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Things are looking up in Colombia

Weekly investor research

19 March 2018

Market-friendly candidate Ivan Duque has taken a clear lead in the Colombian race for the presidency which is scheduled for 27 May after logging a convincing win in the primaries with far more votes than left-wing candidate Gustavo Petro. A market-friendly government may unleash pent-up investment demand at the same time as Colombia receives inflows, recovers from a protracted cyclical downturn and gets additional tail winds from stabilising to rising oil prices. In short, Colombia looks set to beat expectations in the next couple of years. In other notable Emerging Markets (EM) developments, the EM external sovereign debt asset class has now grown to more than USD 1 trn for the first time, and China reforms its regulatory institutions and appoints reformers to key positions. In Russia, as Putin heads for another six years in office, the escalation of a diplomatic spat over the poisoning of a Russian spy in London currently serves the interests of both Putin and British Prime Minister Theresa May. The global backdrop section discusses global inflation dynamics and draws attention to the link between slower US growth, the reshuffle of members of the Trump Administration and the upcoming US mid-term elections. The outcome: trade tensions may escalate further.

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