• Money & Markets
Sunday, February 5, 2023
  • Login
No Result
View All Result
NEWSLETTER
Money & Markets
18 °c
Nairobi
18 ° Fri
18 ° Sat
18 ° Sun
18 ° Mon
  • News
  • Big Read
  • Markets
  • Economy
  • Investing
  • Energy
  • Opinion
  • Africa
  • World
  • News
  • Big Read
  • Markets
  • Economy
  • Investing
  • Energy
  • Opinion
  • Africa
  • World
No Result
View All Result
Money & Markets
No Result
View All Result
Home Economy

Standard Chartered advises investors to “play It safe” in its global economic outlook report

by Editor
January 24, 2023
in Economy
0 0
0
0
SHARES
1
VIEWS
Share on FacebookShare on Twitter

 

Standard Chartered is recommending “Play it Safe” investment strategy for its investors in Kenya.
This is in response to expected recessions in the US and Europe, a recovery in China, a slowdown in global inflation and a pause in Fed rates in H1 23, followed by cuts in H2 23. This advice was shared by Manpreet Gill, Chief Investment Officer, Africa Middle East Europe(AMEE) during a media and analysts briefing in Nairobi.
Manpreet commented, “ While financial markets experienced strain in 2022, with stocks and bonds down, we believe that 2023 holds promise for investors as markets respond to performance adjustments. We see opportunities in consumer- focused equity sectors in China as economic activity gradually normalises. In Foreign Exchange, Standard Chartered is bullish on the EURO and Japanese Yen on a 12-month horizon.”
He encouraged local investors to leverage the bank’s combination of deep understanding of local markets on the ground with its global reach to access wealth and investment solutions from the world’s leading financial centres.
Paul Njoki, Head of Affluent Banking and Wealth Kenya & East Africa said, “Our research reveals that clients are keen to increase their regular cashflows to cater for life goals such as children education, retirement, and improved lifestyle. The current environment offers a rare opportunity to secure higher yields by investing in high-quality bonds and diversifying in currencies. Further, a deliberate asset allocation will be key for investors who are looking to benefit from possible market correction in 2023. We have a comprehensive suite of wealth management products coupled with a team of relationship managers and investment advisors to help our clients navigate the uncertain economic environment.
Playing it SAFE – Key Insights
Positioned against a challenging economic backdrop driven by a rapid US Fed interest rate hiking cycle as well as energy price shocks in Europe, a playing it SAFE investment strategy speaks to a prescribed way of building safe foundation allocations in 2023 by securing your yield, allocating to Asian assets offering long term value and fortifying against further surprises and expanding beyond the traditional
Thematic Predictions
Manpreet said while they expect central banks to continue tightening policy in the first half of 2023, potentially surprising investors with the size of rate hikes, they believe they will reverse course in the second half of the year as it becomes clear that economies are heading into recession. Therefore, we believe bond yields will fall as we move through 2023.
Backed by China’s easing mobility restrictions, expansionary economic policy settings and targeted measures to support the property sector, we believe that Asian assets are set to outperform.
Asia USD bonds have already outperformed other major bond markets markedly in 2022, but the rise in risk-free USD yields meant they still delivered double-digit negative returns. We expect continued outperformance in 2023, but with significantly positive returns. We also expect the risk-reward balance to be more favourable for the more attractively valued Asia ex-Japan equities than for global equities.
We anticipate that a recession is likely in the US and Europe in the first half of the year. Once the Fed pivots from focusing on bringing down inflation to supporting growth, likely in the second half of 2023, equity markets are likely to become increasingly attractive.
Asset Class Outlook
Manpreet said they see today’s bond yields as one of the best opportunities of 2023. We are Overweight bonds – including government and high-quality corporate – relative to equities and cash.
We believe the unusual rise in stock-bond correlations in 2022 is unlikely to last into 2023. Nevertheless, the experience means the demand for relatively uncorrelated assets, or less volatile substitutes for traditional asset classes, is likely to sustain.
Within Asia ex-Japan, we are Overweight Chinese equities as we expect them to outperform the region given their inexpensive valuations and positive catalysts (we, however, expect temporary setbacks, given the reopening experience of other major markets).
Indian equities could struggle to replicate their spectacular regional outperformance in 2022 given elevated valuations, but still-robust earnings growth and the return of foreign investment flows mean we expect them to perform in line with the region and outperform global equities. In India, we are Overweight large-cap equities.
We also see long-term value in Asia USD bonds. While pockets of High Yield bonds could remain under some stress, we believe c.6.5% yield is an attractive value for an asset class where 85% of bonds are Investment Grade-rated.
We believe the USD is likely to turn lower over the next 6-12 months as the Fed pauses in its rate hiking cycle. Elevated valuations make the USD more vulnerable as the Fed cycle turns.
We are bullish on the EUR and JPY and expect them to be strong performers on a 12-month horizon.

Tags: Global economyStandard Chartered
Editor

Editor

Next Post
Zipline ranked best Drone Service Provider in the World in 2022

Zipline successfully completes Kisumu test flight ahead of Commercial Launch of its Operations in Kenya

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *




Latest Articles

  • COVID Safety Influences Choice of Travel Destination in Post-pandemic Era
  • Zipline successfully completes Kisumu test flight ahead of Commercial Launch of its Operations in Kenya
  • Standard Chartered advises investors to “play It safe” in its global economic outlook report
  • Renewable energy key to powering sub-Saharan Africa’s Health Sector
  • Reshaping the future of Africa through clean renewable energy solutions
  • Zipline and Rwanda government Partner to Serve the Country with Instant Logistics
  • COVID-19 Spurs growth of E-commerce in Kenya, Study Reveal
  • Renewable Energy Distributor secures Ksh 332 million funding to aid with climate change
  • Zipline ranked best Drone Service Provider in the World in 2022
  • Role of data in implementing the Abuja declaration on Fertilizer for the African green revolution

TOP SEARCHES

acquisition AfDB Africa Airtel Banks brexit CBK Central Bank Central Bank of Kenya China COVID-19 dividends energy Equity Bank Equity Group Equity Group Holdings Finserve High Court ICT Imperial Bank Insurance interest rates Jambojet Jumia KCB KDIC KenGen Kenya Kenya Airways KRA M-Pesa MD mKey MPesa NSE Patrick Njoroge profit profits Safaricom shareholders shares SMEs StarTimes Tanzania Uhuru Kenyatta




  • Money & Markets

© 2020

No Result
View All Result
  • Money & Markets

© 2020

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In