Asian Economist

Kok Peng Chan

Macroeconomics

<ul>
<li>China’s low consumption ratio is driven by structural constraints—stagnant labour income, early and rapid household leverage, heavy debt burdens, declining workforce and persistent precautionary saving</li>
<li>Such constraints on household consumption mean recent policy announcements to expand overall domestic demand will take longer than expected to deliver a durable consumption-driven Chinese economy</li>
<li>China’s ten-year bond yield appears to recognise this reality, pricing in persistently weak nominal growth and subdued domestic demand rather than a consumption-driven reacceleration. It is now lower than Japan</li>
</ul>


China’s low consumption ratio is driven by structural constraints—stagnant labour income, early and rapid household leverage, heavy debt burdens, declining workforce and persistent precautionary saving
Such constraints on household consumption mean recent policy announcements to expand overall domestic demand will take longer than expected to deliver a durable consumption-driven Chinese economy
China’s ten-year bond yield appears to recognise this reality, pricing in persistently weak nominal growth and subdued domestic demand rather than a consumption-driven reacceleration. It is now lower than Japan


China’s Consumption Push: Will It Take Off?

Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Thematic (Sector/Industry)

<ul>
<li>The 2025 vintage of "5 High Conviction Ideas" showed a positive return for all five picks.</li>
<li>Our best performer was <a href="https://www.smartkarma.com/entities/arras-minerals-corp-0103ceb3-3087-43a7-8e88-cf54392e4429" target="_blank" data-smartkarma-citation="entities:41542:1" rel="noopener">Arras Minerals (ARK CN)</a>, which was up +150%, closely followed by <a href="https://www.smartkarma.com/entities/solaris-resources-inc" target="_blank" data-smartkarma-citation="entities:40176:1" rel="noopener">Solaris Resources (SLS CN)</a>, which gained 139% for the year. </li>
<li>Our 2025 vintage was heavily copper-focused, our 2026 new favorite list is more diverse across sectors and regions.</li>
</ul>


The 2025 vintage of "5 High Conviction Ideas" showed a positive return for all five picks.
Our best performer was Arras Minerals (ARK CN), which was up +150%, closely followed by Solaris Resources (SLS CN), which gained 139% for the year. 
Our 2025 vintage was heavily copper-focused, our 2026 new favorite list is more diverse across sectors and regions.


Overview of My Winners and Losers in 2025...and 5 High Conviction Ideas Going Into 2026

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>EM allocations in Global funds have broken out of a multi-year range, reaching the highest level since 2019 as underweights narrow.</li>
<li>The move is led by Taiwan, China &amp; HK, and South Korea, with strong inflows and rising fund participation.</li>
<li>Despite the shift, EM exposure remains shallow and concentrated, making higher allocations a clear point of differentiation.</li>
</ul>


EM allocations in Global funds have broken out of a multi-year range, reaching the highest level since 2019 as underweights narrow.
The move is led by Taiwan, China &amp; HK, and South Korea, with strong inflows and rising fund participation.
Despite the shift, EM exposure remains shallow and concentrated, making higher allocations a clear point of differentiation.


Breaking the Range: EM Reclaims Attention in Global Portfolios

<ul>
<li>The Materials sector stands out as a key recovery candidate: low positioning but strong positive rotation across the GEM active universe.</li>
<li>Early inflows are being driven by China &amp; HK and South Africa, with rising fund participation and narrowing underweights.</li>
<li>Stock-Level rotation is visible in Gold Fields, Zijin Mining, and Anglo American, alongside a growing set of lightly held rising stars.</li>
</ul>


The Materials sector stands out as a key recovery candidate: low positioning but strong positive rotation across the GEM active universe.
Early inflows are being driven by China &amp; HK and South Africa, with rising fund participation and narrowing underweights.
Stock-Level rotation is visible in Gold Fields, Zijin Mining, and Anglo American, alongside a growing set of lightly held rising stars.


Quantitative Equity Analyst, DMA

Charlotte van Tiddens, CFA

Quantitative Equity Analyst

Technology-First Company

DMA is a technology-first company that provides an end-to-end SaaS solution to institutional investors. DMA enables regulated entities like asset managers, wealth managers, investment managers and financial advisors to connect their front and back office, break silos and reduce headcount.

Index Rebalance

The FTSE/JSE Top40 Index is a capitalization weighted index. Companies included in this index are the 40 largest companies by market capitalization included in the FTSE/JSE All Shares Index. The index was developed with a base value of 10399.53 as of June 21, 2002.

<ul><li>JSE indices are due for rebalancing in the closing auction on Friday.</li><li>There will be no changes to the Top 40 index. GLN will be added to the RESI 10 and BHG will be deleted.</li><li>ISO will be added to ALSI (+Small Cap index), the exposure is estimated to be c 3bps of the Capped ALSI.</li></ul>

JSE indices are due for rebalancing in the closing auction on Friday.There will be no changes to the Top 40 index. GLN will be added to the RESI 10 and BHG will be deleted.ISO will be added to ALSI (+Small Cap index), the exposure is estimated to be c 3bps of the Capped ALSI.

JSE December 2025 Rebalance: No Top 40 Changes

South Africa
Insights on South Africa

China’s Consumption Push: Will It Take Off?

This report shows why China’s consumption push faces structural limits, why rate cuts won’t work, and how delayed reform raises risks for equities,...

Kok Peng Chan

Overview of My Winners and Losers in 2025...and 5 High Conviction Ideas Going Into 2026

The 2025 "5 High Conviction Ideas" vintage had positive returns, with Arras Minerals and Solaris Resources leading the way. The 2026 list is more...

Nicolas Van Broekhoven

Breaking the Range: EM Reclaims Attention in Global Portfolios

EM allocations are breaking out in Global portfolios, led by Taiwan and China & HK. Underweights are narrowing, but exposure remains...

Steven Holden

EM Materials: The Recovery Trade

Materials is emerging from deep under-ownership, combining low positioning with the strongest positive rotation in GEM. Inflows into China and S....

Steven Holden

JSE December 2025 Rebalance: No Top 40 Changes

The end of an era: SWIX indices to be terminated 31 Dec 2025, methodology adopted throughout index series since the harmonisation in March 2024

DMA

China’s Consumption Push: Will It Take Off?

This report shows why China’s consumption push faces structural limits, why rate cuts won’t work, and how delayed reform raises risks for equities,...

Kok Peng Chan

Overview of My Winners and Losers in 2025...and 5 High Conviction Ideas Going Into 2026

​The 2025 "5 High Conviction Ideas" vintage had positive returns, with Arras Minerals and Solaris Resources leading the way. The 2026 list is more...

Nicolas Van Broekhoven

Breaking the Range: EM Reclaims Attention in Global Portfolios

EM allocations are breaking out in Global portfolios, led by Taiwan and China & HK. Underweights are narrowing, but exposure remains...

Steven Holden

EM Materials: The Recovery Trade

Materials is emerging from deep under-ownership, combining low positioning with the strongest positive rotation in GEM. Inflows into China and S....

Steven Holden

JSE December 2025 Rebalance: No Top 40 Changes

The end of an era: SWIX indices to be terminated 31 Dec 2025, methodology adopted throughout index series since the harmonisation in March 2024

DMA

The 2025 "5 High Conviction Ideas" vintage had positive returns, with Arras Minerals and Solaris Resources leading the way. The 2026 list is more...