EM PM, Ecstrat

Emad Mostaque

EM PM

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
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More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Thematic (Sector/Industry)

Against market expectations the British have voted to exit the European Union, a process that could take a few years. The first order impact is being felt in the Eurozone, but the shockwaves could lead to one more leg down in Emerging Markets and potentially the US this year.

Against market expectations the British have voted to exit the European Union, a process that could take a few years. The first order impact is being felt in the Eurozone, but the shockwaves could lead to one more leg down in Emerging Markets and potentially the US this year.

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

It is hard to envisage how the two opposing data sets can co-exist without something worrisome happening behind the scenes. Here we look at annual growth of loan interest income for China’s banks, and the story is bizarre, to say the least. <div class="content-highlight">
Growth in China banks’ loan interest income on a quarterly basis is now negative at 1Q16.
This is totally new.
</div>It is also at complete odds with rampant loan growth. We must remind that this interest income is for loans only, it is not for wealth management…

It is hard to envisage how the two opposing data sets can co-exist without something worrisome happening behind the scenes. Here we look at annual growth of loan interest income for China’s banks, and the story is bizarre, to say the least. 
Growth in China banks’ loan interest income on a quarterly basis is now negative at 1Q16.
This is totally new.
It is also at complete odds with rampant loan growth. We must remind that this interest income is for loans only, it is not for wealth management…

China - Something Happening Here, Exactly What Isn't Clear

China Macroeconomics & Academia

Christopher Balding

Macroeconomics

For all the concern focused on the Chinese economy, financial markets, and credit, the RMB dominates them all.  If a hard landing or crisis like scenario were to take place, it would undoubtedly involve significant devaluation.Aware of this dynamic the PBOC has been working to control both the price and the flow of the CNY, CNH, and the accompanying assorted derivatives resulting in clear market distortions, some of which we have covered here.  The impact of official intervention, though we…

For all the concern focused on the Chinese economy, financial markets, and credit, the RMB dominates them all.  If a hard landing or crisis like scenario were to take place, it would undoubtedly involve significant devaluation.Aware of this dynamic the PBOC has been working to control both the price and the flow of the CNY, CNH, and the accompanying assorted derivatives resulting in clear market distortions, some of which we have covered here.  The impact of official intervention, though we…

RMB Report: Near Term Stability, Long Term Depreciation

International bank transaction data was released on the 20th and we believe this provides a better gauge of currency flows than more widely reported data.  There are large acknowledged discrepancies between Customs report import, export, and surplus numbers and the bank reported data due to fraudulent payment or invoicing issues.  This then permeates the calculations on balance of payment and other flow issues that provide serious distortions on currency flows.Current account based upon…

International bank transaction data was released on the 20th and we believe this provides a better gauge of currency flows than more widely reported data.  There are large acknowledged discrepancies between Customs report import, export, and surplus numbers and the bank reported data due to fraudulent payment or invoicing issues.  This then permeates the calculations on balance of payment and other flow issues that provide serious distortions on currency flows.Current account based upon…

RMB Outflows Continue As Inflows Collapsing

Co-founder & Managing Director, Marketnomix 

Rajan Govil

Co-founder & Managing Director

Marketnomix 

China’s data releases in recent days have continued to broadly reflect the ongoing slowdown in the economy. While industrial production remained steady in May 2016, retail sales as well as fixed asset investment continued to slow.  Money supply and outstanding loans also slowed in May.Industrial production in China remained steady in May 2016 rising 6.0% y-o-y, the same as in April, and compared to an increase of 6.8% y-o-y for March 2016. On a year-to-date (ytd) y-o-y basis, industrial…

China’s data releases in recent days have continued to broadly reflect the ongoing slowdown in the economy. While industrial production remained steady in May 2016, retail sales as well as fixed asset investment continued to slow.  Money supply and outstanding loans also slowed in May.Industrial production in China remained steady in May 2016 rising 6.0% y-o-y, the same as in April, and compared to an increase of 6.8% y-o-y for March 2016. On a year-to-date (ytd) y-o-y basis, industrial…

China: May Industrial Production Held Steady, Fixed Asset Investment, Loans Growth Slowed

China

Industrial and Commercial Bank of China Limited provides banking services. The Company offers deposits, loans, fund underwriting, foreign currency settlement, and other services. Industrial and Commercial Bank of China provides its services to individuals, enterprises, and other clients.

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ICBC (H) (1398 HK)

Will Brexit Break EM's Back?

Against market expectations the British have voted to exit the European Union, a process that could take a few years. The first order impact is...

Emad Mostaque

China - Something Happening Here, Exactly What Isn't Clear

It is hard to envisage how the two opposing data sets can co-exist without something worrisome happening behind the scenes. Here we look at annual...

Daniel Tabbush

RMB Report: Near Term Stability, Long Term Depreciation

For all the concern focused on the Chinese economy, financial markets, and credit, the RMB dominates them all. If a hard landing or crisis like...

Christopher Balding

RMB Outflows Continue As Inflows Collapsing

International bank transaction data was released on the 20th and we believe this provides a better gauge of currency flows than more widely...

Christopher Balding

China: May Industrial Production Held Steady, Fixed Asset Investment, Loans Growth Slowed

China’s data releases in recent days have continued to broadly reflect the ongoing slowdown in the economy. While industrial production remained...

Rajan Govil

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