Citi Private Bank: Brexit Only a Regional Financial Event

Steven Wieting,Citi Private Bank

Steven Wieting,Citi Private Bank

Speaking in Singapore the New York based Chief Investment Strategist at Citi Private Bank was dismissive of any deep or lasting impact from last weeks U.K. referendum. However, another issue could be damaging for Asia.

Steven Wieting, Managing Director and Chief Investment Strategist at Citi Private Bank was in Singapore to present at a major Citi Private Bank client event.

Addressing a media briefing Wieting along with Hong Kong based Ken Peng, Director Investment Strategist Global Investments for Asia Pacific at Citi, doubted that there would be much if any influence on Asian economies from the highly covered vote.

Anti Establishment Sentiment

The United Kingdom Wieting highlighted, accounts for just over 2 percent of the global GDP not a significant influencer, however the Eurozone economy makes up almost 17 percent of Global GDP which if it should slow down markedly is a more crucial indicator.

What worries Wieting and Pang more however is the growing anti-globalisation, anti-establishment sentiment which could be more damaging to Asian economies. The negative sentiment could also come into play in the upcoming American election.

«Bad political outcomes could mean bad economic outcomes,» said Wieting. 

As a result the trade clock could be turned back meaning countries would have to re-establish bilateral or small multi lateral trade deals.

Emerging Markets & Gold

Asian emerging markets though might fare well in both the short and longer term. The population dividends that many SE Asian countries enjoy along with their unrealised consumer demands and years of infrastructure upgrading to come all point to potential investment opportunities.   

When asked about the prospects for gold Wieting was not entirely dismissive about holding the precious metal as a hedge, indicating that other political shocks including the coming U.S. election might also have a sting in the tail.

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