During the first week of July, the UK held, and France concluded, general elections that resulted in significant changes to both countries’ political center of gravity. In the UK, the Labour Party’s resounding victory ended 14 years of Conservative rule while France’s two-round contest ended with no party securing a clear majority.
The decade that started in 2020 has, so far, been a bumpy one for emerging markets bonds and those that invest in them. The Covid pandemic, interest rates in Europe and North America at multi-year highs, major defaults in China’s troubled property sector and Russia’s pariah status following its attack on Ukraine have all sent shockwaves through the asset class.
Cheerleaders for the UK’s stock market are thin on the ground these days. They are even thinner when it comes to the small and mid-cap spaces, with some forecasters arguing that key indexes will be hollowed out by constituent defections and ‘lift outs’ to such an extent that by 2030 they will no longer be viable.