Afrinvest Monthly Market Report
Stock markets across the globe traded largely bullish in March, inspired by positive economic data prints, stellar corporate earnings releases, moderation in price levels in key markets, and strategic positioning ahead of the three course rate hikes in H2:2024 following clear guidance by the US Fed in the month. On the back of these dynamics, the MSCI world equity index sustained its bullish start to 2024, up 3.4% m/m following 2.1% and 4.1% m/m gains in January and February.
Bulls hold sway across advanced markets under our radar, led by Germany’s XETRA DAX index with a m/m gain of 4.6%. This was inspired by improved business climate index (IFO reported 87.8pts business climate index vs 86.0pts projected), as investors continue to bet on near term gains for businesses following ECB’s plan to cut rate in Q2. Following suit, the UK FTSE-ASI and France’s CAC 40 indices gained 4.3% and 3.6% m/m respectively, supported largely by decelerating inflation prints (UK price level slowed to 3.4% in February from 4.0% previously while Euro Zone inflation declined to 2.6% from 2.8% the prior month) and gradual recovery in economic activities.
Similarly, the US S&P 500 and NASDAQ indices advanced 3.0% and 1.9% m/m respectively, aided by strategic positioning in major value stocks ahead of Fed’s three rounds of rate cuts in H2:2024 (amounting to a total of 75bps) despite stuttering disinflation pace. The BRICS market traded mixed albeit negatively tilted, as three indices closed negative while India BSE Sens and South Africa FTSE indices booked gains of 1.6% and 2.4% m/m, sequentially. Conversely, performance in the African market under radar was positively tilted as four indices recorded gains while the other two, Egypt’s EGX 30 and Morocco’s Casablanca MASI, shed 4.9% and 0.3% m/m respectively.
In the Asia and Middle Eastern markets that we tracked, the bears ran riot as four out of five indices shed weight m/m, led by Qatar DSM 20 index with a 5.1% m/m decline. Barring any major shock, we project the global stock market to extend the bullish run in April, supported by resilient Q1:2024 corporate earnings, carry-trade opportunities in emerging markets, and decelerating inflation print in major economies.
