IN THE DOCK As globalisation risks going into reverse, many investors are asking what, if anything, will drive emerging markets as an asset class in future
IN THE DOCK As globalisation risks going into reverse, many investors are asking what, if anything, will drive emerging markets as an asset class in future

EM portfolio doubts

The summary sacking of Turkey’s central bank governor and the shock resignation of Mexico’s finance minister, which immediately roiled markets, are reminders of the high-risk nature of investing in emerging markets. It has cast doubt over developing economies converging with the developed world. Apart from China and India, there’s little sign of convergence. High commodity prices are a fading memory. Trade is stuttering and global supply chains are being disrupted. Many supposedly emerging markets are growing more slowly, raising questions over the role of emerging markets in a diversified portfolio.

Financial Times

The British pound. Picture: PUBLIC DOMAIN IMAGE
The British pound. Picture: PUBLIC DOMAIN IMAGE

Sterling pounded

Sterling’s slide to $1.24 on Tuesday was its weakest level against the dollar since April 2017, reflecting a slide in confidence in the UK’s economic outlook ahead of the October 31 Brexit deadline. Capital Economics calculates sterling could slump to $1.15 if there’s a no-deal Brexit. If there is a deal, the pound could rally back to $1.40 within a couple of years, they suggest.

The Guardian