17-Apr-2019
Perspectives April Publication

Welcome to the 24th edition of Perspectives.

The first quarter of 2019 is one of the most memorable on record with strong returns across all asset classes.

Earnings growth expectations have been revised downward quite sharply, macroeconomic numbers came out generally lower than forecasted and geopolitical risks remained high. But equity markets were able to climb the “wall of worry” as U.S stocks posted their best quarterly return since 2009. Indeed, the deteriorating fundamentals were offset by improving expectations for a trade deal with China and maybe most importantly global central banks moving back to a dovish stance.

In the first part of this publication we review the 10 stories to remember from this eventful start of the year. We then share our views for the second quarter and beyond – the good, bad and ugly developments investors might have to deal with in the foreseeable future.

The second part of this edition of Perspectives is dedicated to our regional markets. Middle East equities posted decent returns in the first quarter although they lagged U.S and Emerging markets equities. We believe there are still some secular and cyclical reasons to be positive on MENA equity going forward. In a dedicated section, we share our main investment themes and stock convictions for the months to come.

Our flagship fund Al Mal MENA equity fund is off to a very reasonable start this year with a gain of 8% as of the end of March. The fund is up more than 30% since January 2017, outperforming all the main asset classes. This demonstrates that an unconstrained and disciplined strategy focusing on alpha opportunities can generate strong returns even in volatile market conditions.

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