30 Mar 2012: Q1 in review; SHK’s co-chairman arrested

  • 2012 Q1 in review: The year started on the back of dread and gloom from last year’s crashes in the market. And with the Greek default probable, there was clearly much to do to recover. However, this quarter mainly saw storming performances from most stock indices- some of the major factors that drove recovery were: unemployment had reduced in the US, owing to strong manufacturing; Germany’s production data was very positive; QE3 in the US is being strongly anticipated which will inject further liquidity into economic systems. FTSE All World has gained 11%  since the beginning of the year, while Tokyo has gained an astounding 19.3% since 1 January. There were of course, fears in Europe, mainly arising from Greece, Spain and Italy that caused concern in European equities. In terms of debt, the US 10-year, German bunds, and the UK gilts were placid most of the quarter, as the Spanish yields struggled to stay below a staggering 5.5% while Italian debt saw volatility only in patches. In recent times (late Q1), the markets have seen an explosion in Crude Oil prices, even though its futures contracts are trading quite low, suggesting that crude oil peaks may be short lived. Gold continued to be the commodity of choice for most of the quarter and touched $1900/ounce at one point. Despite debt fears in Europe, Euro assumed a stable position against the dollar, rarely fluctuating out of the 1.31 to 1.33 mark. Mean reversion is a very tricky tool- while there is quite a lot of value in global equities, this surge in their value may not be sustained throughout 2012. It will be interesting to note if and when the pattern reverses.
  • Currencies: Euro has gained 0.3% against Dollar and is at $1.3339; Dollar has lost 0.47% against Yen and is at 82.002. Sterling has gained 0.33% against dollar and is at 1.6004
  • Debt: US 10-years fall slightly to 2.17%; Bunds at 1.82%; Gilts are at 2.19%
  • Commodities: Brent Crude lost 0.6% cents to $123.09/barrel; Copper rises 0.8% and is at $3.83/pound; Gold falls to $1662/ounce
  • BRIC nations threaten IMF Funding
  • Eurozone inflation still high at 2.6%
  • Sun Hang Kai’s, Asia’s largest property developers’, Co-chairman arrested
  • Blackberry reviews future after sales slump

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