Bin Laden and most of the worlds most wanted people are dead yet the world has never gotten this dangerous.
Since the start of the year, conflicts in Syria, Gaza and Iraq have escalated, China has become more assertive in pursuing territorial claims against Japan, Thailand reverted to military rule, Russia annexed Crimea and separatists in Ukraine downed a civilian airliner as Bloomberg reports.
Boko Haram in West Africa, Al Shabab in East Africa, rebels and ISIS in the Middle East etc, riots in Brazil and labour unrest in South Africa and Ghana. Air crashes and man made disasters are also on the increase. It’s a scary feeling and investors are beginning to take notice.
Typically, investors react to fundamentals, technical analysis as well as sentiments when forecasting equity prices and the bond market. Currently the world market has been bullish largely due to improved earnings from companies, a healing and growing world economy as well as improved personal balance sheets.
Politics and current affairs is not taking center stage as investors are now beginning to realise the danger it posses for their investments. The fear of this risk can’t be more evident in the beairshness creeping into the Nigerian equities market. Most investors now opine, as we get closer to elections the market will commence a pull back as people flee the stock market to more liquid investments.
Some believe this pull back will increase in August and probably get worse in September. I hate to believe that but the recent drop in Treasury Bills yield suggest serious capital allocation is taking place.
This threat is not only restricted to Nigeria as the global market is beginning to also take notice. The Bloomberg article (link) below, explains in greater detail.
http://www.bloomberg.com/news/2014-07-29/geopolitical-risk-rise-for-global-investors.html