Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

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.

Macroeconomics

A lot of chatter has built around the ability of the PBoC to use a QE style intervention to take the bad loans out of the Chinese banking system.  Whilst this is technically possible, the requirement to have a capitalised central bank and the increased cost to central government of such a bailout would make it an unlikely course of action in our opinion.We run through the QE process and highlight the issues that Chinese authorities would have to contend with.  Additionally we take a look at the half way house that Chinese monetary policy has found itself in, which we believe to be one of the root causes for investor concern.  We suggest that the PBoC is already undertaking a Chinese style QE.

A lot of chatter has built around the ability of the PBoC to use a QE style intervention to take the bad loans out of the Chinese banking system.  Whilst this is technically possible, the requirement to have a capitalised central bank and the increased cost to central government of such a bailout would make it an unlikely course of action in our opinion.We run through the QE process and highlight the issues that Chinese authorities would have to contend with.  Additionally we take a look at the half way house that Chinese monetary policy has found itself in, which we believe to be one of the root causes for investor concern.  We suggest that the PBoC is already undertaking a Chinese style QE.

Asia Economic Research, Centennial Asia Advisors

Asees Bajaj

Asia Economic Research

Centennial Asia Advisors

At Centennial Asia Advisors, we tell it like it is. We have no vested interests, no need for a China wall, and no reason to skew our outlook any other way. With over 30 years experience covering Asia’s political economy, you can be sure our conclusions and analyses are based on the unadulterated facts. Through years of fine-tuning our research methodologies, we deliver a quality of macroeconomic analysis few other houses can match.

Centennial Asia Advisors is an independent research and advisory firm that works with governments, multilateral institutions, financial firms and leading MNCs.

Economic Policy and Strategic Advisors

Incremental steps to push the envelope by disputing parties raise the risk of unintended clashes<ul><li>Japan has relocated refuelling of its surveillance aircraft returning from anti-piracy operations off Africa to countries involved in disputes with China over the South China Sea, as opposed to its usual refuelling sites in Singapore and Thailand. Japan is signalling a more activist posture in this dispute. Japan also warned China that its naval forces would confront any foreign naval vessel entering…</li></ul>

Incremental steps to push the envelope by disputing parties raise the risk of unintended clashesJapan has relocated refuelling of its surveillance aircraft returning from anti-piracy operations off Africa to countries involved in disputes with China over the South China Sea, as opposed to its usual refuelling sites in Singapore and Thailand. Japan is signalling a more activist posture in this dispute. Japan also warned China that its naval forces would confront any foreign naval vessel entering…

Economist, Centennial Asia Advisors

Jason Tan

Economist

<ul><li>China released GDP figures for 2015; full-year growth registered at 6.9% in 2015 – the lowest in a quarter of a century. Also, other economic data released in the past week reflected a broadly decelerating economy.</li><li>The transition to a consumption-led economy powered by services continues; consumption contributed significantly to growth while services expanded robustly.</li><li>However, the policy direction in China remains uncertain and there is a sense of growing anxiety in the recent policy moves. This has dented investor confidence.</li><li>While a near-term economic dislocation in China cannot be ruled out, contagion fears are probably overblown. The confluence of factors including stronger G3 economies and a boost to consumption resulting from the continued fall of oil prices should bolster the growth prospects for the global economy.</li></ul>

China released GDP figures for 2015; full-year growth registered at 6.9% in 2015 – the lowest in a quarter of a century. Also, other economic data released in the past week reflected a broadly decelerating economy.The transition to a consumption-led economy powered by services continues; consumption contributed significantly to growth while services expanded robustly.However, the policy direction in China remains uncertain and there is a sense of growing anxiety in the recent policy moves. This has dented investor confidence.While a near-term economic dislocation in China cannot be ruled out, contagion fears are probably overblown. The confluence of factors including stronger G3 economies and a boost to consumption resulting from the continued fall of oil prices should bolster the growth prospects for the global economy.

China: Decelerating Economy but Global Contagion Fears Overblown

Asia Economist and CEO, Centennial Asia Advisors

Manu Bhaskaran

Asia Economist and CEO

Pro-independence DPP records historic victoryThe opposition, pro-independence Democratic Progressive Party (DPP) scored its best ever electoral success, winning not only the presidency by a comfortable margin but also taking a majority in the Legislative Yuan for the first time in history. With a comfortable majority in legislature and Tsai Ing-wen as the incoming President, the DPP will have considerable leeway in pushing its legislative agenda.Charts 1 and 2 showed the victory secured by the…

Pro-independence DPP records historic victoryThe opposition, pro-independence Democratic Progressive Party (DPP) scored its best ever electoral success, winning not only the presidency by a comfortable margin but also taking a majority in the Legislative Yuan for the first time in history. With a comfortable majority in legislature and Tsai Ing-wen as the incoming President, the DPP will have considerable leeway in pushing its legislative agenda.Charts 1 and 2 showed the victory secured by the…

Rocky Road Ahead for Cross-Straits Relations

A follow up question to Part 1 of our 'Regional Currency Outlook' is the role monetary policy will play and what the overall implication is for where each currency will head over the course of this year. Table 1 sets out our views.Table 1: Monetary policy and currency forecasts<table class="table table-striped"><tbody>
<tr>
<td>Country</td>
<td>Monetary policy direction</td>
<td>Currency forecasts/USD for 2016</td>
</tr>
<tr>
<td>China</td>
<td><ul>
<li>The PBOC is likely to abjure aggressive overall depreciation, no net benefit from sparking off a currency war in the region.</li>
<li>Expect the Chinese Yuan to…</li>
</ul></td>
</tr>
</tbody></table>

A follow up question to Part 1 of our 'Regional Currency Outlook' is the role monetary policy will play and what the overall implication is for where each currency will head over the course of this year. Table 1 sets out our views.Table 1: Monetary policy and currency forecasts

Country
Monetary policy direction
Currency forecasts/USD for 2016


China

The PBOC is likely to abjure aggressive overall depreciation, no net benefit from sparking off a currency war in the region.
Expect the Chinese Yuan to…




Regional Currency Outlook: Where Are the Vulnerabilities? (Part 2)

China

iShares FTSE A50 China Index ETF is an exchanged-traded fund established in Hong Kong. The investment objective of the iShares FTSE A50 China Index ETF is to provide investment results that, before fees and expenses, closely correspond to the performance of A50 Index.

iShares FTSE/Xinhua A50 China (2823 HK)

Chinese Style QE

A lot of chatter has built around the ability of the PBoC to use a QE style intervention to take the bad loans out of the Chinese banking system....

Mark Artherton

East and South China Sea Disputes Simmer

Incremental steps to push the envelope by disputing parties raise the risk of unintended clashes Japan has relocated refuelling of its surveillance...

Asees Bajaj

China: Decelerating Economy but Global Contagion Fears Overblown

China released GDP figures for 2015; full-year growth registered at 6.9% in 2015 – the lowest in a quarter of a century. Also, other economic data...

Jason Tan

Rocky Road Ahead for Cross-Straits Relations

Pro-independence DPP records historic victoryThe opposition, pro-independence Democratic Progressive Party (DPP) scored its best ever electoral...

Manu Bhaskaran

Regional Currency Outlook: Where Are the Vulnerabilities? (Part 2)

A follow up question to Part 1 of our 'Regional Currency Outlook' is the role monetary policy will play and what the overall implication is for...

Manu Bhaskaran