Voters and Investors
South Africa, Mexico and India announced election results a few days apart. In the one, the continuity candidate won a solid majority. In the other, the ruling party suffered a heavy defeat, and must now cobble together a coalition. In the third, the popular prime minister will return for a third term, but without a parliamentary majority. In each case, markets were negatively surprised, but for very different reasons. Elections are hard to forecast, and the consensus is often wrong. The longer-term implications of such a political surprise are also difficult to determine, while investors often shoot first and ask questions later.