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November 09, 2020 @ 13:00 +03:00
Emerging markets could benefit from a political environment that looks set to become “more benign” following the victory of Democratic candidate Joe Biden in the U.S. presidential election, Standard Chartered Bank’s Eric Robertsen predicted. “There’s quite a bit of cash sitting on the sidelines and that has been hiding in U.S. assets for a few years,” Robertsen, global head of research at the British lender, told CNBC’s “Street Signs Asia” on Monday.
He explained that over the last 10 years, the S&P 500 stateside has “outperformed emerging market equities by 100%.” That money could “potentially be deployed” into foreign and emerging markets, representing one of the “key potential pivots” following Biden’s election win over incumbent President Donald Trump, he said. Asia is set to be the first region to benefit from this shift for two reasons, Robertsen suggested. Firstly, he said: “Asia’s markets tend to be a little bit lower beta. In other words, a little bit lower volatility than some of (their) peers … and cousins across other emerging markets.”
Robertsen said the other “incredibly powerful” factor is China, which has been a “strong recovery force” both economically and in terms of financial assets. In a September report, China was the only country among the Organization for Economic Cooperation and Development’s estimates expected to experience growth in 2020. The Chinese yuan “remains very stable,” and that serves as an “attractive pull” for currencies in Asia, he said. As a result, the region seems most likely to be the “first port of call” for investors in emerging markets.
Emerging markets could see an influx of cash following Biden victory, Standard Chartered predicts, CNBC, Nov 9