2017 Emerging Markets Outlook



For investors 2016 was a year of hope, while 2017 will be a year of delivery. One year ago, the consensus was that we had avoided another financial crisis but our expectations were modest, expecting a deflationary lower-for-longer environment. The pendulum has since made a full swing to euphoria and hopes of a panacea from Trump reflation. The truth is somewhere in the middle.

The global cyclical outlook has led to lower macro tail-risks. Many of the structural growth areas have already gone through a period of underperformance in light of the hope rally, making them relatively more attractive from the risk-return point of view. As these companies continue to deliver resilient earnings, we believe the market will return to fundamentals in 2017 and reward those that can deliver solid results.


  • US Political Fallout: In 2017, we will look to see the outcome and impact of the US’ new presidential administration, which could challenge the status quo of global trade and could also create a commodity demand surge in order to supply a massive infrastructure program.
  • Rebalancing Chinese Growth: An upgraded global cyclical outlook from a higher growth contribution from the US affords China with a buffer to offset slower infrastructure over-investment with an export-led recovery.
  • Political Uncertainty & Central Banks: 2017 will be marked by newly elected politicians pushing through their much-anticipated agendas along with actions from the world’s key central banks.


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