Asian medium and long-term drivers still on track

From

Asian equity markets have been tough since mid-2015, prompted by fears over China’s slowing growth. In September, global investors withdrew more than USD 50 billion, the biggest redemption ever recorded in Asia ex-Japan. Valuations have also hit record lows. A trailing price-earnings ratio of 9 and an average price-to-book of 1.1x were last seen in... Read more continue reading

China scare

From

China has replaced Greece as the main worry for financial markets – and it is fundamentally a much bigger deal. A depreciation of China’s currency, a sell-off in the country’s equity markets and declining confidence in Beijing policymakers are spooking global markets. BlackRock investment specialists recently discussed the developments in China. The call was moderated... Read more continue reading

China’s FV policy in a tough balancing act

From

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... Read more continue reading

Emerging Markets: the optimistic view

From

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... Read more continue reading

Benign inflation to keep Asian central banks focused on growth risks

From

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... Read more continue reading

China – Lost in transition?

From

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... Read more continue reading

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

From

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... Read more continue reading

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

From

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... Read more continue reading

Two Chinas are better than one for careful investors

From

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-... Read more continue reading

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

From

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... Read more continue reading