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BT Monthly Markets Chart Pack – March 2008

BT Monthly Markets Chart Pack – March 2008. An overview of movements in global financial markets. Global share markets weaker again in March.

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BT Monthly Markets Chart Pack – March 2008

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  1. BT Monthly Markets Chart Pack – March 2008 An overview of movements in global financial markets

  2. Global share markets weaker again in March • Global share markets remained under pressure throughout March amid continued market volatility and question marks over the outlook for the US economy. They weren’t helped either by news that Bear Sterns, once the fifth biggest securities firm in the US, needed to be bailed out after speculation about its financial soundness prompted customers and creditors to withdraw $17 billion of assets. • The Australian share market was also weaker in March, with the S&P/ASX 300 Accumulation Index closing the month down 3.42%. It was the fifth month in a row that the local market has posted a negative return.

  3. The Australian share market closed March down 3.42% and was 14.61% lower over the March quarter S&P/ASX All Ordinaries Index – March quarter 2008 Source: BT Financial Group, Datastream

  4. Key Australian economic news – March • The Reserve Bank of Australia left interest rates on hold at 7.25% following its early April meeting. After rates hikes in February and March, the decision to leave the official cash rate unchanged had been widely expected. • The current account deficit widened to a record $19.4 billion in the December quarter, up from $16.4 billion in the previous quarter. • The local labour market continued to strengthen in February, with the unemployment rate falling to just 4.0%; its lowest level since December 1974. • The Australian economy grew by 0.6% in the December quarter, in line with market expectations. Annual growth eased to 3.9% pa, down from 4.9% pa in the September quarter. Source: BT Financial Group

  5. The Australian dollar was weaker against the major currencies in March • The Australian dollar lost ground on the major currencies over the month as global growth concerns weighed on commodity prices. However, the local currency remains at high levels and this is likely to be the case over the coming months, particularly with the interest rate differential between here and the US looking likely to widen even further in that time. • At the end of March: A$1 bought US$0.91.33 -2.0% €0.5784 -5.8% 91.10 -6.0% Source: BT Financial Group

  6. The Australian dollar versus the US dollar… Currency markets – A$ per US dollar Source: BT Financial Group. Figures at 31 March 2008.

  7. the Euro… Currency markets – A$ per Euro Source: BT Financial Group. Figures at 31 March 2008.

  8. and the Yen Currency markets – A$ per Yen Source: BT Financial Group. Figures at 31 March 2008.

  9. Official world interest rate movements – March • The US Federal Reserve cut interest rates by 0.75% in March, taking the official Fed Funds rate to just 2.25%. Elsewhere, the Reserve Bank of Australia (early April), the Bank of England, the European Central Bank and the Bank of Japan all left their rates unchanged. Source: BT Financial Group

  10. Global share market returns 31 March 2008 Source: BT Financial Group

  11. Short-term asset class performance 1-year rolling returns to 31 March 2008 (%) Best performing asset class for the year Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$

  12. Short-term asset class performance (cont’d) 1-year returns to 31 March 2008 (%) 31 March 2007 31 March 2008 Australian bonds Listed property Australian shares Global bonds Global shares Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$

  13. Long-term asset class performance 31 March 2008 Australian shares Listed property Global shares Australian bonds Cash Note: Accumulated returns based on $1,000 invested in December 1984 Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$

  14. Oil prices spiked to over US$111 a barrel in March but later fell back on concerns over global growth Oil prices – US$ per barrel Source: BT Financial Group. West Texas Intermediate oil price at 31 March 2008.

  15. Summary • The underlying strength of the Australian economy looks set to continue, though any significant deterioration in global growth will obviously have an adverse effect locally. • Whether or not the RBA pulls the trigger on another rate hike in May will depend largely on the outcome of the March quarter inflation data. Rising inflation has been a concern for the Bank for some time now, so a significant rise in the CPI figures could well see the Bank raise rates for a third time this year. • The Australian dollar looks set to remain at high levels in the near-term, though the threat of a slowdown in global growth will mean a rougher ride. • Gains in global share markets, including here in Australia, are likely to remain under pressure in the first half of 2008.

  16. This presentation has been prepared by BT Financial Group Limited (ABN 63 002 916 458) ‘BT’ and is for general information only.  Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described.  The presentation has been prepared without taking into account any personal objectives, financial situation or needs.  It does not contain and is not to be taken as containing any securities advice or securities recommendation.  Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions and is not a replacement of the requirement for individual research or professional tax advice.  BT does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this presentation.  Except insofar as liability under any statute cannot be excluded, BT and its directors, employees and consultants do not accept any liability for any error or omission in this presentation or for any resulting loss or damage suffered by the recipient or any other person.  Unless otherwise noted, BT is the source of all charts; and all performance figures are calculated using exit to exit prices and assume reinvestment of income, take into account all fees and charges but exclude the entry fee.  It is important to note that past performance is not a reliable indicator of future performance. This document was accompanied by an oral presentation, and is not a complete record of the discussion held. No part of this presentation should be used elsewhere without prior consent from the author. For more information, please call BT Customer Relations on 132 135 8:00am to 6:30pm (Sydney time)

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