Issue - meetings

(a)        Noted and discussed the Economic and Market Update 30 September 2018.

(b)        Noted how the information in the report effectively “sets the scene” for what the Committee should expect to see in the Investment Strategy and Manager Summary report in terms of the performance of the Fund’s asset portfolio.

Mr Harkin gave an update on the economy and markets over the latest quarter. Page 315 reflects what happened in the market over the quarter ending 30 September 2018. The key points that Mr Harkin raised where that;

·         The market statistics show that over the three months, the markets were in ‘risk on’ mode.

·         There was a strong return across the board, and Emerging Markets which had been under pressure but now returned positively.

·         From an investment perspective, there was a lot of positive sentiment particularly around the US, as the stance of the Federal Reserve had taken some heat off the economy.

·         Sterling came under pressure against the US Dollar and the Euro, this will affect currencies for pension funds that are UK based for their overseas holdings.

Since then, there has been significant pressure on equity markets. In October 2018, global market equities faced significant losses. The key points that Mr Harkin raised were that;

·         There has been some analysis on Bloomberg, whether there will be a Brexit deal rejected, and what will the impact be on the Sterling,

·         France and Germany are facing presidential pressures, and there is a lot of pressure globally and a lot of negative news flow.

Cllr Bateman questioned whether the Sterling against the US Dollar is good for exporters. Mr Harkin agreed that it is, however there are always winners and losers in the market. He added that the UK exports a significant amount of goods therefore it would be good for an exporter as a business if they had a significant amount coming out of the US. The current position of the Sterling against others is still weak due to Brexit and the drop is significant particularly against the US Dollar, however it is not as weak as it has been.

RESOLVED:

(a)        Noted and discussed the Economic and Market Update 30 September 2018.

(b)        Noted how the information in the report effectively “sets the scene” for what the Committee should expect to see in the Investment Strategy and Manager Summary report in terms of the performance of the Fund’s asset portfolio.