Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

LR Research

Thematic (Sector/Industry)

In the first of our initial asset allocation pieces, we take look at China, the country with the largest weighting in the index and biggest economy in the region.  We will refrain from making any asset changes to our portfolio until we have at least one overweight and one underweight.  As this is the first asset allocation piece in this series we will expand more fully on the process followed for asset allocation in part 1.  Additionally, due to the nature of building the current portfolio from scratch, we will place more emphasis than normal on the characteristics of the index.  However, as we complete the stock selection this will become less important in the overall process.Part 2 looks at asset allocation for China.  Within our framework, we believe that China deserves an overweight position, but we are wary that this call may be quite late in the day given the rally we have already witnessed over the past 6 to 12 months.  Our process places emphasis upon the currency and (at least initially) on momentum characteristics of the index - these two factors still argue for overweight positioning in China. Conditions within China remain conducive for stock picking and identifying positive moves in domestic cash flows.

In the first of our initial asset allocation pieces, we take look at China, the country with the largest weighting in the index and biggest economy in the region.  We will refrain from making any asset changes to our portfolio until we have at least one overweight and one underweight.  As this is the first asset allocation piece in this series we will expand more fully on the process followed for asset allocation in part 1.  Additionally, due to the nature of building the current portfolio from scratch, we will place more emphasis than normal on the characteristics of the index.  However, as we complete the stock selection this will become less important in the overall process.Part 2 looks at asset allocation for China.  Within our framework, we believe that China deserves an overweight position, but we are wary that this call may be quite late in the day given the rally we have already witnessed over the past 6 to 12 months.  Our process places emphasis upon the currency and (at least initially) on momentum characteristics of the index - these two factors still argue for overweight positioning in China. Conditions within China remain conducive for stock picking and identifying positive moves in domestic cash flows.

Asia X Japan Portfolio Builder #2 - China Asset Allocation - Overweight

China Macroeconomics & Academia

Christopher Balding

Macroeconomics

Though China announced GDP growth of 6.9%, this is more accurately seen as a set back for economic reform given the figures reliance on old industry drivers.  There are also significant concerns about the drivers like Hotels and Catering that are above the national growth rate.  Industrial data fails to support the idea that the GDP growth of the Hotel and Catering sector would grow by 7% based upon occupancy rates, visits, new rooms, and revenue.  Some of these figures should be viewed…

Though China announced GDP growth of 6.9%, this is more accurately seen as a set back for economic reform given the figures reliance on old industry drivers.  There are also significant concerns about the drivers like Hotels and Catering that are above the national growth rate.  Industrial data fails to support the idea that the GDP growth of the Hotel and Catering sector would grow by 7% based upon occupancy rates, visits, new rooms, and revenue.  Some of these figures should be viewed…

Strength in Old Industries in Chinese GDP and Trade

Founder-CEO & Chief Analyst, Real Estate Foresight

Robert Ciemniak

Founder-CEO & Chief Analyst

Real Estate Foresight

Since 2012, REF has been helping investors with market research, project due diligence, and strategy development. This has ranged from detailed assessments and estimates on distressed developers' project portfolios to market due diligence on specific projects to macro-level questions linked to demand for commodities. The unique combination of the housing markets and developer data from data partner China Index Academy in Beijing, primary research, and technology-powered alternative data collection from public sources result in a valuable content set used in REF analytics and reports.

Predictive Analytics for China Property

Over the period February 28, 2016, to July 20, 2017, we monitored publicly available online English language 'Western' news headlines from around 10 major mainstream sources, for anything related to China. Over 13,000 headlines later we've now applied word frequency analysis techniques to see what these headlines tell us about this past year and what's been gaining or losing coverage since the May update (for some technical/background details see a footnote below). While this does not carry…

Over the period February 28, 2016, to July 20, 2017, we monitored publicly available online English language 'Western' news headlines from around 10 major mainstream sources, for anything related to China. Over 13,000 headlines later we've now applied word frequency analysis techniques to see what these headlines tell us about this past year and what's been gaining or losing coverage since the May update (for some technical/background details see a footnote below). While this does not carry…

Media Coverage / Sentiment On China - What Got Hot, What Faded (May-July 2017)

FX Strategist

Greg Gibbs

Fundamental analysis of topical themes in FX

Amplifying Global FX Capital

Amplifying Global FX Capital was founded in 2015 and is fully owned by Greg Gibbs. It is a registered company both in Australia and Colorado, USA and is a licensed in Australia to provide financial services.

We are producing a regular trading view orientated macroeconomic analysis of topical themes in global financial markets, with a particular focus on foreign exchange. We invite you to view an “executive summary” of these reports in “AmpGFX Reports” under our “Research” menu.

These reports are drawn from the analysis of Greg Gibbs and inform the capital management he undertakes on behalf of the company. The trading performance is posted periodically on our website. We aim to build our company into both a research and capital management business. We are currently in the planning phase for managing capital for wholesale customers.

Greg Gibbs has spent his working life of more than 26 years in financial markets, beginning in 1989 at the Reserve Bank of Australia, after completing a Bachelor of Economics Degree (Honours) at the Australian National University. He has been a CFA Charterholder since 2005. He has worked in Sydney, Singapore, New York and London for major global banks and presented on foreign exchange markets to major financial institutions and companies around the world, and maintained a high profile in the financial media.

Before Amplifying Global FX Capital, Greg was the Head of Asia Pacific Market Strategy at the Royal Bank of Scotland based Singapore. He now resides in Breckenridge Colorado.

FX & Rates

Global investors heading into Japan equities may no longer be routinely hedging the JPY currency exposure. Equity investors, viewing the largely trendless major currency markets over recent years, albeit with some sizeable swings, and more recently a weaker USD, may be moving funds into Japanese and European equities without currency hedges.  These equity flows may be playing a bigger role in currency performance than in previous years when monetary policy divergence and relative interest rates dominated. US Economic momentum remains intact; GDP is set to rebound in Q2; the labor market is tightening; and gradual Fed tightening remains on track.  This may not be the time to sell the USD after its broad-based fall this year.  But Trump’s antagonistic ill-disciplined style of economic nationalism is a dead-weight on the USD. The US economy must continue to prove its mettle to ensure the USD does not continue to drop. The recent rebound in CNY, while eye-catching, doesn’t reflect any new economic development in China, and still leaves the CNY as one of the weakest currencies in Asia this year.  The AUD remains threatened by evidence of some slowing in demand and tightening credit conditions in China, and signs that the Australian housing market is peaking.

Global investors heading into Japan equities may no longer be routinely hedging the JPY currency exposure. Equity investors, viewing the largely trendless major currency markets over recent years, albeit with some sizeable swings, and more recently a weaker USD, may be moving funds into Japanese and European equities without currency hedges.  These equity flows may be playing a bigger role in currency performance than in previous years when monetary policy divergence and relative interest rates dominated. US Economic momentum remains intact; GDP is set to rebound in Q2; the labor market is tightening; and gradual Fed tightening remains on track.  This may not be the time to sell the USD after its broad-based fall this year.  But Trump’s antagonistic ill-disciplined style of economic nationalism is a dead-weight on the USD. The US economy must continue to prove its mettle to ensure the USD does not continue to drop. The recent rebound in CNY, while eye-catching, doesn’t reflect any new economic development in China, and still leaves the CNY as one of the weakest currencies in Asia this year.  The AUD remains threatened by evidence of some slowing in demand and tightening credit conditions in China, and signs that the Australian housing market is peaking.

Over the period February 28, 2016, to May 29, 2017, we monitored publicly available online English language 'Western' news headlines from around 10 major mainstream sources, for anything related to China. Close to 12,000 headlines later we've now applied some NLP techniques to see what these headlines tell us about this past year and recent topical issues (for some technical/background details see a footnote below).1. One Belt One Road has gained extensive coverage, esp. in the line-up to the…

Over the period February 28, 2016, to May 29, 2017, we monitored publicly available online English language 'Western' news headlines from around 10 major mainstream sources, for anything related to China. Close to 12,000 headlines later we've now applied some NLP techniques to see what these headlines tell us about this past year and recent topical issues (for some technical/background details see a footnote below).1. One Belt One Road has gained extensive coverage, esp. in the line-up to the…

Western Media Coverage/Sentiment On China - What Got Hot (May 2017)

China

iShares MSCI China ETF is an exchange-traded fund incorporated in the USA. The ETF seeks to track the performance of the MSCI China Index. The Index is a free float adjusted market cap weighted index designed to measure the performance of equity securities in the top 85% in market cap of Chinese equity markets, as represented by the A-Shares, H-Shares, B-Shares, Red Chips, & P-Chips.

iShares MSCI China ETF (MCHI US)

Asia X Japan Portfolio Builder #2 - China Asset Allocation - Overweight

In the first of our initial asset allocation pieces, we take look at China, the country with the largest weighting in the index and biggest economy...

Mark Artherton

Strength in Old Industries in Chinese GDP and Trade

Though China announced GDP growth of 6.9%, this is more accurately seen as a set back for economic reform given the figures reliance on old...

Christopher Balding

Media Coverage / Sentiment On China - What Got Hot, What Faded (May-July 2017)

Over the period February 28, 2016, to July 20, 2017, we monitored publicly available online English language 'Western' news headlines from around...

Robert Ciemniak

Trump Is a Dead-Weight on the USD

Global investors heading into Japan equities may no longer be routinely hedging the JPY currency exposure. Equity investors, viewing the largely...

Greg Gibbs

Western Media Coverage/Sentiment On China - What Got Hot (May 2017)

Over the period February 28, 2016, to May 29, 2017, we monitored publicly available online English language 'Western' news headlines from around 10...

Robert Ciemniak