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WEEKLY MARKET ROUND-UP – 03/12/20

Asia’s growing slice of the pie

Between 2015 and 2025, the IMF now expects to see advanced economies surrendering 5% of their total share of global GDP to the emerging markets of Asia. Current forecasts show Asia’s emerging markets are also expected to steal market share from those of Latin America, Europe, the Middle East and Central Asia.

A booster shot for markets

A surge of profit-taking by investors on Monday (30 Nov) did little to curtail a record-breaking month of gains for global equities.

News of three separate vaccines, a new US president, expectations of more fiscal and monetary stimulus and (to top it all) better than expected Chinese economic data, all contributed to the surge in investor sentiment.

The MSCI World Index added almost 13% in November, with Europe advancing close to 15% and the S&P 500 Index adding around 11% to hit new all-time highs. Numerous European markets enjoyed their best month ever with the main indices in France and Italy up 20% and 23% respectively. Meanwhile, the FTSE 100 Index gained almost 12.4% – its best month in over 30 years.

Japan’s Nikkei 225 blue-chip index clocked up its best month since 1994 with a gain of almost 15%, Asian markets added close to 10% with Chinese blue-chip stocks up almost 6% amid the biggest outperformance of value stocks over growth stocks since 2001 (all figures in local currency terms).

Living in Moderna times

Moderna, one of the three pharmaceutical companies to have delivered data on a viable coronavirus vaccine in November, continued to race away as more good news on the progress of its vaccine reached markets.

Shares in the Massachusetts-based biotech are now worth around seven times what they were at the start of the year. They jumped almost 11% on Wednesday (25 Nov) when news was announced that the EU had ordered 80 million doses of its coronavirus vaccine following similar deals with the US, Canada, Japan and the UK.

The shares then jumped some 16% on Friday (27 Nov) and another 20% on Monday (30 Nov) following the news that it was seeking clearance for its highly effective coronavirus vaccine in the US and Europe.

Moderna is tipped to take the lion’s share of the spoils from the vaccine race as both Pfizer and AstraZeneca must share the proceeds with their development partners while Moderna’s gene-based vaccine doesn’t require the super-cold storage needed by Pfizer’s offering.