Global growth is recovering and is projected to rise between 3.5 and 3.7 per cent this year. It is important to note that the additional growth has started coming in largely from developed markets. Emerging markets are still growing (our forecast is 5 per cent in 2015 for EM and 2.3 per cent for developed markets) but not as fast relative to the last year than developed markets.
Regarding equities, we expect much of the growth in returns to come from earnings and dividend growth. US GDP is expected to be around 3 per cent; the earnings growth is going to be about 6 to 8 per cent, with dividend growth of 2 per cent. In Europe, GDP growth is expected to be about 1.2 per cent, while earnings growth is pegged at 7 to 8 per cent and dividend growth at 3.5 per cent. Across the developed world, improved GDP growth and strong corporate earnings are the story behind higher returns.
The China slowdown has been felt in commodity-exporting countries. Since peaking in 2011, the price of a representative basket of commodities that China consumes has fallen by 30 to 40 per cent. EM countries that export commodities to China have experienced falling export revenues, falling growth and underperforming equity markets that in some cases prompted central banks to spend reserves to defend the currency. The big commodity exporters (Brazil, Chile, Colombia, Peru, Russia and South Africa) look like they will face another tough year in 2015.
Our preference is for EM manufacturing countries with competitive labour cost growth versus China, and more stable profit margins: the Czech Republic, Hungary, India, Indonesia, Mexico, Philippines, Poland, Taiwan and Thailand. Other than Mexico, this entire group and China benefit from lower oil prices, with many being larger net oil consumers than Europe. Continued political turmoil in Russia and Brazil, along with unresolved external financing vulnerabilities in countries such as South Africa and Turkey, keep us cautious on emerging markets outside of Asia. For now, we are sticking to Asia—like last year, we advise staying away from emerging economies that are dependent on commodity markets for export growth.
Therefore, oil price decline is expected to be a big growth boost for the emerging markets and it will work similarly for European economies. The decline is positive for consumers in Europe, and not just in terms of better cost structures for companies. At a macro level it will feed into energy prices and ultimately the spending capacity of individuals. We also expect lower energy prices to keep inflation moderate and thus avert the danger of a tail risk coming from that side. For the US economy, we expect the overall effect of lower oil prices to be flat to mildly positive, as capex will also decrease.
In the absence of supply discipline in the market, oil prices are expected to remain low. For many oil suppliers, there are domestic economic factors that are expected to keep supply high in the international market. Additionally, analysts say Middle East suppliers would tolerate price decline up to a level that matches the cost of US shale oil. The continued higher supply could be tactical to prevent US producers from working on new high-cost supply sources. We keep in mind that despite the obvious benefits to consumers, a prolonged slump in oil prices could have serious implications for investments in new oil production.
Cesar Perez is the chief investment strategist Emea at JP Morgan Private Bank
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Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
RESULT
RS Leipzig 3
Marcel Sabitzer 10', 21'
Emil Forsberg 87'
Tottenham 0
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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The years Ramadan fell in May
Company profile
Name: Infinite8
Based: Dubai
Launch year: 2017
Number of employees: 90
Sector: Online gaming industry
Funding: $1.2m from a UAE angel investor
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
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UAE v Ireland
1st ODI, UAE win by 6 wickets
2nd ODI, January 12
3rd ODI, January 14
4th ODI, January 16
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
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Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
'Munich: The Edge of War'
Director: Christian Schwochow
Starring: George MacKay, Jannis Niewohner, Jeremy Irons
Rating: 3/5
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
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MATCH INFO
What: 2006 World Cup quarter-final
When: July 1
Where: Gelsenkirchen Stadium, Gelsenkirchen, Germany
Result:
England 0 Portugal 0
(Portugal win 3-1 on penalties)
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
The biog
Name: James Mullan
Nationality: Irish
Family: Wife, Pom; and daughters Kate, 18, and Ciara, 13, who attend Jumeirah English Speaking School (JESS)
Favourite book or author: “That’s a really difficult question. I’m a big fan of Donna Tartt, The Secret History. I’d recommend that, go and have a read of that.”
Dream: “It would be to continue to have fun and to work with really interesting people, which I have been very fortunate to do for a lot of my life. I just enjoy working with very smart, fun people.”
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions