Download PDF: market_watch_cycle_pcDownload Copper/gold ratio has increased to prior peak in the business cycle, although yield curve is only halfway through. This could be explained by the dovish stance held by Federal Reserve to stay accommodative until maximum employment is achieved and inflation average at 2%, meaning that unlike in previous cycles, pre-emptive tightening isContinueContinue reading “Where Are We in The Cycle? Yield, Gold, and Copper”
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Turkey and EM Policy Normalization
Download PDF: monthly_202104Download I) Turkey: Back to Coma Again? Various indicators were still flashing red even before President Erdogan fired Naci Agbal – the central bank governor he appointed just four months ago – for pursuing a hawkish monetary policy. Although his firing of Mr. Agbal is akin to shooting himself in the foot andContinueContinue reading “Turkey and EM Policy Normalization”
Market Update: View on Major Asset Class
Download PDF: 202103_market_updateDownload U.S. Equity We have a neutral stance on U.S. equity and think it is only slightly overvalued at current level (SPX: 3885 at the time of writing). However, we note that U.S. stocks are priced to perfection and will be vulnerable to bad news, on the back of expensive valuation and potentialContinueContinue reading “Market Update: View on Major Asset Class”
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”
On Brazil and Turkey
Download PDF: 202102_turkey_brazil_pcDownload Stay Positive on Brazilian Assets The backdrop for Brazilian assets remains bullish amid rising commodity prices and undervalued Real (Chart 1). In addition, Brazilian economy has recovered strongly and various indicators – such as manufacturing PMI and retail sales – are now back to pre-pandemic level (Chart 2). With the global economyContinueContinue reading “On Brazil and Turkey”
March 2021: Thoughts on Valuation, Oil, and Silver Demand
Download PDF: monthly_202103Download Part I. World’s Equity Valuation One year after the Covid-19-induced market crash, global equity market has gone through a V-shaped recovery with stock market in many countries breaking record high level amid ample monetary and fiscal stimulus. The U.S. market valuation – now trading at cyclically-adjusted P/E (CAPE) of 32 times –ContinueContinue reading “March 2021: Thoughts on Valuation, Oil, and Silver Demand”
EM Taper Tantrum Déjà vu?
Download PDF: em-and-taper-tantrum_pcDownload Potential for Sizable Portfolio Outflow is Limited. The period before 2013 Taper Tantrum was marked by strong capital flow into EM assets, in contrast to current situation where flow into EM bonds and equities are only beginning to recover (Chart 1). More importantly foreign ownership of EM bonds, especially for the moreContinueContinue reading “EM Taper Tantrum Déjà vu?”
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”
January 2021: Silver and Equity Strategy Review
Download PDF: monthly_202101Download Part I: Silver Last week seen silver prices dropped remarkably amid rising long-term bond yield and receding dollar weakness. We have been constructive on the precious metal and commodity complex for a while now and remain to be so in the reflationary environment. There are reasons to believe that the commodity bullContinueContinue reading “January 2021: Silver and Equity Strategy Review”
2021 EM Equity High Conviction Calls
Download PDF: 2021_em_equity_callsDownload Poland Polish manufacturing sector and exports have both staged a V-shaped recovery despite the reintroduction of a strict lockdown across major European countries (Chart 1). As an open economy that is highly integrated with European manufacturing sector Poland has benefited from the sharp recovery of German manufacturing (Chart 2-4), which points toContinueContinue reading “2021 EM Equity High Conviction Calls”
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