Afghanistan Turmoil adds to list of investor concerns

The rapidly evolving situation in Afghanistan must be added to the growing list of global issues for investors to watch as stock markets digest the Taliban’s return to power, warns the CEO of one of the largest independent organizations in global financial, asset management and fintech consultancy. .

The warning from Nigel Green, chief executive and founder of the deVere group, follows the rapid capture by the Taliban of the capital Kabul where thousands of civilians desperate to flee were flocking to the airport.

It came after US President Joe Biden’s controversial decision to withdraw troops from Afghanistan after Donald Trump’s concessions to withdraw US forces as part of a conditional deal between the US leadership and the Taliban.

Mr Green says: “Despite the news coming out of Afghanistan, it is unlikely that there will be an immediate shockwave rippling through global stock markets.

“Investors are now focusing more on other key factors that could impact returns.

“These include the fallout from the delta variant of Covid, concerns about spikes in income, disappointing Chinese economic data, slowing growth and the release this week of the minutes of the latest Federal Reserve meeting which might hint at a change in policy. “

He continues, “However, the major geopolitical turmoil triggered by the actual Taliban takeover will certainly add to the growing list of global issues for investors to watch as they could have longer-term implications for markets.

“There will be questions regarding stability in the Middle East, the global influence of the United States and increasing pressure on Biden, the prospect of increased international terrorist threats and the growing dominance of the Chinese renminbi.”

At the start of trading in Asia, the MSCI’s largest Asia-Pacific stock index outside of Japan fell 0.4%. European markets are expected to open lower on Tuesday as investors watch the Afghan crisis. On Wall Street, US stock index futures were down slightly after the Dow and S&P 500 closed at record highs on Monday.

The deVere CEO concludes: “Investors will be watching the situation in Afghanistan carefully, as it could very likely have implications down the road.

“As always, the best tool for investors to avoid risks and seize opportunities is to stay invested and ensure good diversification across asset classes, sectors, currencies and regions.”

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