Market perceptions of risk to shift with Trump’s growth-friendly policies
KUALA LUMPUR: Market perceptions of risk have shifted towards the scenario of a “strong demand recovery”, driven by expectations that president-elect Donald Trump will strive for and implement more growth-friendly policies.
HSBC Global Asset Management ( HSBC) said however, the downside risks from US global protectionist policies, tighter financial conditions and consumer headwinds remained.
In its 2017 investment outlook report, HSBC said investors also need to be cautious as political uncertainty remains elevated and the prospect of a more protectionist US has the potential to spill over to corporate fundamentals globally.
The bank viewed that “Trumponomics”, the cooperation of fiscal and monetary policy, improving global economic activity and continuing low interest rates, as four key themes shaping macro environment in 2017.
Meanwhile, OCBC Bank said when Donald Trump is sworn in later today as the 45th US president, he would be inheriting an economy that has been growing rather robustly.
“For Asia’s sake, let’s hope that the growth momentum will remain strong under his watch,” OCBC said in its weekly report on global developments.
Not only is Trump inheriting an economy that is already growing relatively robustly, there is also tremendous expectations that he will make it even better, it added.
“As global markets are already casting a wary eye on Trump’s protectionist instincts, there appears to be still a vein of hope that he will tone down on them in practice, once he comes to office,” OCBC said. — Bernama