Question

please discuss (with support as appropriate) the direction and impact that you think the global capital markets will have over the next decade. (200 words)

Answer 1

The global financial markets would in the broad sense be divided into two parts: The developed economy markets and the emerging economy market. The developed markets would constitute the capital markets of US, Europe, UK and Japan. The merging market basket would contain India, China, Brazil and South Africa. The developed markets like the US have been on a continuous bull run and the equity markets in the developed nations like the US has already done extremely well in the last decade. Hence going forward, these markets may cool off or give lower return and may stagnate for the next few years. The emerging markets are expected to catch up as they have not given spectacular returns in the last few years. Hence the capital markets of the emerging nations are expected to do well (given higher than normal return) and the developed market may give lower returns going forward. The quantitative easing across developed markets like the euro zone would reduce and this would result in tighter liquidity. Overall global growth rates are expected to pick up after several years of low growth after the 2008 financial crises.