% and 55% respectively in Q1 2020.

US and European dividend futures drop sharply

Source: Emirates NBD Research

MENA Markets

Regional markets closed mixed amid a realignment of portfolios by investors and mixed global cues. The S&P Pan Arab Composite index added +2.0% 5d mainly on the back of strength in Saudi Arabian equities. The spike in oil prices happened after most markets in the region had closed and hence had minimal impact.

UAE bourses closed lower with the DFM index and the ADX index losing -4.8% 5d and -0.3% 5d respectively. Emaar-related shares came under pressure after all the three companies listed on the DFM announced the cancellation of dividend payments for 2019 citing ‘current circumstances’. There were also unconfirmed reports that the company has halted work on some of its current projects. Emaar Properties and Emaar Development ended the week with losses of -5.2%, -10.5% while Emaar Malls added +5.6%. Abu Dhabi Commercial Bank (-22.2% 5d) also came under significant pressure after the bank disclosed a USD 981mn exposure to NMC Health. The bank has asked a UK court to put the company into administration as it seeks to protect its interests.

The Tadawul added +6.7% 5d on the back of sustained strength in market heavyweights, notably Saudi Aramco which gained +5.9% 5d. Al Rajhi Bank and Sabic added +3.8% 5d and +10.1% 5d respectively.

Elsewhere, Egyptian equities gave up gains supported by government support as economic factors weighed in. The EGX 30 index ended the week lower by -4.6%. The Egyptian Central Bank, towards the end of the week, left interest rates unchanged as it sought to prevent significant foreign investor outflows.

Developed Markets

As has been the case over the last month, coronavirus and related action by policymakers dominated flows in developed equity markets. The optimism from the previous week was stifled as realism sunk in light of economic data showing the scope of damages to the global economy and the unabated pace of the spread of the viral outbreak. The headline non-farm payroll data showed a decline of 701k and the unemployment rate jumped to 4.4%. The underlying household employment data showed a sharper decline of -2,987k.

Overall, the S&P 500 index, the Euro Stoxx 600 index and the Nikkei index lost -2.1% 5d, -0.6% 5d and -8.1% 5d respectively.

Emerging Markets

Emerging market equities closed lower but outperformed the wider market. The MSCI EM index lost -1.3% 5d relative to -2.8% 5d decline in the MSCI World index. Russian equities, understandably, outperformed amid a sharp rebound in oil prices on optimism over a deal to cut global output. The MSCI Russia index added +11.1% 5d.

According to data from the Institute of International Finance, investors pulled out a record USD 83.3bn from emerging market equity and debt markets in March 2020. The outflow was more severe than those during the 2008 financial crisis, the taper tantrum in 2013 and the 2015 CNY devaluation scare.  

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