Sign in
Research link-chevron Created with Sketch.
link-chevron Created with Sketch. Products and Services link-chevron Created with Sketch.
link-chevron Created with Sketch. Products and Services
Economics link-chevron Created with Sketch.
FX Report
The Loop
Inside China
Insights & Strategy
Equities link-chevron Created with Sketch.
Corporate Commissioned Research
Analysts
Analysts
Help and Support
Help and Support
Corporate and Investment Bank
Standard Bank Group
The SA Daily 25 March 2020

Equity markets and epidemics

Shireen Darmalingam

  • Global equity market performance this year has been dismal. Still, Wall Street yesterday managed to record an almost best-ever on expectations of a US stimulus package. Per the MSCI World Index, equity markets have shed 26% since January. Gains made early this year were quickly erased as the coronavirus hit China whose rising share of world GDP spelled a fall-out far beyond its border. Once the disease spread beyond China, equity market losses became pronounced. Governments and central banks around the globe have since stepped in but markets are looking for more because the economic impact of this pandemic threatens “sudden stops”.
  • Trade around the globe will remain turbulent as the number of confirmed COVID-19 cases is now 422,959 and the death toll continues to rise. This epidemic represents an external shock that has, in the manner of black swan events, abruptly derailed financial markets, economic trends, and market sentiment. Investors will therefore remain cautious, at least until the world economy can flatten the curve. Meanwhile, GDP growth forecasts all over are being revised downward. For now, new bills are being signed, many countries are in lockdown, and financial markets remain in turmoil.
  • South Africa has 554 confirmed COVID-19 cases; we now forecast economic growth contracting by 5.0% in 2020, then picking up to 4.6% in 2021, and we now see the rand weaker, at R16.00/$ by year-end.

Read PDF