Megatrends: Asia rising

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The centre of global economic activity has seen a clear shift away from Developed Markets and towards Emerging Markets since the turn of the century. China has been at the heart of this. However, the traditional drivers of growth that have propelled Emerging Markets to this prominence are becoming unsustainable. The next stage of growth […]

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China after the market intervention: What’s next?

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China’s efforts to stem the market crash have had limited success so far. In our view, attempts to boost domestic demand via the policy banks will only help prevent further economic damage, while a rebound in exports is also unlikely. However, we believe a nascent recovery in the housing market could provide a more effective […]

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Contagion – A perspective

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Recent events in China have sent tremors across global equity markets. Understanding the sources of these tremors and their interplay with our twin themes of secular stagnation and contagion will have important investment implications. This white paper is co-authored by three of Epoch Investment Partners, Inc’s most senior investment people – William Priest, CEO and […]

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China: What’s really behind the currency move?

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China’s decision earlier this month to change the way in which the central parity or “fix” rate of the renminbi (RMB) is determined has been widely characterised as a devaluation designed to shore up the country’s export trade. We question this assessment, for a number of reasons. In our view, the move is much better […]

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Macro Matters: Five reasons the market oversold

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In last week’s “Macro Matters,” I argued that China’s currency regime change is bad news for the global economy and risk assets unless it will be accompanied by further domestic monetary easing and reforms in China and unless central banks elsewhere smell the coffee and ease policy further or postpone tightening. My point was that […]

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Malaysia: capital controls to support ringgit would be disruptive

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China’s surprise currency devaluation, which triggered a sell-off in many Asian currencies, has increased Malaysia’s headache as the country had already been struggling to halt the ringgit’s decline. Reintroducing capital controls to support the currency—as some in the market expect—would be counterproductive, but we believe that investors should be vigilant about such a tail risk. […]

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Shock waves from the rumbling Renminbi

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The market will calm down after the biggest currency devaluation by China in almost two decades which has sent shock waves through global commodity, interest rate and stock markets, says George Lucas, managing director Instreet Investment. “The 3 per cent drop in the currency last week is relatively small for a developing country trying to […]

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China’s currency devaluation increases certainty

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China’s surprise currency devaluation sparked a debate on whether it was part of the country’s ongoing financial reform or a measure to boost flagging exports. The plot thickens, as the flexibility now given to the currency is, ironically, forcing the authorities to step up their intervention, at least for now. It will take some time […]

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Asian small cap stocks are an untapped opportunity for Australian investors

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Small cap stocks in Asia present a real and often untapped opportunity for Australian investors, says Paul Quah, head of research (Asia) at Acorn Capital. “Many of the obstacles that investors believe stop them from investing in Asia are easy to overcome and, in our view, the opportunities that await them there are definitely worth […]

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Fundamentals and policy keep RMB riding at anchor

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Even before the correction in China’s A-Shares market, a number of investors expressed to us scepticism about our positive outlook for the renminbi (RMB). Some even saw devaluation as a possibility. For a variety of reasons, we continue to see the currency appreciating. In the aftermath of China’s A-Shares correction, many investors may be more […]

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