Weekly Review - How 2023 turned out

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09.01.2024

The global market existed in conditions of high inflation, labor market tensions, rising interest rates and increased public debt. Bond yields have reached their highest levels in 15 years. The first trillion-dollar company in the history of artificial intelligence has been recognized as a leader. The stability of the US economy, despite a significant increase in interest rates, was unexpected for many experts.

Oil closed in the red for the year, although in September prices were by grade. Brent and WTI reached levels above $90/barrel. The unstable geopolitical situation has significantly affected oil pricing.

China continues to decline and shares look quite oversold - the lag behind the world index is already almost 60%. PMI is at fairly low levels, the crisis in the real estate market, an unclear system of stimulating the economy. However, there are also advantages, for example, the trade balance is at record levels thanks to increased trade with Russia and India. Due to this, the need for dollars in China will decrease.

Gold turned out to be not only a hedging tool, but also a tool for making money. The price increase was due to unstable geopolitics and the increase in gold volumes by the Central Bank of China.

SP500 corporate earnings supported the market, and investors and hedge funds were able to almost completely offset 2022 losses. The US economy has shown strength, inflation has been declining, and the Federal Reserve may begin easing monetary policy.

Japan has been lagging behind the rest of the world in terms of stock performance since the 90s. In 2023, growth occurred against the backdrop of capital repatriation back to the country. The P/B of Japanese stocks is at extremely undervalued levels. There is a risk of a strengthening of the yen and a decrease in the profitability of export-oriented Japanese companies.

Large investment banks gave forecasts for 2024

We analyzed the forecast reports of large investment houses and highlighted their main points. BlackRock: The company encourages adapting to volatility and the need for active portfolio management. Offers a selective strategy - combining index investing with alpha-seeking strategies. In 2024, he identifies 5 key themes as fundamental factors for investment decisions: digital disruption (changes in business models and production processes caused by the introduction of digital technologies), the transition to a low-carbon economy, demographic changes, the future of finance and economic fragmentation. Goldman Sachs: Soft Landing and Global Growth. The company forecasts approaching inflation targets without the risk of a recession in the United States. Goldman is emphasizing the importance of a balanced asset mix, moving away from the emphasis on cash that dominated 2023. The stock market and emerging market market will show better performance if the inflationary environment improves faster. J.P. Morgan: The investment bank emphasizes skepticism about quickly overcoming inflation and suggests a cautious approach. Rate cuts are forecast to come later and by a larger percentage than markets expect. Morgan Stanley: Recommends buying government bonds and investment grade bonds for stable return potential. Offers cautious equity investing with an emphasis on US and Japanese companies, while reducing its weight in emerging markets and commodities.

We analyzed the forecast reports of large investment houses and highlighted their main points. HSBC: Global economic growth is forecast to be below average, with the US outperforming on consumer strength, technology and healthcare. The Chinese economy will continue to face challenges but is supported by monetary policy and market liquidity. It is advisable to focus on quality bonds and stocks with strong cash flows, favoring US equities and being cautious in emerging markets. Barclays: Despite the challenges, major economies will perform better than expected, highlighting growth for the US, euro area, China and India. Inflation is expected to decline, but not so quickly as to trigger significant easing of monetary policy. Favoring global equities over bonds, Barclays forecast single- to double-digit returns from equities in 2024.

Kazakhstan will take 6th place in the world in attracting foreign direct investment.

According to fDI Intelligence research based on IMF data and fDi Markets monitoring, Kazakhstan will take 6th place in terms of foreign direct investment inflows in 2024. Cambodia will take first place, whose GDP will grow by 6.1% and become the fastest growing economy in Southeast Asia.

In 2022, the 10-year record for attracting gross FDI inflows was broken.

However, data on gross FDI inflows is not enough to understand the real picture of investment flows. In international practice, it is customary to pay more attention to the indicator of net (or net) FDI inflow. For the fullness of the car

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