nottheaverageactuary

Actuarial news and views from Cape Town and beyond

Em Investment Looking Grim

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Currently with the global decrease in commodity prices experienced in Oil, platinum, copper, aluminium and many others there has been a withdrawal from investment in Emerging Markets in fear of further falling of commodity prices. These falls have been so drastic Bloomberg describes these falls:

“Oil traded near the lowest in six years in New York on speculation the global glut that drove prices into a bear market will be prolonged. West Texas Intermediate crude oil added 0.8 percent to $42.20 a barrel.

Copper dropped as much as 2.3 percent to the lowest price since 2009. Aluminum also reached a six-year low, while lead, nickel and zinc retreated.”

This coupled with China’s devaluation of the currency last week, might be an indication of China expecting lower growth in times to come. This has foreign investors fearful of investing in China, where in the past China had excessively high GDP growth with their pegged inflation rate to the USD. With this decreased expected growth in China, investors may become fearful of investing in Emerging markets all together as commodity prices continue to fall.

http://www.bloomberg.com/news/articles/2015-08-17/most-asian-equity-futures-signal-gains-as-baht-slides-on-bombing

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