Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


Cross Asset Strategy

<ul>
<li>
 Global Liquidity is projected to rise in 2023 after last year’s tumble, but after its recent surge are we seeing a material pull-back?</li>
<li>UK gilt crisis in September was a wake-up call. In the 23 following weeks, US Fed liquidity has flat-lined not fallen. US monetary policy is bifurcating 
</li>
<li>Deteriorating US fiscal position will place huge demands for more QE. Between now and 2023 the Fed balance sheet could double in size. QT is dead in America
</li>
</ul>



 Global Liquidity is projected to rise in 2023 after last year’s tumble, but after its recent surge are we seeing a material pull-back?
UK gilt crisis in September was a wake-up call. In the 23 following weeks, US Fed liquidity has flat-lined not fallen. US monetary policy is bifurcating 

Deteriorating US fiscal position will place huge demands for more QE. Between now and 2023 the Fed balance sheet could double in size. QT is dead in America



Global Liquidity Update – Is US Fed QT Dead?

Marketing Director, Asia Frontier Capital

Asia Frontier Capital

Marketing Director

Investing in high growth Asian frontier economies.

Asia Frontier Capital Ltd. is a pioneering fund management company based in Hong Kong that specializes in investing in high growth Asian frontier economies by managing the AFC Asia Frontier Fund , AFC Iraq Fund and the AFC Vietnam Fund.

The AFC Asia Frontier Fund invests in public equities of Asian frontier countries that are seeing increasing consumption due to favorable demographic trends, rising incomes and high GDP growth. The fund invests in listed equities of companies that have their principal business activities in Bangladesh, Bhutan, Cambodia, Iraq, Laos, Maldives, Mongolia, Myanmar (Burma), Nepal, Pakistan, Papua New Guinea, Sri Lanka and Vietnam. The AFC Asia Frontier Fund is positioned to take advantage of the continuing economic shifts in these countries and offers high returns combined with significant diversification opportunities. This fund is directed by the founder and CEO of Asia Frontier Capital, Thomas Hugger, who has been investing in frontier markets across Asia and Africa for more than 20 years.

The AFC Iraq Fund was launched on the 26th June 2015 and aims to achieve long-term capital appreciation for investors by capturing value and growth potential in the post conflict high-growth & resource rich Iraq market. The fund emphasises long term investment horizon to truly capture the opportunity in Iraq. The fund's investable universe consists of locally listed companies that have their principal business activities in Iraq as well as foreign listed companies that have the majority of the business in Iraq as a whole including the prosperous Kurdish Region of Iraq (KRI). The AFC Iraq Fund offers access to investments in post conflict recovery potential of Iraq, including the KRI, and/or stability in its territory. The AFC Iraq Fund is managed by Asia Frontier Capital (Iraq) Limited, Cayman Islands under the executive leadership team of Thomas Hugger (CEO & Fund Manager) and Ahmed Tabaqchali (CIO) who have more than 47 years of investment experience as well as an extensive background covering global, emerging, frontier and MENA markets.

The AFC Vietnam Fund invests exclusively in listed Vietnamese equities to capture value in growth companies with a focus on the small to medium size companies. This market segment offers a unique investment opportunity as the valuation gap between large- and small-cap stocks in Vietnam is presently much wider than in comparable neighboring markets and the valuations are significantly depressed versus their regional peers. The fund adopts a fundamental-quantitative approach and employs an in-house earnings model to identify attractive companies where we see high growth opportunities. In conjunction with targeting the maximum upside potential the portfolio has been structured to mitigate corporate government and liquidity risks. The fund invests in a diversified portfolio of 70-90 attractively valued companies to carefully control concentration risk.  This approach allows the fund to sell, or buy, positions without having a significant market impact. The fund is directed under the executive leadership of Thomas Hugger and Andreas Vogelsanger who have more than 50 years combined experience managing investments in frontier markets, Asia and around the world.

For more information about the fund, management team and investment strategy please contact us at info@asiafrontiercapital.com.

<ul><li>The year began on a strong positive note for global equity markets and most AFC funds also had a positive return at the start of the year.</li><li>Investor sentiment continues to improve as confidence grows that we are at the peak of global inflation and interest rate hikes.</li><li>This was also evident in the less aggressive 25 basis point increase in interest rates by the U.S. Fed on 1st February 2023, as well as less hawkish messaging from the U.S. Fed in the past few weeks.</li></ul>

The year began on a strong positive note for global equity markets and most AFC funds also had a positive return at the start of the year.Investor sentiment continues to improve as confidence grows that we are at the peak of global inflation and interest rate hikes.This was also evident in the less aggressive 25 basis point increase in interest rates by the U.S. Fed on 1st February 2023, as well as less hawkish messaging from the U.S. Fed in the past few weeks.

Asian Frontier Markets Start the Year Strong - Asia Frontier Capital (AFC) - January 2023 Update

Digital Asset Management Firm, Etherbridge

Etherbridge

Digital Asset Management Firm

Etherbridge is a digital asset management firm investing in the value of information and trust

Crypto

<ul><li>Investors will remember 2022 as the first real credit crisis that bitcoin and the broader crypto space have suffered. In historical terms, it was a significant year.</li><li>The ensuing deleveraging eliminated many entities that got overzealous in the bull market and didn't adjust their strategies to new market conditions.</li><li>Almost the entirety of those now-insolvent entities were centralised conduits to the world of blockchain and digital assets. </li></ul>

Investors will remember 2022 as the first real credit crisis that bitcoin and the broader crypto space have suffered. In historical terms, it was a significant year.The ensuing deleveraging eliminated many entities that got overzealous in the bull market and didn't adjust their strategies to new market conditions.Almost the entirety of those now-insolvent entities were centralised conduits to the world of blockchain and digital assets. 

<ul>
<li>
 Global Liquidity Cycle bottomed last October. Noticeable acceleration, particularly in US dollar terms at near 30% annualized clip</li>
<li>
 China and Japan are the key Central Banks leading the charge. Yet, even the US Fed is stirring, with net liquidity injections seeming targeting stable bank reserve levels</li>
<li>Financial markets have already felt this liquidity boost, particularly liquidity-sensitive instruments like tech shares, gold and Bitcoin. The World economy too is stirring 
</li>
</ul>



 Global Liquidity Cycle bottomed last October. Noticeable acceleration, particularly in US dollar terms at near 30% annualized clip

 China and Japan are the key Central Banks leading the charge. Yet, even the US Fed is stirring, with net liquidity injections seeming targeting stable bank reserve levels
Financial markets have already felt this liquidity boost, particularly liquidity-sensitive instruments like tech shares, gold and Bitcoin. The World economy too is stirring 



<ul>
<li>US QT will soon melt away into a ‘stealth QE’ under pressure from illiquidity in key financial markets. QT is effectively already dead
</li>
<li>Recent experiences by the UK (September) and Japanese (December) Monetary Authorities evidence poor sovereign debt market liquidity 
</li>
<li>Lesson is that QE and QT are not symmetric policies: QE is easier to engage than to disengage via QT. This likely puts a floor under Global Liquidity in 2023</li>
</ul>


US QT will soon melt away into a ‘stealth QE’ under pressure from illiquidity in key financial markets. QT is effectively already dead

Recent experiences by the UK (September) and Japanese (December) Monetary Authorities evidence poor sovereign debt market liquidity 

Lesson is that QE and QT are not symmetric policies: QE is easier to engage than to disengage via QT. This likely puts a floor under Global Liquidity in 2023


Is QT Already Dead? Can The Fed Really ‘Ease’ Liquidity And Still ‘Tighten’?

United States

The MSCI World Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31, 1969. MXWO includes developed world markets, and does not include emerging markets. MXWD includes both emerging and developed markets.

MSCI World Index (MXWO INDEX)

Global Liquidity Update – Is US Fed QT Dead?

Between now and 2023 the Fed balance sheet could double in size. QT is effectively dead in America. Wise investors should start to prepare some...

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Asian Frontier Markets Start the Year Strong - Asia Frontier Capital (AFC) - January 2023 Update

The year began on a strong positive note for global equity markets and most AFC funds also had a positive return at the start of the year.

Asia Frontier Capital

What to Watch in 2023

Investors will remember 2022 as the first real credit crisis that bitcoin and the broader crypto space have suffered. In historical terms, it was a...

Etherbridge

Liquidity, Liquidity, Liquidity ….

Global Liquidity cycle bottomed last October. Latest weekly data show major Central Banks’ aggregate liquidity measured in US dollar terms has...

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Is QT Already Dead? Can The Fed Really ‘Ease’ Liquidity And Still ‘Tighten’?

US QT will soon melt away into a ‘stealth QE’ under pressure from illiquidity in key financial markets. QT is effectively already dead. This puts a...

Michael J. Howell