Global economic activity continued to lose momentum over the last quarter, with major risks weighing on the outlook. These include escalating trade tensions, disruptions in Global Supply chains, ongoing BREXIT uncertainty and rising Middle East tensions, all of which are dampening condence and further restraining investment spending. Recent forecast updates by the OECD showed further downward revisions , with growth of 2.9% projected for 2019, down from 3.25% projected as recently as May. This follows growth of 3.6% in 2018, and will be the weakest growth recorded since the Global Financial Crisis. The OECD expects growth of 3.0% in 2020, down from its May projection of 3.4%. The downward revisions were broad-based, but countries with greater exposure to global trade saw the biggest negative revisions. These included most Emerging Economies and some advanced economies like Germany.

A collapse in trade ows has been a major source of weakness for the global economy, fuelled in part by an escalation in the US-China Trade War. Although trade tensions go back years, recent escalations have had a more dramatic impact on global activity. More export-orientated economies, and emerging economies generally, have been hit hard. In advanced economies, the slowdown in trade ows has had a huge impact on their manufacturing sectors, with services sectors more resilient since they are more exposed to domestic demand. But concern is rising that services sectors are succumbing to weaker activity as well. Although job markets in advanced economies have remained strong, bolstering domestic demand, the fear is that the weakness in manufacturing has started to feed through.

Trade wars between the US and China continue to weigh on equity growth prospects and has resulted in an increase in the volatility of global markets. This growing tension has contributed to a weak August that lead to a 2% decline for the MSCI World Index whilst the S&P 500 declined by 1.6%. Although August proved to be a weak month for equity markets, the MSCI World Index and S&P 500 still managed to close positive, showing slight gains of 0.7% and 1.7% for the third quarter. The outperformers from a sectoral perspective were Utilities, Consumer Staples as well as the Technology sector. Basic Materials continues to underperform amidst fear of a weaker demand from China. Even though we saw a supply- shock positively impacting the oil and natural gas prices, prices still remain depressed and served as the main catalyst for the 5.5% decrease in the Energy sector1. Central Banks globally have been engaging in policies to decrease interest rates, which may not be advantageous to bond yields but should provide potential upside for the equity market if geopolitical risk subside.

The current market volatility is ideal for active managers, as it present opportunities to pick some high quality companies which are trading at signicant discount to their intrinsic value. This is reected in the portfolio valuation of the Oasis Crescent Global Equity Fund which is at a signicant discount to the DJIM Index on most metrics. The Fund is invested in companies which are global leaders in their sectors, generate strong free cash ows, which enable them to pursue value enhancing opportunities such as share buy backs and mergers & acquisitions. Oasis has successfully navigated turbulent economic cycles since its inception and with strong focus on downside protection, we are condent that our portfolio is well positioned to provide attractive risk adjusted performance for our clients over the long-term.