Date: 5th March 2020
Our Chief Investment Officer, Jason Hazell gives us a market update amidst the current impacts of the coronavirus on share markets, and how Crescent Wealth is positioned to weather such volatility.
The last week of February 2020 saw equity markets sell off due to concerns relating to the coronavirus emerging from China. This volatility has continued in early March despite efforts from the Reserve Bank of Australia cutting rates by 0.25% on Tuesday followed by a 0.50% emergency meeting cut by the US Federal Reserve on Tuesday night. These cuts were designed to ensure that credit continues to flow to businesses.
The World Health Organisations latest statistics on coronavirus (known as COVID-19) as at 4 March 2020, state that there are 93,090 confirmed cases of which 80,422 are from China and now 12,667 cases outside China. The biggest change of late is that there are significantly more new cases in the previous 24 hours, outside China (2103) vs inside China (120). However, mortality rates for coronavirus outside China appear significantly lower at this stage.
In addition to the health impacts of the coronavirus, is a very real disruption to global supply chains due to the extended delay in getting the Chinese workforce back into the factories that supply global businesses. This is likely to have a negative impact on company profits and GDP in China, Australia and the US.
The Crescent Wealth portfolios are inherently conservative due to our view on the extremes of market valuations and our high holdings in Islamic Cash. We have recently implemented changes in our Australian and global equity portfolios which are aimed at improving the risk-returns outcome of these asset classes. We have also recently funded Australia’s first global sukuk mandate, which is the growing market for Shariah-compliant Islamic fixed income.
It is important to remember that superannuation is a very long-term investment for the vast majority for Crescent Wealth’s members and while markets are currently volatile, returns over the last 12 months continue to be positive for members.
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Talal currently serves as a Non-Executive Director on the Whitlam Institute and Western Sydney University Foundation Council Board. He also serves as Chairman of First Quay Capital and Chairman of the Australian Arab Dialogue. Talal has also served on the Australia Post, Board of Sydney Ports, Macquarie University and the Western Sydney Area Health Service and the Chairman of the Department of Foreign Affairs and Trade; Council of Australia Arab Relations. In an executive capacity, Talal spent 10 years at PwC as a director and strategist, and at investment firm Babcock & Brown in the Corporate Finance Group and later in the Technical Real Estate Division. Later Talal held leadership positions in Better Place Australia, Platinum Hearing and Star Transport Australia.