Over the past two months, events in the Mena region have dominated headlines. While the situation keeps constantly evolving, many investors are also asking how the events will affect global stock markets in the long run.
While the events may cause a modest decline in the short term, Credit Suisse regards this as a buying opportunity for the medium to long term. Political change may result in short-term uncertainty and a temporary loss of output, but over a period of time it can unleash faster long-term growth, especially in countries that have civil institutions with deep historical roots such as Egypt.
Market moves in the past may be an imperfect comparison, but they do provide a guide. In 1991, as the collapse of the Soviet Union gathered pace, global emerging market equities fell about 5 per cent over the month to August 19 when Mikhail Gorbachev, the then president, was briefly arrested. However, they were up by about 20 per cent within a year and by more than 50 per cent in two years.
No comments:
Post a Comment