Global Market Review and Outlook –Week Ended November 13, 2015

It was a sea of reds this week for most global equities within our coverage as news flows from several markets dampened investors' sentiments.  Equally, the impressive US October jobs report released last week which moved the US Fed closer to raising its benchmark interest rate during its next meeting in December, further spurred sell-offs in equities. Against this backdrop, all benchmark equity indicators in our BRICS classification closed in the red with the Russia RTS leading declines with 3.9% W-o-W as threat arises from competition for oil export market between the country, Saudi Arabia and Iran whose UN sanctions are likely to be lifted soon. The South African JSE followed with a 2.9% W-o-W decline on profit taking activities on the SA bourse; also following the investigation of the deputy head of China's Securities Exchange for cases of indiscipline, the China Shanghai Comp waned 0.3% W-o-W.

In the same manner, equities markets in the developed markets closed negative. The UK FTSE All Share led the declines with 3.4% W-o-W on account of weakening economic growth profile. In the U.S markets, the NASDAQ Composite and S&P 500 indices declined 2.8% and 2.5% W-o-W respectively on account of slower than expected retail sales data which could temper inflation statistics and which also suggests decline in consumer spending.

The Euro-Asian region was not left out of the global rout as all markets save for the Japan Nikkei 225 closed negative. This was led by the France CAC 40 with 3.7% W-o-W. The Japan Nikkei however gained 1.7% W-o-W as investors threw caution to the wind and hunted for bargains. Investors' expectation of likely government stimulus also supported market performance.

African markets were not spared either as only the Kenya NSE 20 gained (1.2% W-o-W) of the region's five largest exchanges in our universe. The Egypt EGX, Nigeria All Share Index and Ghana GSE Composite all closed 9.7%, 1.1% and 0.1% lower respectively. We do not expect a broad recovery in global equities next week as investors continue to play cautious due to the weakening macro-economic fundamentals across regions and speculations of a Fed rate hike in December