Left to Right: Standard Chartered Chief Investment Officer of Africa, Middle East and Europe, Manpreet Gill and Head of Wealth & Retail Banking Kenya and East Africa, Edith Chumba during the Bank’s H2 2025 Global Market Outlook, released by its Global Chief Investment Office. Photo/Newsflash
By Newsflash Writer
10 July 2025, Nairobi – The Standard Chartered Bank has projected a weakening US dollar over the next 6 to 12 months, signaling a potential windfall for investors in emerging markets and global equities.
In its Global Market Outlook for the second half of 2025, the bank outlines a cautiously optimistic environment, driven by improving economic conditions in key regions and shifting global financial dynamics.
According to the report, global macroeconomic conditions remain uneven but offer opportunities. In the United States, growth continues to be underpinned by strong consumer spending and ongoing fiscal stimulus. However, trade tensions and policy uncertainties are likely to dampen momentum in the second half of the year. Europe benefits from fiscal easing, though structural economic challenges remain.
Meanwhile, China’s economy is showing signs of stabilisation, aided by targeted government stimulus and an uptick in retail activity. Stronger growth is also expected to continue across India and the ASEAN region.
Emerging markets poised for gains
The bank’s analysts say these trends create a favorable investment environment for emerging markets, especially as the dollar softens.
A weaker US dollar typically enhances returns on risk assets in emerging markets—such as equities and local-currency bonds—by increasing capital inflows and reducing debt burdens tied to the greenback.
“As global markets adjust to weak dollar dynamics, shifting trade policies, and diverging central bank actions, investors in emerging markets have a key opportunity to reposition their portfolios,” said Manpreet Gill, Chief Investment Officer for Africa, Middle East, and Europe at Standard Chartered.
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“This is a pivotal moment to pursue international diversification, especially across asset classes like emerging market bonds and equities, which offer strong potential for income, growth, and resilience,” he added.
Reflecting this outlook, the bank has upgraded Asia (excluding Japan) equities and emerging-market local currency bonds to “Overweight,” signalling strong confidence in their near-term performance. Global equities also remain an “Overweight” position, buoyed by healthy corporate earnings, improving trade conditions, and moderate inflation levels.
The report also identifies opportunities in fixed-income investments. Standard Chartered favours USD-denominated bonds with maturities of 5 to 7 years, citing their attractive risk-adjusted returns as yields begin to decline.
Conversely, Developed Market Investment Grade corporate bonds have been downgraded to “Underweight” due to compressed yield spreads and slower investment inflows.
Alternative assets are also gaining attention, particularly gold. The bank sees gold as a core portfolio allocation in the current market cycle, driven by continued central bank demand and its role as a hedge when traditional bonds offer limited downside protection.
The bank’s outlook suggests that while volatility is likely to persist, investors in Africa and other emerging markets are entering a promising phase—where global diversification and strategic asset allocation can unlock substantial long-term gains
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