QUARTERLY UPDATE AFRICAN & FRONTIER MARKETS FUND

Highlights

The continued slowdown of global economies in Q3 ‘19 led the World Bank to revise down its 2019 world growth projection to 2.6% from their earlier estimate of 3.0%. Global risks have significantly increased due to:

·           Escalation of the trade dispute between the US and China;

·           Heightened geopolitical tensions between US, Iran and Saudi Arabia post terror attacks on Aramco’s refinery that impacted the entire oil supply channel;

·           Prolonged uncertainty surrounding Brexit.

 

The major global central banks have opted for monetary easing led by the US Federal Reserve’s 50 bp cumulative cut. The European Central Bank (ECB) cut the interest rates into negative territory and will further stimulate the economy with bond purchases of EUR 20 billion per month from November 2019 onwards. China’s Manufacturing PMI stood at 49.8 in September 2019, marking the fifth consecutive month of contraction which compelled the country to adopt a more accommodative stance. The central bank reduced the reserve requirements for banks to increase liquidity in the system.