2024: a record year of political elections

Feb 12, 2024

2024 is set to be the biggest election year in history, with over 50% of the emerging markets (“EM”) equities benchmark set to vote, across a range of presidential, legislative, and local elections.

In our piece, we home in on the key political events in the following countries:

  • Taiwan: the country kicked off the political calendar on 13th January, when the pro-independence Democratic Progressive Party (“DPP”) made history by securing a third consecutive term in power. The current vice president, Lai Ching-te, won the tightest presidential campaign for the country in decades, securing 40% of the votes.
  • Indonesia: Southeast Asia’s largest economy and the world’s third-largest democracy will be holding its presidential and legislative elections on 14th February, when over 200 million people, of whom over half are under 40 years of age, are expected to cast a vote.
  • South Korea: legislative elections are due to be held on 10th April, to elect all 300 members of the National Assembly. The incumbent conservative People Power Party (“PPP”), led by President Yoon Suk-yeol, will seek to gain a majority in the National Assembly after winning the presidential elections in 2022.
  • India: the world’s largest democracy will hold general elections between April and May this year, when the incumbent National Democratic Alliance (“NDA”), led by Prime Minister Narendra Modi of the Bharatiya Janata Party (“BJP”), will seek re-election for an unprecedented third term.
  • South Africa: the country follows a parliamentary system of government. This year, 400 members of the National Assembly will be elected, with 200 members from national parties and 200 more from the provincial parties, all following a proportional representation system. This could prove to be the first time a coalition government comes to power in South Africa since the end of apartheid in 1994.
  • Mexico: general elections will be held on 2nd June to elect the president, all 500 members of the Chamber of Deputies, and all 128 members of the Senate of the Republic. Notably, for the first time in the country’s history, Mexicans will be choosing between two women for their president.
  • U.S.: the U.S. is gearing up for presidential and house elections in November, when the prospect of a Donald Trump win is looking increasingly likely. While the outcome and implications are still uncertain, a key consideration for EM investors is how a Trump win may impact relations with China.

While over the long term, the types of companies that we invest in – those with strong management teams and durable business practices – are able to endure economic and political cycles, in the short term, political events can at times have an impact in terms of investor sentiment and equity market returns.

As long-term investors, we would typically view bouts of uncertainty as an opportunity to add to select names. However, at the extremes, we would be cautious. Experience tells us that significant shifts in political leadership can have structural implications, both positive and negative, when it comes to the reform trajectory of a country and its long-term economic development.

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