Demand for flexible capital rises amid biggest election year in history

As 2024 unfolds, the world approaches what is projected to be the most impactful election year in history. With representation at stake for nearly half of the world’s population, accounting for more than 60% of global economic output and significant GDP implications, financial markets brace themselves for heightened volatility.^[1] The anticipated evolution of the geo-economic landscape, which is expected to endure over an extended duration,^[2] is poised to cast a shadow of uncertainty. In the face of liquidity pressure amid these changing dynamics, investors and businesses are called upon to reassess their portfolios and financing strategies to stay ahead of the curve.

Impact of political transitions on capital markets and private equity

Political transitions, as inevitable outcomes of elections, will wield substantial influence over capital markets and private credit. The mere possibility of alterations in fiscal, monetary, tax, and regulatory policies adds to the already volatile market environment. As a result, investors find themselves at a critical juncture, compelled to secure flexible liquidity while re-evaluating their risk tolerance and investment strategies. They closely monitor these political developments, seeking insights that can shed light on the broader economic outlook and inform their decision-making processes.

Some may view such market fluctuations as opportunities to capitalize on undervalued sectors. In the face of limited traditional funding access via banks and higher borrowing costs,^[3] investors are turning to alternative liquidity sources such as securities-backed financing from private capital providers like EquitiesFirst. In the face of persistent central bank tightening, private liquidity sources may bring increased stability as well as more diversified returns.

Investing in emerging markets and developing economies

The International Monetary Fund (IMF) expects the world economy to grow at no more than 3.0% in 2024.^[4] The prevailing conditions of slower economic activities and tighter financial conditions set the stage for a synchronized rise in policy rates, as highlighted in S&P’s 2024 global economic outlook.^[5] This further underscores the need for flexible liquidity from the private sector, as investors seek to navigate and create value across global economies that may present unsynchronized growth outcomes.

Despite stagnant GDP growth forecasts in advanced markets such as the US and the Eurozone, projections in key emerging markets and the Asia Pacific are marginally higher,^[6] rendering them appealing for strategic capital investment. This shift in economic dynamics prompts investors to adopt a discerning approach, directing their capital towards regions exhibiting optimistic outlooks and promising growth trajectories.

In the sphere of economic evolution, developing economies such as India and Indonesia are positioning themselves for significant transformation and globalization. Indonesia, for instance, is set on playing a pivotal role in green supply chains, from mining and refining nickel to building and exporting electric vehicles.^[7] Meanwhile, Narendra Modi envisions India as a high-tech manufacturing powerhouse, churning out microchips and smartphones for the global market.^[8] Investors can adeptly navigate through regional disparities by strategically aligning the positions of their investments with these projected economic trajectories, seizing lucrative opportunities in emerging markets. Leveraging alternative liquidity solutions, such as securities-backed financing, may provide a flexible avenue for capital access while maintaining exposure to potential market upsides.

Seizing opportunities with securities-backed financing

In an era of economic uncertainty, investors are actively seeking robust strategies to mitigate risk and secure liquidity. Securities-backed financing presents an appealing proposition for long-term shareholders and investors, providing non-recourse and non-purpose features that limit downside risk and serve as a potential hedge against inflation. EquitiesFirst’s secure framework aligns with the imperative of risk mitigation, offering investors a relatively stable and efficient means of accessing capital.

As 2024 unfolds, with its intricate blend of opportunities and challenges, the significance of adaptive financial strategies becomes increasingly paramount. In navigating the complex landscape, individuals capable of strategically diversifying risks and leveraging resilient financing tools are poised to thrive in this impactful election year. With over 20 years of experience, EquitiesFirst’s securities-backed financing brings investors the benefits of an exceptional level of efficiency, empowering those who seek flexible liquidity to capitalize on emerging trends and navigate market volatility.

[1] https://www.bloomberg.com/graphics/2024-global-election-watch-on-economic-market-issues/

[2] https://www.bloomberg.com/graphics/2024-global-election-watch-on-economic-market-issues/

[3] https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-outlooks/banking-industry-outlook.html

[4] https://www.imf.org/en/Publications/WEO/Issues/2023/07/10/world-economic-outlook-update-july-2023#:~:text=The%20global%20recovery%20is%20slowing,in%20both%202023%20and%202024.

[5] https://www.spglobal.com/marketintelligence/en/mi/research-analysis/top-10-economic-predictions-for-2024.html

[6] https://www.spglobal.com/_assets/documents/ratings/research/101590414.pdf

[7] https://www.economist.com/leaders/2024/01/04/can-india-indonesia-and-saudi-arabia-be-the-next-great-economies

[8] https://www.economist.com/leaders/2024/01/04/can-india-indonesia-and-saudi-arabia-be-the-next-great-economies

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