In today’s briefing:
- Emerging Markets Could Outperform in 2023?
- Potential Economic and Financial Market Downside Risks in 2023
- Wall Street Is Fighting the Fed, Should You Join In?
- Singapore Mulls Dumping 20% Stake in CK Hutchison’s Port Business
Emerging Markets Could Outperform in 2023?
- EM Liquidity remains low but again pushed higher in November and looks set to rebound strongly in 2023, helped easier Chinese monetary conditions
- World economy skidding badly and probably already in recession. EM investor positioning data already discounts much of this drop. Capital outflows becoming far less negative.
- Weaker US dollar likely to add support to EM, gold and commodities in 2023. Many commodity-rich EMs look attractive.
Potential Economic and Financial Market Downside Risks in 2023
- Chair Powell is not expecting a rapid decline in broad-based core inflationary pressures in 2023, thereby making it impossible to contemplate cutting the policy rate next year.
- The bulk of risks for 2023 are skewed to the downside due to potentially more deeply-entrenched inflationary pressures and continued geopolitical fallout impacting energy prices.
- Asia Pacific countries reliant on external demand will be impacted by downside outcomes in the US and Europe, while net importers of food and energy will face domestic demand pressures.
Wall Street Is Fighting the Fed, Should You Join In?
- Despite evidence of a hawkish Fed outlook, the market has chosen to fight the Fed by loosening financial conditions. Should investors join in to fight the Fed?
- In the face of a hawkish Fed, it pays to be more cautious and maintain a balanced view of risk and return.
- Investors seeking exposure to U.S. equities will find better value in mid- and small-cap stocks.
Singapore Mulls Dumping 20% Stake in CK Hutchison’s Port Business
- Singapore state-controlled port operator PSA International is considering selling its 20% stake in the port business of Hong Kong conglomerate CK Hutchison Holdings Ltd., according to people close to PSA’s controlling shareholder Temasek Holdings.
- PSA is reviewing its portfolio against the backdrop of geopolitical change and declining global trade demand, the sources said.
- The port operator bought its 20% CK Hutchison stake in 2006 for $4.4 billion.
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