02 January 2019
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Global stockmarkets report 2018 losses as investors flee to gold, and Theresa May continues to attempt to drum up support for the proposed Brexit deal. Investment Week takes a look at the key headlines over the Christmas 2018 and New Year break.
Worst annual equity returns since 2008
Global stockmarkets suffered one of their worst years in a decade in 2018, with the FTSE 100 reporting losses of 12%.
Following the final trading day of the year on New Year's Eve, when markets followed tradition to close earlier, the UK blue chip index ended the year down 12% at 6,728.13 points.
Meanwhile, in the US, despite an uplift in equity prices towards the end of December, markets were also in the red with the Dow Jones posting a 5.6% loss for the year and the S&P 500 reported a fall of 6.2% amid concerns of trade wars, tightening monetary policy and the slowing global economy.
In what was a tough year for emerging markets, Asian indices also suffered with the Hang Seng index down 14% in 2018 - and continuing to fall on the first day of trading in 2019 - while China's Shanghai Composite saw a huge 25% annual decline.
Sentiment plummets
Investor sentiment fell in December to the lowest level on record, according to Lloyds Private Bank's monthly tracker.
Investor sentiment fell in December to the lowest level on record, according to Lloyds Private Bank's monthly tracker.
The poll saw the greatest month-on-month decline in investor sentiment since July 2016 - a month after the Brexit vote - with UK assets suffering the biggest declines.
UK shares, corporate bonds and property all dropped to their lowest recorded levels with the latter leading the way dropping by almost 36% compared to December 2017.
Investors flee to gold
As a result of investor nervousness and poor 2018 equity returns, gold, traditionally considered a safe haven, sales soared towards the end of last year.
As a result of investor nervousness and poor 2018 equity returns, gold, traditionally considered a safe haven, sales soared towards the end of last year.
Looking at the four days from 24 to 27 December, data from online physical metal platform BullionVault showed the number of new gold investors increased 82.7% compared to the previous five festive seasons.
The total quantity of gold bought rose 168.4% and in terms of prices, gold bullion has also risen to a 15-month high of £1,010 per ounce.
'Good year' for corporate billionaires despite market turmoil
The market volatility of 2018 did not prevent another 31 names being added to Bloomberg's Billionaires Index.
The market volatility of 2018 did not prevent another 31 names being added to Bloomberg's Billionaires Index.
However, a tumultuous year for global markets caused a $451bn fall in the wealth of the world's 500 richest people in 2018, whom saw their fortunes increase by $1trn in the previous year.
Jeff Bezos, Amazon founder and the richest man in the world, was 2018's biggest gainer for the second year running. His net worth grew by around $24bn to $123bn.
Michael Zeuner, managing partner of WE Family Offices said: "It was a tough year in financial markets, but for people who are creating wealth through companies, the economy itself is very strong."
Brexiteer hedge fund manager Odey's UK bets fail to pay off
The Brexit-backing founder of Odey Asset Management Crispin Odey saw his firm's profits fall by £4m in 2018, as £149m of short positions against the UK's economy across shops, banks, estate agents and property companies failed to pay off.
The Brexit-backing founder of Odey Asset Management Crispin Odey saw his firm's profits fall by £4m in 2018, as £149m of short positions against the UK's economy across shops, banks, estate agents and property companies failed to pay off.
Odey earned £1.5m from Odey Asset Management in the year to 5 April, a 72% decline on the £5.5m he made in the previous 12 months, according to The Guardian.
The hedge fund reported a 52% fall in profit to £8.8m, as billionaire Odey's bets against sterling and UK companies failed to bear fruit.
May continues to urge MPs to back Brexit deal
With 90 days to go until the UK is scheduled to leave the European Union (EU), Prime Minister Theresa May continued to call upon MPs to back her proposed Brexit deal in her New Year message.
May said the the UK can "turn a corner" and start to "put its differences aside" if Parliament backs the proposed deal.
Should MPs approve the exit terms later this month, she said the UK could "move forward together" and concentrate on other issues like housing and health, reported the BBC.
The UK is scheduled to exit the EU on 29 March, but it is unclear what will happen if MPs reject the withdrawal agreement.
