In today’s briefing:
- Emerging Markets: Structural Shifts as Allocations Stabilise Among Global Funds.
- Great Game – Another cease-fire fata morgana?
- Indonesia Policy Rate 6.25% (consensus 6.25%) in Aug-24
- China: Growth Inevitably Set to Flag as All Monetary Easing Proves Inefficacious
- CX Daily: Domestic Carriers Add Global Routes as Foreign Rivals Quit China Amid Sluggish Demand
- Thailand Policy Rate 2.5% (consensus 2.5%) in Aug-24
- Actinver Research – Macro Daily: Preliminary Inflation 1h-Aug
- Actinver Research – Macro Daily: Preliminary Foreign Investment 2Q-24
Emerging Markets: Structural Shifts as Allocations Stabilise Among Global Funds.
- Emerging Market allocations are stabilizing among active Global equity funds.
- Country-Level shifts show China & HK allocations more than halving since 2022, while Taiwan has seen strong gains. India becomes the top country underweight.
- Alibaba has declined to record lows, Tencent ownership is stabilizing, and TSMC has reached new highs.
Great Game – Another cease-fire fata morgana?
- Welcome to this week’s Great Game, where we continue to cover the situations most likely to impact global markets.
- Currently, that’s the war in the Middle East and the potential harbor strike on the US East Coast.
- Doha cease-fire talks: The latest Gaza ceasefire talks in Doha ended without a breakthrough, but new negotiations are set for next week in Cairo.
Indonesia Policy Rate 6.25% (consensus 6.25%) in Aug-24
- Bank Indonesia’s decision to keep the BI-Rate steady at 6.25% aligns with expectations, reinforcing a pro-stability stance to manage inflation and Rupiah stability amid global uncertainties.
- The easing of global financial market uncertainty amid solid domestic growth influences interest rate decisions that focus on balancing inflation control and sustaining economic momentum.
- Bank Indonesia’s commitment to Rupiah stabilization and maintaining inflation within the target range remains central to its monetary policy, supported by effective interventions and optimized monetary operations.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
China: Growth Inevitably Set to Flag as All Monetary Easing Proves Inefficacious
- China’s M2 (USD42.04trn) is double the size of US M2, having risen 10.4-fold in 18 years (far faster than the 3.1-fold increase in US M2 over that period).
- Attempts at further monetary ease (RRR/rate cuts, QE) are futile, as they induce larger capital flight, and fail to rekindle credit demand amid PPI deflation and real-estate over-capacity.
- RGDP growth is likely to weaken in H2CY24 as FAI and industrial growth flag, and retail sales stay sluggish. A larger trade surplus won’t help, as FX reserves stagnate.
CX Daily: Domestic Carriers Add Global Routes as Foreign Rivals Quit China Amid Sluggish Demand
- Airlines / In Depth: Domestic carriers add global routes as foreign rivals quit China amid sluggish demand, Russia ban Since China dropped the Covid-era restrictions that slowed international flights to a trickle, the experience of domestic and foreign airlines has diverged sharply.
- Many foreign carriers are scaling back their operations in China and in some cases completely withdrawing from the market, largely because the need to avoid Russian airspace has sent their costs spiraling and made them uncompetitive against Chinese rivals who can still fly over the country’s northern neighbor.
- Meanwhile, Chinese airlines are ramping up their overseas routes, particularly to the Middle East.
Thailand Policy Rate 2.5% (consensus 2.5%) in Aug-24
- The Bank of Thailand maintained the Policy Rate at 2.5% by a 6 to 1 vote, reflecting confidence that current monetary policy is appropriate for balancing economic recovery and inflation management despite underlying structural challenges.
- Economic growth is driven by tourism and domestic demand. Uneven recovery across sectors and structural headwinds in exports and manufacturing necessitate close monitoring of risks to private investment and consumption.
- Inflation is expected to return to the target range by the end of 2024, with concerns over credit quality deterioration in SMEs and households prompting the Committee to support targeted measures aimed at maintaining financial stability.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Actinver Research – Macro Daily: Preliminary Inflation 1h-Aug
- We expect inflation for the first half of August to be 0.02% bw, as agricultural prices continue to reverse the increases observed in June and July.
- On Thursday, in addition to inflation data, new consumer basket weights will be released.
- Typically, inflation for this fortnight averages 0.29% bw.
Actinver Research – Macro Daily: Preliminary Foreign Investment 2Q-24
- The Ministry of Economy released preliminary estimates of foreign direct investment for the second quarter of the year.
- Up to June, USD 31 billion arrived at the country, concentrated in Mexico City, in the manufacturing sector and in the reinvestment component.
- In the first half of the year, foreign investment increased 7.2% annually, showing a sustained expansion since 2022.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
