There is little doubt that political uncertainty will dent confidence at least to some extent. Economic growth globally has been stuck in slow gear since 2012, and central bankers have been pleading for reform and fiscal leadership which in the current political situation is unlikely to come to complement the monetary stimulus that has been the source of solo support since the GFC. The low growth, low inflation, and low interest rate environment is, therefore, likely to remain for a while longer. Such conditions are not helpful for acceleration in earnings growth (see chart below). The risk to FY2017 earnings estimates for the market seems to be to the downside, in a pattern consistent with those in recent years. (Prasad Patkar, Portfolio Manager)



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