Politics Expected to Have Outsized Impact on Emerging Markets in 2014, According to BNY Mellon
2014 Global Market Outlook Outlines Views from Investment Boutiques
Jan 13, 2014
NEW YORK and LONDON, Jan. 13, 2014 /PRNewswire/ -- A key investment theme of 2014 is expected to be politics, as elections could affect policies in several emerging markets, according to the BNY Mellon Global Market Outlook. The outlook is the annual look ahead from BNY Mellon Investment Management and features views from across the firm's global investment affiliates.
"While our investment boutiques have their distinct views on markets and investing, a common theme from many is that potential opportunities lie amid the political uncertainty likely to characterize 2014," said Curtis Arledge, chief executive officer of BNY Mellon Investment Management. "In addition to questions about Fed policy in 2014 and its impact around the world, elections in some key emerging countries could have important market implications."
Among the countries facing elections in 2014 are Turkey, Brazil, India and South Africa. "Brazil stands out as the country that has a sizeable civil service and bureaucratic regulatory system, so a change of leadership could affect a number of sectors and the way Brazil does business," said Sophia Whitbread, investment manager and a member of the emerging markets team at Newton, BNY Mellon's London-based thematic investment boutique. "However, the incumbent is leading in the polls and there might not be any changes."
Looking at Asia, Whitbread added, "Political unrest to varying degrees has always been a feature of Asian markets and one factor investors should consider."
Colm McDonagh, fixed income manager at Insight Investment, the London-based BNY Mellon boutique specializing in liability-driven investment and multi-asset strategies, also focused on the upcoming elections. "Typically, before elections people spend more money, which can lead to inflation and other negative side effects."
Looking at Brazil, McDonagh said, "Its middle class had been rising, but now has become squeezed. Not enough has been done to improve infrastructure such as public transportation, which can be a catalyst for protests."
In addition to prospects for emerging markets, the Global Market Outlook focuses on a range of additional topics including the potential impact of the policies from the U.S. Federal Reserve on the U.S. and other economies and the outlook for various asset classes.
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Notes to Editors:
Newton is a London-based global asset management subsidiary of The Bank of New York Mellon Corporation and part of BNY Mellon. With assets under management of more than $84.2 billion (as at 30 September 2013) including assets managed by Newton Investment Management Limited as dual officers of Newton Capital Management Limited and The Bank of New York Mellon, Newton's group of affiliated companies provides a broad range of award-winning investment products and services to individuals, pension funds, charities and corporations. News and other information about Newton is available at www.newton.co.uk or follow us on Twitter @NewtonIM.
Insight Investment is a leading asset manager focused on designing investment solutions to meet our clients' needs. Founded in 2002, Insight's partnership approach has delivered both investment performance and impressive growth in assets under management. Insight manages £272 billion ($446 billion) across fixed income, liability-driven investment, absolute return, cash management, multi-asset, specialist equity and currency strategies. Assets under management are represented by the value of cash securities and other economic exposure managed for clients. The assets under management figure represents the combined assets under management of Insight Investment Management (Global) Limited and Pareto Investment Management Limited, which became part of the Insight group on 1 January 2013. Data as at 30 September 2013. Insight Investment is owned by BNY Mellon.
BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.5 trillion in assets under management. It encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. More information can be found at www.bnymellon.com.
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