Publications -

Global Matters Weekly – 23 March 2020

(iI) Liquidity of Property
by Jackson Franks

As we temporarily enter a new way of living, I spent Wednesday night giving my grandparents a step by step guide on creating a Skype account. After a good 45 minutes (which felt like weeks) and a lot of patience we managed to complete the process. They couldn’t quite believe that they could see me and me them as we sat down to eat dinner together via Skype. With my Grandpa’s interest in the financial markets, especially the real estate sector, we had a lot to talk about considering six UK open-ended property funds were suspended last week with the expectation that others will follow this week.

Market Snapshot

  • The rapid spread of COVID-19 has led to the continued lockdown of parts of Europe and the US, although a steady slowdown in cases is being seen in Italy
  • Global equity markets declined 12.2% over the past week
  • Brent crude fell 20.3% ending the week at $27.0 a barrel
  • Gold fell 2.0% ending the week at $1498.7 an ounce

Global Matters Weekly – 16 March 2020

The Bear Necessities
by Robert White, CFA

“There are decades where nothing happens; and there are weeks where decades happen”. After the longest bull market on record finally came to an end last week, Lenin’s famous quote concisely sums up the current mood among investors. The S&P 500 officially moved into bear market territory on Thursday after it breached the 20% level in a record 16 sessions of trading. Such price action reflects the tragic reality that the coronavirus has now caused the death of thousands globally, and the focus quite rightly is on limiting its human cost. Amidst the barrage of negative news, it is important for long term investors to act rationally and take account of the situation as it develops.

Market Snapshot

  • The rapid spread of COVID-19 caused significant portions of Europe to lockdown
  • Global markets declined 12.4% over the past week
  • Brent crude fell 25.2% ending the week at $33.9 a barrel
  • Gold fell 8.6% ending the week at $1529.8 an ounce

Global Matters Weekly – 9 March 2020

Tipping point
by Alex Harvey, CFA

When the seeds of the Arab Spring were sown in 2010 in a market in Tunisia, few would have foreseen the chain of events that followed. The resulting wave of civil protest and unrest that rippled across north Africa led to the collapse of regimes and leaders that had been in place for many decades, most notably Muammar Gaddafi. Roll forward nearly a decade and 9,123 kilometres and another otherwise unremarkable marketplace finds itself at ground zero for the current bout of volatility in markets. In reality there is little to link these events, but the pattern of snowballing and onward contagion is perhaps not so different as camels’ backs get broken.

Market Snapshot

  • Global equity markets volatile in response to the coronavirus
  • Bond yields tumble as investors go risk-off
  • Brent crude tumbles around 30%, currently at $36 a barrel
  • Gold rose 5.6% ending the week at $1665.9 an ounce

Global Matters Weekly – 2 March 2020

Breathe, think, act
by Lorenzo La Posta

When markets panic, the only investment mantra I believe in is “breathe, think, act”. Sell-offs can provide fantastic buying opportunities, but elevated risks often accompany them. After last week’s sharp drop in global equities, is this now a good entry point or is this a falling knife we do not want to catch? Are markets overly worried about coronavirus or are more negative prospects not yet priced in? We believe that, at these levels, risk assets offer attractive long-term expected returns, but more volatility is likely to come.

Market Snapshot

  • Rising COVID-19 fears caused the fastest market correction in history
  • Global markets declined 10.8% over the past week
  • Brent crude fell 13.6% ending the week at $50.5 a barrel
  • Gold fell 3.5% ending the week at $1585.7 an ounce

Global Matters Weekly – 24 February 2020

The dangers of DIY
by Andrew Hardy, CFA

Thanks to our global client base we have the opportunity to meet advisers and institutional investors with a very varied mix of underlying client types. Some live in countries that have a very well-established investment culture and others are more nascent. Regardless of which environment our end users are used to, the allure of investing on your own, without professional help, is always present.

Market Snapshot

  • Coronavirus concerns dominated sentiment again, with markets falling strongly today
  • Markets turn increasingly risk-off in light of global data releases
  • Brent crude rose 2.1% ending the week at $58.5 a barrel
  • Gold rose 3.7% ending the week at $1643.4 an ounce

Global Matters Weekly – 17 February 2020

Who cares wins
by Andrew Hardy, CFA

Nobody could have missed the global awakening to the debate on climate change over the past year. The greater frequency of extreme events – fires, storms, flooding – as well as the increased visibility of movements like Extinction Rebellion have been key driving forces behind this, although the heightened attention is long overdue. Within the investments industry this has translated into a marked increase in demand for strategies that focus on sustainability; an inexorable trend that the whole industry needs to adjust for.

Market Snapshot

  • Most equity bourses ended the week in positive territory
  • Coronavirus concerns dominated sentiment again, but containment confidence grew
  • Brent crude rose 5.2% ending the week at $57.2 a barrel
  • Gold rose 0.9% ending the week at $1583.7 an ounce

Global Matters Weekly – 10 February 2020

Opportunities to leapfrog in Emerging Markets
by David Lashbrook, CFA

Having personally experienced how the mobile telephone has transformed communications and enabled business in Africa, I wonder if the combination of poor existing infrastructure and technological advancement could transform the retail sector in emerging markets. Just as Kenya-based Safaricom has led the world in mobile money transfers, I wonder if there is an opportunity for Africa to pioneer retail delivery via drone.

Market Snapshot

  • The Coronavirus continues to occupy major news headlines and investor sentiment
  • The US impeachment saga ended on Wednesday as the Senate voted to acquit President Trump
  • Brent crude fell 6.3% ending the week at $54.5 a barrel
  • Gold fell 1.2% ending the week at $1570.4 an ounce

Weekly Digest – 3 February 2020

Unknown unknowns: the coronavirus
by Michael Clough

When we talk about risks to our investment outlook, we always warn of the threat of ‘unknown unknowns’, events that come seemingly out of nowhere that can’t be predicted or planned for. All we know is at some point they will arise. As all readers will be aware, two have already arisen in the early stages of 2020, firstly with the tragic incident in Iran when a civilian plane was shot down and secondly with the outbreak of the new coronavirus in China. Understandably, we have received numerous queries from clients, notably on the latter, and this Global Matters Weekly seeks to clarify our current stance on recent events.

Market Snapshot

  • The UK departed from the European Union on Friday, after more than 47 years of membership
  • Global markets continued to fall as the coronavirus concerns dominated sentiment
  • Brent crude fell 4.2% ending the week at $58.2 a barrel
  • Gold rose 1.1% ending the week at $1589.2 an ounce