China’s FV policy in a tough balancing act

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An ongoing liberalization of China’s currency and capital account is under threat as the renminbi falls, capital outflows intensify and foreign reserves dwindle. Forging ahead with the reform and taking a pause to let the market settle down both have their pros and cons. Our base-case scenario is that Beijing will continue to walk a […]

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Emerging Markets: the optimistic view

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With all the gloom and doubt surrounding China and other emerging market economies, Portfolio Manager of the Van Eck Emerging Markets Equity Strategy, David Semple, remains optimistic that 2016 will end well. “We anticipate better economic numbers out of China and at least we have started down the journey of Fed tightening. A combination of […]

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Benign inflation to keep Asian central banks focused on growth risks

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Concerns that food and oil prices may soon reverse their downtrend, potentially derailing a nascent monetary easing cycle in Asia, are likely overdone. Central banks, in our view, are likely to remain focused on the downside risks to growth, given the slackening domestic demand and sluggish exports. Persistent disinflation due to lower oil and food […]

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China – Lost in transition?

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James Eginton provides his insights on the economic transition in China following a recent research trip to the region. The transition from a reliance on infrastructure investment to consumer spending – perhaps the largest the world will ever see – has significant implications for global growth. The transition in China is underway. A country where […]

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China’s economic transition takes another positive step with reserve currency status

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The decision by the IMF to include the renminbi into the Special Drawing Rights (SDR) currency basket is another positive step in the ongoing and long-term transition and liberalisation of China’s economy and financial markets according to fund manager Van Eck Global. The announcement by the IMF means that the renminbi joins only four other […]

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China to ‘focus on currency stability’ in face of inflows of up to US$3 trillion

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Yesterday’s announcement that China will join the reserve currency basket of the International Monetary Fund is only one aspect of a process that could channel up to US$3 trillion ($4.2 trillion) into the country, global asset manager AllianceBernstein (AB) said yesterday. While the development is beneficial for China in the long term, the management of […]

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Two Chinas are better than one for careful investors

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Investors seeking a balanced perspective on risk and opportunity in China should set aside outdated perceptions of the country as a manufacturing juggernaut and think of it instead as “two Chinas”, global asset manager AllianceBernstein (AB) has said. “While China continues to face risks in the short term, we think pessimism about the country’s medium- […]

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Yuan’s reserve currency status: The door to China swings open

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Inclusion of the Chinese yuan in the IMF’s basket of reserve currencies, expected to be approved at the end of this month, heralds China’s increasing presence in global capital markets. With its new status, the yuan will become more widely accepted in international transactions and more widely traded alongside the IMF’s other reserve currencies: the […]

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Asia: Sound fundamentals suggest no repeat 1997–1998 crisis

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While Asian currencies have been quite unstable in recent months, comparisons with the Asian Financial Crisis are over the top, in our view. External positions of the region’s economies are in a much healthier state today. A big problem, however, is that global export demand has remained sluggish for so long, depriving the currencies of a key source of strength. […]

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China’s policies and fundamentals converge

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Given all the negative commentary about China at the moment, it’s difficult for many investors to get a balanced perspective on the risks and opportunities there. Our bottom-up research, however, is uncovering early signs of stabilizing trends which point to a better year for the country in 2016. Two are particularly interesting, in our view: […]

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