Global Outlook

Developed markets rallied in January 2024, with Japan posting a gain of 8.4%. The S&P 500 and Europe followed closely, rising 1.6% and 1.4% respectively. However, in Asia most bourses experienced corrections. Hong Kong, Shanghai, and Korea faced significant declines, falling 10%, 6.3%, and 6% respectively. Malaysia on the other hand managed a positive return of 4%. Bond performance was mixed, ranging from a decline of 1.4% to a slight increase of 0.2%.¹

The US Federal Reserve (Fed) maintained the Fed Fund rate at 5.50%. While the European Central Bank (ECB) maintained their commitment on combating inflation, the Fed has had preliminary discussions on potential interest rate cuts. The Fed’s balance sheet shrinkage continued at USD95 billion.²

We are positive on Asian equities given attractive investment themes and corporates having the potential to post better earnings growth in 2024 than developed markets.¹ Within bonds we remain neutral on global developed market fixed income.