Perspectives November Publication

Welcome to the 20th edition of Perspectives. 

Global risk assets had a rough start to the fourth quarter, as widespread risk-off sentiment sent U.S. and international stocks sharply lower. Markets ignored strong economic data in the U.S., focusing instead on fears about the impact of rising interest rates, increased U.S.-China trade tensions, and future earnings uncertainty. This led to the S&P 500’s largest monthly decline in seven years. 

In the first article of this edition, we explain why we stay positive on risk assets even though we expect market corrections to be more likely and more frequent going forward. We then look at the policy and market impacts of the U.S mid-term election which produced a legislative gridlock, as widely anticipated by the markets. 

In this context of increased uncertainty, we revisit the attractive features of one asset class which has been producing steady income with no correlation to other assets – trade finance loans. Taking a step back from market noise, we then look at one of the most promising application of Blockchain for the financial industry – the tokenization of financial and real assets. In this article, we look at how security tokens could turn the world into a massive exchange. 

In the Middle East section, we review the case for Egypt and why we believe the country is on the path of a sustainable recovery.    

We hope you will enjoy this issue. 

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