Here are the biggest emerging markets winners and losers under President Trump

After the first weeks of the new Trump administration, identifying the long-term winners and losers requires looking past much of the market’s current noise. Being international equity managers based in the UK, we have a global perspective and are able to distance ourselves from much of that noise.

While President Trump emphasized “America First” during his inauguration, there are opportunities beyond U.S. equities. Based on what we know so far, below is a matrix highlighting what we believe are the winners and losers in Emerging Market countries under the Trump administration.

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Winners

RUSSIA:  It appears to be the most conspicuous winner as the likelihood of sanctions being rolled back is increasing.

EGYPT, TURKEY and PAKISTAN: The first two countries will benefit via less hectoring on human rights, while Pakistan may enjoy a position of leverage between China and the US that it has never experienced before.

Losers

MEXICO: It is clearly facing headwinds but may be able to negotiate a much less damaging outcome for itself.

SOUTH KOREA and TAIWAN: These two countries may find the insistence on iPhones being manufactured in the US could impact technology sector exports to the US directly.

• Specifically for Taiwan, there is the added risk of the law of unintended consequences – a small victory in reaching a US President-elect by telephone for the first time will result in more punishing measures from China, where many Taiwanese companies have significant exposure, both as an off-shoring location and as a huge market for their products.

Kim Catechis is a Portfolio Manager at Martin Currie, a Legg Mason affiliate. His opinions are not meant to be viewed as investment advice or a solicitation for investment.

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