Times Of Swaziland: LET’S TAKE A MOMENT, REMEMBER 2018

LET’S TAKE A MOMENT, REMEMBER 2018
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BY KWANELE DHLADHLA on 11/03/2019 08:01:00


MBABANE – The year 2018 started off with signals of synchronised growth across
the globe, instilling a fair amount of optimism in investors.
However, as the year progressed, the harsh realisation of life emerged
throughout the remaining part of the year.
We capture the main themes of 2018 that caused the outlook of investors to turn
gloomy, and cover the conversations advisers need to have with their clients to
make sure clients’ portfolios pull through this low-growth environment
unscathed.
The year of trade tensions
Just as we thought the theme of synchronised global growth was set for 2018,
international trade was disrupted by President Trump’s announcement of tariffs
on imports – mostly aimed against China – in January. Nine months later the
IMF revised its growth forecast for the global economy down for the first time
in more than two years, citing escalating trade tensions and emerging market
stress. Also in the course of nine months, the Yuan shifted from a two-year high
to a decade-low.
Interest rates slowly returning to normal
During the year 2018, it also became clear that developed markets were leaving
the risks of a deflationary environment behind with the US, the UK and the EU
all experiencing mild inflationary increases. The Fed continued to hike its
federal funds rate, up from 1.25-1.5 per cent at the start of the year to 2-2.50
per cent at the end of the year.