Market Review – January/February 2019 (Part 3)

Asia

  • Asian equity markets reversed year-end declines to close January higher despite lower 2019 corporate earnings forecasts.
  • China and Korea shrugged off trade concerns to lead performance in the region, with ASEAN markets including Thailand, the Philippines, and Indonesia also posting strong returns.
  • January saw China emerge as the best performing market in the region on the back of easing trade tensions and indications from the central government of plans to stimulate the economy further.
  • India was the worst performer over January, with autos, auto parts, machinery and equipment, cement and steel particularly affected.

Emerging Markets

  • Global emerging equity markets enjoyed a strong start to the year with all regions registering gains. Latin America led the advance, followed by EMEA (Europe, Middle East and Africa).
  • The US dollar lost ground against a basket of emerging market currencies as the US Federal Reserve put
  • further US interest rate rises on hold and signalled flexibility on running down its balance sheet (decreasing the money supply – quantitative tightening).
  • Brazil was the best performing equity market in Latin America, driven higher by favourable economic and political developments.

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