Investment banking: It’s the politics, what-else?

Published: February 1, 2017

Politics, both domestic and global, have overshadowed capital markets developments in EMEA’s emerging markets, with coups, sanctions and scandals adding to the challenges of a sustained commodity price downturn.

Given the backdrop, it is perhaps unsurprising that markets have been led by politics in emerging and developed markets in 2016. The unexpected election of Donald Trump in the US, following on from the result of the UK’s referendum on membership of the European Union, have created huge uncertainty around the future of elements of the global economic and financial system. As analysts at Deutsche Bank expressed it: “we have come to the end of a 35-year super cycle for globalisation, demographics, politics, policy and asset prices with big changes likely to come.”

Whether that comes to pass or not, the turbulence of the year’s end has added to the existing backbeat of political tensions in Russia, Eastern Europe and the Middle East; and to the sustained low commodity price environment that has seriously impacted exporters in emerging markets.

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