The performance of equity markets across the world was a tale of two quarters in first half of 2020.
United Capital Report attributes the poor performance to the outbreak of the COVID-19 pandemic in first quarter of 2020 spurred a broad-based risk-off sentiment while the synchronized injections of fiscal and monetary stimulus spurred a risk-on sentiment later in second quarter.
Despite the recovery in second quarter, major equity indices in the global, emerging and frontier markets remain below the water, still wheezing from the negative impact of COVID-19-induced selloffs. Notably, all the six bourses under our coverage in SSA ended first half of 2020 in the negative territories.
Looking ahead, we expect the overall interest in SSA equities to strengthen as more countries continue to ease lockdown policies and businesses begin to re-open.
Also, the low interest rate environment in the developed market, the continued rollout of monetary and fiscal monetary stimulus and our expectation for currencies within the region to strengthen as external as well as domestic conditions improve, should spur a renewed foreign interest in the region.
