<strong>By:</strong> <b>Gielie de Swardt, head of Retail Distribution at Sanlam Investments</b>

Global markets were helped along by a dovish Fed stance, and the S&P 500 index managed the best first quarter in four years. The markets took note of the Boeing plane crash but the Dow Jones escaped most of the negative sentiment at first, though Boeing shares later dropped over 6%. While still cautious about the Fed’s lowered growth and inflation projections, global markets ended the first quarter on an overall positive note - a delightful change from last quarter’s sullen December finish.

European markets pondered the lowered unemployment figures with a bittersweet sentiment. White the data was better than expected, it remains at a stagnant 5%. In contrast, German manufacturing data hit the lowest point in six years and interest rates dropped further, causing German 10-year bond yields to decline below 0% – generally indicating a possible recession. The European central bank slashed growth forecasts for the year, further halting the markets. As Deutsche Bank and Commerzbank move closer to a merger, both share prices moved upwards, finally boosting the European markets.

In UK markets, the Pound surged ahead of the vote from the House of Commons, and then dropped dramatically preceding a parliamentary vote on extending Brexit. The British Chancellor surprised investors by voicing a promise of a billion-Pound Brexit dividend from Government following a smooth exit from the European union. UK unemployment stats reported the lowest figures in over 40 years, garnering renewed support for the Pound by month end.

Asian markets fluttered hopefully at the news of a pending trade deal between China and the US. The markets leaped even higher to the tune of stimulus strategies highlighted in the Chinese Government’s annual report. As a result, the Shanghai composite index came out of the first quarter of 2019 up a staggering 25%! Indian markets were also unusually positive as Prime Minister Narendra Modi looks set to enter another term in power, and the atmosphere between India and Pakistan has calmed. But poor Chinese export figures for February brought several markets back down. The Hang Seng fared better, boosted by technology stocks, though Tencent shares fell sharply after a poor profit report.

Emerging markets were battered at month start following the 10% drop in the Argentinian Peso following a year of negative economic growth. Ahead of local government elections the Turkish markets struggled to keep composure. Local markets shouldered the emerging market concerns better, but escalating Eskom power cuts reduced business confidence. The financial sector of the JSE was one of the worst performers in March, while commodities boosted markets. The first quarter did end on a positive note, and investor sentiment remains largely positive as lowered market prices present an opportune time to buy shares.

During March 2019 the FTSE/JSE All Share Index (ALSI) gained 1.56% on a total return basis, while bonds gained 1.33%. The SA Listed Property Index (SAPY) lost 1.46% in March, and cash returned 0.61%. Internationally, the MSCI World Index gained 1.31% in Dollar terms and the MSCI Emerging Markets Index ($) gained 0.83%. This March the Rand lost 2.5% against the greenback and 1.13% against the Euro.

For the year to date, the ALSI and ALBI returned 7.97% and 3.81% respectively. Listed property returned 1.45% and cash returned 1.77%. Internationally, the MSCI World Index returned 12.48% in Dollars.