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-19 Global Markets and Covid 19

May 2020

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Introduction

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Agenda

Global Economic BackdropCatalysts for faster GVC economic reboundFiscal & monetary response

Asset Class ViewsGlobal Equities – The Good, The Bad and The UglyGlobal Fixed IncomeCommodities

Asset Class PositioningBenefits of Global Asset Diversification

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Global Economic Backdrop

Well documented that the global economy has fallen off a cliff –the US economy shrank in the first quarter at its fastest rate since the 2008 crisis

Policymakers and investors are turning their attention to when and how lockdowns can be lifted.

Lifting restrictions may not necessarily translate into a rebound in activity. E.g. Leisure and Travel

Encouragingly business is picking up in China.

Could a second wave of COVID-19 stop China’s progress? Absolutely. But so far, so good.

What shape will the recession and recovery be?

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Global Economic Backdrop

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Catalysts for faster GVC economic rebound

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Faster and more accurate testing –through blood and even sewage plants

Testing

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Gilead’s Remdesivir and other promising treatments

UK, US and other countries making swift progress

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Fiscal and monetary response

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Central banks to the rescue. QE4ever

Fed’s balance sheet has ballooned by $2.5 trillion to a record $6.6 trillion since the end ofFebruary.

Total Assets of the Fed, the European Central Bank, and the Bank of Japan has jumped by$3.2 trillion from the end of February to $17.8 trillion.

Banks globally (except in China) present a low to moderate financial stability risk. Banks’capital positions have been strengthened since then by more stringent capital requirementsand supervision.

In the US the personal saving rate has jumped from 8.0% to 13.1% at the same time

Four days after the Fed’s QE4ever announcement, Trump signed the CARES Act. It provided$2.2 trillion in rescue programs for the economy.

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Plenty of liquidity being provided by the major central banks to stabilize the globalfinancial system - S&P 500 has rebounded strongly since March 23 lows.

73% of S&P 500 companies have reported – earnings misses highest since Q4 2008

Now, the bad news: If you thought Q1 results were bad, you ain’t seen nothing yet!!Q2 is expected to be much worse, with businesses shuttered in the US and in manyother nations as the quarter begins.

We expect near term volatility post ‘relief’ bounce and remain neutral asset class

BUT

The end of globalization and the new world order – reinvention of supply chains?

The end of buybacks and cuts to dividends?

And now throw in a fresh eruption of political sparring between the US and China.

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Global equities – THE GOODA

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Global equities – THE BADA

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Global equities – THE UGLYA

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Market remains supported by Central Bank Bond Buying!

But Fed bond buying is not the panacea for all ills.

In the corporate space Fed buying is unlikely to discourage ratings agencies fromdowngrades!

Liquid assets soared $1.7 trillion from the end of February to a record $15.5 trillion atend of April.

Many businesses drew down their lines of credit, fearing an impending cash crunch.

Covenant amendments have been most common in transport, leisure and energysectors.

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Double black swan event of a GVC driven demand shortage and the Saudi-Russia oil war.

Lack of storage capacity exacerbating demand/supply balance. Negative futures pricing. Unlike shares commodities can trade at a negative price.

Positive for consumers who are able to consume!

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Commodities - GOLDA

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Gold is safe haven asset

Supply Backdrop providing further support to the market

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Benefits of global asset diversification

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-19 Broader opportunity set of investments

Benefit from global disruption themes

Risk diversification

Liquidity

Hard currency exposure

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Contact Details

Name Peter JarvisTitle: Group Chief Investment OfficerDirect: + 27 11 214 8322Email: jarvisp@africanalliance.com

Name Rose LimoTitle: Business Development ManagerMain: +254 20 2777 000Direct: + 254 20 2777 012Email: limor@africanalliance.co.ke

African Alliance 4th Floor, Kenya Re Towers Upper Hill Nairobi

www.africanallianceassetmanagement.com

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Global Economic BackdropCatalysts for faster economic reboundFiscal & monetary response

Asset Class ViewsGlobal Equities – The Good, The Bad and The UglyGlobal Fixed IncomeCommodities

Asset Class PositioningBenefits of Global Asset Diversification

Thank you. Questions?

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Confidentiality and disclaimer

The material in this presentation has been prepared by the African Alliance Group and is general background information aboutAfrican Alliance’s activities current as at the date of this presentation for the purpose of setting out certain confidential informationin respect of African Alliance’s business activities. This information is given in summary form and does not purport to be complete.References to the “Presentation” includes any information which has been or may be supplied in writing or orally in connectionwith the Presentation or in connection with any further inquiries in respect of the Presentation. This Presentation is for theexclusive use of the recipients. This Presentation and the information contained herein is confidential . It is subject to copyright andmay not be reproduced in whole or in part without written permission from the author. While the information contained in thisPresentation is believed to be accurate, no representation or warranty, express or implied, is provided in relation to the fairness,accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. African Allianceexpressly disclaims any and all liability for representations or warranties, expressed or implied, contained in, or for omissions from,this Presentation or any other written or oral communication transmitted to any interested party in connection with thisPresentation so far as is permitted by law. Neither the dissemination of this Presentation nor any part of its contents is to be takenas any form of commitment on the part of African Alliance to enter any contract or otherwise create any legally binding obligationor commitment. African Alliance expressly reserve the right, in their absolute discretion, without prior notice and without anyliability to any recipient to terminate discussion with any recipient or any other parties. The African Alliance Group is held by AfricanAlliance Limited (incorporated in the Isle of Man under registration number 79171C). African Alliance Limited (and/or itssubsidiaries) (“African Alliance”) does not carry on any operational or regulated activities in, or from, the Isle of Man as defined bythe Financial Services Act 2008 (Act of Tynwald). Accordingly it is not, nor is it required to be, licensed or authorised by the FinancialSupervision Commission or any other regulatory body in the Isle of Man. African Alliance has no permanent place of business in theIsle of Man and does not hold itself out to carry on any regulated activities in, or from, the Isle of Man. African Alliance’s businessesare licensed, where applicable, by domestic regulators. African Alliance does not carry any operational or regulated activities in, orfrom the United States of America. Accordingly, African Alliance is not a licensed broker-dealer in the United States of America, noris it licensed or regulated by the Securities Exchange Commission, the Financial Industry Regulatory Authority or any otherregulatory body in the US.