Page 86 - SC Annual Report 2018 (ENG)

Securities
Commission
Malaysia
ANNUAL
REPORT
2018

Chart 5
2018 marked the return of global financial market volatility especially in the latter part of the year

Volatility measures of major equity markets Volatility measures of the US bond market
(VIX, VSTOXX, VXEEM) and Brent crude oil prices (MOVE Index and
Brent 3-month Implied Volatility)

43 VIX Index 85 MOVE Index (LHS) 55
VSTOXX Index 80 Brent 3M Implied Volatility (RHS) 50
38 VXEEM Index
75 45
33
70
40
28 65
Index Index 35 %
23 60
30
55
18 25
50
13 20
45
8 40 15
Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18

Source: Bloomberg

Overall, the global capital markets ended Meanwhile, the global bond market also ended
significantly weaker in 2018 (Chart 6), with higher relatively weaker as higher global interest rates
levels of global financial market stress and volatility. drove bond yields higher with notable upward
In the equity market, the MSCI World ended the pressure among EMEs local currency sovereign
year -10.4% lower to 1,883.93 points (2017: 20.1% bonds. However, stronger risk aversion particularly
to 2,103.45 points), marking its worst annual in the latter part of the year had kept long-term
performance since the Global Financial Crisis (GFC) yields anchored, leading to a further flattening
in 2008. Similarly, the MSCI Emerging Markets and even an inversion of the yield curve as
declined by a double-digit rate of -16.6% to 965.67 experienced in the UST mid-range tenures in early
points (2017: 34.3% to 1,158.45 points), and down December 2018.
by -24.1% from its peak of 1,273.07 points on 26
January 2018.

76 | PART 4 »» CAPITAL MARKET REVIEW AND OUTLOOK

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