Champagne corks popped towards the end of 2019 as US equity markets notched up another sterling year, with the S&P 500 gaining 28%. The MSCI World Index ended the year 24% higher, with local investors also benefitting from the weaker rand. In contrast, the JSE All Share Index rose only 10% for the year.
The US Federal Reserve was seemingly vindicated with its stance to halt further interest rate cuts, supported by a strong US economy. Jobs data in the form of nonfarm payrolls surprised to the upside in November and, together with unemployment at a record 3.5%, reflected a vibrant US economy not in need of further upliftment through lower rates – as the Fed indicated earlier.
The surge in equity markets coincided with renewed merger and acquisition activity, reaching its highest level in two decades. But things look somewhat different this time. The high equity valuations provided the opportunity for companies to finance mergers with share issues, and not external bank debt. This is a much more prudent approach, which could mitigate any fallout in the event of a financial crisis or market pullback.
However, before popping more corks, it would be circumspect to be reminded of what Fed chair Jerome Powell said only a few months ago. Appearing somewhat perturbed, Powell noted that US debt was now growing faster than GDP, “which was clearly unsustainable”.
この記事は Finweek English の 16 January 2020 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
すでに購読者です ? サインイン
この記事は Finweek English の 16 January 2020 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
すでに購読者です? サインイン
THE HEALTH OF SA'S MEDICAL SCHEMES
As the Covid-19 pandemic abates, finweek takes a look at the financial performance of some of the largest players.
The effect of Gilbertson's departure
With Ntsimbintle Holdings now the major shareholder of Jupiter Mines, it could change SA’s manganese industry.
Making money from music
Why investors are increasingly drawn to the music industry.
Conviction is key
Sandy Rheeder plays a critical role in Mukuru’s mission to open up financial services to the emerging consumer market in Africa through tailor-made technology solutions and platforms.
The post-pandemic toolkit
How CFOs can use technology to support growth.
Big city living exodus
Mini cities like Waterfall City and Steyn City are redefining city-style apartment living.
Big compact, big value
Handsome, with a hefty level of standard specification, the roomy Haval Jolion compact crossover is a great value proposition.
On barriers to entry
There are various ways in which a company or sector can achieve competitive dominance. They usually make for good investments.
Fear and greed in one index
To buck the trend, when markets are hot or cold, is a tough thing to do. However, it can deliver solid returns.
Africa's largest data centre facility coming soon
Vantage Data Centers plans to invest over R15bn for its first African data centre facility in Attacq’s Waterfall City.
