With Trump in power, geopolitical risks in 2017 will be significant
GLOBAL stocks have rallied since the US presidential election on Nov 8, led mainly by Wall Street where the Dow Jones Industrial Average crossed 19,000 last week for the first time in history, up 7 per cent since Mr Trump's win.
Even with Mr Trump threatening a 45 per cent tariff on Chinese imports when he assumes the presidency and the possibility of a trade war between the two economic superpowers, the Shanghai Composite is up almost 5 per cent, possibly as investors took in the slightly improved economic data in the past fortnight which indicate that the slowdown of the past year may be over. Over in Japan, the Nikkei's gain is almost 7 per cent while closer to home, the Straits Times Index has also risen and is now just in the black for 2016, albeit largely thanks to the three banks.
These moves might give the impression that a Trump government in Washington will be good for Asian markets, perhaps because the president-elect is seen as being a businessman first and politician second. Maybe so, and maybe the protectionist, "America First" expansionary fiscal platform that carried Mr Trump to victory will prove to be a firm foundation for a benign investment climate all round the globe.
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