UBS, the world’s leading global wealth manager reveals what the US elections mean for emerging markets and more specifically the Gulf Cooperation Council (GCC) countries in a recent report published by the UBS Global Wealth Management’s Chief Investment Office.
According to the report, investors pay more attention to the US presidential election than any other Ieadershipcontest elsewhere and therefore it is important to look back and Iearn from past US electionsand the impact they may have on emerging economies. One of those lessons is that emerging market assets often experience strong, if short-Iived, price moves around ElectionDay. At the same time, theoutcomeof the elections matters with emergingmarketassetsappearing to perform better during periods of a unified US government as weII as during periods with a DemocraticpresidentintheWhiteHouse.
The GCC isoneofthe regions that are mostexposedtotheelectionoutcome according to UBS. Despite the fact thatthe US’s dependence on energy imports is declining, the energy policies of Saudi Arabia, the UAE, and other GCC countries are of world-widerelevanceastheyhaveahugeimpactongIobaIenergyprices.
The importance of a coherent energypolicyforUSshaIeenergy producers is evident as thesectorcontributestoUSgrowth andemployment,andaIsosupportsthe US’s energyindependence.TheUSaIsohasastrongstrategicinterestinthe MiddIe East and whoeverbecomes thenextUSpresidentwiIIthereforeIikeIymaintainclosetieswithaIIkeyactorsintheregion,to ensureanongoingdialogueandsupportstabiIity.
The shift toward greener energy sources and greater energy efficiency would IikeIy happen much faster under a Biden administration than if Trump were to win a second term. A more sustainable US energy policywould sIow the demand for fossiI fueIs, reinforcing the ongoing gIobaI trend toward renewables and highlighting the need for the GCC countries to fast track their oil diversification programme.
In a UBS report released earlier, a survey conducted among UAE investors has shown growing interest in the US elections with 64% of participants being highly interested and with 70% of UAE based investors expecting Biden to be the next US President.