Source: Allied Wealth, Bloomberg (Data as at 10th March 2026 close)
The ongoing escalation of violence in the Middle East remains a material risk that markets find difficult to quantify. Our analysis indicates that investors’ primary concern centres on rising oil prices and the flow-through impact on inflation, and interest rates. This dynamic mirrors what was observed at the onset of the Russia-Ukraine conflict.
In equity markets, sentiment towards Technology and AI-related sectors has become more measured. Investors are reassessing valuations and recalibrating long-term earnings assumptions, which has contributed to heightened volatility across these segments.
Our medium-term outlook remains Neutral. However, equity valuations have become more attractive following the recent market drawdown. While near-term forecasting is complicated by geopolitical risks, we expect steady economic growth over the medium-term supported by ongoing capital expenditure in digital and energy infrastructure. Where appropriate the current environment provides an opportunity to rebalance portfolios back to targets, selectively increasing risk where appropriate.
As communicated previously, we see a price-to-earnings entry point around 18x as attractive from a long-term valuation perspective. With global equity markets currently trading near 19.7x, we are closely monitoring market conditions for alignment with our preferred valuation levels; with consideration given to any structural shifts in fundamentals.