ISC, UIC hold sem­i­nar on ‘What Makes Pol­i­tics Tick’

Kuwait Times - - Business - By Nawara Fat­ta­hova

KUWAIT: The In­vest­ment Stud­ies Cen­ter (ISC) at the Union of In­vest­ment Com­pa­nies (UIC), in col­lab­o­ra­tion with Aberdeen Stan­dard, re­cently held a sem­i­nar on ‘What makes pol­i­tics tick’ at KIPCO Tower.

Fadwa Dar­wish, UIC Tech­ni­cal Sup­port Man­ager, while dis­cussing the broader rise of po­lit­i­cal pop­ulism and it con­tin­ues to chal­lenge in­vestors, said fi­nan­cial mar­kets are re­silient but are not im­mune against ma­jor events hap­pen­ing in the world. “Cap­i­tal mar­kets do not op­er­ate in a vac­uum - tur­bu­lence on the global po­lit­i­cal scene has a sig­nif­i­cant im­pact on their per­for­mance. Po­lit­i­cal in­sta­bil­ity and fre­quent regime changes create eco­nomic un­cer­tain­ties that may im­pact growth,” she noted. “So, at the end of the day, it’s im­por­tant to not take spec­u­la­tions of the ef­fect of po­lit­i­cal change on fi­nan­cial mar­kets to heart. In­stead, trust the ad­vice of peo­ple who are in the in­dus­try,” Dar­wish said.

This was be­hind invit­ing se­nior po­lit­i­cal econ­o­mist Stephanie Kelly from Aberdeen Stan­dard In­vest­ments to present this sem­i­nar and dis­cuss how the rise of pop­ulist pol­i­tics chal­lenges the tra­di­tional in­vest­ment ap­proach, as polls have proven un­re­li­able and mar­kets strug­gle to price po­lit­i­cal risk. “I think in­vestors can strug­gle to un­der­stand what ex­actly they need to be look­ing at, in or­der to bring po­lit­i­cal risk into their ap­proach when they look at fun­da­men­tal analy­ses for their in­vest­ment,” Kelly told Kuwait Times. “We pro­vide a process that al­lows for that to be pulled in. So it’s not just about say­ing there is po­lit­i­cal risk, but ac­tu­ally it be­comes part of your fun­da­men­tal anal­y­sis to go along­side eco­nomic val­u­a­tion and other el­e­ments of the fun­da­men­tal analy­ses we al­ready use,” she added.

The sem­i­nar dis­cussed var­i­ous is­sues. “In my pre­sen­ta­tion I also ap­plied this to Italy, the US and to Brexit. In each case, it shows the even­tual cer­tainty and the de­gree of space there is for us to move both pos­i­tively and neg­a­tively,” ex­plained Kelly.

The pre­sen­ta­tion also showed the dif­fer­ence be­tween ac­tual re­sults and polls, and that fal­li­ble poll­sters have brought po­lit­i­cal risk to the fore, in ad­di­tion to the broader rise of po­lit­i­cal pop­ulism that con­tin­ues to chal­lenge in­vestors. Kelly also men­tioned that po­lit­i­cal risk in­cludes in­sti­tu­tional and cycli­cal fac­tors. She also spoke about the sce­nar­ios that sug­gest es­ca­la­tion which could come from China. She con­cluded with ex­plain­ing long-term in­vest­ment out­look and strate­gic as­set al­lo­ca­tion.

KUWAIT: Stephanie Kelly speaks dur­ing the sem­i­nar. — Photo by Yasser Al-Zayyat

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