Global Asset Allocation, Politics & Governance, Ecstrat

John-Paul Smith

Global Asset Allocation, Politics & Governance

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.

Cross Asset Strategy

The surge in volatility should be welcome to longer-term investors by removing some of the technical distortions that had arisen during the long unbroken run in global equities, although some momentum trades such as FANG are continuing to outperform the broader market for the time being. Whilst there will clearly be some normalisation of monetary policy in the US this year, the inflation scare is unlikely to persist given the correction in financial markets including energy prices. The most…

The surge in volatility should be welcome to longer-term investors by removing some of the technical distortions that had arisen during the long unbroken run in global equities, although some momentum trades such as FANG are continuing to outperform the broader market for the time being. Whilst there will clearly be some normalisation of monetary policy in the US this year, the inflation scare is unlikely to persist given the correction in financial markets including energy prices. The most…

Cyclical Assets To Underperform From Here

Technical Analyst - Global with an Asian focus, Aletheia Capital

Chris Roberts

Technical Analyst - Global with an Asian focus

Independent and original Asian investment research

Aletheia Capital

Aletheia Capital (HK) Ltd. (previously known as Asianomics) combines the extensive knowledge of its experienced team with technology and regulatory changes to disrupt Global Markets business in Asia. The firm is completely independent with no conflicts of interest either on Investment Banking advisory or Capital Markets execution.

Technical Analysis

If market participants were to vote for a company to be the poster-boy for the Asian bull market that started in early 2016, the hands down winner would be Tencent (700 HK – HKD411.40). Not only does the stock have the most significant weighting in the MSCI China Index (Tencent and Alibaba account for more than 30% of the benchmark), but earlier this year it even usurped Samsung Electronics to become the leading stock in the MSCI Asia Free ex-Japan regional benchmark.At last week’s new all-time high of HKD439.60, Tencent was up 145% from the late December 2016 low of HKD179.60, easily outperforming the 60% gain of the MSCI China or the MSCI Asia Free ex-Japan’s 43% advance.The default option this year has been to buy the dip or if no dip, buy a new high. But stepping back from the shorter-term charts and focusing on monthly and weekly charts shows similar set-ups to the current situation have occurred on a number of previous occasions since 2006 and they did not end well for Tencent. Buy the dip…not so fast.

If market participants were to vote for a company to be the poster-boy for the Asian bull market that started in early 2016, the hands down winner would be Tencent (700 HK – HKD411.40). Not only does the stock have the most significant weighting in the MSCI China Index (Tencent and Alibaba account for more than 30% of the benchmark), but earlier this year it even usurped Samsung Electronics to become the leading stock in the MSCI Asia Free ex-Japan regional benchmark.At last week’s new all-time high of HKD439.60, Tencent was up 145% from the late December 2016 low of HKD179.60, easily outperforming the 60% gain of the MSCI China or the MSCI Asia Free ex-Japan’s 43% advance.The default option this year has been to buy the dip or if no dip, buy a new high. But stepping back from the shorter-term charts and focusing on monthly and weekly charts shows similar set-ups to the current situation have occurred on a number of previous occasions since 2006 and they did not end well for Tencent. Buy the dip…not so fast.

Tencent (700 HK): Buy the Dip? Not so Fast…

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

REAL-Economics.com

Thematic (Sector/Industry)

China's net outflows of capital and services (the latter mainly real-estate purchases abroad disguised as travel payments) aggregated US$241bn in Jan-Oct 2017 despite a relatively strong RMB. This limits China's ability to keep investing overseas as part of the Belt and Road initiative: private capital outflows are continuing despite tighter capital controls. With the current account surplus shrinking, there is less surplus capital left for China to recycle overseas for OBOR projects. Meanwhile,…

China's net outflows of capital and services (the latter mainly real-estate purchases abroad disguised as travel payments) aggregated US$241bn in Jan-Oct 2017 despite a relatively strong RMB. This limits China's ability to keep investing overseas as part of the Belt and Road initiative: private capital outflows are continuing despite tighter capital controls. With the current account surplus shrinking, there is less surplus capital left for China to recycle overseas for OBOR projects. Meanwhile,…

China: Capital Flight Despite Strong RMB Suggests Belt and Road Investments Are a Pipe-Dream

Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

<div class="content-highlight">Green bonds are not just for saving the planet and there are additional benefits that Asian investors should consider. A green bond concept is quite new in Asia and we believe Asian investors need both monetary incentives and directives from their regulators/governments to be more interested in saving the planet. In this flash note, we look at green bonds from an investor point of view. Green bonds can help reduce spread volatility and corporate governance risk in the investment portfolio. Green…</div>

Green bonds are not just for saving the planet and there are additional benefits that Asian investors should consider. A green bond concept is quite new in Asia and we believe Asian investors need both monetary incentives and directives from their regulators/governments to be more interested in saving the planet. In this flash note, we look at green bonds from an investor point of view. Green bonds can help reduce spread volatility and corporate governance risk in the investment portfolio. Green…

Asian ESG Monitor: Green Bonds - Veggie Is Good for You

Founder, Supreme Peoples Court Monitor

Susan Finder

Founder

Supreme Peoples Court Monitor

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/021/924/original/szzy.gif?1488676695" class="editor-image img-responsive" data-smartkarma-image-id="21924"></figure><div class="content-caption">Shenzhen intermediate court</div>In late <a href="http://mp.weixin.qq.com/s?__biz=MjM5NjA3NDc5MA==&amp;mid=2654696895&amp;idx=1&amp;sn=41c2982eaf329a40760af460a0773537&amp;chksm=bd2111f68a5698e00d716a661a5d3a7a0eb34fa17ece44afe63a6eebc593cb0bb8968db492ff&amp;mpshare=1&amp;scene=5&amp;srcid=0304MZHkgsHHaR2svvqFNMLb#rd" target="_blank">February</a>, Liu Tao, the deputy general manager of the legal department of China Construction Bank, Shenzhen branch provided an update on bank litigation under the "new normal" at a symposium on commercial litigation. The issues faced by Chinese domestic banks relate both the domestic and international environment, particularly to Chinese companies "going out."<ol><li>In domestic litigation, in 90% of cases, the bank is the plaintiff suing regarding a corporate loan…</li></ol>

Shenzhen intermediate courtIn late February, Liu Tao, the deputy general manager of the legal department of China Construction Bank, Shenzhen branch provided an update on bank litigation under the "new normal" at a symposium on commercial litigation. The issues faced by Chinese domestic banks relate both the domestic and international environment, particularly to Chinese companies "going out."In domestic litigation, in 90% of cases, the bank is the plaintiff suing regarding a corporate loan…

Update on Chinese Bank Litigation Under The "New Normal"

China

The MSCI China Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31, 1992.

MSCI China Index (MXCN INDEX)

Cyclical Assets To Underperform From Here

The surge in volatility should be welcome to longer-term investors by removing some of the technical distortions that had arisen during the long...

John-Paul Smith

Tencent (700 HK): Buy the Dip? Not so Fast…

If market participants were to vote for a company to be the poster-boy for the Asian bull market that started in early 2016, the hands down winner...