Geopolitical tensions not yet a red flag for investors: Cameron Brandt

Economic Times

09-05-2025

So, as I said earlier, people will certainly be watching, but in the short run, frankly, the fact that India's oil bill is going to get much cheaper, that seems to be where it is heading, will provide a pretty heavy counterweight to any geopolitical uncertainty.
Given the current US administration, never say never. But I actually think that a lot of investors who used President Trump's first term as a template have certainly been expecting that after the sound and fury a somewhat more palatable midpoint would be reached.
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"Historically, things have to get pretty bad before investors really get chased out of a market and while there will certainly be more caution until this gets resolved, I do not think it is going to completely reverse the flows that sort of India funds and sort of Indian asset markets in general I have seen in recent weeks," says Cameron Brandt Diminished rather than derailed is what I would say. I have just been looking at the latest week's numbers and while flows into dedicated India funds are not quite as strong as they have been, they are still positive.What I have been picking up is that at least for the moment investors and fund managers are putting more weight on the benefits to India of much cheaper oil than they are on what is or was until the latest about regarded as you know spat.But historically, things have to get pretty bad before investors really get chased out of a market and while there will certainly be more caution until this gets resolved, I do not think it is going to completely reverse the flows that sort of India funds and sort of Indian asset markets in general I have seen in recent weeks.Given the current US administration, never say never. But I actually think that a lot of investors who used President Trump's first term as a template have certainly been expecting that after the sound and fury a somewhat more palatable midpoint would be reached.We have certainly seen fixed income investors recover risk appetite over the past three weeks. Equity investors are still being somewhat cautious. It is not clear how much damage has been done and how much that damage will influence earnings for the remainder of the year, but certainly when I look at flows to fixed income funds, junk bond funds, mortgage backed funds, bank loan funds, and indeed emerging markets bond funds, all of those are starting to see money again after a pretty sharp hiatus in early.I do not. You mentioned sort of the geopolitical complexities and the fact that there more actors than just India and Pakistan.But the global financial markets have been living with a version of that now for three years. The situation in Ukraine also puts Turkey somewhat close to the action. Russia has gravitated to China for support. Europe and US are feeding arms to varying degrees into Ukraine. So, intensely as you and your viewers feel the current situation and it certainly, it is not that it could not get worse, but financial markets have been living with an equally contentious and indeed long running geopolitical event with some pretty big actors behind the main protagonist.So, as I said earlier, people will certainly be watching, but in the short run, frankly, the fact that India's oil bill is going to get much cheaper, that seems to be where it is heading, will provide a pretty heavy counterweight to any geopolitical uncertainty.