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Hong Kong: The unexpected election of a president who’s never held political office is merely a layover on the way to a fresh peak in political-risk premiums, according to 57% of investors who responded to a survey conducted by Bank of America Merrill Lynch in the aftermath of the vote.
That may help explain why a similar portion of respondents said they were making no change to their cash holdings. Disdain for Treasuries was another strong theme of the survey—conducted on 9 November—and one which has been borne out in subsequent days by the sell-off that brings the total of value wiped off bonds worldwide this week to $1 trillion.
A mere 2% of the 114 respondents recommended buying in. The most popular post-election trade in the survey was buying the S&P 500, a preference 30% of investors subscribed to. Nearly 15% said they were selling risky assets, while 12% said buy gold. Only 4% of respondents said the election result won’t affect their plans.
The poll also shows that investors are “discounting fiscal stimulus not protectionism”, as the note’s authors wrote, after 46% of the respondents said they expect Trump is most likely to proceed with corporate-tax repatriation and infrastructure spending plans during his first 100 days. A mere 5% expect new trade policies during that period. Bloomberg