The Equities Market in 2020: A return to glory?

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Equities Market

From a glorious performance in 2017 to a sustained downward spiral in 2018 and 2019, one of the major questions from our clients, as we headed into the new year, was whether the equities market is going to return to its glory days or remain out of grace in 2020?

In our recently published 2020 outlook report ” A different playing field” we had noted that technical and fundamental analysis supports the return to glory narrative. This was as we estimated the potential for a downtrend on a technical basis to -16.3% in 2020 and the potential for uptrend at +67.6%. Meanwhile, based on the fundamental analysis we projected a +5.3% gain in 2020 (base case) or +23.6% upside (bull case). So far, the performance has exceeded our base case scenario but remain in line with our bull case scenario for the year.

This is as the NSE-ASI have chalked a YTD gain of 10.7% amid rising interest from the local investors – spurred by the currently low rate environment and increased system liquidity. Accordingly, we reiterate our position that 2020 will see equities return to its glory days, especially if conditions in the macroeconomics space remain supportive.

United Capital Research