Maseru Securities Market

Market Status: Closed

Global Market Review

 

WEEKLY MARKET COMMENTARY: EQUITIES

12/03/2020

 

United States

 

  • US markets were little convinced on the stimulus responses from governments and central banks amid President Trump’s failure to offer details on specifics of what Treasury is discussing with Congress.
  • The economic fallout from the pandemic appears to outpace the massive stimulus.
  • US lawmakers appeared to inch closer to implementing fiscal stimulus measures that include expanding paid leave and unemployment benefits as part of what is expected to be a whopping governmental response to avoid a downturn.
  • On the monetary front, the Fed announced earlier that they plan to pump an additional $1 trillion into the US economy through asset purchases and cut fed rate to zero.
  • Oil prices sank 24 percent to an 18-year low.
  • Panic appears to continue hitting more on the fragile markets, with volatility at 79.35 at market open on Thursday and averaging 45.18 over a period of a month. Meanwhile the much needed ingredient for a sustainable recovery – risk appetite is missing.
  • NASDAQ Composite, S&P 500 and Dow Jones Industrial Average were down at 7039.531, 2328.72 and 19518.04 respectively on Thursday open.

Europe

  • European stocks headed a little upwards on Thursday after ECB surprised markets by unveiling a major asset-purchase program.
  • The ECB committed to buy EUR750 billion worth of private and public sector securities in what they called Pandemic Emergency Purchase Program.
  • Social distancing is widely accepted as a means to limit the outbreak and more businesses around the world are on lockdown and large numbers of people out of work.
  • France’s CAC 40 lost 5.9 percent with shares in plane maker Airbus nosediving 22 percent on concerns that airlines struggling with the near-complete shutdown of air travel will slow down purchases.
  • UK’s FTSE 100, German DAX, French CAC 40 and Stoxx 600 were at 5117.94, 8508.28, 2800.21 and 284.45 respectively on Thursday close.

  

South Africa

  • ­The JSE struggled to shrug off the negative sentiment across the globe despite SARB action
  • SARB joined peers around the globe in boosting efforts to protect their economies from the pandemic by slashing rates by 100bps to their 6-year lows to tackle virus fallout.
  • Capital continues to move out of South Africa as foreigners remaining net sellers of South African stocks for four consecutive days, disposing R1.46 billion worth of shares.
  • In the economics, STATSA released inflation data for February which came out up 4.6 percent.
  • SARB announced that they expect the economy to contract by 0.2 percent in 2020, further raising concerns of a credit rating downgrade.
  • The JSE plunged the most since the market crash of 1997.
  • All major JSE indices edged lower on Thursday. JSE All share index, Resources index and Financials index ended at about 37963.01, 16060.36 and 21790.97 respectively.

 Data source: Bloomberg

 

 

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