By Cornelius Matthes, CEO of Dii Desert Energy and the MENA Hydrogen Alliance
An interesting situation is brewing on capital markets: we have seen the longest bull markets for equities in history (since March 2009!).
Interest rates are still relatively low according to the long term average, but we are starting to observe anomalies, e.g. that at the start of April, bonds were falling during a period of correction in equities, which should usually be the opposite.
Globalisation has been the top factor to reduce inflation over the past decades, and this, together with free trade is currently being challenged.
The valuation of certain companies seems more dramatic than at the height of the dot.com bubble in year 2000.
The geopolitical situation does not very positive either.
It is difficult to say how long the party will continue, but always good to get prepared for different scenarios, with significant volatility ahead.
And the USD just started a downward trend, reversing the period of appreciation since 2008 – this is expected to be a prolonged one with a possibly much larger shift away from the USD this time.
In summary, interesting times ahead on capital markets, with significant implications for projects, similar to the massive interest rate increase during 2022 we have warned before as well.
Just a few personal reflections as food for thought so that we don’t get too complacent.