Asian traders, investors bet on Clinton win
> But caution lingers, surprise Trump victory not ruled out
SYDNEY/SINGAPORE: Investors and traders in Asia indicated yesterday they are mostly increasing their bets on Democratic nominee Hillary Clinton winning the US presidential race after the second of three debates with Republican nominee Donald Trump.
Some though remain cautious, saying there was still a chance of a surprise Trump win. They said many in the markets were wary after being burned by the shock “Brexit” vote in June.
MSCI’s broadest index of AsiaPacific shares outside Japan edged up around 0.1% by mid-afternoon in Singapore yesterday, while Wall Street index futures were little changed after Clinton exchanged barbs with Trump in the televised event, which was shown live across trading rooms during Asia’s morning.
The 90-minute debate quickly turned into an acrimonious discussion of a 2005 video that emerged on Friday in which Trump was heard using vulgar language and talking about groping women. The controversy has caused some senior Republicans to withdraw their support for him.
“For those that think that Trump has a very, very low chance of winning the US elections it might be a good time to go long on global equities,” said Itay Tuchman, Citi’s head of markets for Australia and New Zealand.
Markets could be prematurely pricing in a Clinton victory, as they did during the “Brexit” vote in June, when the United Kingdom voted unexpectedly to leave the European Union, said Lee Jin Yang, research analyst for Aberdeen Asset Management in Singapore.
“We need to remember that Brexit only became a key focus one week before the vote. The market had priced in near zero probability of it happening but it did.”
According to a CNN online poll, Clinton won the debate by 57% to 34%.
But Josh Crabb, head of Asian equities at Old Mutual Global Investors in Hong Kong, said he is wary of such polls – especially after Brexit.
“The way that mainstream media, and a lot of commentators, interpret the outcome of the debate may be different to what the voting public in general takes away,” Crabb said. “That is a concern because often, a lot of these polls have not been quite as accurate as people are expecting.”
Mathan Somasundarum, a strategist at stock brokerage Baillieu Holst in Sydney, said a Clinton victory would reduce the risk of the United States adopting a strong trade protectionist policy. Trump has been highly critical of the Nafta trade deal with Mexico and Canada as well as the Trans-Pacific Partnership, which has yet to be ratified by the US Congress. He has promised to build a border wall and make Mexico pay for it.
“I would expect the US dollar to weaken and you would expect then there is some pressure coming off emerging markets, and then commodities, which (are a) proxy for emerging markets,” he saud,
“China, commodities and the Aussie dollar should do better.” – Reuters
A trader working at his desk as the second Trump-Clinton debate is shown on television at Citibank’s trading floor in Sydney, Australia, yesterday.