2018 marked a tumultuous year for stock markets across the globe. The ups and downs that markets experienced can be attributed to key events that shook the international political economy. One of these is the US-China trade war. Stay in the know with this handy guide on what to expect in 2019.
Thailand will be holding their general elections on 24 February 2019. This is the first election since a military coup in May 2014, led by General Prayut Chan-o-cha, deposing the previously elected government and installing a military body known as the National Council for Peace and Order (NCPO). Civil rights, including the right to vote, were suspended indefinitely by the NCPO.2
Despite declining 8.09% in 2018, the SET (Stock Exchange of Thailand) Index posted 5 years annualized returns of 7.14%.3
Learn more on investing in Thai stocks.
United Kingdom (UK)
The UK is set to formally exit the European Union on 29 March 2019, with the terms of the Brexit deal still facing uncertainty. In the event of a “no-deal Brexit”, various rules, permits and accords will fall into limbo. Trades will be subject to World Trade Organisation tariffs and border controls. With UK Prime Minister Theresa May holding off the crucial Brexit vote on 11 December 2018, uncertainty is high, with the pound dropping to an 18-month low against the dollar.4
Following the Brexit referendum in June 2016, the FTSE 100 fell more than 5% over 3 days. The FTSE 100 Index has declined 8.7% in 2018, with 5 year annualized returns of 3.88%.2
Learn more on investing in UK stocks.
United States (US)
The US Federal Open Market Committee (FOMC) Meeting is set to take place on 19-20 March 2019, with a press conference scheduled as well. Observers expect that there will be 2 to 3 interest rate hikes in 2019 and any rate hike will likely cause further market volatility.5
Learn more on investing in US stocks.
Indonesia’s General Elections will be held on 17 April 2019. Incumbent President of Indonesia Joko Widodo, also known as Jokowi, will be running for re-election against former general Prabowo Subianto, who lost the race against Jokowi back in 2014. The President, Vice-president and members of the People’s Consultative Assembly will also be contesting in elections on the same day in a historic occasion for Indonesia.6
With the Jakarta Composite Index posting a 0.28% decline for 2018, Indonesia still remains a country with potential investment opportunities. This can be attributed by the fact that it is one of the fastest growing economies in Asia, coming in second only to Vietnam, with 10% annualised growth over 5 years.3
Learn more investing in Indonesian stocks.
European Parliamentary elections are set to be held on 23-26 May 2019. Post Brexit, the number of Members in the European Parliament will decrease from 751 to 705. Populist parties are expected to gain seats this election, which could mean tougher laws on immigration.
Learn more on how to invest in European stocks.
The Philippines will be conducting their midterm elections on 13 May 2019, where the winners will take office on 30 June 2019. Seats in the Senate and House of Representatives will be up for contest.7
Learn more on investing in Philippines stocks.
The G-20 Summit of world leaders will be held in Osaka, Japan, on 28-29 June 2019. Trade issues could be at the top of the agenda, especially for major economies like the US and China. This has been a central topic in 2018, with the threat of increasing tariffs weighing heavily on investors’ sentiments worldwide.
The Shanghai Composite and Shenzhen Composite have both declined significantly in 2018 (22% and 32% respectively), with price-earnings (P/E) ratios at 10x and 14x respectively.2
Another US FOMC Meeting is scheduled on 19 June 2019, followed by a press conference.3 Markets may see the trend of increasing interest rates continue.
The House of Councillors (Japan) election will be held in July 2019 to elect 121 of 242 members. The House of Councillors is the upper house of Japan. After the lost decade during the 1990s, the Japan Nikkei225 finally breached the 23,000 points level in 2018. With the Tokyo 2020 Olympics coming, the Japan Nikkei225 looks set to continue its 6% annualised growth over the past 5 years.2
Learn more on investing in Japanese stocks.
The US FOMC Meeting is scheduled on 18 September 2019, followed by a press conference.3 Will we see another announcement of interest rate hikes on the cards?
The 43rd Canadian General Elections is scheduled to take place by 21 October 2019. The 2015 election resulted in the Liberal Party attaining a majority, with Justin Trudeau being sworn-in as Prime Minister.
Learn more on investing in Canada stocks.
President of the European Central Bank (ECB) Mario Draghi is due to step down on 31 October 2019 following the completion of his 8-year term. The President heads the Executive Board, Governing Council and General Council of the ECB. He also represents the Bank at high-level EU and international meetings such as the G20 Summit.8
Japan will increase sales tax from 8% to 10% to alleviate national debt and pay for healthcare costs. With higher taxes, consumer spending may be impacted and this may affect Japan’s economic growth. However, the planned hike could still be scrapped if market conditions point to a major recession.9
The 2019 Australian Federal Elections will be held on or before 2 November 2019 to elect its 46th Parliament. Australia is one of the few nations to enforce compulsory voting, where voting is regarded as a citizen’s duty rather than a right.
While the S&P/ASX 200 Index fell 0.6% in 2018, it has one of the highest dividend yields at 5%, largely due to Australian bank shares. Commonwealth Bank (CBA.AU), the largest in Australia with a market cap of 122 billion AUD, currently has dividend yield of more than 6%.3
Learn more on investing in Australian stocks.
Hong Kong’s District Council Elections is expected to be held in November 2019. All 18 District Councils, totaling 452 seats, will be up for election.
Hong Kong’s Hang Seng Index was not spared from trade jitters, tumbling more than 11% for the year 2018. Business groups in Hong Kong are worried that the US administration under President Donald Trump will end the city’s preferential trade status as their autonomy from Beijing comes into question.10
Learn more on investing in Hong Kong stocks.
The US FOMC Meeting is scheduled on 11 December 2019, followed by a press conference.3 Will we see another interest rate hike to cap off the year?
Watch the Financial Markets Keenly
The confluence of events above are set to keep investors and traders on their feet, as they keenly watch major events unfold and look for signs of market volatility.
In 2018, trade tensions between the US and China have dominated news headlines, causing jitters in the financial markets, as observers weighed the impact of the trade spat.
Against the backdrop of 2018’s developments spilling into the new year, what can you expect in 2019?
Keep your eyes peeled for further developments!
Information is accurate as of 31 Dec 2018.