In today’s briefing:
- Political Risks in Asia: Lull In Geopolitical Competition Implies Softening of Risks
- Macro Nugget: US Real Estate and Interest Rates
- Thailand: Election of New Premier Provides Only Short-Term Respite
- Great Game: Ukrainian Breakthrough imminent?
- CX Daily: Clock Ticking on Country Garden’s Debt Bomb
- Istanbul or Bust: The Decline of Turkish Investor Positioning
- The Energy Cable #35 – Are Monster Draws Ahead?
- Philippines: Emerging Signs of Investment Recovery
Political Risks in Asia: Lull In Geopolitical Competition Implies Softening of Risks
- The likelihood of serious geopolitical disruptions has been reduced as the US-China relationship is better managed and domestic political conditions in Asia stabilize.
- While antagonistic non-military measures by Washington and Beijing may continue, both countries will avoid rocking the boat. The odds of a substantial escalation are thus low.
- Other regional flashpoints such as Taiwan, the Sino-Indian border, and the South China Sea may see episodic confrontations but these will probably be contained.
Macro Nugget: US Real Estate and Interest Rates
- As we approach the zenith of a historic hiking cycle, it’s hardly surprising to see mortgage applications plunging to unprecedented lows.
- We’ve previously discussed how households that secured low rates have minimal motivation to relocate or refinance.
- Consequently, there’s been a significant drop in volume, which is evident in the decline in purchase applications
Thailand: Election of New Premier Provides Only Short-Term Respite
- The election of Pheu Thai’s Srettha Thavisin as the new Thai premier ends, for now, months of political limbo. We expect a lull in political infighting in the short run.
- Partially-Restored business confidence and expansionary fiscal policy will bolster the short-run outlook, and Thailand’s bureaucrats may be able to pursue growth-promoting reforms.
- However, the longstanding political divide has been reconfigured, rather than resolved. Meanwhile, the economy’s structural challenges remain daunting, whoever is in charge.
Great Game: Ukrainian Breakthrough imminent?
- Welcome to this week’s Great Game – our weekly coverage of the geopolitical arena.
- This week our eyes remain fixed on Ukraine where we are finally seeing some movement and developments.
- Last week, war reporters on X and other social media began fuzzing about an ongoing Ukrainian breakthrough.
CX Daily: Clock Ticking on Country Garden’s Debt Bomb
- Country Garden /Cover Story: Clock ticking on Country Garden’s debt bomb
- Tax /: China extends tax incentives by two years to bolster housing market
- Housing /: Li Auto’s first pure EV to use CATL’s fast-charging batteries
Istanbul or Bust: The Decline of Turkish Investor Positioning
- Turkish fund ownership falls to record lows after significant rotation
- No single company owned by more than 10% of managers. BIM and Koc Holdings the most widely held
- Turkey falls to the 9th largest country allocation in the EMEA region
The Energy Cable #35 – Are Monster Draws Ahead?
- From supply to demand side weakness in 12 months. Key take aways: As opposed to last year, Germany is now seeing the demand side weaken. The supply side uncertainty is prevalent. A thermometer might be your best investment for trading markets this winter. Last Friday we received the August print of the business assessment from German firms via the Ifo Institut and it wasn’t pretty.
- As we are nearing the levels seen around the energy crisis of last summer/early fall, we notice the difference in the cause for pessimism.
- Last year it was all about the supply side with companies suffering from the high input prices, but this time around companies are telling a story of weakness on the demand side.
Philippines: Emerging Signs of Investment Recovery
- Philippines fund ownership shows signs of life after decade long bear market
- Asia Ex-Japan funds buy in to BDO Unibank, Bank of the Philippine Islands and Jollibee Foods Corp.
- Despite this, The Philippines remains a zero allocation for 50% of the funds in our analysis.
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