Political Risk and Market Volatility
“Political risks have not been seriously looked at when analyzing the financial markets,” Mr Daniel Franklin, the Executive Editor of The Economist told the audience in a seminar organized by the MSc in Global Finance (MSGF) Program Office.
Mr Franklin, the Editor of The Economist’s “The World in ..” a leading annual publication in offering forecasts, was invited to talk about his views on “Political Risk and Market Volatility in 2016”. The seminar held on 4 March 2016 not only attracted MSGF students, but other business graduates, financial practitioners and executives from the industry.
He identified and shared his insights on a list of issues that could shape the year ahead. He started with Europe and the influx of refugees from Syria, the conflict between Russia and Turkey, the threat of terrorist attacks, the referendum for the UK on its exit from the European Union, and the debt crisis facing several European countries.
When talking about worries in America, Mr Franklin pinpointed the Brazil’s gloomy economy, the uncertainties of the presidential election and the ongoing threat of terrorists in the US. Regarding Asia, he spoke about China’s economic slowdown and the unrest North Korea has created in the region.
In addition to the regional risks, Mr Franklin said people should be mindful of a currency war, a regulatory backlash, the impact of cheap oil price and growing anti-globalization sentiment, among others. Several of these factors could be interacted and reinforced together.
In a discussion moderated by Project Director of the MSGF Program Prof Veronique Lafon-Vinais, Warut Promboon, a Thai educated in the US and has experience working in four countries and an MSGF alumni from 2014, and a current student Patryck Pimpao Merhy, a Brazilian previously worked in Latin America and New York and now based in Hong Kong, exchanged opinions with Mr Franklin on some of his forecasts. They included the odds of Donald Trumps winning the US presidential election and if China will have a hard landing and its implications for the global economy. The discussion was a success due to the diversity of the two MSGF students and their knowledge about different regions.
In fact, in a typical MSGF class, over 60% of students reside outside Hong Kong and they attend classes held in Hong Kong, New York and Shanghai. Jointly organized by HKUST and NYU Stern, the program is a fast-track, one-year executive-format master program for experienced professionals.