Founder and CEO, Europacifica Consulting

Naomi Fink

Founder and CEO

Europacifica Consulting

Thematic (Sector/Industry)

The stock of foreign direct investment into the "One Belt One Road" bloc is a small share of global investment; nonetheless, the bloc's share of global greenfield investment remain disproportionately large.Examination of large OBOR-resident firms and the composition of their assets and revenues show that many firms in the region remain much more dependent on Chinese sales than do Chinese firms on foreign-earned sales.  Nonetheless, the diversion of Chinese investment from domestic to overseas (as China rebalances its domestic growth away from domestic investment) could potentially shift this dynamic.  Large Chinese firms leading the charge abroad tend to belong to the Transport and Storage and Computer Equipment sectors.Meanwhile, large firms resident in OBOR tend already to be much more dependent on foreign-earned revenue; some of those more dependent on Chinese domestic demand  rather than regional demand may experience fallout from China's rebalancing.  Others exposed to growth elsewhere in the region may benefit, or themselves become targets for Chinese cross-border acquisitions within the region.

The stock of foreign direct investment into the "One Belt One Road" bloc is a small share of global investment; nonetheless, the bloc's share of global greenfield investment remain disproportionately large.Examination of large OBOR-resident firms and the composition of their assets and revenues show that many firms in the region remain much more dependent on Chinese sales than do Chinese firms on foreign-earned sales.  Nonetheless, the diversion of Chinese investment from domestic to overseas (as China rebalances its domestic growth away from domestic investment) could potentially shift this dynamic.  Large Chinese firms leading the charge abroad tend to belong to the Transport and Storage and Computer Equipment sectors.Meanwhile, large firms resident in OBOR tend already to be much more dependent on foreign-earned revenue; some of those more dependent on Chinese domestic demand  rather than regional demand may experience fallout from China's rebalancing.  Others exposed to growth elsewhere in the region may benefit, or themselves become targets for Chinese cross-border acquisitions within the region.

Silk Roads Part 3: China and OBOR Investment

Specialist in Indian Banking and Economic Research

Hemindra Hazari

There are high hopes that Urjit Patel, the new RBI governor will attempt to revive bank lending, and thereby stimulate capital investment in the Indian economy. But that would require his having the right diagnosis in the first place. The current approach is that India suffers from a 'balance sheet' issue of over-leveraged large corporates and banks burdened with poor asset quality. Resolving these issues through stringent asset recognition norms and recovery mechanisms combined with economic reforms will put India back on the track of high investments. However, RBI's own data shifts the spotlight elsewhere but strangely nobody appears interested in exploring further as it challenges the mainstream view.

There are high hopes that Urjit Patel, the new RBI governor will attempt to revive bank lending, and thereby stimulate capital investment in the Indian economy. But that would require his having the right diagnosis in the first place. The current approach is that India suffers from a 'balance sheet' issue of over-leveraged large corporates and banks burdened with poor asset quality. Resolving these issues through stringent asset recognition norms and recovery mechanisms combined with economic reforms will put India back on the track of high investments. However, RBI's own data shifts the spotlight elsewhere but strangely nobody appears interested in exploring further as it challenges the mainstream view.

Asia focused research insights & advisory, Asia Advisors

Vinay Patel

Asia focused research insights & advisory

Asia Advisors

Asia Advisors is an independent financial advisory and research firm working closely with corporates and institutions to provide consulting solutions & research insights. We provide advisory services including capital solutions, business strategy and investment insights.
Firm is headed by Vinay Patel who has close to two decades of experience in research and business development at large, international investment banks such as HSBC and ICICI Securities. Led research efforts in areas of Macroeconomics, Asset Allocation & Investment Strategy for close to a decade in global & domestic research teams. As a business head in Singapore, advised top global investment management firms & Portfolio managers in Asia for India related investments.
Vinay was recently joined by Swapnil Manish, an investment banker and ex-ecommerce entrepreneur with more than 12 years of experience. Swapnil was the TMT banker at BNP Paribas and was part of several large M&A and ECM transactions (Bharti-Zain, Bharti Infratel IPO, Schneider-Zicom among several others). He's also had a stint as an ecommerce entrepreneur having launched & led Mumbai's first online grocery player.

Geopolitical tensions in the sub-continent, already running high, have taken a turn for the worst as India carried out surgical strikes across the Line of Control (LoC) into Pakistan Occupied Kashmir. This is a first time that India has actually crossed the LoC to send a strong signal to Pakistan and this action, unfortunately, increases the risk of confrontation well into the future. Historically any tensions between India and Pakistan were defused by back channel intervention of global powers…

Geopolitical tensions in the sub-continent, already running high, have taken a turn for the worst as India carried out surgical strikes across the Line of Control (LoC) into Pakistan Occupied Kashmir. This is a first time that India has actually crossed the LoC to send a strong signal to Pakistan and this action, unfortunately, increases the risk of confrontation well into the future. Historically any tensions between India and Pakistan were defused by back channel intervention of global powers…

Rising Geopolitical Risks in Indian Sub-Continent: Towards a Worse-Off Sub-Optimal Nash Equilibrium

Managing Partner, Ampersand Investment Advisors

Rahul Singh

Managing Partner

Ampersand Investment Advisors

In what has been a range bound market, the element which stood out in recent times is increased participation of small/micro caps with relatively unknown names or proven track record. Even as foreign inflows through ETFs chased the large caps, domestic flows have led to a surge in midcap valuations and growth expectations in several names are bordering on the unrealistic now. This has to be a concern and could be a lead indicator of market volatility and imminent correction.Since the overriding sentiment in this newsletter is that the markets will correct, the most prudent course of action would be to partially book profits wherever valuations don't support fundamentals. Meanwhile, we would continually scout for new ideas as well as consolidate existing position in stocks/sectors we strongly believe can generate absolute returns i.e. Cement, NBFCs, Speciality Chemicals. Beneficiaries of rising construction equipment demand is in focus in this edition.

In what has been a range bound market, the element which stood out in recent times is increased participation of small/micro caps with relatively unknown names or proven track record. Even as foreign inflows through ETFs chased the large caps, domestic flows have led to a surge in midcap valuations and growth expectations in several names are bordering on the unrealistic now. This has to be a concern and could be a lead indicator of market volatility and imminent correction.Since the overriding sentiment in this newsletter is that the markets will correct, the most prudent course of action would be to partially book profits wherever valuations don't support fundamentals. Meanwhile, we would continually scout for new ideas as well as consolidate existing position in stocks/sectors we strongly believe can generate absolute returns i.e. Cement, NBFCs, Speciality Chemicals. Beneficiaries of rising construction equipment demand is in focus in this edition.

Big Money, Small Ideas - Sep 16 Newsletter

Govt decision to appoint Urjit Patel as next RBI Governor will assuage investor concernsIn its decision to appoint Dr Urjit Patel as the next governor of the Reserve Bank of India, the govt has sent a clear message to the investor community that it is business as usual even after the end of incumbent Rajan's term on 4th Sep'16.  Quite like the incumbent, Dr Patel also has excellent creds with his education at top global schools and then extensive work in public policy at IMF, Ministry of Finance…

Govt decision to appoint Urjit Patel as next RBI Governor will assuage investor concernsIn its decision to appoint Dr Urjit Patel as the next governor of the Reserve Bank of India, the govt has sent a clear message to the investor community that it is business as usual even after the end of incumbent Rajan's term on 4th Sep'16.  Quite like the incumbent, Dr Patel also has excellent creds with his education at top global schools and then extensive work in public policy at IMF, Ministry of Finance…

Quick Event Wrap: Sound Choice by Govt in Urjit Patel; India GST Plans Speed Up; Traders Corner-INR

India

Apar Industries Ltd. manufactures aluminum conductors for power transmission. The Company also manufactures polymers, synthetic rubbers, latexes, transformer oils, pharmaceutical oils and other specialty oils.

Nava Bharat Ventures Limited manufactures ferro alloys which are utilized by the steel industry. The Company also generates & distributes power and manufactures sugar.

Balmer Lawrie & Company Ltd. operates in a diverse range of business areas as a manufacturer and service provider.  The Company produces industrial packaging products, greases and lubricants, performance chemicals and marine freight containers.  Services include tea exporting and trading, project engineering and consultancy and travel, tours and cargo.

Balmer Lawrie Investments Ltd., through subsidiaries, manufactures lubricating greases and lube barrels, exports tea, and operates travel and shipping businesses.

Jaiprakash Associates Ltd. is an industrial conglomerate.  The Company's lines of business include engineering and construction, cement, power, hospitality, real estate, and expressways and highways.

Adani Enterprises Limited is an international trading house that operates from offices in India as well as other countries. The Company is involved in coal mining, cargo handling and power generation.  Adani also trades in a large number of products including textiles, energy, metals and agricultural products.

Bharat Heavy Electricals Limited manufactures power plant equipment. The Company's products include gas turbines, generators, thermal sets, diesel shunters, turbo sets, hydro sets, power transformers, switch gears, circuit breakers and boilers. The Company also manufactures compressors, valves, rectifiers, pumps, capacitors, oil rigs, as well as castings and forgings.

CG Power and Industrial Solutions Limited manufactures, distributes, installs and services electrical and allied equipment. The Company offers transformers, reactors, switchgear control equipment and accessories, industrial motors, pumps, and communication systems. CG Power and Industrial Solutions serves customers globally. 

Bharat Electronics Ltd. manufactures electronic communication equipment, night vision equipment such as image converter tubes, night vision binoculars, and goggles, periscopes, gunsights and tank electronics.  The Company's electronic communication products include HF/VHF transmitters, receivers, microwave radio relays, radars and other electronic components required by defense services.

Cummins India Limited manufactures internal combustion engines, including diesel, reciprocating piston, gas turbine and gasoline engines. The Company also manufactures generating sets and public transport-type passenger motor vehicles, including luxury coaches and air-field buses.  In addition, Cummins India Ltd. operates a computerized and fully-equipped research and development facility.

CK Hutchison Holdings Limited holds all of the non-property businesses of the Cheung Kong Group and the Hutchison Group, including ports and related services, telecommunications, retail, infrastructure, energy, and movable assets leasing operations.

Samsung C&T Corporation conducts diversified business support services and resort operation activities. The Company offers a range of services in areas including clothing retail, construction, energy, real estate, food service, and resort accommodations. Samsung C&T also operates a resort with amusement rides, a zoo, water park, golf clubs, and restaurants.

Toshiba Corporation manufactures and markets electrical and electronic products. The Company's products include digital products such as PCs and televisions, NAND flash memories, and system LSIs (large-scale integrated), as well as social infrastructures such as power generators, medical equipment, and home appliances.

Carlisle Companies Incorporated manufactures and distributes construction materials, transportation products, and general industry products.  The Company manufactures a variety of products for the roofing, real estate, construction, trucking, food-service, aircraft manufacturing, lawn and garden, and other industries.

Jardine Matheson Holdings Limited is a multinational enterprise with a portfolio of businesses focused on the Asia-Pacific region. The Group's activities include financial services, supermarkets, consumer marketing, engineering and construction, automobile trading, insurance broking, property investment, and hotels.

SM Investments Corporation is an investment holding company. The Company operates retail business and develops shopping mall and other real estate property.  The Company also provides tourism services.

CITIC Limited operates in a range of business activities including financial services, resources and energy, manufacturing, real estate and infrastructure, engineering contracting and other businesses in China and overseas.

Koninklijke Philips NV is a health technology company focused on improving people's health across the health continuum from healthy living and prevention, to diagnosis, treatment, and home care. The Company offers products and services in diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care.

Rheinmetall AG is an automotive, electronics, defense, and engineering group. The Company produces automotive pumps and components to supply air, reduce emissions, and supply fuel, pistons for gasoline and diesel vehicle and stationary engines, bearings for engines and other applications and aluminum engine blocks, and offers aftermarket service to engine repair shops.

Lifco AB operates as a holding company. The Company, through its subsidiaries, provides dental products, machinery and tools, sawmill equipment, contract manufacturing, vehicle interiors, and environmental technology. Lifco offers its products through a network of subsidiaries and partnerships worldwide.

Siemens Ltd. has its operations in various areas: in the transportation sector it delivers high speed trains, in the lighting sector it manufactures small light bulbs. In the healthcare sector Siemens executes complete solutions for hospitals, for the industry sector it builds airports as well as produces contracts & for the communication segment it provides public network to mobiles.

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Siemens Ltd (SIEM IN)

Silk Roads Part 3: China and OBOR Investment

The stock of foreign direct investment into the "One Belt One Road" bloc is a small share of global investment; nonetheless, the bloc's share of...

Naomi Fink

Bank Credit Growth: Wrong Diagnosis ?

There are high hopes that Urjit Patel, the new RBI governor will attempt to revive bank lending, and thereby stimulate capital investment in the...

Hemindra Hazari

Rising Geopolitical Risks in Indian Sub-Continent: Towards a Worse-Off Sub-Optimal Nash Equilibrium

Geopolitical tensions in the sub-continent, already running high, have taken a turn for the worst as India carried out surgical strikes across the...

Asia Advisors

Quick Event Wrap: Sound Choice by Govt in Urjit Patel; India GST Plans Speed Up; Traders Corner-INR

Govt decision to appoint Urjit Patel as next RBI Governor will assuage investor concernsIn its decision to appoint Dr Urjit Patel as the next...

Asia Advisors

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Silk Roads Part 3: China and OBOR Investment

The stock of foreign direct investment into the "One Belt One Road" bloc is a small share of global investment; nonetheless, the bloc's share of...

Naomi Fink

Bank Credit Growth: Wrong Diagnosis ?

There are high hopes that Urjit Patel, the new RBI governor will attempt to revive bank lending, and thereby stimulate capital investment in the...

Hemindra Hazari

Rising Geopolitical Risks in Indian Sub-Continent: Towards a Worse-Off Sub-Optimal Nash Equilibrium

Geopolitical tensions in the sub-continent, already running high, have taken a turn for the worst as India carried out surgical strikes across the...

Asia Advisors

Big Money, Small Ideas - Sep 16 Newsletter

In what has been a range bound market, the element which stood out in recent times is increased participation of small/micro caps with relatively...

Ampersand Investment Advisors

Quick Event Wrap: Sound Choice by Govt in Urjit Patel; India GST Plans Speed Up; Traders Corner-INR

Govt decision to appoint Urjit Patel as next RBI Governor will assuage investor concernsIn its decision to appoint Dr Urjit Patel as the next...

Asia Advisors