Saturday, Oct 25, 2014

Market analysts react to Osama’s death

Written by Agencies | New Delhi | Posted: May 2, 2011 9:40 am

Al Qaeda leader Osama bin Laden was killed on Sunday in a firefight with U.S. forces in Pakistan and his body was recovered,U.S. President Barack Obama said.

After searching in vain for the al Qaeda leader since he disappeared in Afghanistan in late 2001,Obama said U.S. forces led the operation that killed the Saudi-born extremist.

COMMENTS:

TETSU AIKAWA,DEPUTY GENERAL MANAGER OF CAPITAL MARKETS,SHINSEI BANK,TOKYO:

It is reasonable to expect an improvement in U.S. consumer sentiment,but that may not be enough to change the course of the U.S. economy. I don’t expect the chance of less U.S. involvement in Afghanistan to lead to an improvement in U.S. public finances.

This could increase flows into risk assets like yen and dollar carry trades. It’s also possible for some European sovereigns spreads to tighten.

Given the unrest in places like Syria and Yemen,there is still a chance of democracy spreading like dominoes through the Middle East and North Africa. In the short term this might be a cause of worry,but this is something that markets would welcome in the long term.

CHIP HANLON,PRESIDENT,DELTA GLOBAL ADVISORS,HUNTINGTON BEACH,CALIFORNIA:

I’m not sure there will be much of a market reaction. He is a figurehead and there is a feel good value in knowing he is gone. But most people think (al Qaeda deputy Ayman) al-Zawahri has been running it for a while now.

There some feel good value and market will like that. There will be a boost for the appropriate politicians,primarily the commander in chief. It doesn’t change much about the energy situation and doesn’t change much about the ongoing battle with radical Islamists.

It’s sort of like the news when we heard Saddam was caught,in the end it didn’t change much fundamentally and I don’t think this will either.

KEN HASEGAWA,COMMODITY DERIVATIVES SALES MANAGER,NEWEDGE,TOKYO:

Absent other news,the death sparked selling in oil and gold,and buying in stocks. But it has only had a passing impact and the markets will eventually return to normal.

It’s not that bin-Laden suspended the crude oil production,although he had some influence as a whole. But it does not mean that all the terrorism acts will be gone because of this.

MOHAMED EL-ERIAN,CHIEF EXECUTIVE OFFICER AND CO-CHIEF INVESTMENT OFFICER,PIMCO:

In reflecting the news on Bin Laden,markets will balance the durable impact of a reduction in a security risk with the possibility of isolated disturbances in some parts of the Middle East and central Asia.

By lowering national security risks overall,this is likely to bolster equity markets and lower U.S. Treasury prices in a reverse flight to quality movement.

Oil markets are likely to be the most volatile given their higher sensitivity to the tug of war between lower risk overall and the possibility of isolated disturbances in some parts of the Middle East and central Asia.

PETER KENNY,MANAGING DIRECTOR,KNIGHT CAPITAL GROUP JERSEY CITY,NEW JERSEY:

Geopolitically this will have an enormous impact on unrest in the Middle East. It won’t be purely positive for markets because it could lead to further instability in the Middle East.

It certainly will help the flagging fortunes of the current president of the continued…

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