Joe Biden has officially won the razor-thin 2020 US election and will be the next 46th US president. We hear a sigh of relief by leaders and people all around the world welcoming the news as Biden has pledged to reverse some of Trump’s policies. With changes expected, what does a Biden presidency mean to Singapore and Asia? Here are some thoughts:
Volatility in the Markets
As Trump still holds the role of US president for the next two months, there is a lot of uncertainty as to what will happen and how it will impact the financial markets. During the transition, share markets are expected to be volatile and investment opportunities may arise. If you are not gamed with the uncertainties in the market, it may be good time to look into alternative investments like Trade Receivables trading which offers an uncorrelated and more stable return.
Once Biden officially takes over the Oval Office, it is expected that stock markets in Asia and Singapore will become more stable and perhaps more predictable.
Increase in International Trade
It is expected that Biden’s administration will ease trade tensions between the US and China by adopting a more open and negotiable approach with tariffs being reconsidered or removed. This will in turn boost international trade activities and help support Singapore’s and Asia’s economy to bounce back from the recession.
Singapore companies who have production facilities in China and sales exposure to the US should see positive movements in the market.
Fluctuation in the US Dollar
The US dollar is an important instrument for many businesses and financial markets. With a possible large financial stimulus package being rolled out under Biden presidency, plan to help US citizens overcome the pandemic, we may see the US dollar fall in value. Businesses should have a plan in place to minimise its possible affects.
