The developments on the global financial markets in 2016 will be driven by dynamic geopolitical changes, the intervention of the increasingly important central banks and the development of the Chinese market, according to the participants in the fourth annual Investor Finance Forum held in Sofia. Among the discussed topics were the leading events on the global capital markets, the expectations for 2016, trading strategies, the psychology of the investors and presentations of Bulgarian listed companies.
The participants in Bloomberg TV’s Investing as a Way of Life panel analysed the recent trends on the global capital markets with emphasis on the macroeconomic framework. Three major factors were pointed out:
- Central banks’ policies
- State of the of Chinese economy
- Dynamics of petrol prices
Central banks, especially the operations of the Federal Reserve and the European Central Bank, will have a crucial effect on the global capital markets. Central banks will continue to stick to low-interest policy, which is expected to affect adversely the market of shares, according to the financial expert Biser Manolov. The need of strengthened risk control should lead to consolidation and balancing of policies among EU member states. The European Central Bank is expected to further lower interest rates, while the Fed has announced its plans for a slight increase next year. However, there is no evidence for a global upward trend in interest rates. As a whole, the striving towards balanced monetary policy will create opportunities for investors.
The other major driver of financial markets, although its importance is being disputed by some analysts, will be the performance of the Chinese economy. It will grow further, mainly due to surging domestic consumption. However, global analysts are pessimistic as far as credibility of official data and forecasts are concerned. Digital and knowledge economy companies are expected to benefit the most from the large but vague Chinese economy.
Petrol prices will be the third factor to influence the global markets. Analyst Viktor Manev, managing partner at Impetus Capital, expects a slight rise in oil prices, mainly as a result of the geopolitical crises in the Middle East and Russia. On the other hand, the hedge fund manager Lex van Dam pointed out the growing and cheap extraction of shale gas in the USA and the significant petrol reserves of China as a factor for even cheaper petrol in 2016.