Rising global inequality fuels populist policies and market intervention, Australia wealth fund chief warns
Investors are navigating elevated geopolitical risks as global trade patterns shift and protectionist barriers rise
[SINGAPORE] Rising inequality around the world is contributing to more populist policies and a higher amount of intervention in markets, warned the boss of Australia’s sovereign wealth fund.
Raphael Arndt, chief executive at the Future Fund, said the fund made the decision to reduce US exposure as a result of changes following US President Donald Trump’s tax-and-spend legislation and volatility around trade policy after “Liberation Day.” Speaking at the Bloomberg New Economy Forum in Singapore on Thursday (Nov 20), he quipped that Adam Smith’s invisible hand is “a bit too invisible at the moment.”
Investors are navigating elevated geopolitical risks as global trade patterns shift and protectionist barriers rise. Growing state intervention in strategic industries and the increasing use of economic policy to gain leverage over other countries are heightening uncertainty and reshaping market dynamics.
Arndt’s team recently warned that the risk of shocks across the global economy is rising and has bolstered its holdings of gold, actively managed stocks and hedge funds to provide a cushion. He oversees around A$261 billion (S$221 billion).
Speaking on the same panel, which honed in on problems in current market structures, Nasdaq CEO Adena Friedman said challenges remain with regulatory oversight in supporting companies accessing public markets and their investors.
In January, she welcomed the new Trump administration as an opportunity to revamp regulation in the US to make it more attractive for companies to tap capital markets.
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“It’s important to recognise that public markets are the most accessible markets in the world,” she said. “So, if you want to engage the entire population in the economy, the public markets need to be vibrant and accessible to them.”
David Vélez, CEO and co-founder of Nu Holdings, said on the panel that “capitalism needs a reboot in the direction of more capitalism, not less,” reflecting his views on how the banking system and competition have supported growth in Latin America.
Nubank, as the company is known, is one of the largest financial firms in Latin America. As one of the world’s biggest digital banks, Nubank has been trying to navigate a tougher environment in Brazil where interest rates remain at a nearly two-decade high. BLOOMBERG
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