In today’s briefing:
- Easy Money to Low PBR Stocks in KOSPI 200 Is Now Over – What’s Next?
- Indonesia Politics: Prabowo Wins, But Does Indonesia?
- Great Game – Asian elections and Ukraine outlook
- Positioning Watch – Low FX volatility provides cheap leverage for a rebound in manufacturing
- US Dollar: Trend Reversal or Start of Bull Run
- 2% is Neither Necessary Nor Sufficient
- CX Daily: Summers on Secular Stagnation and Lessons for China
- Canada CPI Inflation 2.86% y-o-y (consensus 3.3%) in Jan-24
- Kuwait CPI Inflation 0.2% m-o-m in Jan-24
Easy Money to Low PBR Stocks in KOSPI 200 Is Now Over – What’s Next?
- There are 92 stocks in KOSPI 200 that are trading at less than 1x PBR. These 92 stocks are up on average 6% YTD.
- Among these 92 stocks, 40 of them are trading at below 0.5x PBR. These 40 stocks are up on average 8.2%.
- In this insight, we argue that the “easy money” of making money by increasing capital allocation to low PBR stocks in Korea is nearly over in the near term.
Indonesia Politics: Prabowo Wins, But Does Indonesia?
- Ex-General Prabowo Subianto got third-time lucky in his bid for the presidency. We caution, however, that things will not be “business as usual” under the erratic strongman.
- Contrary to his campaign rhetoric of providing “continuity Jokowi”, we argue that Prabowo will not pursue several positive aspects of the Widodo agenda with the same vigour.
- Short-Term political intrigue and long-run degradation in governance are material risks given the election results and preceding developments, These are due cause for worry.
Great Game – Asian elections and Ukraine outlook
- Welcome to this week’s rundown of international events and the impact on your portfolio.
- There is still some time to go on my cease-fire prediction from last week, so let’s focus on some other topics that we’re talking about right now.
- As a new addition to our offering, we’re experimenting with video editions of certain articles as many of you have requested.
Positioning Watch – Low FX volatility provides cheap leverage for a rebound in manufacturing
- Hello everyone, and welcome back to our weekly Positioning Watch.
- Markets were caught on the wrong side of expectations last week with PPI coming in substantially hotter than expected, but equity sentiment has remained decent outside of some profit taking in Tech, as the cocktail of better liquidity conditions and a brightening economic outlook is likely to prevail – and positioning provides very decent opportunities to trade the potential comeback for cyclical assets.
- As this week’s chart of the week we present to you what looks to be the theme of Q1 2024, and the reason why right now is not a good time to be contrarian: momentum is king, and “go with the flow” currently performs WAY better than cherry-picking the good old value stocks.
US Dollar: Trend Reversal or Start of Bull Run
- U.S. interest rates have been climbing since early January 2024 after reaching their lowest points between December 27th and January 11th.
- For example, the yield on 2-year Treasury bonds has increased by 52 basis points (bps), and the yield on 10-year bonds has risen by 49 bps since their respective lows.
- Similarly, the Dollar Index (DXY), which measures the value of the U.S. dollar against a basket of other currencies, experienced its weakest point on December 28th, 2023.
2% is Neither Necessary Nor Sufficient
- UK CPI inflation is slowing, but low 6-month and 3m-o-3m growth rates don’t provide any helpful signal at the 2yr horizon. Relevant measures remain above the 2% target.
- Falling energy prices are depressing spot inflation closer to target this summer. Without sustainable reasons, proximity to 2% is not a sufficient condition for rate cuts.
- The BoE could clarify its reaction function with threshold guidance of what would be necessary to consider cuts. It probably won’t do this, despite the benefits.
CX Daily: Summers on Secular Stagnation and Lessons for China
- Summers /: Cover Story: Summers on secular stagnation and lessons for China
- China-U.S. /: China’s Foreign Minister meets U.S. counterpart for ‘constructive’ talks
- Tourism /Analysis: Property slump, weak confidence loom over stellar China Lunar New Year travel data
Canada CPI Inflation 2.86% y-o-y (consensus 3.3%) in Jan-24
- Canada’s CPI inflation increased by 2.86% year-on-year in January 2024, which was lower than the anticipated 3.3%.
- This is the lowest growth rate recorded since June 2023.
- Core inflation rates were also below expectations by approximately 0.2pp, with half of the downside news being non-core.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Kuwait CPI Inflation 0.2% m-o-m in Jan-24
- Kuwait’s CPI inflation remained stable at 0.2% month-on-month in January 2024.
- The current inflation rate is only 0.08 percentage points below the 1-year average.
- The data indicates a steady economic situation in Kuwait.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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