PHOTO
The turmoil in Afghanistan could impact the global stock markets and should be added to the growing list of issues for investors to track, a financial advisory firm said Tuesday.
Nigel Green, chief executive and founder of deVere Group, also said that the current situation in Afghanistan is so far not causing shockwaves in the markets, as investors are currently more focused on other concerns, such as the pandemic.
“However, the major geopolitical turbulence triggered by the Taliban’s effective power grab will certainly be added to investors’ growing list of global issues to track as it could have longer-term implications for markets,” Green said in a note.
“There will be questions regarding stability in the Middle East, the global influence of the US and the mounting pressure on Biden, the prospect of increasing international terror threats, and the growing dominance of China’s remnibi.”
The Taliban has seized several cities in Afghanistan, including the capital of Kabul, where thousands of civilians have thronged to flee the country. Commercial flights from the UAE have already been suspended in view of the ongoing turmoil.
Despite the developments in Afghanistan, there haven’t been any “immediate shockwaves rippling through” the markets so far, Green said.
He said the focus now is on other key issues that could affect returns, including the Delta COVID-19 variant, concerns about peak earnings, disappointing Chinese economic data and slowing growth.
The release of the minutes of the Federal Reserve’s latest meeting this week is also among the issues that investors are keeping an eye on.
“Investors will be monitoring the Afghanistan situation carefully as it could very likely have implications down the road,” Green noted.
“As ever, investors’ best tool to avoid risk and seize opportunities is to remain invested and ensure proper diversification across asset class, sectors, currencies and regions.”
During early trade, shares fell on the back of growing concerns over the Delta variant and weak Chinese data. Asia-Pacific shares outside Japan dropped 0.4 percent, while on Wall Street, US stock index futures fell slightly after the Dow and S&P 500 closed at record highs on Monday.
In the Middle East region, most major Gulf stock markets dropped on lower oil prices, Reuters reported. The index in Abu Dhabi went up on the back of extended gains in International Holding (IHC).
(Reporting by Cleofe Maceda; editing by Seban Scaria)
This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2021
