Download PDF: perspective-on-chinese-real-estate-sector-pcDownload The news related to Evergrande default last month has reignite investors attention to the country real estate sector, which is a major driver of Chinese growth and strongly intertwined to the country’s banking sector. Moreover, property accounts for 70% of household wealth – a significantly higher portion compared to U.S. and JapanContinueContinue reading “China: Implications from Real Estate Crackdown and Growth Outlook”
Tag Archives: macro
Positive on Russia, Neutral on Mexico
Download PDF: russia-and-mexico-2021q4-pcDownload Remains Overweight Russia Russia and other oil-exporting countries historically perform poorly during a global slowdown, but tighter discipline among OPEC+ and shale producers since last year has bolstered oil prices to above $80/bbl, which creates a positive spin for energy producers. We have been constructive on Russian and energy sector since lastContinueContinue reading “Positive on Russia, Neutral on Mexico”
Negative Outlook: Chile, Peru and Brazil
Download PDF: brazil-chile-and-peru-2021q4-pcDownload Downgrade Chile and Peru to Underweight Our recommendation to trim exposure to Chile and Peru is driven by three things: downside risk in copper price, rising political risk, and aggressive tightening by both countries’ central bank. Slowdown in Chinese growth is going to weigh on commodity intensive Latam bourse heavily through theContinueContinue reading “Negative Outlook: Chile, Peru and Brazil”
EM Equity Strategy in an Economic Downturn
Download PDF: downturn-ahead-2021q4-pcDownload The global economic boom unfolding in the past year is showing signs of moderation, with data from China – the first country to suffer and come out of the pandemic – currently signaling a contraction in manufacturing activities. It is very likely that the U.S. and Euro area will also see aContinueContinue reading “EM Equity Strategy in an Economic Downturn”
Chinese and Asian High Yield Corporate Bonds: Feeling the Heat
The jitter surrounding Evergrande’s solvency problem has spread to other Chinese property developers that account for sizeable portion of Chinese and Asian High Yield Corporate index. Chart 1 and 2 show spreads of Chinese and Asian USD bonds have widened to 16% and 11.5%, respectively, while the total return index declined 18% and 12% fromContinueContinue reading “Chinese and Asian High Yield Corporate Bonds: Feeling the Heat”
USDBRL – Better Entry Point Ahead
We are currently cautious on the BRL. Although valuation is cheap, deceleration in global growth and rising downside risk for global equities and commodities mean there will be a better entry point to short USD/BRL. Shorting EUR/BRL is a more attractive trade given the risk of a stronger dollar in such macro environment. First, theContinueContinue reading “USDBRL – Better Entry Point Ahead”
Central and Eastern European Countries: Rising Rates Will Lift All Boats
Download PDF: central-and-eastern-european-countries-202109-pcDownload Central banks in Czech and Hungary have begun to raise their policy rate this year amid acceleration in inflation as their domestic recovery unfolds, creating a tailwind for the koruna and forint against the Euro, which will not see the ECB raising its borrowing cost anytime soon (Chart 1). With Central andContinueContinue reading “Central and Eastern European Countries: Rising Rates Will Lift All Boats”
The Semi Shortage
Download PDF: the-semi-shortage_pcDownload In the past three decades the world has seen a dramatic digital transformation happening with the widespread adoption of internet, computers, and smartphones, which only accelerated when lockdown restriction last year pushed our life further into the digital realm. Demands of electronic gadgets, data centers, and networking equipment surged in 2020 asContinueContinue reading “The Semi Shortage”
Peru: Latin America’s Growth Star
Download PDF: peru-researchDownload For long investors have regarded Chile and Peru as one of the more stable Latam countries, as reflected in these countries’ borrowing cost and disciplined management of fiscal and monetary policy. Late last year, however, Peru went through a political crisis over the impeachment of former President Vizcarra by the Congress overContinueContinue reading “Peru: Latin America’s Growth Star”
February 2021: EM Bonds, Brazil and Turkey
Download PDF: monthly_202002Download EM local-currency bonds EM bonds still have room for spread tightening against U.S. Treasury. The 10-year Treasury yield will have difficulty to break 1.2% level as the Fed is unlikely to raise rate until inflation overshoot its 2% target, creating an anchor for yields globally to remain low. Moreover, the relatively modestContinueContinue reading “February 2021: EM Bonds, Brazil and Turkey”
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