PARIS (Reuters Breakingviews) - It’s going to be another great year in the weed business - but maybe not for U.S. President Donald Trump. Those, at least, are two conclusions to draw from informal polls of participants at Breakingviews Predictions 2019 summits in a half-dozen financial centres around the world. From New York to Paris to Hong Kong, there was unusual consensus, but with regional variations, on some of the major questions facing markets, including where to invest, the impact of a prolonged trade war and even Britain’s exit from the European Union.
Start with the money question. When asked which investment will perform best in 2019, more attendees in New York, Toronto, Paris, London and Hong Kong chose Canadian cannabis shares over U.S. equities, crude oil, Chinese banks, private equity and the British pound. Parisians led the enthusiasm, with 63 percent of them choosing ganja ahead of private equity, which garnered 21 percent of the votes.
Funny enough, only 38 percent of those voting in Toronto chose the homegrown option, just a bit less than the 40 percent chosen by Hong Kongers and 43 percent of New Yorkers who cast ballots. A fifth of voters in London opted for the pound - more than anywhere else - though even the assembled Brits couldn’t contain their enthusiasm for the reefer business, which topped the polls at 48 percent. The outliner was Singapore, where 42 percent of respondents, perhaps reflective of conservativism at home, chose private equity over bud.
A global consensus emerged when asked whether the U.S. Congress will impeach the president. Forty percent of New Yorkers clicked on “it’s a 30 percent chance”. Combined with clicks for “50-50 odds”, “highly likely” and “unequivocally yes”, that suggested a full 82 percent of voting attendees in the Big Apple saw a 30 percent or higher probability that the House of Representatives would draw articles of impeachment against the Republican president.
Londoners were slightly more divided, with 30 percent voting “not a chance” on a Trump impeachment, not far off the 39 percent that pegged the probability at 30 percent. Half of Singaporeans agreed that Trump faces a 30 percent chance of impeachment. Parisians came out more strongly against that likelihood, though, with a full 47 percent of attendees choosing “not a chance” in response to the question. Even then, more than half of attendees in Paris, like London, Singapore and New York, put the chance of impeachment at 30 percent or higher.
The impact of the ongoing U.S.-China trade skirmish also drew a harmony of responses around the globe. When asked who would win in a trade war between the two largest economies, participants overwhelmingly chose “nobody at all” in New York, Toronto, Singapore and Hong Kong. Paris was the outlier, as half of voting attendees suggested China would benefit over the United States. Closer to home, a third of Singaporeans regarded Southeast Asia as the next best beneficiary to nobody at all from a prolonged trade kerfuffle.
Turning to more local concerns, participants at the Paris event were asked whether French President Emmanuel Macron would emerge stronger or weaker from European Parliament elections in late May. Fully half of them believed Macron - who has been facing months of social unrest every Saturday in Paris from the gilets jaunes, or yellow vests, movement - would be weakened by a poor showing of his En Marche! candidates.
Across the Channel, London attendees gave their view on who would be prime minister in January 2020. While Brexit-beleaguered incumbent Theresa May grabbed 17 percent of the vote and Labour Party rival Jeremy Corbyn snagged 14 percent, both were outshone by Sajid Javid, the Conservative Party Home Secretary, who took 52 percent of the ballot. Coincidentally, Javid’s former employer, Deutsche Bank, emerged as the lead candidate for an activist campaign in the London polling, as Peter Thal Larsen detailed last week (full story).
China’s economic slowdown preoccupied the Predictions discussions in Singapore and Hong Kong, where the audience was asked what will be the most significant brake on Chinese growth in 2019. In the Fragrant Harbour, corporate debt won the most votes, at 34 percent, followed by Trump, at 28 percent. In Singapore the views were more evenly distributed, with corporate debt, weak consumption and the U.S president taking around a quarter of the vote each.
Finally, audiences in London, New York and Toronto took the easy prediction when asked which company will have the largest market capitalisation. They all chose Amazon, which at over $800 billion, is bigger than the alternatives, including Apple at $750 billion, Tencent, Alibaba, Berkshire Hathaway and Canopy Growth, the 22 billion Canadian dollar cannabis firm. Then again, some 5 percent of New Yorkers and Londoners chose Aramco, Saudi Arabia’s unlisted national oil company. Maybe they know something about what’s to come in 2019 that others don’t.
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