Citi Research’s chief economist continues to expect the “remain in the EU” side to win, amid increasing uncertainty of the outcome. Results of the UK’s EU referendum – which determines whether Britain stays or leaves the EU – are expected to be out this Friday.
In a report published last Thursday, Citi says that regardless of a Brexit or Bremain outcome, it is likely to emerge looking to add risk in emerging markets (EM) in Asia.
This is because in Citi’s opinion, additional negative fundamental and political impulses will probably take time to pan out – while in the short run, policy makers are likely to quickly add further stimulus and limit spill overs. The result is an opportunity to add risk in EM given the “broadly constructive backdrop amidst a much more dovish Fed and a period of some stability in Chinese data and markets,” says the team.
The research house recommends adding EM exposure immediately in Asia’s case if ‘Remain’ prevails, or a few days after the vote if ‘Leave’ is victorious.
“If Brexit is avoided, we believe investors will quickly come back to the bullish EM trade based on a dovish Fed,” says Citi on the subject of the EU referendum results impacting EM markets as a whole.
“If Brexit happens, it is likely that there will be a sharp but short sell-off in EM. But this may well turn out to be a buying opportunity given that fundamentally very little will change.”
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In a report published last Thursday, Citi says that regardless of a Brexit or Bremain outcome, it is likely to emerge looking to add risk in emerging markets (EM) in Asia.
This is because in Citi’s opinion, additional negative fundamental and political impulses will probably take time to pan out – while in the short run, policy makers are likely to quickly add further stimulus and limit spill overs. The result is an opportunity to add risk in EM given the “broadly constructive backdrop amidst a much more dovish Fed and a period of some stability in Chinese data and markets,” says the team.
The research house recommends adding EM exposure immediately in Asia’s case if ‘Remain’ prevails, or a few days after the vote if ‘Leave’ is victorious.
“If Brexit is avoided, we believe investors will quickly come back to the bullish EM trade based on a dovish Fed,” says Citi on the subject of the EU referendum results impacting EM markets as a whole.
“If Brexit happens, it is likely that there will be a sharp but short sell-off in EM. But this may well turn out to be a buying opportunity given that fundamentally very little will change.”
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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